Currency Exchange Rate Oversight Reform Act of 2011

Floor Speech

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Mr. THUNE. Madam President, I come to the floor today to talk about one of the dirty little secrets around here, and that is the ticking time bomb that is right under our noses and that, until recently, had been virtually ignored until some recent activity in Congress and at the Department of Health and Human Services brought the program into the spotlight. That time bomb is the CLASS Act.

It is a long-term care entitlement program created by the health care reform law. On Tuesday, the Wall Street Journal described the inclusion of the CLASS program in the health care law as the definition of insanity.

I ask unanimous consent to have printed in the Record a copy of the article from the Wall Street Journal.

There being no objection, the material was ordered to be printed in the Record,

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Mr. THUNE. Madam President, the editorial highlights a point that I have been making since I first offered an amendment to strip the CLASS program from the health care reform bill back in December of 2009. The inclusion of the CLASS program is perhaps one of the most brazen budget tricks used by the majority in the health care reform bill. As the Wall Street Journal says:

CLASS was added to the bill because it was among the budget gimmicks that Democrats needed to create the illusion that trillions of dollars of new spending would somehow reduce the deficit.

Due to the 5-year vesting period required by the CLASS program, premiums will be coming in long before benefits must be paid. That pot of money somehow is simultaneously used to reduce the deficit and pay for other programs within the health care reform law.

When it is clear to Americans that the money is not there to pay benefits to beneficiaries, this administration will be long gone, and taxpayers are going to be left holding the bag. It is, at best, disingenuous the way the Democrats have promised individuals who participate in the CLASS programs that their premiums paid into the CLASS system will be available to pay out future benefits.

When I asked Secretary Sebelius about this program earlier this year in a Senate Finance Committee hearing, she called the program ``totally unsustainable.''

But HHS continued to push forward toward implementation, asserting that they have the authority to make changes in the program.

Given the inherent questions in the fiscal sustainability of the CLASS Act, I cochaired a bicameral group of Senators and Representatives, along with Representative Rehberg and Representative Upton from the House of Representatives, that investigated the behind-the-scenes story of the CLASS Act. We released the findings of our investigation last month in a report entitled ``CLASS' Untold Story: Taxpayers, Employers, and States on the Hook for Flawed Entitlement Program.'' I commend it to my colleagues. This report can be found by visiting my Web site, http://thune.senate.gov.

We found astonishing statements from within the Department of Health and Human Services that show the lengths to which the administration Democrats knew this program was on a crash course but proceeded anyway, statements such as, this program is ``a recipe for disaster'' with ``terminal problems.''

The e-mails also show that the independent Chief Actuary for CMS sounded the first warning in May of 2009. The Chief Actuary is a nonpartisan official who estimates the long-term financial effects of current law and proposed legislation. In May 2009, he wrote to other HHS officials, some of whom were working directly with Senate Democrats, saying, ``At first glance this proposal doesn't look workable.'' The Chief Actuary said a back-of-the-envelope analysis showed that the program would have to enroll more than 230 million people--more than the number of working adults in the United States--to be financially feasible.

A few months later, the Chief Actuary was more assertive in his comments. In July of 2009, after reviewing the latest information from Senate Democrats, he wrote HHS officials:

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.

Unfortunately, Democrats here in the Senate needed the political win more than they needed to hear the truth, so they pushed forward and included the CLASS Act based off of illusory savings coming in the form of incoming premiums from the paychecks of hard-working Americans--incidentally, some of whom may never consent to program participation.

Late last month, there was another interesting development that occurred. The Actuary tasked with designing the CLASS Program announced he was leaving his position at Health and Human Services and that the CLASS office was closing. HHS denied closing the CLASS office and said they are still evaluating this program, but in a blog post on healthcare.gov, HHS announced they will be releasing a report on CLASS sometime this month. I believe this report will indicate that this program does not have the fiscal muster to move forward, but it is possible that HHS may try to hide that information.

If this Congress is truly concerned about long-term deficits, this program should be at the top of the list of programs to repeal. This program may not cost taxpayers money in the short term as the premiums are coming in, but eventually it will require an ongoing bailout from taxpayers to the tune of billions of dollars.

I filed an amendment to the current legislation that is before us to repeal the CLASS Act. It probably will not get a vote today, but I hope that sometime in the days ahead the Senate will weigh in and exercise some common sense and do what we should have done a long time ago; that is, strike and eliminate this program so we do not have to deal with this massive timebomb that is ticking out there, waiting for future generations of Americans who are going to be stuck with the huge deficits that will occur when the inevitable happens. It is pretty clear that it is only a matter of time, as I submitted from the statements that were made by the Actuary at HHS and statements made by the Congressional Budget Office at the time.

There are all kinds of anecdotal evidence out there and all kinds of empirical evidence out there that suggests this is a program which is headed for fiscal disaster. It should not have been included as a pay-for in the health reform bill. That is why it was included, because it showed some short-term revenues. But the long-term costs, like many of the programs we funded here in the past, have a long tail on them, and the American taxpayer is going to be stuck on the hook for a long time into the future.

I hope we will have the good sense here in the Senate to repeal this program before it becomes the fiscal nightmare and fiscal disaster I think everybody has predicted it would be.

I yield the floor.

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