The CLASS Act

Floor Speech

Mr. THUNE. Mr. President, late last week the American taxpayer got some very good news, and that was that the administration announced they were not going to move forward with implementing the CLASS Act. It was a stunning end for something many of us have believed is a fiscal timebomb for our country. They acknowledged it is simply not workable. In fact, HHS Secretary Katherine Sebelius said, ``Despite our best analytical efforts, I do not see a viable path forward for CLASS implementation at this time.''

The Washington Post went on to say that ``the Obama administration cut a major planned benefit from the 2010 law on Friday, announcing that a program to offer Americans insurance for long-term care was simply unworkable.''

The Hill reported that ``HHS officials acknowledged that CLASS fell apart simply because it was too flawed to salvage.''

From Politico: `` ..... a stunning end to a financially troubled long-term care insurance program and a major setback to the health care reform law.''

Even the New York Times editorialized that ``it was too costly and would not work.''

This is good news for the American taxpayer. This is something many of us argued was the conclusion that inevitably people would come to, when this was discussed and debated as part of the health care reform bill over a year ago. In fact, on December 4, 2009, I offered an amendment to repeal the CLASS Act.

It was then offered as one of the pay-fors for the President's health care reform bill. At that time, it was said it would generate somewhere on the order of $70 billion in additional revenue that could be used to pay for the health care bill. More recent estimates of that number are somewhere in the order of $86 billion that would be generated in the first 10 years. One of the reasons for that was, of course, people would begin to pay premiums even though they would not start demanding benefits until later. Even at that time, there was tremendous concern that this would run up deficits, blow up deficits in the outyears when you got outside of that 10-year window; that after people were through paying their premiums and started demanding benefits, this would get into sort of a downward death spiral and would never pay for itself. That was a conclusion many people were drawing already, at the time, that there was such a rush to pass health care reform through here and to come up with ways to pay for it, that this ill-fated program was included. It was interesting because that amendment I offered back in December 2009 actually had pretty broad bipartisan support. At that time, every Republican voted for the amendment and 12 Democrats as well. We had a majority of Senators--51 Senators said in December 2009 that we ought to repeal the CLASS Act from the underlying health care bill simply because it was not workable and it was going to run up deficits in the outyears and everybody knew it. Instead, we proceeded and plowed forward, and the health care bill was going to be passed irrespective of concerns that had been raised by many of us but, more importantly, also by people who really study these things, people in the Congressional Budget Office, the Actuary at the Health and Human Services Department. There were a lot of warnings going forward about this program and what a bad idea it really was.

It is time that we be honest with the American people about this particular budget gimmick. I can't help but think that if we had come to this conclusion a long time ago, we would have saved some money when looking at whether this could be implemented, whether it could actually work. The inevitable conclusion is that it would not.

I want to read for my colleagues something that was stated by the Actuary at the Health and Human Services Department way back in 2009. In fact, this goes back to July 2009, well before the final vote occurred on the health care reform bill, particularly the vote on the amendment that would have stripped this provision from the health care reform bill. The Actuary at the Health and Human Services Department, Mr. Richard Foster, said:

I'm sorry to report that I remain very doubtful that this proposal is sustainable at the specified premium and benefit amounts ..... 36 years of actuarial experience lead me to believe that this program would collapse in short order and require significant federal subsidies to continue.

That was from the Actuary at the Health and Human Services Department.

Later that year, in the August-September timeframe, he said:

As you know, I continue to be convinced that the CLASS proposal is not actuarially sound.

I believe these are statements by somebody who had looked closely at this program and had come to the right conclusion way back then--that it flat was not going to work. Yet, because of the mad rush to pass health care reform and to argue to the American people that somehow it was going to be paid for, this particular program was included. It clearly was a colossal mistake. Fortunately, it looks as though the administration has concluded the same. Hopefully we can get this killed once and for all so that it doesn't become a drain on our children and grandchildren, which it, of course, would when the bills started to pile up in those outyears and the deficits started to mount.

If you think about the fact that every American today owns about $48,000 of the Federal debt--I mean, for most Americans the Federal debt is like having a second mortgage or, for that matter, a first mortgage on their homes. They have an enormous amount of debt for which they are responsible. Instead of looking at ways to reduce that debt, reduce the size of government, and get spending under control, Washington, DC, continues to look for ways to expand government and to add to the amount of debt we are passing on to our children and grandchildren.

Last week, when the announcement was made by the administration that this program is simply not workable and they are not going to implement it, it was a huge victory for the American taxpayer and a huge victory for our children and grandchildren--future generations of Americans who would end up having to pay for this. If you think about the fact that we already have somewhere along the lines of $60 trillion in unfunded liabilities in other entitlement programs, piling on yet another one seems to be digging the hole ever deeper than it already is. What you do not want to do when you are in a deep hole is keep digging, and this plan, the CLASS plan, would have kept digging that hole even deeper for our children and grandchildren.

Interestingly enough, this was the analysis that was done by Health and Human Services when they came to the conclusion that it should not be implemented. Now, as you can see, this is a volume that is several inches thick, so obviously they looked very carefully at this. Unfortunately, they came to that conclusion 19 months later than they should have. But this is what they came up with in terms of concluding that the CLASS program would not work. So, having done that analysis, one would think the next logical conclusion would be, let's repeal this piece of legislation. Let's get this off the books. Yet the administration is still talking about and still somehow wedded to the idea that somehow this might work, so they are saying they don't want to see it repealed.

Well, Senator McCain, my colleague from Arizona, was down here earlier today talking about this program and this report, and he is a cosponsor, as I am, of a piece of legislation we put forward to repeal the CLASS Act. We will work as quickly as we can to put together legislation, now that we have this report from HHS, that will actually move forward with the intention to repeal this. But it strikes me that this is something most of my colleagues, given what we know now, should be willing to support, and especially given the fact that there were 12 Democrats who voted with the Republicans back in December 2009, to constitute a majority here in the Senate. There were 51 Senators who voted to repeal the CLASS Act from the health care bill back in December 2009 before all of this analysis came out. So now that we have this analysis in front of us, it seems to me that the logical thing we should do is to move forward with repealing this piece of legislation.

It is interesting; when we were debating in the Senate back in December 2009, many of my colleagues in the Senate said things about the CLASS Act that were very supportive; that they actually, I guess, believed this was going to work. I will not mention names to protect the guilty, but they called it a breakthrough. Some referred to it as a ``win-win.'' Others referred to it as ``critical.'' One of my colleagues said: So we get a lot of bangs for the buck, as one might say, with the CLASS Act that we have in this bill. Another one of my colleagues said: One of the critical pieces of the bill is the Community Living Assistance Services and Supports Act, or the CLASS Act. Another one said: The CLASS plan is a win-win. One went so far as to suggest that certain colleagues on our side of the aisle who argued that the CLASS plan would lead to a financially unstable entitlement program that would rapidly increase the deficit--he went on to say that was simply not accurate.

There are many of my colleagues on the other side of the aisle who at the time believed wrongly this was going to work. I hope, now that we have this voluminous copy of the analysis done by the Department of Health and Human Services, they will join with us in repealing this really bad piece of legislation and get it off the books once and for all. We have 32 cosponsors on a bill that would do that. I hope that we, at the very first opportunity--and perhaps that will be even sometime this week--in the legislation we are considering now, could have an amendment that would repeal the CLASS Act so we can put this issue to bed once and for all for the American people.

It seems to me, with the kinds of year-over-year deficits we are running--$1.3 trillion, $1.4 trillion deficits--the very least we can do is take something we know is not going to work and focus on those things that actually will work. We ought to be talking right now about that which will reduce government spending, make the Federal Government smaller, expand the private economy, and look at what we can do to create jobs.

I am not suggesting for a minute that the issue of long-term care is not important; it is. There are right ways and wrong ways to deal with that. The CLASS Act represented the very worst way to deal with that; that is, to come up with a program that has been described as a downward death spiral and actually add to the debt we are going to pass on to our children and grandchildren, knowing full well this program would not pay for itself. It is a farce. It was never going to reduce the deficit. We now have that demonstrated in this analysis that has been done. So I hope my colleagues here in the Senate on both sides of the aisle will come together and recognize that and repeal once and for all this very bad piece of legislation.

It was good news when the administration recognized they couldn't implement it, it was not workable. It would be better news for the American taxpayers and for future generations of Americans if the Congress would repeal this legislation and do it soon.

I yield the floor.

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