Currency Exchange Rate Oversight Reform Act of 2011
Floor Speech
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Mr. BARRASSO. Mr. President, I come to the floor, as I have repeatedly since the health care bill was signed into law, to offer a doctor's second opinion about issues related to that health care law.
A group of House and Senate Republican lawmakers, including Senator Thune of South Dakota, released a startling new report about the President's health care law. The report is entitled ``CLASS' Untold Story: Taxpayers, Employers, and States on the Hook for Flawed Entitlement Program.'' I commend this report to my colleagues.
Many may remember that President Obama's health care law established a brandnew, Federal long-term care entitlement program. It is called the CLASS Program, the Community Living Assistance Services and Supports Program.
This CLASS Program pays a stipend to individuals enrolled when they are unable to perform daily living activities--dressing, bathing, eating. To qualify for the benefits, an individual would have to pay a monthly premium for 5 years--pay a monthly premium for 5 years--before the Federal Government starts to pay out any of the benefits.
The health care law mandates that the CLASS Program collect individual premiums for those 5 years before the program actually even starts to pay out benefits.
It sounds pretty good but not so fast. When it comes to the health care law, the American people have come to realize that if it sounds too good to be true, it probably is.
The CLASS Program was supposed to start January 1, 2011--10 months ago. But the Obama administration's officials decided to delay the program because they know it does not work. It is now known that the CLASS Program was an intentionally designed budget gimmick--that is correct: an intentionally designed budget gimmick.
During Senate floor debate of the President's health care bill, I, along with many other Members of this side of the aisle, warned repeatedly--repeatedly--that the CLASS Program is a financial disaster waiting to happen.
The Congressional Budget Office estimated the CLASS Program would reduce the deficit by $70 billion over a 10-year period. These savings are mythical, and they come from the premium dollars CLASS collects those first 5 years, before it pays out a single penny.
During those first 5 years, the program is not required to pay out any benefits to any individuals. Over its first 10 years, the Congressional Budget Office says this CLASS Program will collect $83 billion in premiums and only pay out $13 billion in benefits.
But instead of holding on to the $70 billion in excess premiums collected to pay for future expenses we know are coming, Members of the Senate--Members on the other side of the aisle--used those same funds to pay for President Obama's health care law.
To add insult to injury, Washington Democrats then tried to claim that the $70 billion could also be used to pay down the deficit.
The American people immediately saw this claim was irresponsible. Even the Senate Budget Committee chairman, Senator Kent Conrad from North Dakota, admitted the CLASS Program was ``a Ponzi scheme of the first order--something Bernie Madoff would be proud of.'' Yet the President and Washington Democrats pushed to include this CLASS Program in the health care law.
This new report provides undeniable evidence that administration officials knew the CLASS Program's design and payment structure were fiscally unsustainable. The Obama administration knew it. Yet they repeatedly ignored the explicit and persistent warnings.
One might ask: Why is that? The only logical explanation is, administration officials chose to hide the CLASS Program's true cost from congressional lawmakers and the American people--all to advance President Obama's ideological health care agenda.
This push to advance an agenda, rather than reasonable patient-centered health care reforms, served only to create yet another unsustainable entitlement program, an entitlement program this country simply cannot afford. The Obama administration's own Chief Actuary, a man named Richard Foster, repeatedly tried to tell administration officials that the CLASS Program was not fiscally sound. Internal e-mails from Mr. Foster first warned administration officials in May of 2009--well before the health care law was enacted.
According to that report, Mr. Foster's e-mail says:
The program is intended to be ``actuarially sound'', but at first glance this goal may be impossible. Due to the limited scope of the insurance coverage, the voluntary CLASS plan would probably not attract many participants other than individuals who already meet the criteria to qualify as beneficiaries.
He went on to say:
While the 5-year ``vesting period'' would allow the fund to accumulate a modest level of assets, all such assets could be used just to meet benefit payments due in the first few months of the 6th year.
Then, a key sentence:
The resulting substantial premium increases required to prevent fund exhaustion would likely reduce the number of participants, and a classic ``assessment spiral'' or ``insurance death spiral'' would ensue.
What does this mean in plain English? It means the CLASS premiums will be too expensive to persuade young, healthy people to participate. It means the CLASS plan's long-term care payout is very enticing to people who know they are going to need the care; healthy people do not participate, sicker people do participate. Individuals in the health care system call this phenomenon adverse selection. When adverse selection occurs, the American taxpayer is at very serious risk of being forced to bail out the program when it fails.
The report goes on to show that Mr. Foster repeated his concerns during the summer of 2009. He writes to another administration official:
I'm sorry to report that I remain very doubtful that this proposal is sustainable at the specified premium and benefit amounts.
He says:
Thirty-six years of actuarial experience lead me to believe that this program would collapse in short order and require significant federal subsidies to continue.
Let me remind everyone that the Chief Actuary is a nonpartisan, high-ranking official at the U.S. Department of Health and Human Services. The Chief Actuary's estimates are critical to understand the health care law's true fiscal impact and long-term viability.
Mr. Foster certainly does not have an ax to grind. He simply offered his analysis based on the data, and the Obama administration ignored it. Not only did Obama administration officials ignore Mr. Foster, they stopped requesting his input. But Mr. Foster was not alone.
In the fall of 2009, the Department of Health and Human Services' Office of the Assistant Secretary for Planning and Evaluation also raised the red flag. According to the report, one employee wrote in an e-mail on October 22:
Seems like a recipe for disaster to me. ..... I can't imagine that CLASS would not have high levels of adverse selection given the significantly higher premiums compared to similar policies in the private market.
Just a week after Senator Thune released this stunning new report on the floor of the Senate, media outlets indicated that the Department of Health and Human Services has closed its CLASS Program. Mr. Bob Yee, the CLASS Chief Actuary, announced the closure in an e-mail. He went on to say he would leave his position as the CLASS office Actuary effective immediately. News reports indicated the CLASS office's employees have either been reassigned or asked to leave.
Mysteriously, however, the Department of Health and Human Services issued a statement denying the office was officially closing. In fact, the statement failed to say if and when the CLASS Program would even start. The Obama administration has had 18 months to figure out how to implement this CLASS Program. Recent developments show they are not even close to resolving questions about the program's solvency.
The American people deserve more. The American people deserve the truth. The evidence is indisputable. Administration officials at the Department of Health and Human Services knew the CLASS Program was unsustainable, and they knew it before President Obama signed the health care bill into law. They knew it. Yet this Senate and the House of Representatives and the administration failed in their duty to be honest with the American people and to tell them the truth.
Were administration officials deliberately hiding CLASS's true cost for political gain? This is certainly not the first time during the last several weeks that we have seen troubling reports exposing the administration's tendency to ignore financial warnings. They ignore the warnings so they can advance politically important projects to them--projects that turn into expensive failures, with the American taxpayers being stuck with the bill.
I see this report, this incredible study, as yet one more piece of evidence that the President's health care law must be repealed. It must be repealed and replaced with reasonable, commonsense, and financially sound alternatives: patient-centered reforms that allow individuals to get the care they need, from the doctor they want, at a price they can afford.
I yield the floor.
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