Obamacare’s new ad hoc ‘benefit’: Making work not pay

Written by . Posted in 2014 Campaigns, Featured, Issue Watch

Published on February 04, 2014

CaptureSo, today’s CBO report on Obamacare has forced the White House to make some pretty weird arguments. Among the report’s findings: Provisions of the Affordable Care Act will mean 2.3 million fewer full-time workers than we would have otherwise. Not 2.3 million fewer jobs, mind you — 2.3 million fewer workers.

There may or may not be the separate issue of health care requirements causing employers to scale back or cancel expansion plans, but that’s not what this is. The idea here is that the tax and subsidy incentives the law creates for working people will prompt many to decide that their jobs aren’t worth keeping.

This is what we usually call a “perverse incentive.” When government makes you worse off for doing things like working — as it could, for example, by imposing a 150 percent income tax — that’s usually considered a bad thing. But the White House has been reduced to arguing that this is really a good thing — people will be choosing not to work because Obamacare will have made it less worthwhile for them. 

The absurdity seems evident, White House spin notwithstanding. If it wasn’t such an ad hoc argument, one could accuse them of trying to reduce the number of workers just because they’ve already clearly lost their six-year fight to create jobs. But I highly doubt this was intended at all. 

I’d invite you to think back to President Obama before he was president. In The Audacity of Hope, then-Senator Obama discussed at some length the importance of rewarding hard work. He makes a persuasive argument on behalf of workers — a liberal analog to arguments conservatives often make about entrepreneurs. Extolling the virtues of “self-reliance, self-improvement, drive, discipline, temperance, hard work, thrift and personal responsibility,” Obama wrote in The Audacity of Hope:

The legitimacy of our government and our economy depend on the degree to which these values are rewarded….

He adds elsewhere:

Americans believe in work — not just as a means of supporting themselves but as a means of giving their lives purpose and direction, order and dignity…Americans also believe that if we work full-time, we should be able to support ourselves and our kids. For many people on the bottom rungs of the economy — mainly low-skilled workers in the rapidly growing service sector — this basic promise isn’t being fulfilled.

Obama also mixes into this latter quotation a criticism of the old pre-reform welfare programs that created incentives not to work. (You can read the whole thing on page 180.)

This entire line of thinking is related to the argument Obama recently made regarding the minimum wage. Americans generally agree that people who work should be rewarded. No one who puts in his eight-hour day should have to live in abject poverty. People who play by the rules should have an opportunity to get ahead, etc.

And until today, this has been a pretty fundamental Obama theme. It found a place in his administration when Obama introduced and signed into law the “making work pay” tax credit, so that working people enjoyed a greater benefit from their work. Work improves social cohesion and gives workers the ability to participate in the economy as consumers. That was a short-term measure of limited value, perhaps, but it wasn’t the worst idea in the world.

Now, the White House is trying to justify an unintended consequence of Obamacare after-the-fact. Yes, Obamacare may actually do the reverse of making work pay — it might be making work not pay compared to not working. But, uh…well, now people have more options! Or perhaps more precisely — since we always have the option of not working — we’ve made the option of working less rewarding than it once was.

What an awkward position this puts them into.