Exclusive: Study shows ObamaCare will destroy as many as 700,000 jobs by 2019

posted at 8:45 am on March 17, 2010 by Ed Morrissey

During the ObamaCare summit three weeks ago, Nancy Pelosi declared that the bill would create four million jobs over the next ten years, with 400,000 new jobs created almost immediately.  Pelosi relied on a study written by the left-wing advocacy group Center for American Progress for those figures, although the Bureau of Labor Statistics already predicts growth in the health-care industry of 3.2 million jobs without ObamaCare.  Now, Americans for Tax Reform and the Beacon Hill Institute have conducted their own study using CAP’s methodology and determined that ObamaCare will destroy jobs, not create them.  Hot Air has an exclusive first look at the BHI executive summary:

Nancy Pelosi, the Speaker of the House of Representatives, has urged passage of the massive health reform plan moving through Congress as a way to create up to 400,000 jobs.  Speaker Pelosi bases her claim on a report by the Center for American Progress (CAP) in which the Center estimates that the Patient Protection and Affordable Care Act (PPACA) would create 250,000 to 400,000 jobs per year over 10 years.

This estimate by CAP amounts to a hurried effort to add academic heft to the claim that national health care reform offers a collateral benefit in the form of an economic “stimulus.” It turns out, however, that its methodology, stripped of unsupportable claims about savings in health care costs, shows just the opposite of what CAP intended. PPACA is a job killer, not a job creator.

Using the CAP methodology, we find that the bill would destroy a total of 120,000 to 700,000 jobs by 2019, a far cry from the number suggested by leading advocates.

CAP’s claim about job creation rests on its assumption that various developments ensuing from passage of the bill – upgrades in medical technology, the promotion of preventive care and the reduction in administrative costs – would save $683 billion over ten‐years and thus set in motion new incentives for firms to create jobs. The trouble is that the claimed costs savings are at odds with estimates from both Congress and the Executive Branch, which, together, are responsible for considering and ultimately implementing the legislation.

There is no evidence that the projected savings proposed by the Obama administration, particularly in areas such as preventive care, would ever materialize. The literature cited by proponents is speculative at best. Also, there is no guarantee that the administration would be successful in lowering insurance premiums while expanding coverage, without limiting access to health care.  …

Once we dismiss purported cost savings such as the proposed Medicare cuts, the job gains produced by the CAP methodology become job losses. We  utilized the same econometric model used by the CAP authors to derive employment effects of PPACA, but with the unsupportable costs savings stripped from the model. We provide two estimates:

  1. The first estimate applies the CAP methodology to the CMS estimate that the PPACA would increase national health expenditures by $24.8 billion over the baseline case by 2019. This estimate shows that PPACA would kill 120,000 jobs by 2019.
  2. The second estimate applies the CAP methodology to a scenario in which we begin with the CMS estimate but in addition eliminate the $437 billion in Medicare cuts assumed by CAP and then factor in an additional $70 billion in discretionary spending that the CBO indicated would take place under the Bill. The addition of these figures would increase national health expenditures by $148.8 billion in 2019 and thus kill 700,000 jobs by 2019.

ATR and BHI will roll out the entire study later today.


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