CBO Director: ObamaCare Will Cost Economy 800,000 Jobs
Testifying before Chairman Paul Ryan's House Budget Committee yesterday, CBO Director Doug Elmendorf estimated that ObamaCare will reduce employment by 800,000 jobs. Here's an excerpt of the transcript (via Weekly Standard):
Chairman [Paul] Ryan: “[I]t’s been argued...that the new health care law will create jobs and increase labor force participation. But if I recall from your analysis, it was quite the opposite. Is that not the case?”
Director [Douglas] Elmendorf: “Yes.”...
[…]
Rep. [John] Campbell: Thank you, Mr. Chairman, we'll -- and Dr. Elmendorf -- and we'll continue this conversation right now. First on health care, before I get to -- before I get to broader issues, you just mentioned that you believe -- or that in your estimate, that the health care law would reduce the labor used in the economy by about 1/2 of 1 percent, given that, I believe you say, there's 160 million full-time people working in '20-'21. That means that, in your estimation, the health care law would reduce employment by 800,000 in '20-'21. Is that correct?
Director Elmendorf: Yes. The way I would put it is that we do estimate, as you said, that...employment will be about 160 million by the end of the decade. Half a percent of that is 800,000.
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Re: CBO Director: ObamaCare Will Cost Economy 800,000 Jobs
Worth thinking about: each worker producers about $100,000 of output by 2020 (currently around $90k). So for federal health care reform we are sacrificing about 800000x$100000 = $80,000,000,000 or $80 billion of lost output, or about 0.4% off the growth of GDP, every year. This would be a remarkable slowdown of our long-run growth rate.
Re: CBO Director: ObamaCare Will Cost Economy 800,000 Jobs
King Banaian, Guest Contributor: Worth thinking about: each worker producers about $100,000 of output by 2020 (currently around $90k). So for federal health care reform we are sacrificing about 800000x$100000 = $80,000,000,000 or $80 billion of lost output, or about 0.4% off the growth of GDP, every year. This would be a remarkable slowdown of our long-run growth rate. · Feb 11 at 12:52pm
King, welcome! When you frame it like you have above, the economic consequences sound much more severe than they do in the exchange between Elmendorf and Campbell. After all, "half of one percent" sounds rather less frightening than $80 billion of lost output, or a loss of 0.4% off the growth of GDP each year.
And since you've dropped in already, I should get an introduction of you up on our main feed ASAP!
May '10
Re: CBO Director: ObamaCare Will Cost Economy 800,000 Jobs
Washington Post takes on the Weekly Standard's spin here: "Elemendorf never said 800,000 jobs would be destroyed and he certainly did not mean to suggest that. Given that Republicans have routinely faulted the CBO for its estimates and assumptions on the health care bill, they should be ashamed of immediately embracing this particular aspect of the CBO's analysis."