What the CBO report on Obamacare really found

Republicans erupted in applause today when the Congressional Budget Office released a new report on projected deficits and on the impact of the Affordable Care Act. They widely claimed the CBO report had found that Obamacare will cause the loss of over two million jobs.

That isn’t what the report found at all. And there’s a very simple way to prove it. But more on that in a moment.

Here is a sample of GOP reactions to the report. Mitch McConnell’s spokesman claimed that CBO had projected “a loss of at least two million jobs.” A spokesman for the NRCC insisted that “because of Obamacare, there will be 2 million less [sic] jobs in the economy.”

A statement from Senator Chuck Grassley claimed that the CBO had found that the law will “cause the loss of 2.5 million jobs.” Former Romney policy adviser Lanhee Chen claimed the CBO had estimated that Obamacare “will result in 2.5 million jobs lost.”

That’s not what the report says. Here is the key passage, on page 117:

Although CBO projects that total employment (and compensation) will increase over the coming decade, that increase will be smaller than it would have been in the absence of the aCA. The decline in full-time-equivalent employment stemming from the ACA will consist of some people not being employed at all and other people working fewer hours; however, CBO has not tried to quantify those two components of the overall effect. The estimated reduction stems almost entirely from a net decline in the amount of labor that workers choose to supply, rather than from a net drop in business’ demand for labor, so it will appear almost entirely as a reduction in labor force participation and in hours worked relative to what have occurred otherwise rather than as an increase in unemployment (that is, more workers seeking, but not finding jobs) or underemployment (such as part-time workers who would prefer to work more hours per week).

The CBO report actually says that the impact of the ACA will be “almost entirely” due to a decline in labor that “workers choose to supply.” It says explicitly that the ACA’s impact will not be felt as an “increase in unemployment” or “underemployment.”

Now, a few conservatives on twitter did seize on the report to make an argument about how the CBO report shows that the safety net act as a disincentive to work. Whether or not you agree with that argument, it at least exists within the parameters of what the CBO report actually said. The suggestion that Obamacare will cause over two million jobs to be lost does not. This is not a small distinction. It goes directly to the heart of one of the Republican arguments against the law — that it is a job killer, i.e., that its regulations strangle jobs.

Indeed, the response from many Republicans to the report suggests they are so wedded to their “Obamacare is a job killer” talking point that they will misrepresent what it actually says in order to continue making it. That’s not surprising, in a way. After all, the larger political context here is that claiming the safety net is a disincentive to work — again, whatever you think of the substance of that argument — is politically a hard case to make. Remember how Republicans moved away from arguing that unemployment benefits lull people into a state of dependency — Paul Ryan’s Hammock Theory of Poverty — and began arguing instead that the UI extension needed to be paid for?

As for the CBO report, there is a simple way to settle this argument. CBO director Douglas Elmendorf is set to testify before the House Budget Committee tomorrow. One committee lawmaker can ask him the following question: Is it true that your report found that Obamacare will result in over two million lost jobs?

And so, this doesn’t have to be a partisan argument. Tomorrow we can find out what the CBO’s own director has to say about it. There shouldn’t be any need for this to be represented by neutral news orgs as an unresolvable he-said-she-said standoff.


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