In policy debates, the two parties rarely acknowledge that their choices have tradeoffs. Instead, one party will point out the benefits, the other the costs. In an adversarial system, we count on the two parties opposing interests to report all of the benefits and costs.
To the extent that we have a neutral arbiter, the CBO is it. And they just came down hard on President Obama's two major initiatives,
...By providing households with a transfer payment to
purchase health insurance that phases out as labor market income grows,
Obamacare discourages work—period. The subsidy shrinks with income. That
means for every additional dollar you earn, you lose a bit of support
White House and its allies have characterized this as a good thing, and
as a free choice that households are making. This characterization
insults basic economics reasoning. People electing to work less because
the government has raised their marginal income tax rates is not quite
an independent choice that deserves our congratulations. And since
the health care subsidies are paid for by progressive taxes, this
creates an awkward scenario where higher-income families are subsidizing
the newfound leisure time of the less fortunate.
For the minimum wage, a similar finding
...The White House and its
allies have been arguing that the minimum wage is basically a free
lunch: There will be negligible job losses, and millions of workers will
get a raise. The CBO rejected this talking point.
be fair, there is considerable debate among economists as to whether
and how much an increase in the minimum wage will decrease employment.
But my opinion is that the weight of the evidence points to a noticeable
decrease in employment among low-skill workers. The CBO agrees, arguing
that an increase in the federal minimum wage to $10.10, as the
president is proposing, will likely cause hundreds of thousands of jobs
to disappear relative to a world without the minimum wage increase.