Rep. Michele Bachmann took part in her first presidential debate this week, and in addition to announcing she’ll run for the White House, she made this statement about the new health care law.
“This is a job killer,” she said. “The [Congressional Budget Office] has said that ‘Obamacare’ will kill 800,000 jobs.”
Bachmann’s claim contains some truth but leaves out some finer points that are worth exploring.
In August 2010, the CBO, Congress’s nonpartisan number cruncher, released its Budget and Economic Outlook. It included an assessment of how the new health care law would affect the labor market. According to the report, provisions in the new law would reduce the amount of labor by about 0.5 percent.
That amounts to about 800,000 out of the 160 million projected workers in 2021, said CBO director Douglas Elmendorf in testimony on Capitol Hill in February.
But does that mean that the health care will “kill” 800,000 jobs? Not necessarily.
First, the CBO makes clear that, while some employers may choose to hire fewer people as the result of penalties brought about by the new law, the law “will reduce the amount of labor used in the economy…primarily by reducing the amount of labor that workers choose to supply.”
However, a key assumption in the CBO analysis is that some people are only working to get benefits. And because the law offers new ways to get insurance that don’t involve working, the CBO foresees two outcomes:
– Some people may opt to work less.
– Or, some people will leave their jobs and get coverage through Medicaid, which was expanded to include low-income, childless adults, or with government subsidies through the health care exchanges.
Medicaid benefits and health care exchange subsidies are only available to lower income earners, so the CBO predicts that the government assistance will effectively discourage some people from working to keep their income levels low.
Bachmann is correct that the CBO has predicted approximately 800,000 people won’t work in 2021 as a result of the new health care law.
But she says those jobs will be “killed.” In fact, the CBO assumes that many if those people may not want to work because they can get health coverage without having a job.
Without providing the full context around the number, Bachmann’s statement is misleading.
Minnesota Public Radio News, GOP debate, June 13, 2011
The Congressional Budget Office, The Budget and Economic Outlook: An Update, August 2010
Politico, Health law to shrink workforce by 800,000, by J. Lester Feder and Kate Nocera, Feb. 10, 2011
CBO’s Analysis of the Major Health Care Legislation Enacted in March 2010, Statement of Douglas Elmendorf, Director, Congressional Budget Office, March 30, 2011
PolitiFact, Adam Hasner cites CBO, says health care law cuts 800,000, by Aaron Sharockman, June 8, 2011
The Washington Post, Fact Checker: Playing games with CBO testimony on jobs and the health-care law, By Glenn Kessler, Feb. 11, 2011