The CBO study -- which also said the ACA is projected to reduce the federal deficit by more than $1 trillion in 10 years -- said the healthcare reform law is expected to reduce employment by about 2.3 million jobs during the same period. The new estimate nearly triples the previous CBO estimate of 800,000 jobs that the Affordable Care Act, aka Obamacare, was to have cost the economy, the Hill newspaper reported.
The law is expected to slow the economy and cause many people to leave the workforce, the impact being felt mostly by low-wage workers, the Washington Post said.
The White House issued a statement disputing media reports the CBO says the law will result in employers cutting jobs or hours, and noted the economy has added 8.1 million jobs since ACA was passed in 2010.
"While many factors affect job growth, the actual performance of businesses refutes those who predicted that the Affordable Care Act would dramatically hurt the economy," the statement said.
"What the CBO report does find is one key immediate effect of the Affordable Care Act is to 'induce some employers to hire more workers or to increase the hours of current employees' during the 2014-16 period," the White House said. "Over the longer run, CBO finds that because of this law, individuals will be empowered to make choices about their own lives and livelihoods, like retiring on time rather than working into their elderly years or choosing to spend more time with their families."
The CBO report said the estimated reduction of hours worked "stems almost entirely from a net decline in the amount of labor that workers choose to supply rather than a net drop in businesses demand for labor."
The report said federal subsidies for healthcare insurance "will both stimulate demand for healthcare services and allow low-income households to redirect some of the funds that they would have been spent on that care toward the purchase of other goods and services -- thereby increasing overall demand. That increase in overall demand while the economy remains somewhat weak will induce some employers to hire more workers or to increase the hours of current employees during that period."
The CBO said the healthcare law would see 1 million fewer sign ups this year than previously expected due to the clumsy launch of the federal website last year.
Eventually, the number of signups will catch up to previous expectations, but 6 million people are now expected to sign up in 2014, rather than 7 million, which was the previous estimate. By 2017, the number is expected to swell to 24 million, the CBO said.
The CBO said the economy would grow at a rate of 3.1 percent in 2014, a downgrade from the 3.4 percent growth previously expected.
The agency expects unemployment to end the year at 6.7 percent, where it is now. Last year, the CBO predicted the unemployment rate would end 2014 at 7.6 percent.
The agency also expects a smaller federal deficit compared to its previous forecast. The 2014 federal deficit is now forecast at $514 billion. It was previously estimated to come in at $560 billion.
2014: The Year in Music [PHOTOS]