The non-partisan Congressional Budget Office caused quite a stir on Capitol Hill this morning with its new report (pdf) on long-term economic projections. There’s no shortage of interesting angles, though the top-line results are immediately striking.
The U.S. budget deficit is set to fall to $514 billion this year, down substantially from last year and the lowest level by far since President Barack Obama took office five years ago, a congressional report said Tuesday.The Congressional Budget Office credits higher tax revenues from the rebounding economy and sharp curbs on agency spending as the chief reason for the deficit’s short-term decline.
To be sure, this is a preliminary projection, which will likely change by the end of the fiscal year in the fall, but a $514 billion deficit would represent rather dramatic deficit reduction – nearly a full trillion dollars below the annual deficit when President Obama took office. It would also put the deficit at about 3% of GDP, which is roughly in line with the average of the last four decades.
In terms of the political implications, there’s clearly a rational need for anyone involved in the fiscal debate to stop asking, “Why isn’t Obama doing anything about the deficit?” Indeed, for those who continue to throw around the “trillion dollars a year” talking point – Rand Paul, I’m looking in your direction – it’s clearly time for a broad revision to the right’s fiscal rhetoric.
The same report also had quite a bit to say about health care policy. For example, the CBO now projects that the Affordable Care Act’s open-enrollment period will sign up 6 million consumers in private coverage, not 7 million. If recent history is any guide, many conservative critics of the law will argue this revised total points to too few and too many enrollees.
Also note, the CBO found that repealing provisions from the law related to risk corridors – which spontaneously became a top Republican priority late last year for reasons that remain unclear – would add $8 billion to the deficit. It’s an ironic twist: many GOP lawmakers want to make this a condition in a debt-ceiling hostage strategy, suggesting that these Republican proponents of the tactic want Democrats to increase the deficit on purpose as a condition for raising the debt limit.
But that’s not the part of the CBO report the right is most eager to talk about.
The Affordable Care Act will reduce the number of full-time workers by more than two million in coming years, congressional budget analysts said Tuesday in the most detailed analysis of the law’s impact on jobs.After obtaining coverage through the health law, some workers may forgo employment, while others may reduce hours, according to a report by the Congressional Budget Office. Low-wage workers are the most likely to drop out of the workforce as a result of the law, it said. The CBO said the law’s impact on jobs mostly would be felt after 2016.
For “Obamacare” critics, these CBO findings seem like manna from heaven. It’s proof, the argument goes, that the Affordable Care Act is a “jobs killer.” After all, the non-partisan Congressional Budget Office agrees that the law will take 2 million Americans out of the workforce.
But that’s not quite right. Those who’ve followed the health care debate closely may remember the relevant details, but some of the ACA’s most heated detractors appear to have forgotten them.
So let’s revisit an old fight.
Some of the headlines and coverage this morning make it seem as if “Obamacare” will cause mass layoffs, but what the CBO actually found is that the health care reform law will likely create new opportunities for people who would otherwise be stuck under job-lock.
As the Wall Street Journal put it, the CBO found “the jobs figures largely represent Americans who will choose not to work rather than those who will lose their jobs or have their workweeks reduced because of the law.”
Exactly. There are very likely some 60 years olds out there, for example, who would prefer to retire but can’t – they and their families can’t afford to lose their health care benefits. Thanks to the Affordable Care Act, those folks can go ahead and voluntarily leave the workforce, knowing that it won’t leave them uninsured. Or maybe a parent who wants to stay home with a child, who would ordinarily feel forced to get a job in order to get access to health care, now would take advantage of the choice “Obamacare” offers.
Those saying, “See? This law will cost us 2 million jobs!” aren’t paying close enough attention. The CBO report specifically says, “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, so it will appear almost entirely as a reduction in labor force participation and in hours worked relative to what would have occurred otherwise rather than as an increase in unemployment (that is, more workers seeking but not finding jobs) or underemployment (such as part-time workers who would prefer to work more hours per week).”
That’s a complicated way of saying: a lot of folks who would feel the need to work for health care benefits probably won’t have to bother. The 2 million figure refers to Americans who’ll choose to leave the workforce voluntarily because the Affordable Care Act will create opportunities that otherwise wouldn’t be available.
The challenge for “Obamacare” critics, then, is explaining why this is a bad thing.
Update: Glenn Kessler rounds up a whole lot of reports, including a press release from the NRCC, arguing that the CBO report found that the Affordable Care Act “will cost 2.5 millions jobs.” That’s plainly incorrect.