Why Did CBO Wait?

Why did the Congressional Budget Office (CBO) wait until now to inform the Congress and the rest of the country about the large negative effects of Obamacare on employment and hours of work?  (See CBO Budget and Economic Outlook pp 117-127). The disincentive effects on labor supply and demand were well known from the time the law was passed, and, more importantly, before the law was passed.  A more timely analysis could have altered or even stopped the legislation.

The CBO asked itself this question in its report (See section “Why Does CBO Estimate Larger Reductions Than It Did in 2010?” on page 118), answering that it  “reviewed new research about those effects” referring to 2013 working papers by Casey Mulligan and to others. But similar research was done earlier. In fact it’s pretty old and straight forward. My colleague Dan Kessler reported some of his findings in an article How Health Reform Punishes Work  in the Wall Street Journal in April 2011, and I blogged about it here.  In fact, the nature of the disincentive effects was so straight forward that I lectured about them in my Economics 1 course at Stanford and put them in my Principles of Economics text.

But regardless of when and whose research on disincentives was done outside the CBO, isn’t this the type of policy evaluation research that the CBO was created to conduct and report to the public in order to inform debate about proposed legislation?

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