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"Obamacare" a job killer? Experts doubtful

WASHINGTON - Despite what Republicans say, the 2010 health care law isn't necessarily a job killer, experts say.

Republicans have titled their effort to overturn the law the "Repealing the Job-Killing Health Care Law Act," and that's their favorite talking point against it. The House of Representatives will start debate on repeal today and probably vote Wednesday. Saying the law is a job killer doesn't necessarily make it one, however, and independent experts say that such a conclusion is at least premature, if not unfounded.

"The claim has no justification," said Micah Weinberg, a senior research fellow at the centrist New America Foundation's Health Policy Program.

The law contains dual mandates that most individuals must obtain insurance coverage and most employers must offer it by 2014 so "the effect on employment is probably zero or close to it," said Amitabh Chandra of Harvard University.

House Republicans defended their job-killer claim in a 19-page Jan. 6 report, "Obama-Care: A Budget-Busting, Job-Killing Health Care Law." But some of its points are out of date or omit information. For instance:

The report says a National Federation of Independent Business study "found that an employer mandate alone could lead to the elimination of 1.6 million jobs between 2009 and 2014, with 66 percent of those coming from small businesses."

But that study was released on Jan. 28, 2009, well before the law was written. It studied a model, and it was based on a different set of assumptions.

"It's old. We don't use it anymore because it was based on a hypothetical mandate," said Stephanie Cathcart of NFIB.

The GOP report says: "Economic theory suggests the penalty should ultimately be passed through [as] lower wages [to an employee]," quoting a Congressional Research Service report.

But Republicans chop that sentence short; the CRS version goes on to say that the penalty "would not be a burden on small business owners."

A central problem with concluding flatly that the measure will kill jobs, experts say, is that the law's impact on the economy depends on a host of unpredictable variables. Experts advise considering these questions:

Will the law help or hurt economic growth?

The nonpartisan Congressional Budget Office estimates that the measure would reduce federal budget deficits by about $230 billion over 10 years. House Speaker John Boehner (R-Ohio) has disputed that, saying "CBO is entitled to their opinion." Augustine Faucher, director of macroeconomics at Pennsylvania-based Moody's Analytics, said the deficit savings should "bring down interest rates and free up more capital for private firm investment, and . . . could boost long-run growth" and create more jobs.

Will the law's mandates discourage hiring?

Maybe, but it's hard to tell. The CBO found last August that employers' hiring decisions will be affected "in some cases by the health care legislation," adding that many of the law's effects "may not be felt for several years because it will take time for workers and employers to recognize and to adapt to the new incentives." Employer mandates in isolation would "mean wages would decline, because a larger portion of compensation goes into health insurance, and Republicans are right on that," said Chandra.

But because there's also an individual mandate, "individuals would value the health care benefit, and would be willing to work for less wages," Chandra said.

Will minimum-wage unskilled workers be particularly hurt?

"It's not an irrational position," said Weinberg, of the New America Foundation, "but there is vastly stronger justification for the claim that it will create jobs than that it will eliminate them."


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