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Health care claims long on hype, short on facts

By RICARDO ALONSO-ZALDIVAR
January 19, 2011

Republicans pushing to repeal President Barack Obama‘s health care overhaul warn that 650,000 jobs will be lost if the law is allowed to stand.

But the widely cited estimate by House GOP leaders is shaky. It’s the latest creative use of statistics in the health care debate, which has seen plenty of examples from both sides.

Republicans are calling their thumbs-down legislation the “Repealing the Job-Killing Health Care Law Act.” Postponed after the mass shootings in Tucson, a House vote on the divisive issue is now expected Wednesday, although Democrats promise they’ll block repeal in the Senate.

A recent report by House GOP leaders says “independent analyses have determined that the health care law will cause significant job losses for the U.S. economy.”

It cites the 650,000 lost jobs as Exhibit A, and the nonpartisan Congressional Budget Office as the source of the original analysis behind that estimate. But the budget office, which referees the costs and consequences of legislation, never produced the number.

What follows is a story of how statistics get used and abused in Washington.

What CBO actually said is that the impact of the health care law on supply and demand for labor would be small. Most of it would come from people who no longer have to work, or can downshift to less demanding employment, because insurance will be available outside the job.

“The legislation, on net, will reduce the amount of labor used in the economy by a small amount _roughly half a percent_ primarily by reducing the amount of labor that workers choose to supply,” budget office number crunchers said in a report from last year.

That’s not how it got translated in the new report from Speaker John Boehner, R-Ohio, and other top Republicans.

CBO “has determined that the law will reduce the ‘amount of labor used in the economy by.roughly half a percent.,’ an estimate that adds up to roughly 650,000 jobs lost,” the GOP version said.

Gone was the caveat that the impact would be small, mainly due to people working less. Added was the estimate of 650,000 jobs lost.

The Republican translation doesn’t track, said economist Paul Fronstin of the nonpartisan Employee Benefit Research Institute.

“CBO isn’t saying that there is job loss as much as they are saying that fewer people will be working,” explained Fronstin. “There is a difference. People voluntarily working less isn’t the same as employers cutting jobs.”

For example, the budget office said some people might decide to retire earlier because it would be easier to get health care, instead of waiting until they become eligible for Medicare at age 65.

The law “reduces the amount of labor supplied, but it’s not reducing the ability of people to find jobs, which is what the job-killing slogan is intended to convey,” said economist Paul Van de Water of the Center on Budget and Policy Priorities. The center advocates for low-income people, and supports the health care law.

In theory, any legislation that increases costs for employers can lead to job loss. But with the health care law, companies can also decide to pass on added costs to their workers, as some have already done this year.

To put things in perspective, there are currently about 131 million jobs in the economy. CBO projects that unemployment will be significantly lower in 2014, when the law’s major coverage expansion starts.

A spokeswoman for House Ways and Means Committee Republicans pointed out that CBO’s report did flag that some employers would cut hiring. “The CBO analysis does not claim that the entire response is people exiting the labor market,” said Michelle Dimarob.

The law’s penalties on employers who don’t provide health insurance might cause some companies to hire fewer low-wage workers, or to hire more part-timers instead of full-time employees, the budget office said. But the main consequence would still be from more people choosing not to work.

That still doesn’t answer the question of how Republicans came up with the estimate of 650,000 lost jobs.

Dimarob said staffers took the 131 million jobs in the economy and multiplied that by half a percent, the number from the CBO analysis. The result: 650,000 jobs feared to be in jeopardy.

“For ordinary Americans who could fall into that half a percent, that is a vitally important stat, and it is reasonable to suggest they would not characterize the effect as small,” she said.

But Fronstin said that approach is also questionable, since the budget office and the GOP staffers used different yardsticks to measure overall jobs and hours worked. The differences would have to be adjusted first in order to produce an accurate estimate.

Said Van de Water, “The number doesn’t mean what they say it means.”

Copyright © 2011 The Associated Press

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3 Responses to Health care claims long on hype, short on facts

  1. Keith

    January 19, 2011 at 10:39 am

    This vote is largely symbolic.

    However, as the Congress still holds the purse strings of the government, they can simply refuse to fund (or underfund) certain aspects of the legislation. This “death by a thousand cuts” is yet to come.

    Stay tuned.

  2. Carl Nemo

    January 19, 2011 at 1:29 pm

    One half percent of 131 million jobs in the economy doesn’t sound like much unless you happen to end up in the layoff population of 650,000 who would be facing grim prospects finding jobs in an employment situation that’s already been destroyed by 30 years of scheming crimpols in Congress selling us out for free, but not fair trade, while clearing the path for one world government.

    As I’ve predicted when all is said and done, nothing will be done and if so these “republicrats’ will make it far worse than it is already. We’re doomed unless we can somehow change course in short order.

    The last thing our leadership has on its mind is the well-being of the citizens of this nation especially the middle class. They feather the corporate and wealthy class’ nest while sucking up to the poor for votes as a function of evermore handouts for which none have contributed their fair share. The burden lies on the backs of the middle class which they are hellbent on destroying. Sounds like the commies won after all without firing a shot. / : |

    Carl Nemo **==

  3. Pondering It All

    January 19, 2011 at 3:53 pm

    If you read the article, the CBO was talking about people who might chose not to work any longer because they can get health insurance at a reasonable price without needing to be in an employer’s group. For people still in the labor pool, that’s actually good news: More job opportunites!

    I know several people who would retire early (generally for health reasons) but they are not 65 (so no Medicare) and they can’t afford to buy (or can’t even get) individual health insurance.