Obamacare is "costing 2 million jobs."
The Sunday morning TV pundits revived some passionate talking points about the health care law following this week’s resignation of Health and Human Services Secretary Kathleen Sebelius. Look to the partisan bickering between Democratic strategist James Carville and conservative radio host Laura Ingraham on ABC’s This Week to see what we mean. Carville said Sebelius’ departure doesn’t change the fact that the law is working. "You know what? Y’all said it was gonna collapse. You said no one would sign up. You said it was going to cost part-time jobs -- " "It’s costing 2 million jobs," Ingraham jumped in, attributing the figure to the nonpartisan Congressional Budget Office. Carville kept talking: "You said the risk corridors were going to go broke. None of that has happened. Get over it. It’s working. It’s gonna work." PunditFact checks out Carville’s point on risk corridors here. In this fact-check, we focused on Ingraham’s point about a CBO report that analyzed the health care law’s long-term effect on employment. Fact-checkers have heard Obamacare critics misrepresent the report many, many times. When the CBO released this report in February, House Speaker John Boehner and Fox News host Gretchen Carlson jumped out in front with some poor interpretations of this paragraph from CBO: "The reduction in CBO's projections of hours worked represents a decline in the number of full-time-equivalent workers of about 2.0 million in 2017, rising to about 2.5 million in 2024," the nonpartisan research service wrote. At first blush, that may seem to match what Ingraham said about the law "costing 2 million jobs." But the losses CBO projected aren’t exactly full-time jobs, and they aren’t driven by employers laying off employees. Essentially, some workers are expected to voluntarily dial back their hours. Or as the CBO put it: "The estimated reduction stems almost entirely from a net decline in the amount of labor that workers choose to supply, rather than from a net drop in businesses’ demand for labor." It’s an important distinction. CBO estimated that millions of Americans will probably decide they don’t need to work as much because the law makes health insurance more available by offering subsidies for some to obtain insurance and expanding Medicaid eligibility in some states. CBO found the tax penalties imposed on employers that do not provide insurance to their workers and new taxes on labor income would have a smaller effect on the labor market than the Medicaid expansion and exchange subsidies. Just as important, CBO’s 2 million "full-time-equivalent workers" figure is not a dressed-up word for 2 million full-time jobs. CBO did not break down how many full-time jobs would be reduced under the law versus employees simply working fewer hours, dropping a separate part-time job, or leaving the workforce. "Because some people will reduce the amount of hours they work rather than stopping work altogether, the number who will choose to leave employment because of the ACA in 2024 is likely to be substantially less than 2.5 million," the report states. "At the same time, more than 2.5 million people are likely to reduce the amount of labor they choose to supply to some degree because of the ACA, even though many of them will not leave the labor force entirely." None of this is to say the health care law is not affecting the job market. Analysts expect the country’s labor force participation rate to fall over the coming decade, and some people may not like the idea that people would work fewer hours because they can obtain government-subsidized insurance. "Bigger implicit and explicit tax distortions are reducing productive economic activity," Alan Auerbach, an economist at the University of California-Berkeley, told us in February. Lastly, researchers said the law’s biggest effects on employment would happen after 2016, when more provisions have taken effect, so the estimate is not a present-day reflection as Ingraham makes it sound. CBO researchers also note total employment and compensation will increase over the next decade, but "that increase will be smaller than it would have been in the absence of the ACA." Our ruling We are fact-checkers, not fortune-tellers. We’ll steer clear of declaring the health care law a success or failure. For one, it’s simply too soon to tell. It is possible to say, however, whether pundits are accurately summarizing projections from nonpartisan government analysts about the law. And when Ingraham cited CBO for her claim that the law "is costing 2 million jobs," she glazed over a swath of important details. Ingraham’s claim contains an element of truth but ignores critical facts that would give a different impression. We rate it Mostly False. (Update April 15: Ingraham responded to our ruling on her April 14, radio show, saying: "The economy is affected when fewer people work. This is a real effect on the real American economy. So you can argue about how you interpret the number of jobs lost. You can say that's a good thing. ... Democrats love when people aren't working. ...That does not change the underlying fact that jobs will be lost because of Obamacare. PolitiFact and the Democrats think it's a good idea to add to those terrible (jobs) numbers with more people not working. And you're going to fact-check me? Fact-check this. Fact-check yourself. You are so untethered to reality and the real world for most people. Go finger paint in your free time.")
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