For some Americans, Obamacare’s subsidies will “reduce incentives to work,” the Congressional Budget Office reported on Tuesday.
That’s partly because as incomes rise, Obamacare’s subsidies will decline — “thus making work less attractive” for people on the lower end of the wage scale. “As a result, some people will choose not to work or will work less — thus substituting other activities for work,” the report said.
The Obama White House — trying to turn a negative into a positive — has seized on the word “choice.”
“This is a choice on the part of workers,” Jason Furman, the chairman of the President’s Council of Economic Advisers, told reporters at the White House on Tuesday.
According to Furman, the CBO reported “that workers will choose (to) supply less labor.” It’s not that businesses are cutting jobs, he insisted. It’s that workers will choose to work less, or not at all. (This puts a greater burden on full-time workers, whose taxes subsidize those who choose to work less.)
“So to some degree this might be somebody who used to work 60 hours because they needed health insurance, and that was the only job that offered it, and now they can get a different job at 35 hours that doesn’t offer health insurance, but they’re getting it through this (Obamacare exchanges) and they’re switching from one to the other, and that’s a better choice for that person, and this has given them that option that they didn’t used to have,” Furman said.
CBO said Obamacare’s largest impact on labor markets will probably happen after 2016, once the law’s major provisions have taken full effect.
The report (Appendix C) says: “CBO estimates that the ACA will reduce the total number of hours worked, on net, by about 1.5 percent to 2.0 percent during the period from 2017 to 2024, almost entirely because workers will choose to supply less labor—given the new taxes and other incentives they will face and the financial benefits some will receive.
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