![handle is hein.congrec/cbo1695 and id is 1 raw text is: JUNE 10, 2014
Answers to Questions for the Record
Following a Hearing on the
Budget and Economic Outlook for 2014 to 2024
Conducted by the Senate Committee on the Budget
On February 1], 2014, the Senate Committee on the Budget convened a hearing at which
Douglas W Elmendorfi Director of the Congressional Budget Office, testified about CBOs report
The Budget and Economic Outlook: 2014 to 2024 (February 2014), www.cbo.gov/publication/
45010. Some Members of the Committee submitted further questions for the record, and this
documentprovides CBOs answers.
Ranking Member Jeff Sessions
Question: On page 117 of Appendix C of the latest Budget and Economic Outlook, CBO
estimates that the [Affordable Care Act] 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. CBO also reports that the largest declines in labor supply will probably
occur among low-wage workers.
Based on CBO's estimates in Appendix C, please provide the data and a distributional analysis
showing who would be affected by the reduction in compensation. Please provide the median
income of workers that will experience a reduction in labor compensation in each year over
the 2014 to 2024 period. Please also provide the number of workers making less than
400 percent of the federal poverty level that will experience a reduction in labor
compensation, including the average income for this group and the average reduction
in labor compensation for this group.
Answer: As described in Appendix C of The Budget and Economic Outlook: 2014 to 2024
(www.cbo.gov/publication/450 10), the Congressional Budget Office expects that the
Affordable Care Act (ACA) will reduce the number of full-time-equivalent workers by about
2.0 million in 2017; that number will increase to about 2.5 million in 2024. That reduction
will occur almost entirely because workers will choose to supply less labor given the new taxes
and other incentives they will face and the financial benefits some will receive. Some of the
reduction will arise from people choosing not to work at all and some will arise from other
people choosing to work fewer hours than they would have in the absence of the law.
CBO's method for estimating the labor market effects of the ACA was designed to estimate
the aggregate effect but not the effect on individual workers or subsets of the population.
Consequently, CBO does not have a basis for estimating either the median income of the
workers who will experience a reduction in labor compensation or the effects on workers](ViewImageLocal?handle=hein.congrec/cbo1695&div=1&collection=&method=preview&ext=.png&size=3)
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