LAMBRO: Obamacare’s ‘poverty trap’

The health law provides incentives to work less

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The fiery debate over Obamacare this week sparked new fears about the harm it will inflict on our economy, jobs and the rising costs of medical care.

They were ignited by the Congressional Budget Office’s troubling forecasts of the health insurance law’s impact on all of us that raised many more questions than answers.

A few things became clearer, though, in the aftermath of this week’s firefight between the White House and Democrats, and the law’s Republican critics.

The law will further reduce our nation’s dwindling workforce. It will cut the hours worked by many Americans as employers attempt to avoid its employment health care costs.

The vastly inflated enrollment numbers used by President Obama and his administration do not hold up to serious scrutiny.

The White House, whose dishonesty index skyrocketed when 5 million Americans lost the insurance they liked and their doctors, defended the program.

Mr. Obama’s health care law is “helping labor markets, is helping businesses and is helping jobs,” said Jason Furman, the president’s chief economist.

That’s not how Sen. Bob Corker, Tennessee Republican, described the CBO’s outlook on what Obamacare would do to the U.S. economy in the years to come: “Today’s CBO report gives a sobering outlook on our economy. It confirms what we’ve known all along: The health care law is having a tremendously negative impact on economic growth.”

Stripped of its other economic analysis, the CBO essentially forecasts that more than 2 million Americans who have relied on health insurance through their employer will see their work hours reduced or they will stop working altogether as a result of Obamacare’s benefits.

Why? CBO Director Douglas Elmendorf offered this answer Wednesday at the House Budget Committee’s hearing that made some Democrats cringe:

“By providing heavily subsidized health insurance … to people with very low incomes … [Obamacare] creates a disincentive for people to work relative to what would have been the case in the absence of the [law].”

Then Budget Committee Chairman Paul Ryan, Wisconsin Republican, weighed in with this jaw-dropping observation: “These changes — they disproportionately affect low-wage workers. Translation: Washington is making the poverty trap worse.”

All of this opens up a new political can of worms for an unpopular law that has been racked by multiple debacles during its botched website rollout, shaky finances, despotic mandates and new constitutional court challenges.

The latest revelations now further threaten Democratic lawmakers with widespread retaliation from the voters in the 2014 midterm elections. There were new signs this week that many of Obamacare’s once-stalwart defenders were distancing themselves from the controversial law.

The Washington Post, one of the law’s most enthusiastic defenders, reported Wednesday that when the CBO report came out, “few Democrats publicly defended the law, a sign that lawmakers recognize its vulnerability.”

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