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It has always been clear that health reform will induce some Americans to work less. Some people will, for example, retire earlier because they no longer need to keep working to keep their health insurance. Others will reduce their hours to spend more time with their children because insurance is no longer contingent on holding a full-time job. More subtly, the incentive to work will be somewhat reduced by health insurance subsidies that fall as your income rises.

The budget office has now increased its estimate of the size of these effects. It believes that health reform will reduce the number of hours worked in the economy by between 1.5 percent and 2 percent, which it unhelpfully noted “represents a decline in the number of full-time-equivalent workers of about 2.0 million.”

Why was this unhelpful? Because politicians and, I’m sorry to say, all too many news organizations immediately seized on the 2 million number and utterly misrepresented its meaning. For example, Representative Eric Cantor, the House majority leader, quickly posted this on his Twitter account: “Under Obamacare, millions of hardworking Americans will lose their jobs and those who keep them will see their hours and wages reduced.”

Not a word of this claim was true. The budget office report didn’t say that people will lose their jobs. It declared explicitly that the predicted fall in hours worked will come “almost entirely because workers will choose to supply less labor” (emphasis added). And as we’ve already seen, Mr. Elmendorf did his best the next day to explain that voluntary reductions in work hours are nothing like involuntary job loss. Oh, and because labor supply will be reduced, wages will go up, not down.

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President Obama will pronounce on the state of the union for the fifth time on Tuesday, and never during his time in office has the state of the economy been better — yet rarely has he gotten such low marks from the public for his handling of it.

Not only have economic indicators shown progress toward pre-recession health, but many forecasters are predicting what one called “a breakout year” for growth. A new study from a Federal Reserve economist even put a more benign spin on a negative trend, the shrinking labor force, by attributing the decline not to discouraged unemployed workers who have quit looking for jobs, but to the first baby-boomer retirements.

Demand for labor is up and the unemployment rate is below 7 percent for the first time since November 2008. Consumers, buoyed by rising home prices and stock values, are spending more; so are businesses. Exports are growing as Europe regains health. The fiscal drag from state and federal spending cuts has abated. And contrary to Republicans’ claims, many forecasters do not see the health care law as “a job-killer.”

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