Economists spar over effect of health reform on job creation

Echoing the national debate, leading economists from the right and left sparred Tuesday over the effect of healthcare reform on the current jobs crisis. 

A number of businesses have blamed requirements in the law for their reluctance to hire new workers — a claim disputed by health reform supporters.

In that vein, Douglas Holtz-Eakin, director of the Congressional Budget Office under President George W. Bush, said Tuesday the new law "lies at the center" of the nation's employment woes.

"If you talk to businesses, they cite the new laws as one of the major reasons they're hesitant to put employees on the books," he told Bloomberg TV. "It's bad economic policy. It's going to prove to be bad health policy. And it's too expensive for us to afford.

"If you want to get the budget deficit under control and you want to take off the table the fear of an interest rate spike or a large tax increase, you've got to address this new law."

Not so, said Dean Baker, liberal founder of the Center for Economic and Policy Research, who noted that the unemployment crisis long-preceded the health reform law. 

"I know businesses are all saying they aren't hiring because of the healthcare plan," Baker told Bloomberg, "but there's really no evidence to support that position."  

If it were the case, Baker added, businesses would be asking existing employees to work longer hours and would be hiring temporary workers to fill the void.  

"Neither of that's happening," he said.

"Business people complain," Baker argued. "They always complain. They always want lower taxes. They always want less regulation. They always want to pay their workers less. That's fine. That's what they do. That's what they're paid for. 

"But that doesn't mean the rest of us should take that seriously."

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