Director of the nonpartisan Congressional Budget Officer, Douglas Elmendorf, told a House committee Wednesday that Obamacare creates a “disincentive for people to work" and yet will reduce unemployment.
Elmendorf testified before the House Budget Committee, after the CBO released a detailed report claiming millions of workers could work fewer hours or stop working because of benefits under the Affordable Care Act.
Elmendorf said the subsidies provided by Obamacare make low-income people “better off.”
"The act creates a disincentive for people to work," Elmendorf said, under questioning from Committee Chairman Paul Ryan, R-Wis.
“So who are these workers?” Ryan asked. “I mean, I know this is the statistical realm, but who are the people typically in this category? What kind of worker – from an income-scale side – are being affected by this?”
“The effect is principally on the labor supply of lower-wage workers,” Elmendorf replied.
Ryan said workers wouldn’t have to be laid off to receive benefits; they could simply choose not to work.
"As a result ... that [lower] labor supply lowers economic growth," Ryan said.
"Yes, that's right,” Elmendorf agreed.
Ryan noted that means fewer people will be “joining the middle class.”
"It's adding insult to injury. As the welfare state expands, the incentive to work declines -- meaning grow the government, you shrink the economy."
Republican Rep. John Kline of Minnesota, chairman of the House Education and the Workforce Committee, said the report is evidence that "the president's health care law is destroying full-time jobs.”
"This fatally flawed health care scheme is wreaking havoc on working families nationwide," Kline added.
Rep. Chris Van Hollen, D-Md., said the CBO report is being widely misinterpreted.
Van Hollen said the ACA will “boost overall demand for goods and services” which will “boost demand for labor over the next few years.”
“When you boost demand for labor in this kind of economy, you actually reduce the unemployment rate, because those people who are looking for work can find more work, right?” he asked Elmendorf.
“Yes, that’s right,” Elmendorf responded.
“I just want it to be very clear,” Van Hollen said, “that the director of the Congressional Budget Office says for this year and the next couple years, actually, it will help reduce unemployment. More people who are looking for work will find work as a result of the Affordable Care Act.”
Van Hollen criticized the media for portraying Obamacare as a jobs killer.
“I think it’s really important that that information gets out there,” he later said, “because as the media has confessed, they bought hook, line and sinker some of the talking points from our Republican colleagues. And unfortunately misrepresentation go around the world three times before the truth begins to catch up.”