Why It’s A Good Thing If Some People Stop Working Under Obamacare

President Barack Obama announces he will nominate Maria Contreras-Sweet, founder and board chairman of a Latino-owned community bank in Los Angeles, to head the Small Business Administration (SBA), Wednesday, Jan. 15... President Barack Obama announces he will nominate Maria Contreras-Sweet, founder and board chairman of a Latino-owned community bank in Los Angeles, to head the Small Business Administration (SBA), Wednesday, Jan. 15, 2014, in the South Court Auditorium of the Eisenhower Executive Office Building on the White House complex in Washington. (AP Photo/Jacquelyn Martin) MORE LESS
Start your day with TPM.
Sign up for the Morning Memo newsletter

Implicit in the GOP’s offensive since the Congressional Budget Office said Tuesday that millions of Americans would stop working or cut back their hours under Obamacare is that those people are, well, lazy. Maybe it’s not their fault, maybe the nanny government is lulling them into complacence. But whatever the reason, it’s a bad thing.

House Budget Chair Paul Ryan (R-WI) said as much at the beginning of Wednesday’s hearing on the CBO report.

The law encourages Americans “not to get on the ladder of life, to begin working, getting the dignity of work, getting more opportunities, rising the income, joining the middle class,” he said. “This means fewer people will do that.”

But, as usual, the real story is more complicated than that. People choosing to work less could actually be a good thing, congressional Democrats have since suggested. It just depends on why they’re making that choice.

Rep. Tim Ryan (D-OH) took up that line of questioning at the end of Wednesday’s budget committee hearing with CBO director Doug Elmendorf.

“So who would this be?” Ryan asked.

“I think a number of groups of people could be affected in that sense, but I would not try to break this down,” Elmendorf said. He repeated the last point a number of times during the five-minute back-and-forth: There are likely to be people who fall within these various scenarios, but figuring out how many people fall into the individual categories is currently impossible.

“It could be spouses, but they could be primary earners who decide to scale back their hours and may not leave the work force altogether,” he said. “It can be older people that decided to retire earlier than they would have been able to otherwise and it also includes younger people.”

“So we are talking about a situation where there is a husband and wife and they are both working and they have a baby and one of them decides to not work or to reduce their hours in order to stay home with the baby,” Ryan said. “They would fall into this category.”

“Yes, Congressman,” Elmendorf said.

Ryan then turned to the possibility that some people will choose to retire early because they no longer need a job to gain health coverage. CBO had raised that particular possibility in its own report, and numerous economists told TPM that those people are likely to be beneficiaries of Obamacare, but their exit from the labor market will contribute to the lost hours that CBO reported.

“Some people in their late 50s and early 60s would like to retire because they have health issues but have kept working for the health benefits,” Larry Levitt, vice president at the non-partisan Kaiser Family Foundation, told TPM. “Some of them can now retire because they can’t be discriminated against for having a pre-existing condition and may get help paying their premiums.”

Ryan then gave the example of somebody who currently works three jobs and drops one because of the additional financial security provided by Obamacare or somebody who cuts their working hours to take care of a sick parent.

“That would fall into this analysis as well,” Elmendorf said.

The White House and congressional Democrats used this argument to push against Republican criticism. Separating health coverage from employment is a feature of the law, not a bug, they said. “Because of this law, individuals will be empowered to make choices about their own lives and livelihoods, like retiring on time rather than working into their elderly years or choosing to spend more time with their families,” White House Press Secretary Jay Carney said.

At Wednesday’s hearing, Ryan acknowledged that Obamacare would likely encourage some people to work less because they simply don’t want to work. “There are always going to be people like that,” he said.

But he concluded by using the above examples to rebut the implicit criticism forwarded by Ryan and others about the law’s deleterious effect on America’s work ethic.

“There’s been an undertone of disrespect in this hearing as I sat through it about people who just don’t want to go to work,” Ryan said. “So I appreciate your being very clear that this isn’t about 2 million jobs. This is about average people having an opportunity to reduce the burden on their own family.”

Latest DC
Masthead Masthead
Founder & Editor-in-Chief:
Executive Editor:
Managing Editor:
Associate Editor:
Editor at Large:
General Counsel:
Head of Product:
Director of Technology:
Associate Publisher:
Front End Developer:
Senior Designer: