Repealing Obamacare would boost economic growth by an average of 0.7 percent after several years, according to an analysis by the Congressional Budget Office released on Friday.
"CBO has determined what many in Congress have known all along," Republican Senate Budget Committee Chairman Mike Enzi of Wyoming said in a statement. "This law acts as an anchor on our economy by dragging down employment and reducing labor force participation.
Repeal would make the economy grow faster in the budget office's projections mostly because of the removal provisions of the law that reduce the supply of labor.
CBO estimated that repeal would not boost growth immediately. Then economic output would be boosted by 0.1 percent in 2017, rising to about 0.6 percent in 2020.
From 2021-2025, gross domestic product would be on average 0.7 percent greater. Based on the budget office's most recent economic projections, that amounts to between $100 billion and $200 billion in today's dollars.
That effect is mostly driven by the fact that with Obamacare in place, some people face incentives to work less because they might lose subsidies or credits if their earnings rise. Removing those incentives leads to more hours worked and more jobs.
A smaller factor is that repealing some of Obamacare's taxes would cause businesses to invest and grow more.
The added revenues from the faster growth, however, would not be enough to offset the fiscal costs of repeal, the office estimated. Repealing the law would add $137 billion in deficits over 10 years. That sum reflects the $216 billion that would come from faster economic growth in absence of the law. Without taking the added growth into account, repeal would add $353 billion to deficits.
Friday's estimate from the budget office is the first of its kind to attempt to project the costs of repealing the healthcare law while incorporating changes in the overall economy that would result. Such dynamic analyses have been sought by Republicans, who early this year appointed new director Keith Hall to the budget office.
The economic growth result accords with previous analyses conducted by the budget office in past years, before Hall became director. For example, last year the budget office projected that the law would cause a decline of the equivalent of up to 2.5 million jobs because of its changes to workers' incentives.