Rebuild America Jobs Act--Motion to Proceed

Floor Speech

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Mr. THUNE. Mr. President, I appreciate the objection of the Senator from West Virginia and I appreciate his comments about the importance of long-term care. I agree, it is something we need to address in this country. There are other ideas out there, and I think better ideas, ideas that are based upon incentives as opposed to creating a new government program. But let me get, if I might briefly here, for a moment at what I believe is the real issue.

This was a program destined to fail. It was clear from the beginning many of us said that. There were 12 of my colleagues on the other side, 12 Democrats who voted to strike this particular provision from the health care bill back in December of 2009. I think at that time many of us were making the same arguments the experts are now conceding at the Department of Health and Human Services. In fact, there were colleagues on the other side, one of my Democratic colleagues, who called this ``a Ponzi scheme of the first order, the kind of thing that Bernie Madoff would be proud of.'' That is how it was described before it was voted on and put into the health care bill to help demonstrate the health care bill would actually reduce the deficit.

The fact is, after having had several months to look at this, here we are 19 months or so later, the Department of Health and Human Services has concluded that this doesn't work. They can't make it work. Now the CBO has come out and said it doesn't impact the budget. My view is we ought to pull this, we ought to get it off the books, and we ought to address the issue in a way that makes sense for the American people, not in a way that adds trillions of dollars of additional debt.

If we look at what we have today in terms of unfunded liabilities, we have $61.6 trillion in unfunded liabilities in this country or $528,000 for every family. That is five times what most families have in terms of home mortgages, car mortgages, other types of debt. That is what we are piling on the American people today. This would have been yet another unfunded liability, and the experts warned us at the time.

Now, we did an investigation of this. It was published in September. I worked with some of my House colleagues on it. It was ``The CLASS Act, The Untold Story.'' It concluded that the actuaries at HHS were saying before this bill was even passed that it would be a recipe for disaster, that it would lead to an insurance death spiral, and the Chief Medicare Actuary at HHS said at the time:

..... 36 years of actuarial experience lead me to believe that this program would collapse in short order and would require significant Federal subsidies to continue.

That is what the experts were saying about this program way back before it was even voted on in 2009.

I think we ought to acknowledge what now everybody concludes to be the case; that is, this program will not work. It is actuarially unsound. We ought to repeal it. We ought to get it off the books, and that was simply what my motion would do. I regret that the other side has objected to it, but I have some of my colleagues today who have been very active on this issue.

I say to my colleague from Arizona, in light of this report that came out from the HHS last month outlining exactly why they cannot move forward with CLASS, it seems difficult to understand why the administration doesn't support repeal of this program. Can my colleague make any sense out of this contradiction and apparent hypocrisy to say a program doesn't work, yet we want to keep it on the books?

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Mr. THUNE. I would simply say--we have the ranking member of the Budget Committee here too--that it strikes me that there were probably lots of other budget gimmicks in the health care law that are going to come to the surface in the same way this CLASS Act gimmick has. The Senator from Arizona pointed out they tried to understate the true cost by taking a lot of savings in the early years as people were paying premiums, knowing full well in the outyears it was going to add billions of dollars to the deficit. So it was a gimmick that was used, again, to make this salable to the American people and salable here.

In spite of that, there was still a majority of Senators who voted again against this, who actually voted to strike the provision from the health care bill in December of 2009 when I offered that amendment.

It seems to me at least we ought to have bipartisan support now that everyone has come out and recognized what we were trying to tell them in advance: this doesn't work, it was a gimmick, and we ought to get it off the books.

I ask my colleague, the ranking member of the Budget Committee, about this budget gimmick that was used. Is it illogical to think if we have this $2.5 trillion expansion of government in the form of this new health care bill that somehow it is going to reduce the Federal deficit because that was the argument that was made at the time, and that is one of the reasons they were able to make that argument? I suggest there are going to be lots of other gimmicks we are going to uncover to demonstrate this thing was way out of line at the time, but I ask for his comments as being the ranking member of the Budget Committee.

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Mr. THUNE. I would say to our colleague from Wyoming, who is a physician and has a lot of experience on these issues, who comes down every week with a second opinion talking about all the various issues regarding the health care bill--the more recent one, as we have all seen now is contrary to predictions--health care costs are going up. The predictions were that they would go down. That is also something many of us saw coming.

The question is if we leave this on the books, and if they decide at some point to resurrect it--after they have already acknowledged it doesn't work--and come up with some new language that does away with the Judd-Gregg proviso, what are the fiscal consequences of this program being resurrected? We talked about this, and there were lots of predictions made at the time.

In fact, the Senator from Arizona had statements from some of our colleagues who said on the floor at the time how this was going to be a great deal and how it was going to work. The administration said at the time that this was not a budget gimmick. That is what they were quoted as saying. Clearly this was a budget gimmick. We all know that now. It is a Ponzi scheme. Clearly that is what the actuaries are saying at Health and Human Services.

If, in fact, we don't get this repealed and at some point this program ends up being resurrected, what are the fiscal consequences and implications for the country and future generations who will be saddled with yet another unfunded liability, another entitlement program that is not paid for?

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Mr. THUNE. We all saw this coming and we tried our best to prevent it, but now we know and we have these statements that came out as part of the report that was done by the House and Senate, an investigative report called the CLASS Act, the untold story. It was published in September. What it revealed was that the Health and Human Services Department actuaries--the people who are the experts, not the politicians, not those of us who are making many of these statements during the political debate we are having here in the Senate--who are actually responsible for doing the math on this came up and called the CLASS program a recipe for disaster. Those were in internal e-mails we discovered when we were doing this investigation.

Prior to their announcement in October that HHS is not moving forward with the CLASS program at this time, Secretary Sebelius and other officials at the Health and Human Services Department claimed through much of 2011 that the Department had sufficient authority to modify it. What they were trying to suggest is that we can make this work. Yet these internal documents cast significant doubt on all of those assertions.

I will repeat this because I think this is important. The Chief Actuary, during 2009, when this program was being debated--it was a part of the health care bill. It was during the debate here in the Senate. Richard Foster said:

..... 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 what they were saying in 2009 before this vote ever occurred. He also went on to say:

..... this would end in an insurance death spiral because the coverage would only be attractive to sicker people who will need costly services. This will force premiums higher and deter healthy individuals from enrolling.

You have all the experts who were putting all this information out there and sharing this with their superiors, all of who were out there on the record promoting this as being something that would work and something that is not a budget gimmick, but actually could, in fact, be actuarially sound. We all know now it was not. It wasn't then and isn't now and that is why we ought to repeal it.

Again, I appreciate my colleagues' input and work on this. I think this is something we ought to end. We need to put the final touches on this program and end it once and for all so it doesn't come back in some other form and saddle future generations with trillions of dollars of additional unfunded liabilities and debt. There are ways we can approach this issue.

In fact, I have some ideas that I introduced in 2007 that deal with long-term care and providing incentives for people that we all are going to be faced with at some point in our lives. But this is the wrong way. It was the wrong prescription at the beginning. It is the wrong prescription now. That is why it ought to be repealed.

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Mr. THUNE. We have to quit making promises we cannot keep. What we are seeing today in Europe and the meltdown that is occurring in the economies over there is a result of too many promises that were made, too much government debt, governments that have gotten too big, that can no longer be supported by the economy in those countries.

That is where we are headed. That is why we have to start living within our means. We have to quit spending money we don't have, and this was a perfect example of the tendency around here to want to grow government, to have a government answer, a government solution for everything, when this makes matters not better but much worse. It makes it much worse for hardworking taxpayers in this country and for future generations of Americans for whom this would become an enormous liability added already to the $528,000 that every family in this country owes, the mortgage they have on their families already as a result of the unfunded liabilities we have already racked up. We cannot keep making promises we cannot keep.

I hope we can get this repealed, and I appreciate my colleagues' hard work in that regard and look forward to getting an opportunity to get it voted on. I am sorry our request this afternoon to repeal it was rejected, but I hope we will get another opportunity to revisit that and perhaps a vote that will actually put people on the Record. I believe there is a majority of Senators who agree with us on this point.

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