Scandal Sheet

The shape of Obamacare’s economy

This article originally appeared on heartland.org.

The White House just undermined everyone who was speaking from its talking points sheet over the past week on the CBO analysis by reacting as if all the criticisms of Obamacare’s effect on labor markets are true. [http://vlt.tc/1a64″>The second delay of the employer mandate is obviously driven by politics, not policy:

For the second time in a year, the Obama administration is giving certain employers extra time before they must offer health insurance to almost all their full-time workers. Under new rules announced Monday by Treasury Department officials, employers with 50 to 99 workers will be given until 2016 – two years longer than originally envisioned under the Affordable Care Act – before they risk a federal penalty for not complying. Companies with 100 workers or more are getting a different kind of one-year grace period. Instead of being required in 2015 to offer coverage to 95 percent of full-time workers, these bigger employers can avoid a fine by offering insurance to 70 percent of them next year …

As word of the delays spread Monday, many across the ideological spectrum viewed them as an effort by the White House to defuse another health-care controversy before the fall midterm elections. The new postponements won over part, but not all, of the business community. And they caught consumer advocates, usually reliable White House allies, by surprise, particularly because administration officials had already announced in July that the employer requirements would be postponed from this year until 2015. … A senior administration official, who briefed reporters on the proposal on the condition of anonymity shortly before the rule became public, said the Treasury Department decided to allow medium-size businesses more latitude because they “need a little more time to adjust to providing coverage.”

More here on the decision. The important thing to recognize here is that this is not a “failure of implementation” or a “rollout problem” or anything like that. It’s an example of Obamacare working exactly as it’s supposed to – see Robert VerBruggen’s analysis hereThe CBO’s justification for its analysis makes this even more clear:

Here’s a useful way to think about the choice of wording: When firms do not have enough business and decide to lay people off, the people who are laid off are generally worse off and are therefore unhappy about what is happening. As a result, other people express their sympathy to those people for having “lost their jobs” due to forces beyond their control. In contrast, when the labor market is strong and people decide on their own to retire, to leave work to take care of their families, or to cut back on their hours to pursue other interests, those people presumably think they are better off (or they would not be making the voluntary choices they are making). As a result, other people are generally happy for them and do not describe them as having “lost their jobs.”

So to be clear: In the Obamacare economy, people will have less money, fewer people will be working, the ones who are will be working for lower wages, and the economy will have less growth. But hey, there’s always Medicaid. No wonder Obamacare fatigue is setting in even among its fans.

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