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June 2012
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POLLYANNALess-work-is-good stanceby White House troubling

We suppose nothing that comes from the mouths of Washington spin doctors should astonish us anymore. But the efforts by the Obama administration to put a positive face on this week's Congressional Budget Office report on the impact of the Affordable Care Act on jobs might deserve some sort of award.

The non-partisan CBO released an analysis earlier this week finding that the ACA will reduce the number of hours Americans work by the equivalent of 2.3 million full-time jobs in 2021 - much greater than the 800,000 jobs originally forecast.

The reduction in work hours will occur, says the CBO, because the ACA "creates an implicit tax on marginal earnings" for people in lower income brackets. Or in plain English, it penalizes those people for working their way out of the lowest-paying jobs.

Specifically the CBO says many low-wage workers will voluntarily reduce the number of hours they work in order to maximize their health insurance subsidies because for them, it makes financial sense. If one more hour at the same wage costs a worker a subsidy, to be ahead of the game without the subsidy, that worker would have to work a far greater number of hours. For instance, if the next hour worked causes an ACA insurance subsidy to drop by $2,000 and the worker makes $8 an hour, it would take an additional 250 hours a year of work - a little more than six 40-hour weeks - to pull even financially.

The CBO's hours worked numbers don't even take into account the impact on full-time jobs that will come as larger companies seeking to limit the impact of the employer mandate cut some employees back to less than 30 hours a week. That's the cut-off below which companies are not required by the ACA to offer workers insurance or pay a $2,000 fine.

The White House response to the CBO report was, amazingly, that it's all good. This is a case of "liberating" Americans who now will "have the opportunity to pursue their dreams," according to White House Economist Jason Furman.

So the new American dream is - not working? Or maybe it's just not working very much?

That's a tad too cynical for our blood. The late Fred Paxton, longtime publisher of this newspaper, frequently put it this way: There are not many problems in life that a good job won't solve.

The American dream is to have a good job, and the sense of accomplishment and self-worth that goes with it. It's not to sit at home playing video games and drawing assistance.

The carnage of the Obama administration's policies on the job front is piling up, be it with the ACA-related job reductions, the impact of aggressive new EPA policies on Kentucky coalfield jobs, or the obstruction of the Keystone XL pipeline and the thousands of jobs it would provide.

There is a reason that the labor force participation rate in the United States is at the lowest point in 35 years. It's bad policy at the federal level, including an outright antipathy for corporations and investors who create jobs. That low workforce participation rate in turn feeds a downward spiral in the economy. What is needed for a true economic recovery is for more people to participate in the workforce, creating more wealth, more demand and more jobs.

The White House response to the CBO report shows that the Obama administration simply does not grasp that economic fundamental. We find that pretty disturbing.

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