The Latest CBO News Turns a Dream Into a Nightmare

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For Republicans, Obamacare is the political gift that keeps on giving. Its latest generosity came wrapped in a mundane Congressional Budget Office report. However, it contained three damaging estimates that the administration's health plan would further reduce work, earnings, and employees receiving employer-provided health care.

Every year CBO releases its budget update, which goes largely unnoticed except by budget experts. Last Tuesday's release was very different. Buried inside, in its Appendix no less, were two sections with three new Obamacare estimates that set off another firestorm.

The first and most reported, though arguably the least damaging, projected reduced employment: "CBO's updated estimate of the decrease in hours worked translates to a reduction in full-time equivalent employment of about 2 million in 2017, rising to about 2.5 million in 2024, compared with what would have occurred in the absence of the ACA."

The second projected reduced earnings: "Specifically, CBO estimates that the ACA will cause a reduction of roughly 1 percent in aggregate labor compensation over the 2017-2024 period..."

And the third projected reduced employer-provided health care coverage: " 2019, an estimated 11 million people who would have had an offer of employment-based coverage in the absence of the ACA will lose their offer under current law..."

Damning in themselves, these estimates go right to their opponents' preconceptions and the casual observers' reservations about Obamacare. They also help bolster the charge that the administration has been less than fully transparent about the consequences of the new law.

How real these doubts already were, can be seen from recent polling. The day before CBO released its report, Rasmussen released a poll (1,000 likely voters, MOE +/- 3%) on public reaction to Obamacare. Overall, it was rated unfavorably 42%-53%, but by those holding strong opinions the deficit fell to 18%-42%. Seventy-seven percent felt Obamacare would cost more than projected, 58% felt the cost of health care would increase, and by 46%-26%, respondents felt the quality of health care would fall. To top it off, 66% said that health care would be "very important" to how they voted in November.

The White House already faced two serious problems with the public over its health care plan: the effectiveness of the policy and the truthfulness of the administration. The efficacy concerns are serious because health care affects everyone in the most personal and important of ways. These concerns had already been raised by the failings of the plan's rollout.

The truthfulness concerns are no less serious because this has been the president's best defense. He has seemed a different politician and been liked for it, projecting an air of cool competency.

The CBO report seems to challenge both effectiveness and truthfulness. And the president's critics will certainly use it to do so.

How devastating such questions can be, has already been seen in the administration and Democrats' rapid deterioration since Obamacare's rollout. Just after the government shutdown ended in October, a 10/20 Rasmussen poll showed Democrats with a 43%-36% lead in the generic ballot question. A month later (on 11/17) after undistracted public focus on Obamacare's botched unveiling, and Rasmussen showed Republicans holding a 40%-39% lead on the generic ballot.

The day before CBO's report release, Republicans continued to hold an identical generic ballot advantage. The difference now is that CBO's report goes beyond just a fumbled rollout, to the very substance of both Obamacare and Obama.

If someone has difficulty booking a vacation, that is frustrating. It is a wholly different matter if the vacation destination itself is a disaster. Having CBO, Washington's official bipartisan umpire, significantly hike its estimates of Obamacare's impact on employment, earnings, and employer-provided coverage - the mainstay of America's quality health care system for decades - strikes right at where the new law will take us.

If Democrats saw a rollout turn a seven point generic ballot lead into a deficit, how much greater impact could CBO's report have? And how much more still, if it proves correct?

There is never a good time for bad news, but the latest Obamacare revelations could hardly have come at a much worse time for Democrats. With midterm elections less than nine months away, Democrats find themselves having a difficult time mounting a positive message over Obamacare's problems for the last four months. And things are not getting better.

For Republicans, Obamacare seems to be an endless gift. For Democrats, it seems to be becoming a nightmare from which they cannot awaken.


J.T. Young served in the Treasury Department and the Office of Management and Budget from 2001 to 2004, and as a congressional staff member from 1987 to 2000. 

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