Rep. Kevin Brady (R-TX), Chairman of the Joint Economic Committee, responded to today’s release of the Congressional Budget Office’s (CBO) The Budget and Economic Outlook: 2014 to 2014 and The Slow Recovery of the Labor Market:
“President Obama’s policies have created a massive Growth Gap between this recovery and an average post-1960 recovery and a long-term reduction in our economy’s ability to grow and create good middle-class jobs. Today’s CBO reports confirm my warnings:
? The CBO lowered its estimate of real GDP growth to 2.6% per year over the next decade. According to CBO, ‘Over the next decade, potential output is projected to grow by 2.1 percent per year, on average, which is much lower than the average rate since 1950.’ In addition to slower growth in the size of the labor force, ‘potential output in 2024 will be constrained by the lingering effects of the recent recession and slow recovery and by federal tax and spending policies in current law.’ Indeed, ‘potential output is about 1.5 percent lower in 2023 than the amount estimated a year ago.’
? While the Administration blames the fall in the labor force participation rate to 62.8%, a 35-year low, on an aging population, the CBO attributed only one-half of the decline to demographic factors. The other half was due to the weak recovery that led some workers to become discouraged and cease looking for work.
? The CBO found that Affordable Care Act (a.k.a. Obamacare) will have significant, negative effects on our economy. I quote:
? ‘CBO estimates that the ACA will reduce the total number of hours worked, on net, by about 1.5 percent to 2.0 percent during the period from 2017 and 2024, 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.’
? ‘Specifically, CBO estimates that ACA will cause a reduction of roughly 1 percent in the aggregate labor compensation over the 2017-2014 period, compared with what it would have otherwise been.’
? ‘The reduction in CBO’s projections of hours worked represents a decline in the number of full-time equivalent workers of about 2.0 million in 2017, rising to about 2.5 million in 2024.’”