Drudge Retort: The Other Side of the News
Monday, February 10, 2014

In his State of the Union address, President Obama urged Congress to "give America a raise." Well, it turns out that Obama is giving America a $70 billion annual pay cut, courtesy of Obamacare.

That is the overlooked nugget in the new Congressional Budget Office report detailing the economic costs of Obamacare. While much attention has been paid to the report's finding that Obamacare will reduce employment by as much as 2.5 million workers, buried on page 117 (Appendix C) is this bombshell: "CBO estimates that the ACA will cause a reduction of roughly 1 percent in aggregate labor compensation over the 2017-2024 period, compared with what it would have been otherwise."

Translation: Obamacare means a 1 percent pay cut for American workers.

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From the article:

How much does that come to? Since wages and salaries were about $6.85 trillion in 2012 and are expected to exceed $7 trillion in 2013 and 2014, a 1 percent reduction in compensation is going to cost American workers at least $70 billion a year in lost wages.

It gets worse. Most of that $70 billion in lost wages will come from the paychecks of working-class Americans -- those who can afford it least. That's because Obamacare is a tax on work that will affect lower- and middle-income workers who depend on government subsidies for health coverage. The subsidies Obamacare provides depend on income. If your income goes up, your subsidies go down. This means Obamacare effectively traps people in lower-income jobs by imposing an additional tax on every dollar of additional income they earn. Working hard to earn a promotion or get a raise, or taking on additional part-time work -- all the things people do to pursue the American Dream -- are discouraged by Obamacare. As Keith Hennessey, former chairman of the White House National Economic Council, explains it, "Obamacare punishes additional work, education, job training and professional advancement, anything that generates additional income for those trying to climb into the middle class."

#1 | Posted by JeffJ at 2014-02-10 02:40 PM | Reply | Flag:

I haven't seen an article regarding Obamacare that is honest. I just stopped reading them. Let me know if this one passes muster.

#2 | Posted by BruceBanner at 2014-02-10 02:45 PM | Reply | Flag:

#2...it doesn't.

#3 | Posted by ichiro at 2014-02-10 02:53 PM | Reply | Flag:

www.cbo.gov

#4 | Posted by ichiro at 2014-02-10 02:56 PM | Reply | Flag:

Wow. You two really deconstructed this article point-by-point.

Well done!

#5 | Posted by JeffJ at 2014-02-10 02:56 PM | Reply | Flag:

#3 Why? Because you don't agree? I'll side with the CBO until you can generate compelling evidence to back up your assertion.

PS A note from your mom doesn't count as compelling evidence.

#6 | Posted by MUSTANG at 2014-02-10 02:57 PM | Reply | Flag:

I can understand a degree of aversion to the linked article - the author got fairly partisan with some of his criticisms.

Here is a well-written analysis of the CBO report:

www.nationalreview.com

#7 | Posted by JeffJ at 2014-02-10 02:59 PM | Reply | Flag:

Don't you understand, Jeff, that losing this income is actually giving Americans the "opportunity" to go do other things, like become street mimes or beggars?

#8 | Posted by cookfish at 2014-02-10 03:02 PM | Reply | Flag:

Progressive income tax does exactly the same thing this guy is claiming will be such a burden on working class Americans. Of course your subsidies will diminish as your income rises but by no stretch of the imagination does your subsidy shrink so much that it eliminates the additional income earned through working more hours or a second job. Such a misleading op-ed that it could be called pure propaganda. What he leaves out of the equation is that sure a slightly smaller portion of addional income would be spendable income but the worker now has the benefit of health insurance which will give him/her much more benefit than that small amount of income lost due to the shrinking subsidy as income rises.

#9 | Posted by danni at 2014-02-10 03:02 PM | Reply | Flag: | Newsworthy 1

We have to lose our shirts to find out what's in it.

#10 | Posted by sames1 at 2014-02-10 03:11 PM | Reply | Flag:

Here's an interesting site regarding ACA subsidies:

laborcenter.berkeley.edu

I put in 45k for household income.
Family of 4.
Age of parents 40
2 kids under 18

When I increased the income to 47K the subsidy amount dropped by $25 per month which translates to $300 annually. That's an additional 15% tax on that extra $2k, above and beyond federal, state and local taxes on said income as well as FICA.

15% additional tax on a $2k raise.

#11 | Posted by JeffJ at 2014-02-10 03:13 PM | Reply | Flag:

I haven't seen an article regarding Obamacare that is honest.
I just stopped reading them.
Posted by BruceBanner

Was that right after the you can keep your Doctor articles or you can keep you insuarance articles?

#12 | Posted by wisgod at 2014-02-10 03:15 PM | Reply | Flag: | Funny: 1

"15% additional tax on a $2k raise."

And if your income went up even more you'd lose even more subsidy until you got no subsidy because you would no longer need the subsidy. We may as well change the conversation back to the progressive income tax, it's the same thing. As income rises the percentage of tax you pay does too. We've had it this way for a very long time and personally, I don't think we should ever change it. It makes it much more possible for those at the bottom to try and eek out a living, quit being so jealous of those who have less than you.

#13 | Posted by danni at 2014-02-10 03:19 PM | Reply | Flag:

As income rises the percentage of tax you pay does too.

We already have a progressive income tax. ACA's inverse subsidies tax is on TOP of that - another disincentive to earn more money.

#14 | Posted by JeffJ at 2014-02-10 03:25 PM | Reply | Flag:

"We've had it this way for a very long time and personally, I don't think we should ever change it"

And we are such good shape, no national debt, everyone is happy with the taxes we pay, etc... we shouldn't look to improve at all.

#15 | Posted by sames1 at 2014-02-10 03:26 PM | Reply | Flag:

Danni,

That 15% was for a family of 4 with a household income that went from 45k to 47k. That is a HUGE tax on $2000 of a pretty low overall household income.

#18 | Posted by JeffJ at 2014-02-10 03:32 PM | Reply | Flag:

"That is a HUGE tax on $2000 of a pretty low overall household income."

It isn't even equal to the average increase in health care costs annually which that same family had to pay before Obamacare.

#19 | Posted by danni at 2014-02-10 03:33 PM | Reply | Flag: | Newsworthy 1

It isn't even equal to the average increase in health care costs annually which that same family had to pay before Obamacare.

#19 | Posted by danni

Translation: At least my side gets it this way.

#20 | Posted by wisgod at 2014-02-10 03:36 PM | Reply | Flag:

And if your income went up even more you'd lose even more subsidy until you got no subsidy because you would no longer need the subsidy. We may as well change the conversation back to the progressive income tax, it's the same thing. - Danni

Its the effective tax rate of losing the subsidy. In fact once you don't need the subsidy, the effective tax rate actually drops.... so its not progressive at all, and hardly the same thing.

I haven't seen an article regarding Obamacare that is honest.
I just stopped reading them.
Posted by BruceBanner

A perfect example of confirmation bias.

#21 | Posted by AndreaMackris at 2014-02-10 03:36 PM | Reply | Flag:

Don't you understand, Jeff, that losing this income is actually giving Americans the "opportunity" to go do other things, like become street mimes or beggars?

#8 | Posted by cookfish at 2014-02-10 03:02 PM | Reply

Everything we predicted about the disaster of Obamacare is coming true. The only positive was allowing the expanding children living at home to be carried on their parents health insurance until the age of 26 along with the pre-existing issue. Otherwise, this monstrosity is only going to add to the already burdened economy along with lower benefits, higher deductibles and co-pays, lower full-time employment, higher taxes, and the shunting of many citizens away from the higher quality hospitals/physicians. Of course, the corporations will off-load health insurance and their profits will be maintained if not actually increase.

#22 | Posted by matsop at 2014-02-10 03:36 PM | Reply | Flag:

On the fictional scenario I created above, let's see how much of that additional $2k the family would keep in Michigan including the ACA tax.

I just did some math at the IRS website and the effective rate on that $2000 for married filing jointly is 15%, or $300.

The wage earner is self-employed so the FICA tax is 12.4% which translates to $248.

The Michigan income tax rate is 4.25% which is another $85.

So, before ACA that $2000 was taxed down to a take-home amount of $1367. The amount is actually a bit higher than this as the federal take is calculated AFTER the state tax is assessed, but trying to keep it sort of simple.

Let's call it $1400 before the ACA subsidy tax. So, now that $1400 is reduced to $1100 which means the ACA tax is actually 21% which pushes the overall taxes deducted from a $2k bump in income to a measly $47k altogether is close to 50%.

We are not talking about a 21% tax on the 1 percenter, but somebody who is barely getting by.

#24 | Posted by JeffJ at 2014-02-10 03:47 PM | Reply | Flag:

It isn't even equal to the average increase in health care costs annually which that same family had to pay before Obamacare.

#19 | POSTED BY DANNI

Premiums and deductibles have gone up dramatically under ACA.

#25 | Posted by JeffJ at 2014-02-10 03:49 PM | Reply | Flag:

With all of the discussion of these subsidies, I am reminded that a lawsuit is in process regarding them.

Basically, the law stipulates that only STATE-run exchanges qualify for the subsidies. It was kind of the carrot (or stick, if you prefer) that the law's architects conceived to encourage states to set up their own exchanges. Well, 36 states (it could be 34, I don't remember the exact number for sure) chose not to set up exchanges. According to the text of the law, these states don't qualify for subsidies. Now, the defense will argue that the 'spirit' of the law clearly shows the subsidies were intended to be available to all.

The outcome of this case is in no way certain and my gut tells me the defendant (government) will win the case and the subsidies will be available in all states. Having said that, things will get REALLY interesting if the court rules in favor of the plaintiff on this one.

#26 | Posted by JeffJ at 2014-02-10 04:02 PM | Reply | Flag:

Maybe a straight deflection to the article, but I'd prefer our government spend $70 billion on national healthcare rather than several trillion in the Middle East.

#27 | Posted by ClownShack at 2014-02-10 04:08 PM | Reply | Flag:

Maybe a straight deflection to the article, but I'd prefer our government spend $70 billion on national healthcare

The article isn't talking about federal spending on healthcare, it's talking about $70 billion less in private earnings as a result of Obamacare.

#28 | Posted by JeffJ at 2014-02-10 05:05 PM | Reply | Flag:

The article is about spin from this guy:

"He is a fellow at the American Enterprise Institute. Thiessen served as a chief speechwriter to President George W. Bush and Secretary of Defense Donald Rumsfeld, and before that as a senior aide to Senate Foreign Relations Committee Chairman Jesse Helms."

What the CBO says is:

ACA Is Good for US Economy, Really.

www.boston.com

#29 | Posted by Corky at 2014-02-10 05:11 PM | Reply | Flag:

www.boston.com

The only point the author made that paints ACA as good for the economy is that the additional Medicaid recipients will now have more money to spend because they are no longer spending on healthcare. This of course assumes that they were spending tons of money on healthcare in the first place.

The second 'point', that the 2.1 million jobs lost is 'voluntary' is beyond stupid.

People leaving the workforce in higher numbers than they would have otherwise in order to receive federal dollars has a number of negative effects:

1. Fewer dollars flowing into the treasury.
2. More dollars flowing out of the treasury.

The result can only be more taxes paid by those of us still working to finance that absurd 1-2 punch, and/or more borrowing and a further screwing of this country's youth who will be forced to pay for all of this.

This article does a good job of explaining why the 2.1 million jobs lost is a bad thing for the economy:

www.nationalreview.com

#30 | Posted by JeffJ at 2014-02-10 05:20 PM | Reply | Flag:

"The only point the author made that paints ACA as good for the economy is that the additional Medicaid recipients will now have more money to spend because they are no longer spending on healthcare. This of course assumes that they were spending tons of money on healthcare in the first place. "

#30 | POSTED BY JEFFJ AT 2014-02-10 05:20 PM | REPLY: Good luck on them finding a doctor that will take Medicaid. Medicare pays better than Medicaid and many doctors either limit or do not even take those patients.

#31 | Posted by MSgt at 2014-02-10 05:33 PM | Reply | Flag:

"I haven't seen an article regarding Obamacare that is honest."

except all of the ones that support Obamacare....then, of course, those are honest.

STFU

#32 | Posted by eberly at 2014-02-10 05:35 PM | Reply | Flag:

DemocRat Turd Polishers stand up!

#33 | Posted by Greatamerican at 2014-02-10 05:42 PM | Reply | Flag:

OoooooooPs. Obummer has changed the rules again. He must really hate his bill.

www.cnbc.com

#34 | Posted by matsop at 2014-02-10 05:45 PM | Reply | Flag:

#30

Regardless of how the National Review spins it, the CBO report does NOT imply that 2+ million jobs will be "lost". It implies that the supply of workers available to employers may be reduced by 2+ million.

Comprehension is important here.

As people are no longer chained to their employers because of fear of losing health insurance, they may choose to do other things, like not work as much, or leave their employer to start a business. Business start-ups are a good thing, right?

A reduction of the labor pool often prompts an increase in wages. See the difference? I doubt it...

#35 | Posted by Whatsleft at 2014-02-10 06:10 PM | Reply | Flag: | Newsworthy 1

#35 | POSTED BY WHATSLEFT

Paying people not to work doesn't make any economic sense.

None.

The Democratic Party used to be the party of the worker, the party that valued work. Now they are the party of the recipient.

I think it's unfair to tar liberals/Democrats as favoring all of these programs as a means of making people dependent upon government.

But when I see them take this CBO report and try to say ACA will be good for the economy, it makes me pause.

Regardless of how the National Review spins it,

Did you read the NRO article?

the CBO report does NOT imply that 2+ million jobs will be "lost". It implies that the supply of workers available to employers may be reduced by 2+ million.

A 2.1 million reduction in the labor pool is not good for the economy, particularly when said reduction is a direct result of increased government handouts.

#36 | Posted by JeffJ at 2014-02-10 06:19 PM | Reply | Flag:

STFU

#32 | POSTED BY EBERLY AT 2014-02-10 05:35 PM | REPLY | FLAG:

Lots of rocks thrown. No links to a scandal that passes muster. Ah well. This is what passes for discourse in RW circles.

#37 | Posted by BruceBanner at 2014-02-10 06:31 PM | Reply | Flag:

No links to a scandal that passes muster

Really?

How about Pigford?

#38 | Posted by JeffJ at 2014-02-10 06:34 PM | Reply | Flag:

Pigford v. Glickman? Debunked www.snopes.com

#39 | Posted by BruceBanner at 2014-02-10 06:41 PM | Reply | Flag:

Debunked.

Really?

www.nytimes.com

#40 | Posted by JeffJ at 2014-02-10 06:55 PM | Reply | Flag:

my link was Last updated: 28 April 2013

yours was printed 25 April 2013

Mine says it's a mixture of false and true.

#41 | Posted by BruceBanner at 2014-02-10 07:08 PM | Reply | Flag:

If two million people voluntarily stop working then presumably two million unemployed people will be needed to fill those jobs, right? Two million who would come to the job with a desire greater than that of just maintaining their health insurance would be a good thing overall, imo.

#42 | Posted by Hagbard_Celine at 2014-02-10 07:09 PM | Reply | Flag:

#41 | POSTED BY BRUCEBANNER AT 2014-02-10 07:08 PM
How does a mixture of true and false = debunked? I guess it's true that liberals only read what they want to see

en.wikipedia.org

#43 | Posted by T_Man at 2014-02-10 07:27 PM | Reply | Flag:

Yeah. Get it right T-man

#44 | Posted by BruceBanner at 2014-02-10 08:08 PM | Reply | Flag:

bruce

scandal? what scandal? I never said anything about a scandal. I'm talking about Obamcare's impact on this country, it's citizens and employers.

#45 | Posted by eberly at 2014-02-10 08:52 PM | Reply | Flag:

"I'm talking about Obamcare's impact on this country, it's citizens and employers."

STock market way the hell up.
Home values rising.
Unemployment down.
GDP growing.
No new wars.

You are so partisan that you can't give credit where it is due because you are a hack.

#46 | Posted by danni at 2014-02-10 09:10 PM | Reply | Flag:

scandal? what scandal? I never said anything about a scandal. I'm talking about Obamcare's impact on this country, it's citizens and employers.

#45 | POSTED BY EBERLY AT 2014-02-10 08:52 PM | FLAG:

STFU.

#47 | Posted by BruceBanner at 2014-02-10 09:24 PM | Reply | Flag:

#46 | POSTED BY DANNI AT 2014-02-10 09:10 PM

All artificially inflated by the Federal Reserve.

#48 | Posted by T_Man at 2014-02-10 09:57 PM | Reply | Flag:

"All artificially inflated by the Federal Reserve."

REad up on what the responsibility of the FEd is, it is to prevent inflation and unemployment. That's why we have a fed. BE glad we do in spite of all the nonsense put out by those who would let the economy collapse and then expect you to revive it on your own. Sort of the way Somalia works.

#49 | Posted by danni at 2014-02-10 10:03 PM | Reply | Flag:

"I haven't seen an article regarding Obamacare that is honest."
#2 | Posted by BruceBanner

Broaden your horizon.

#50 | Posted by KBM at 2014-02-10 11:33 PM | Reply | Flag:

#49 | POSTED BY DANNI AT 2014-02-10 10:03 PM

So you are OK with massive inflation if the GDP doesn't keep up with the money being printed? The Fed should regulate/soften an economic downfall but they were never meant to sustain it this long. They are buying 85+ billion dollars worth of bonds a month with money that they are printing.

But I do see that you don't deny that the only reason that things look "merry" in your world is because the government is artificially making it look "merry". They are making the rich, richer. Something I know you hate.

#51 | Posted by T_Man at 2014-02-10 11:56 PM | Reply | Flag:

Broaden your horizon.

#50 | POSTED BY KBM AT 2014-02-10 11:33 PM | FLAG:

I'm in the thread, commenting and reading. All I got in response were some insults and a STFU. Thanks for opening my eyes.

#52 | Posted by BruceBanner at 2014-02-11 11:02 AM | Reply | Flag:

"You are so partisan that you can't give credit where it is due because you are a hack."

wow, you poor thing. I'm talking about Obamacare. Not the entire economy and everything you listed.

you just can't deal with any scrutiny of Obama of any kind, can you?

there are plenty of partisans here, especially you, and yet you try to label me as "partisan" as an insult.

Do you even know what in the hell you are saying anymore?

Good God, woman.

#53 | Posted by eberly at 2014-02-11 11:11 AM | Reply | Flag:

"I'm in the thread, commenting and reading."

you're claiming you've never read any legitimate criticism of obamacare.

go join Danni in the retard corner.

#54 | Posted by eberly at 2014-02-11 11:12 AM | Reply | Flag:

go join Danni in the retard corner.

#54 | Posted by eberly

We're going to need a bigger corner......

#55 | Posted by wisgod at 2014-02-11 11:16 AM | Reply | Flag:

Yet to see any compelling argument against universal health care. As you were, boys.

#56 | Posted by BruceBanner at 2014-02-11 12:54 PM | Reply | Flag:

universal health care or obamacare?

They're 2 different things, boy.

#57 | Posted by eberly at 2014-02-11 12:57 PM | Reply | Flag: | Newsworthy 1

sundial.csun.edu

Obamacare is NOT Universal Health care.

#58 | Posted by eberly at 2014-02-11 01:04 PM | Reply | Flag:

$70 billion is nothing out of the economy. To take one percent out of GDP to get universal health care is just fine.

#59 | Posted by BruceBanner at 2014-02-12 11:12 AM | Reply | Flag:

From your article Eberly.

Because the U.S. Supreme Court has ruled that states can decide whether or not they want to expand Medicaid to the poor, 26 Republican controlled states that have rejected the expansion will keep millions still uncovered under Obamacare. People of color in Republican-controlled states in the South will especially be hit hard by their refusal to expand Medicaid for the working poor.

This, coupled with other barriers causing millions of others to fall in between the cracks, will result in upwards of 31 million remaining uncovered by 2023, according to the Congressional Budget Office. Even after Obamacare is implemented, at least half of all currently uninsured Americans as of 2012 will still be uninsured or underinsured– 80 million Americans said they avoided a doctor or prescriptions because of cost in 2012, according to the Commonwealth Fund.


THIS is a legitimate article about Obamacare. I don't see how you can post this link and criticize my earlier comments. Surely you see the difference between actual structural problems in the plan and the weak sauce coming from the RW? Maybe not?

#60 | Posted by BruceBanner at 2014-02-12 11:17 AM | Reply | Flag:

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