Washington, D.C. – Today, U.S. Senator Jerry Moran (R-Kan.), Ranking Member of the Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies, responded to Congressional Budget Office (CBO) Director Douglas Elmendorf’s testimony before the House Budget Committee where he reiterated the nonpartisan CBO’s findings that the Affordable Care Act (ACA) will create a “disincentive” for people to work. According to the CBO, the ACA will reduce the number of full-time workers by more than 2 million in coming years. Additionally, the CBO projects that employers will cut hours, hire fewer workers and lower wages for new jobs in response to ACA penalties.
“Well before the Affordable Care Act was voted into law, I argued that Obamacare was fundamentally flawed and would do significant harm to the American economy,” Sen. Moran said. “Now, the nonpartisan Congressional Budget Office has confirmed my long-standing concerns. In fact, the updated data tells us that the negative impact on the labor market and economic growth is substantially larger than initially predicted.
“Every American should be concerned by these findings,” Sen. Moran continued. “Federal policies should promote job creation and economic growth, not create conditions that facilitate layoffs and reduce working hours for Americans. The Obama Administration and Congressional Democrats have imposed new tax burdens and regulations that increase the cost of health care and restrict economic growth. This is bad policy, especially at a time when many Americans are already working so hard to survive in a tough economy. This law is unworkable and is proving to be harmful to the very people it aimed to help.”
In a report released yesterday, the CBO found that the health care law would lead some workers, particularly those with lower incomes, to limit their hours to avoid losing federal subsidies that Obamacare provides to help pay for health insurance and other health care costs. The CBO estimates the decrease in hours worked “translates to a reduction in full-time-equivalent employment of about 2.0 million in 2017, rising to about 2.5 million in 2024, compared with what would have occurred in the absence of the ACA.” The CBO earlier predicted 800,000 fewer fulltime jobs by 2021.
“By providing heavily subsidized health insurance to people with very low income and then lowering those subsidies as their income goes up, the act created a disincentive for people to work relative to what would have been the case in absence of the act,” CBO Director Elmendorf said while testifying before the House Budget Committee on the CBO’s latest economic outlook.
Starting next year, the ACA’s employer mandate will impose a penalty on businesses that employ 50 or more full-time workers but do not offer insurance. CBO’s analysis also echoes the concerns of numerous job creating businesses in Kansas and across the country who say the costs of this mandate will decrease their business’ demand for workers – resulting in wage cuts and hour reductions for their employees.
In July 2013, President Obama delayed the employer mandate by one year – an admission from the Administration that the mandate was going to do great harm to businesses and economic growth. Sen. Moran offered an amendment in the Senate Appropriations health subcommittee to codify into law the President’s one-year delay by executive order, but his amendment failed on a party-line vote.