The Congressional Budget Office is supposed to be an independent analyst — one of the few nonpartisan entities still operating in our national politics. So, when the CBO comes out with a report, it possesses a certain inherent credibility . . . and the partisans who read the report as favoring their positions will tout the CBO’s nonpartisan status and try to use the report as sword and shield to further their partisan objectives.
Recently the CBO came out with a report estimating the impact of the Affordable Care Act on the job market, and both sides of the debate predictably tried to use the report to support their positions. The CBO report estimated that, by 2017, American participation in the workforce will drop by the equivalent of 2 million full-time jobs and that there will be a slower rate of growth in compensation and employment over the next decade.
Some Republicans leaped on the report to buttress their arguments that “Obamacare” is costing jobs. Democrats responded, however, that the CBO doesn’t really forecast an impact on the supply of jobs, but rather on the demand for work hours — a matter of individual choice. The CBO report predicts that the health law would cause some workers to voluntarily forgo working more hours in order to protect the subsidies that they will receive from the federal government to pay for health insurance and related costs. Of course, conservatives bemoan the CBO’s conclusion that a federal law will encourage able-bodied people to sit at home and receive subsidies rather than go out, work, and earn money on their own.
It’s hard for me to get worked up about CBO reports about the impact of the Affordable Care Act, because I just don’t believe they have any credibility. The CBO earlier forecast that the Affordable Care Act would produce a net loss of the equivalent of 800,000 full-time jobs by 2021, now it says a loss of the equivalent of 2.5 million full-time jobs by 2024. What’s changed? Who knows — but why should the CBO’s current estimate be any more valid than their earlier estimate?
Recently a member of Congress asked the CBO whether it ever goes back and checks on the eventual accuracy of its estimates. The CBO website contains a response where the CBO explained why that was impossible in many cases, looks at a few instances where a comparison could be made, and finds that the CBO estimates were reasonably accurate in some instances and not in others. Trying to predict the impact of a law like the Affordable Care Act on the job market, however, is a far more daunting assignment than, for example, trying to estimate the impact of the 2009 “stimulus” legislation on federal spending and revenues. There are simply too many moving parts — individual decisions by millions of large companies and small businesses, individual decisions by millions of workers, the impact of outsourcing and overseas job markets, and decisions by federal regulators, among countless others — to make the “Obamacare” estimates meaningful.
So, let the CBO make its future forecasts and let the partisans on each side pimp the CBO conclusions that they think support their positions. I’d rather focus on the tangible reality of how the Affordable Care Act is performing right now.