CBO Predicts Obamacare Will Cause 2-Million-Job Blow to Labor Force

| by Allison Geller

The nonpartisan Congressional Budget Office yesterday released a report stating that the Affordable Care Act will result in the cutting of hours in the American labor force to the equivalent of 2 million jobs.

The CBO report found that the Affordable Care Act provides disincentives for workers, encouraging them to cut their hours so they can keep receiving federal healthcare subsidies.

Lower-income workers will be especially affected. The subsidies effectively represent “an implicit tax on additional work,” according to CBO Director Douglas Elmendorf.

In general, the country can expect a slower rate of employment and salary growth in the next decade, the CBO reported.

The worst of the impact is expected by 2017, when most of the ACA provisions will be in effect. The healthcare act would reduce work hours by the equivalent of 2.5 million jobs by 2024, the report said.

Republicans were quick to use the report as further evidence against Obama’s landmark healthcare legislation, Reuters reported.

"The president's healthcare law creates uncertainty for small businesses, hurts take-home pay, and makes it harder to invest in new workers. The middle class is getting squeezed in this economy, and this CBO report confirms that Obamacare is making it worse," House of Representatives Speaker John Boehner said in a statement.

The White House denied the claims that the ACA would further distress the job market. Jason Furman, chair of the White House Council of Economic Advisers, said the report indicated an impact to labor supply, not demand, for employees.

“It's not that the businesses are cutting those jobs," said Furman.

Sources: Reuters, Washington Post