In the Two Minute Drill, we explain complex issues in politics in 250 words or less (roughly the amount of words it takes the average adult two minutes to read on a monitor). Politics just isn’t always that complicated. Without the fluff and partisan bias, even the most complex of our political differences can be explained succinctly. This week: the CBO projected the Affordable Care Act would cut the labor force; the media botched the story.
On Tuesday, the Congressional Budget Office (CBO) reported that the Affordable Care Act (ACA) will reduce workforce participation by the equivalent of 2 million full-time jobs in 2017, and the equivalent of 2.5 million jobs in 2024. The report represented a significant revision by the CBO, which earlier predicted 800,000 fewer full-time jobs by 2021.
The CBO report prompted Republicans to paint the law as bad medicine for the U.S, economy. “Under Obamacare, millions of hardworking Americans will lose their jobs and those who keep them will see their hours and wages reduced,” House Majority Leader Eric Cantor (R-Va.) said via Twitter.
The media portrayed the CBO report as lending support to the Republican charge that the ACA is a “job-killing” nightmare. The Hill ran a story with the following headline: “O-Care will cost 2.5M workers by 2024.” National Review declared: “The CBO Just Nuked Obamacare.” And Politico contended that the CBO report “will put the White House, and especially red-state Democrats, in an even more awkward position heading into November.”
But what, exactly, did the CBO report say?
The Explanation (250 or Bust)
Per the CBO: “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 businesses’ demand for labor.” In other words, the CBO predicted that, with the increased availability and affordability of insurance coverage, more people will choose not to work, and others will choose to work fewer hours than they might have otherwise, to obtain employer-provided insurance.
Thus, the CBO report made it abundantly clear that the reduction of the labor force would largely be the result of Americans having more choices for how they get health coverage – not the result of businesses hiring less. Simply put, any media story (or political attack ad, for that matter) that contends that 2 million jobs had been killed by the ACA is telling a lie.
That is not to say, however, that all of the effects on the economy will be positive. For example, while Josh Barro lauded the way the law will make it “easier for people to retire before age 65, quit a full-time job to start a business, or shift to part-time work and spend more time raising children or attending school,” he pointed out the perverse incentive that might drive workers to choose to reduce their hours in order to maintain an income low enough to qualify for subsidies.
Nevertheless, Tuesday’s eruption reveals glaring weaknesses in the media that contribute to, and fuel, public confusion.
Word Count: 247
The Five Most Interesting Things We’ve Read This Week
Here are the five most interesting articles (both political and non-political) we’ve read this week:
- Art begets art. “For those who didn’t know him personally (I never met him), the horror is inseparable from art – the love of his performances, the acknowledgment that there’s nothing more of them besides what’s in the can, and the sense that the torment and the talent are inseparable.” Richard Brody in The New Yorker: Philip Seymour Hoffman’s Genius.
- “He’s worried about a co-worker discovering him. He is worried about blackmail. He is worried, and he does not know what else to do. He wishes he could fight, but he doesn’t know how. Sign a petition? March in a parade?” From GQ: What It’s Like to Be Gay in Putin’s Russia.
- “The HSBC case went miles beyond the usual paper-pushing, keypad-punching sort-of crime, committed by geeks in ties, normally associated with Wall Street. In this case, the bank literally got away with murder – well, aiding and abetting it, anyway.” Matt Taibi in Rolling Stone: How HSBC hooked up with drug traffickers and terrorists. And got away with it.
- “Most commercial orange juice is so heavily processed that it would be undrinkable if not for the addition of something called flavor packs.” From The Atlantic: Misunderstanding Orange Juice as a Health Drink.
- “Whatever happens on the ice and snow of Sochi in the next couple of weeks, one thing is certain: this Winter Olympics is the greatest financial boondoggle in the history of the Games.” James Surowiecki in The New Yorker: The Sochi Effect.
And in case you missed it, check out The Weekly Column. This past week explored the constitutionality of executive orders. Read the Column – Executive Orders: The Power of the President’s Pen.