Commentary: Truth of CBO's Obamacare report
Today’s featured presentation is an Anatomy of a Washington Murder. It is an autopsy of Capitol crimes against the truth of the flawed Affordable Care Act, which most of us now call Obamacare. It reveals political deceptions, distortions, downright lies, skillful media manipulation, woeful media capitulation — and maybe even an analytic lapse.
Today’s case began with a Feb. 4 report on America’s budget and economic outlook for the next decade, almost 200 pages of analysis by the respected, nonpartisan Congressional Budget Office. Suddenly a dozing Washington was awakened by shrill Tweets and email blasts from Washington’s political right — gleefully making assertions that were factually wrong.
At 12:40 p.m., House Speaker John Boehner Tweeted: “Pres. Obama’s #hcr law expected to destroy 2.3 million jobs.” House Majority Leader Eric Cantor rushed out a press release declaring: “The CBO’s latest report confirms what Republicans have been saying for years now. Under Obamacare. Millions of hardworking Americans will lose their jobs and those who keep them will see their hours and wages reduced.”
In a media nanosecond, the 24/7 nonstop cable news channels were channeling the same message — with Fox News in the lead, of course. And around the country, Republicans rushed to repeat the attack lines. For years, as we now know, President Obama had made false promises that Americans could keep their insurance and doctors under his new plan. This seemed like the Grand Old Party’s payback moment.
But don’t think this was just maliciousness from the far right.
The New York Times, hardly a megaphone for conservative spin-masters, led the next day’s newspaper with an article that began by saying the CBO predicted the Affordable Care Act “would shrink the workforce by the equivalent of more than two million full-time positions.”
That seemed to support the Republican assertions and many newspapers reported it much the same way. Never mind that later, news media fact checkers unanimously showed the political attacks were wrong.
The Times’ article didn’t contain any direct quote from the CBO that supported its opening sentence. But its readers would have gotten a truer picture by reading this sentence, from the report’s page 117: “CBO estimates that the ACA will reduce the total number of hours worked, on net, by about 1.5 percent to 2 percent during the period from 2017 to 2024, almost entirely because workers will choose to supply less labor.”
Yes — “almost entirely,” the workforce losses would be because workers were finally freed to leave jobs that had been their family’s only source of health insurance. Now parents could opt out to raise young children; seniors could retire; a bored worker could start her or his own small business — and still have health insurance.
The CBO’s economists were shocked that their report triggered those political attacks. CBO’s widely respected director, Dr. Douglas Elmendorf, issued a new fact-sheet. At congressional hearings, he painstakingly repeated his down-the-middle explanations: employees wouldn’t be forced out, they’d be choosing to quit.
But as I read and listened to all that, it seemed a far more crucial reality wasn’t being mentioned. Since the departing workers had their jobs because employers needed their productivity, wouldn’t employers quickly replace them — probably with unemployed people who desperately wanted a job?
If so, with one person leaving the workforce and another entering it, that nets out at a zero loss to the workforce. Indeed, that’s a win-win for all sides.
Surprisingly, that assumption wasn’t calculated in detail in the CBO analysis. The closest the CBO came to it was on page 126:
“If changes in incentives lead some workers to reduce the amount of hours they want to work or to leave the labor force altogether, many unemployed workers will be available to take those jobs — so the effect on overall employment of reductions in the labor supply will be greatly dampened.”
As I understand it, the CBO actually believes my assumption may be correct — in ACA’s early years, at least, there may only be a workforce small reduction once workers become freed to make their own life choices. But later in the decade, CBO believes, economic realities of supply, rather than demand, may lead employers to not replace departing workers, allowing their workforce to shrink.
But that’s a crucial assumption the CBO needed to more fully explore — and more fully explain — in its report.