The Affordable Care Act will shrink the workforce by the equivalent of 2 million full-time workers by 2017, according to a nonpartisan report, but Democrats on Wednesday stressed the fact that it will not increase unemployment -- in fact, the health law is expected to grow the economy and boost the demand for labor over the next few years.
“I just want it to be very clear that the director of the Congressional Budget Office says for this year and the next couple years, actually, it will help reduce unemployment,” Rep. Chris Van Hollen, D-Md., the top Democrat on the House Budget Committee, said in a hearing. “More people who are looking for work will find work as a result of the Affordable Care Act.”
Congressional Budget Office chief Doug Elmendorf confirmed that over a 10-year window, the Affordable Care Act is expected to reduce national deficits and consequently lead to stronger growth.
Van Hollen read from the CBO report released Tuesday, which says, “On balance, CBO estimates that the ACA will boost overall demand for goods and services over the next few
years... The net increase in demand for goods and services will in turn boost demand for labor over the next few years.”
“So when you boost demand for labor in this kind of economy, you actually reduce the unemployment rate because those people who were looking for work can find more work, right?” Van Hollen asked. Elmendorf confirmed, “Yes, that’s right.”
The CBO’s report prompted Republicans on Tuesday to slam the Affordable Care Act’s impact on the economy, claiming that reducing the workforce will have negative consequences.
Committee Chairman Paul Ryan, R-Wis., acknowledged Wednesday that the report does not predict that two million Americans will be laid off -- in fact, people will consider their options and choose to work less. However, he worried that having a smaller workforce would have negative consequences.
“A big part of this is something we already knew, which is boomers are retiring, so we're effectively basically doubling the amount of retirees we have in the country over a generation, and far fewer people are following them into the workforce,” he said. Furthermore, he added, “What this is doing is it's adding insult to injury. You're saying because of government policies, as the welfare state expands, the incentive to work declines, meaning grow the government and you shrink the economy.”
White House spokesman Jay Carney on Wednesday also defended the health law’s economic impact, describing the sort of people who will choose not to work.
“It will allow people who are locked in jobs because they desperately needed health insurance and couldn't get it any other way, to have the peace of mind of being able to get affordable quality health insurance through the exchanges instead,” he said. “And to start a business, perhaps, or to stay at home and take care of kids instead of having to work.”