The nonpartisan Congressional Budget Office (CBO) reported in Aug. 2010 that Obamacare would increase joblessness. But a new report shows the CBO greatly underestimated both how many jobs would be lost and the reason behind losing them.
The 2010 CBO report showed that the healthcare law would result in 800,000 fewer jobs by 2021.
The report said this Obamacare-prompted joblessness would be caused by employers' response to Obamacare penalties. Employers would cut hours, hire fewer workers, and lower wages in order to avoid penalties for failing to offer insurance to employees who work more than 30 hours per week.
But here's what the CBO is saying now…
Why Obamacare Joblessness Is Getting Uglier
On Tuesday, the CBO published a follow-up analysis that revised its projection to 2.5 million fewer full-time jobs by 2023.
The additional 1.7 million job losses will stem not from employer actions, but from employees incentivized by Obamacare to voluntarily quit their jobs or reduce their hours.
For instance, some will choose to keep Medicaid rather than take a job at reduced wages. And some will delay returning to work in order to keep subsidies that are granted under the law.
"By providing subsidies that decline with rising income (and increase with falling income), and by making some people financially better off, the ACA will create an incentive for some people to work less," the CBO wrote.
Meanwhile, those who forego subsidies and choose to work will suffer through higher premiums.
"The middle class is getting squeezed in this economy, and this CBO report confirms that Obamacare is making it worse," said House Speaker John Boehner, R-OH.
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Additional CBO findings from Tuesday's report state that the healthcare law's effects on the economy will be "substantially larger" than previous estimates, and Obamacare will cause a $1 trillion increase in projected deficits.
The hits keep coming for Obamacare. But it's important to note that from this healthcare law mess springs opportunity.
"Obamacare is one of the single biggest wealth creation opportunities to hit the markets in decades," Money Morning Chief Investment Strategist Keith Fitz-Gerald said. "That's because huge amounts of money – trillions – will be spent as Obamacare gets rolling."
"There's a handful of key investments you can make today that will not only protect your portfolio from the financial firestorm of Obamacare, but can be expected to reward you richly as it takes effect," Fitz-Gerald said.
Fitz-Gerald's exclusive Obamacare research shows the specific investments to bet on to profit from the new U.S. healthcare law. Find out more here.
- Congressional Budget Office:
The Budget and Economic Outlook: 2014 to 2024