Blog ››› ››› TYLER HANSEN
After the Congressional Budget Office (CBO) released new estimates of the Affordable Care Act's (ACA) impact on labor markets, the Associated Press' Julie Pace claimed there were "two different ways" to characterize the report: the Republican characterization, and the White House's position. But there's a major problem with Pace's false balance -- only the White House's position is backed up by the facts.
On February 4, the non-partisan CBO released its Budget and Economic Outlook for the years 2014 to 2024. One section of the report projected that the number of full-time-equivalent workers would decline by about 2 million over the next three years due to the impact of the ACA. Conservative media quickly declared that the report showed 2 million jobs would be destroyed.
During a panel discussion on the February 4 edition of Fox News' Special Report, guest host Shannon Bream asked Julie Pace, the Associated Press (AP) White House correspondent, to spell out the details of the new CBO report and what the White House said about it. Pace explained:
PACE: Basically what you have is two different ways of characterizing this report. If you talk to Republicans, they say there are going to be nearly 2.5 million jobs that are going to be lost over a decade because of the Affordable Care Act. If you talk to the White House, there are going to be 2.5 million people who are going to have a choice to leave full-time employment.
Pace included the Republican talking point in an apparent attempt to balance the White House's statements, but the idea that "there are going to be nearly 2.5 million jobs that are going to be lost" is simply not true. As the Los Angeles Times' Pulitzer Prize-winning business columnist Michael Hiltzik explained (emphasis original):
The CBO projects that the [Affordable Care] act will reduce the supply of labor, not the availability of jobs. There's a big difference. In fact, it suggests that aggregate demand for labor (that is, the number of jobs) will increase, not decrease; but that many workers or would-be workers will be prompted by the ACA to leave the labor force, many of them voluntarily.
As economist Dean Baker points out, this is, in fact, a beneficial effect of the law, and a sign that it will achieve an important goal. It helps "older workers with serious health conditions who are working now because this is the only way to get health insurance. And (one for the family-values crowd) many young mothers who return to work earlier than they would like because they need health insurance. This is a huge plus."
The ACA will reduce the total hours worked by about 1.5% to 2% in 2017 to 2024, the CBO forecasts, "almost entirely because workers will choose to supply less labor -- given the new taxes and other incentives they will face and the financial benefits some will receive." That translates into about 2.5 million full-time equivalents by 2024 -- not the number of workers, because some will reduce their number of hours worked rather than leaving the workforce entirely.