CBO: Health Care Reform Lets People "Choose" To Work Less

Elmendorf: Health Care Reform Causes “Reduction Of 800,000 Workers” in 2021. In his February 10 testimony before the House Budget Committee, CBO Director Douglas Elmendorf stated:

REP. JOHN CAMPBELL (R-CA): Thank you, Mr. Chairman, we'll -- and Dr. Elmendorf -- and we'll continue this conversation right now. First on health care, before I get to -- before I get to broader issues, you just mentioned that you believe -- or that in your estimates, that the health care law would reduce the labor used in the economy by about one-half of 1 percent, given that, I believe you say, there's 160 million full-time people working in 2021. That means that, in your estimation, the health care law would reduce employment by 800,000 in 2021. Is that correct?

DOUGLAS ELMENDORF: Yes. The way I would put it is that we do estimate, as you said, that the household employment will be about 160 million by the end of the decade. Half a percent of that is 800,000. That means that if the reduction in the labor used was workers working the average number of hours in the economy and earning the average wage that it would be a reduction of 800,000 workers. [House Budget Committee, 2/10/11]

CBO: Health Care Reform Reduces “The Amount Of Labor That Workers Choose To Supply.” In August 2010 the Congressional Budget Office stated of the health care reform law:

The Congressional Budget Office (CBO) estimates that the legislation, on net, will reduce the amount of labor used in the economy by a small amount -- roughly half a percent -- primarily by reducing the amount of labor that workers choose to supply. [Congressional Budget Office, 8/10]

CBO: People Will Work Less Because Health Care Reform Provisions Increase Their “Financial Resources.” CBO further stated that the “reduction in the supply of labor is largely attributable to the substantial expansion of Medicaid and the provision of subsidies that will reduce the cost of insurance obtained through the newly created exchanges.” CBO explained that these measures “will effectively increase beneficiaries' financial resources. Those additional resources will encourage some people to work fewer hours or to withdraw from the labor market.” [Congressional Budget Office, 8/10]

Health Expert Paul Van De Water: “If People Voluntarily Choose To Reduce Their Hours Of Work ... That's Not Killing Jobs.” Paul N. Van de Water, health care expert at the Center on Budget and Policy Priorities, told Media Matters via email:

The CBO report ... finds that health reform's major effect on employment will be a small reduction in the amount of labor that workers choose to supply. For example, some people with pre-existing health conditions may choose to retire earlier if they can obtain health insurance coverage through the new health insurance exchanges and no longer have to wait until age 65 for Medicare. If people voluntarily choose to reduce their hours of work, however, that's not killing jobs. [Email to Media Matters, 10/27/10]

Harvard Economist David Cutler: “People Who Are Working Solely To Get Health Care” Will “No Longer Need To Do That.” Health economist and Harvard professor David Cutler, who also advised Obama's presidential campaign, told Media Matters via email:

First, the CBO noted that there were many effects in different directions. In fact, they are particularly conservative in their estimate of the cost savings to firms, which are a huge driver in employment. Second, most of the possible employment losses come from people who are working solely to get health care, who no longer need to do that. Why we need disabled people and people who would prefer to be home raising a family to instead be crammed into the work force is beyond me. [Email to Media Matters, 10/27/10]

Factcheck.org: “Reduction In Supply Of Labor” Is “Not The Same As A Reduction In The Supply Of Jobs.” FactCheck.org rejected Republicans' claim that health care reform is a “job-killing” law, stating that “Experts predict the health care law will have little effect on employment.” FactCheck.org further stated that the Republicans' claim “badly misrepresents what CBO actually said”:

To support its claim, the GOP report first cites the nonpartisan Congressional Budget Office -- but the report badly misrepresents what CBO actually said.

House GOP Leadership, Jan. 6: The health care law will cause significant job losses for the U.S. economy: the Congressional Budget Office has determined that the law will reduce the “amount of labor used in the economy by ... roughly half a percent...,” an estimate that adds up to roughly 650,000 jobs lost.

In fact, CBO did not predict a 650,000 job loss. The Republican report cites a CBO report from August, which actually said that the economy will use less labor primarily because many people will choose to work less, or retire early, as a result of the new law. (See Box 2.1, pages 48 and 49.) What CBO projects is mostly a reduction in the supply of labor, which is not the same as a reduction in the supply of jobs. [Factcheck.org, 1/7/11]

Politifact: "A Person Who Voluntarily Chooses To Work Less Is Not Having Their Job 'Killed.'" Evaluating the claim that the health care reform law is a “job killer”, Politifact found the claim to be “False,” and noted that the CBO report was being distorted:

Basically, the CBO is saying that some people right now are working mostly to keep their health insurance. Once they have other options -- to enroll in Medicaid, or to qualify for tax breaks to buy insurance from a health exchange -- they might choose to work less. The CBO describes this as a “small segment” of the population. And, because the CBO is describing reduced hours rather than lost jobs, it never uses the 650,000 number that the Republican document cites. The Republican extrapolated that number from the CBO's estimate of one-half percent of the labor supply. Finally, we should point out that a person who voluntarily chooses to work less is not having their job “killed” by federal legislation. [Politifact, 1/20/11]

Conservative Media: “CBO Admits Health Care Law Will Kill” 800,000 Jobs

Glenn Beck: “According To The CBO” Health Care Reform “Will Create 800,000 New Positions In The Unemployment Line.” On the February 11 edition of his radio show, Glenn Beck stated: “According to the CBO, the job creating health care bill will create 800,000 new positions in the unemployment line.” [Premiere Radio Networks, The Glenn Beck Program, 2/11/10]

The Blaze: “800,000 Jobs Gone.” Glenn Beck's website The Blaze posted video of Elmendorf's testimony under the headline: “800,000 Jobs Gone: CBO Admits Health Care Law Will Kill Jobs.” [The Blaze, 2/10/11]

National Review Online: “Job Killing.” In a blog post titled, “Job Killing,” National Review Online's Yuval Levin cited Elmendorf's testimony and stated: “That's 800,000 fewer jobs in ten years than we would have had without the law, even if you accept all the dubious assumptions that CBO was required to accept about future spending and taxes under the law." [National Review Online, 2/10/11]

Hot Air: “ObamaCare Will Crush 800,000 Jobs Into Nonexistence”. In an article titled, “Video: CBO admits ObamaCare will kill 800,000 jobs”, Hot Air's Ed Morrissey stated:

Oh, sorry; that headline isn't really a New Tone entry. What shall we say, then? ObamaCare will crush 800,000 jobs into nonexistence? It will give 800,000 jobs a hug that, er, chokes the life out of them. Let's take a cue from Mom and Dad after the dog disappeared -- ObamaCare will send 800,000 to a nice farm where they can run free all day long and chase rabbits. [Hot Air, 2/10/11]

The Weekly Standard: Obamacare Will “Reduce The Number Of Jobs In The Labor Market By An Estimated 800,000.” A post by Jeffrey Anderson on The Weekly Standard's blog stated: “Testifying today before the House Budget Committee, Congressional Budget Office (CBO) Director Doug Elmendorf confirmed that Obamacare is expected to reduce the number of jobs in the labor market by an estimated 800,000.” [The Weekly Standard, 2/10/11]

Fox Nation: “CBO Director: Obama Health Law Will Cost 800,000 Jobs.” Linking to The Weekly Standard, Fox Nation claimed:

[Fox Nation, 2/10/11]

Jim Hoft: “Obamacare” “Will Cost 800,000 Jobs.” Also linking to the faulty Weekly Standard report, Jim Hoft wrote: “Not only will Obamacare impose $500 billion in new taxes on American taxpayers... Not only will it actually cost more than $2.3 trillion in ten years... It will cost 800,000 jobs, too.” [Gateway Pundit, 2/11/11]