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ObamaCare: ‘Liberating’ the Workers

Posted By Arnold Ahlert On February 6, 2014 @ 12:39 am In Daily Mailer,FrontPage | 20 Comments

On Tuesday, a report by the Congressional Budget Office (CBO) revealed that ObamaCare will have a “substantially larger” impact on the job market than the originally anticipated reduction of 800,000 full-time workers. Instead, the CBO predicts that the law will reduce the workforce by the equivalent of 2.3 million full-time jobs by 2021, and 2.5 million over the next decade. Most people would consider that bad news. Yet according to media organizations that have devolved into little more than Obama administration cheerleaders, most people are wrong. In short, for an American left working overtime to save the ongoing disaster known as ObamaCare, bad news is good news.

Unsurprisingly, the New York Times is leading the charge, characterizing the more than tripling in the reduction of workforce participation as “liberating.” They contend ObamaCare “will free people, young and old, to pursue careers or retirement without having to worry about health coverage. Workers can seek positions they are most qualified for and will no longer need to feel locked into a job they don’t like because they need insurance for themselves or their families. It is hard to view this as any kind of disaster.”

The LA Times, offers a different spin, saying that “the CBO estimates that on balance, the ACA will increase aggregate demand for goods and services, in part by relieving lower-income people of the burden of health insurance or healthcare expenses, so they can increase their spending on other things. In turn, that will ‘boost demand for labor,’ especially in the near term, while the economy remains slack.”

CBS News anchor Scott Pelley contended the CBO report was “both surprising and widely misunderstood,” and that reduction in labor aren’t “necessarily jobs being lost. They’re also workers choosing to work less.” ABC’s Jonathan Karl also played up the good news angle, noting that people “can qualify for subsidized health care without a full-time job. And again, others will actually find it’s just not worth it to work full-time.” NBC’s Brian Williams noted the reduction in jobs or working hours, but insisted that “the White House is cautioning, for its part, that those departures are more a result of workers’ flexibility to leave their jobs and still have health insurance.”

White House Press Secretary Jay Carney went much further than that. In a released statement, he insisted that “individuals will be empowered to make choices about their own lives and livelihoods,” and that they “would have the opportunity to pursue their dreams.”

Senate Majority leader Harry Reid (D-NV) chimed in as well, claiming the CBO report “rightfully says, that people shouldn’t have job lock. If they–we live in a country where there should be free agency. People can do what they want,” he told reporters.

If all of this “liberation” has a familiar ring, it’s because Nancy Pelosi (D-CA) said virtually the same thing four years ago. She spoke about musicians and other creative types who could quit their jobs and focus on developing their talents. “We see it as an entrepreneurial bill, a bill that says to someone, if you want to be creative and be a musician or whatever, you can leave your work, focus on your talent, your skill, your passion, your aspirations because you will have health care,” Pelosi declared at the time.

Yet who, exactly, is being liberated? As the New York Times explains, one of the driving forces behind this newfound freedom is “the availability of subsidies to help pay the premiums associated with ObamaCare.” The LA Times is less specific, contending that “burden” of ObamaCare’s costs will be relieved.

In reality such subsidies and relieved burdens amount to nothing more than cost shifting. That means millions of Americans will indeed be bound to their jobs to pay for the subsidies and burdens of other Americans. Adding insult to injury, in Nancy Pelosi’s universe, much of those costs will apparently be borne by those less artistically inclined and/or creative.

Unfortunately, that’s only half the story. Because the aforementioned premium subsidies are reduced or disappear as workers reach certain levels of compensation, ObamaCare provides a massive disincentive to work more, or even work at all. “If those subsidies are phased out with rising income in order to limit their total costs, the phaseout effectively raises people’s marginal tax rates thus discouraging work,” the report states. The CBO report also addresses the possibility that ObamaCare subsidies might need higher levels of taxation to finance them, dealing another blow to the labor market. “If the subsidies are financed at least in part by higher taxes, those taxes will further discourage work or create other economic distortions, depending on how the taxes are designed.”

Thus, it should come as no surprise that CBO Director Douglas Elmendorf testified yesterday before Congress that ObamaCare “creates a disincentive for people to work,” in response to a question asked by House Budget Committee Chairman Paul Ryan (R-WI). No doubt in response to Democrat and White House criticism that Republicans were mischaracterizing the findings of the report, Ryan affirmed that the CBO did not say people would be laid off, only that more and more of them would choose not to work. Ryan then noted that a lower labor supply lowers economic growth. Elmendorf agreed, but insisted that premium subsidies would improve the lives of lower-income people, and that they would be “better off” as a result.

The idea that people are “better off” due to increased dependency on government is the essence of progressivism. Gene Sperling, Obama’s top economic-policy adviser, inadvertently added fuel to that particular fire. “What this report said is a rather obvious point, which is that as people have greater access to healthcare, there is going to be some two-parent families where someone says I’m going to work a little less because we can get healthcare and I’m going spend time raising my children,” he contended. “There is going to be somebody out there who because they can afford healthcare has wanted to retire and may retire earlier. This is about giving Americans more choices.”

Wrong. This about giving some Americans more choices at the expense of other Americans who are being forced to underwrite their fellow Americans’ insurance subsidies. As the CBO report mentions, if such underwriting comes in the form of increased taxes, there will be two parent families forced to work a little more and see their children a little less. Some Americans will be forced to retire later, rather than sooner.

Two items in the report tilted in the Democrats favor. There was a “broad and persistent” slowdown in Medicare costs. And through 2024, the government will collect $8 billion more from the “risk corridor” provision — whereby insurers with healthier and more profitable risk pools subsidize those with sicker, less profitable ones — than it will be required to pay out.

Democrat claim a third statistic, that premium costs will be 15 percent cheaper than projected for 2014, works out in their favor as well. But the stat is misleading because insurance companies did many things to make their plans cheap, such as narrowing networks and selling policies with high deductibles. That may also be the case next year, when the risk corridors that remain in place until 2017 allow the insurance companies to once again low-ball their prices before there 2014 election. What happens to premiums when those risk corridors disappear is impossible to say, but more than likely, costs will soar without a government net below the insurer tightrope. If projections of those cost increases appear while our “make law up as I go along” president remains in power, bet on a unilateral extension of the risk corridor provision. One that will rapidly morph from a profit, to the taxpayer bailout Republicans envision.

The little bit of good news was more than offset by the reality that there will still be 31 million Americans uninsured in 2024, despite almost $2 trillion in new expenditures. The report also states that “between 6 million and 7 million fewer people will have employment-based insurance coverage each year from 2016 through 2024 than would be the case in the absence of the ACA.” But the most troubling statistic once again concerns government dependency. The federal government will be subsidizing five out of six million policies in 2014, and a whopping 19 million out of 24 million in 2024.

The Obama administration, Democrats and their media allies apparently believe such dependency is, as the New York Times puts it, “liberating.” Perhaps it is, as long as one ignores the reality that, more often than not, it is achieved by kicking one’s dignity, decency and ambition to the curb.

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