Fed Chair: Obamacare’s Economic Impact ‘Complex’

Yellen says the Congressional Budget Office’s analysis is likely still a work in progress.

Federal Reserve Board Chair Janet Yellen makes remarks before a House Financial Services Committee to testify on "Monetary Policy and the State of the Economy", on Capitol Hill, February 11, 2014, in Washington, DC. Yellen, the first female chair of the Federal Reserve Board, is making her first appearance before Congress since being named to replace former Fed Chairman Ben Bernanke.
National Journal
Catherine Hollander
Feb. 11, 2014, 7:24 a.m.

As Wash­ing­ton con­tin­ues to spar over the Con­gres­sion­al Budget Of­fice’s Obama­care ana­lys­is, Fed­er­al Re­serve Board Chair Janet Yel­len weighed in Tues­day.

“In the case of the Af­ford­able Care Act, CBO has done im­port­ant ana­lys­is and prob­ably will con­tin­ue to look at it. I think they’ve re­cog­nized that the im­pact of the act is likely to be com­plex,” Yel­len told mem­bers of the House Fin­an­cial Ser­vices Com­mit­tee on Tues­day. “I think they’re still at­tempt­ing to fig­ure out what all of the dif­fer­ent chan­nels are by which it will af­fect the eco­nomy.”

Obama­care’s im­pact on jobs has been the sub­ject of in­tense de­bate in Wash­ing­ton over the past week. Wonks, law­makers, and pun­dits sparred over a re­port from the non­par­tis­an CBO last week that said the health re­form law would re­duce em­ploy­ment by the equi­val­ent of 2.5 mil­lion full-time work­ers in 2024.

The CBO’s re­port made such a splash be­cause when the of­fice last looked at the labor mar­ket im­pact of the Af­ford­able Care Act, it es­tim­ated that the num­ber of hours worked would be re­duced by the equi­val­ent of 800,000 work­ers in 2021.

In the re­port, the budget of­fice said the new es­tim­ate — 2.3 mil­lion in 2021 — was the res­ult of the in­cor­por­a­tion of “ad­di­tion­al chan­nels” in­to its es­tim­ate. Yel­len said CBO is likely to con­tin­ue look­ing in­to these chan­nels.

She was ap­pear­ing be­fore the Fin­an­cial Ser­vices Com­mit­tee on Tues­day to de­liv­er con­gres­sion­ally man­dated semi­an­nu­al testi­mony.

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