This week the U.S. House repealed an unsustainable entitlement called the Community Living Assistance Services and Supports (CLASS) program, which was created to offset the costs of Obamacare. Its repeal is a victory for those of us seeking to dismantle the fiscal quagmire of President Obama’s health care reform law.
A former director of the nonpartisan Congressional Budget Office called CLASS “the poster child for President Barack Obama’s health care reform: bad policy, deceptive budgeting and stealth government expansion.” The top Democrat on the Senate Budget Committee called it “a ponzi scheme Bernie Madoff would be proud of.”
It is also the key policy linchpin the Obama Administration used to offset the $1 trillion price tag on Obamacare. The CLASS program was not an accidental miscalculation, but rather an attempt to withhold information from the American people on the full cost of the health care law.
The CLASS program was intended to be a national, voluntary insurance program for long-term care. However, the program depended on budget gimmicks to hide the actual cost: it would immediately begin collecting payments, but would not pay out benefits for five years.
As a result, in the short run, it appeared viable, accounting for $80 billion in phony savings. But in the long run, particularly as America’s population ages, the new entitlement would wreak havoc on our already broken federal budget.
What is really alarming is that the President and other proponents of Obamacare knew about the fiscal train wreck and did nothing about it. A congressional investigation found that the administration was well aware of this budgeting trick, but ignored warnings from Health and Human Services officials that the program was a “recipe for disaster.”
Instead, the president and congressional Democrats rushed to include it in the law to achieve its phony savings as a way to shore up support for the health care law.
Thankfully, an amendment was added to Obamacare that required the administration to first ensure that the CLASS program would be solvent for 75 years, before HHS began implementation. Of course, that made transparency and disclosure wait until after Obamacare’s passage.
Only because of this requirement, last October, HHS Secretary Kathleen Sebelius had to suspend the program and admit that it was insolvent. Just as suspected, there was no way to successfully implement this new entitlement in a way that was fiscally sustainable.
The CLASS program’s failure is significant for two reasons. First, the phony savings now leave an $80 billion hole in our federal budget. Second, this program reveals the budgeting gimmicks upholding the health care law.
Still, the administration refuses to acknowledge these two facts. In fact, the president promised to veto efforts to repeal the CLASS program.
Obamacare-believers have buried their heads in the sand, but clearly, the false charade is unraveling before our very eyes. Repealing the CLASS program is one step toward undoing this atrocity.