Repeal the Class Act

Floor Speech

Mr. THUNE. Mr. President, I come to the floor today to laud the actions of the House of Representatives which voted to repeal the CLASS long-term care entitlement program that was created by the health care law. The vote yesterday in the House of Representatives was 267 in favor of repeal. It was a bipartisan vote. It was a clear, I think, message that this is a piece of legislation that needs to be taken off the books.

It was a disaster in the making from the very beginning. Many of us tried to predict that ultimately this program was destined to fail. The vote in the House of Representatives yesterday to repeal this insolvent program I hope will pave the way for the Senate to follow suit. My fear has been all along that if we do not get this program off the books, at some point there will be an attempt to resurrect it. That would be the absolute worst outcome and worst scenario for the American taxpayer because this is a program that, even before it was voted on and added to the health care bill, was predicted would fail.

The Congressional Budget Office said it would run deficits in the outyears. The Actuary at the Health and Human Services Department predicted that this was a program that actuarially was unsound, could not be viable in the long run. It was here in the last few months that finally the Secretary of Health and Human Services, Kathleen Sebelius, came out and said, ``I do not see a viable path forward for CLASS implementation.''

That was a statement she made back in the middle of October. So even the person who was tasked with implementing this program has now said there is no viable path forward for CLASS.

We ought to get this off the books. It was, in fact, a pay-for in the health care bill. It was designed to help understate the cost of the health care bill. It front-end-loaded premiums, got revenue in the door early, knowing full well that when the demands for payments came later on that it was going to be upside down, and it was clearly a program that I think, by any account, all who observed this process closely knew just flat out this would not work. But what was done--it obscured the cost of the health care bill and helped it to sort of balance out because it was front-end loaded, saw revenues come in in the early years before payments would have to go out in the outyears.

I am hopeful the Senate will take the action that was taken by the House of Representatives and end this once and for all. We have people on both sides of the aisle who have come to that conclusion. There was a lot of debate, even in the runup, the lead-up to the health care bill, about how this would not work. I offered an amendment during the health care debate to strip it. We had 10 Democrats at the time who voted with me on that amendment. Many of them made statements regarding this legislation and the implications if it were to pass. In fact, the Senator from North Dakota, the chairman of the Senate Budget Committee, said at the time that this is ``a Ponzi scheme of the first order, the kind of thing that Bernie Madoff would have been proud of.''

He vowed to block its inclusion in the Senate bill. It ended up in the Senate bill and ended up in the overall bill, so to this day it is still a part of the health care legislation but a part that needs to be stripped out if we are going to do what is in the best interests of the American taxpayer and not put yet another unfunded liability on the backs of our children and grandchildren.

We have a lot of bipartisan support for repealing it. There are a lot of people who have weighed in against this, who know it will not work. We have an awful lot of outside interests as well who have observed, now, that this is not something that is sustainable over time. In fact, a lot of editorial pages around the country, newspapers have weighed in on this. The Washington Post:

..... a new gimmick that has been designed to pretend the health reform is fully paid for.

That is something they said back when this was being debated.

The Wall Street Journal:

Known by the acronym CLASS, the long-term care insurance program for nursing homes and the like was grafted onto the health-care bill mostly to hide that bill's true costs.

It has been described as ``a budgetary time bomb.''

It seems to make perfect sense to me, and I hope to many of my colleagues, that we take the steps necessary to get this program off the books once and for all. In trying to justify this, there are people who say we ought to keep it on the books in case we figure out a way to go forward with it, to implement it. It does not work. It cannot work. That has been known from the very outset.

I want to mention something else the Actuary, Rick Foster, said prior to it being voted on. He said:

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.

I want to repeat that. This is from the person who studies the trends and makes sure, or tries to make sure, these programs are actuarially sound.

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.

That was the warning that was issued way before the vote ever occurred on the CLASS Act.

He described it as `` ..... a classic `assessment spiral' or `insurance death spiral.' '' Those are words he used to describe this.

The program is intended to be ``actuarially'' sound but at first glance this goal may be impossible.

These were all statements made by the Actuary.

Those of us who were here at the time and were concerned about this being included in the health care bill came to the floor and, as I said, I offered an amendment to strip it. It came close to getting the necessary votes but unfortunately came short. It had broad bipartisan support but we recognized at the time this thing was destined to fail. Now we have all this, the studies that have been done since, that validate that by the objective third-party validators, if you will, by the HHS Actuary.

It seems to me at least that the American taxpayers, the American people deserve to know where their elected officials stand on the CLASS Act. Are they for keeping this unviable, insolvent, actuarially unsound provision in the health care bill, which now even those who are tasked with implementing it--the Health and Human Services Secretary, Kathleen Sebelius--have said there is no viable path forward for its implementation? Are we going to continue to keep this around? Or are we going to have a vote here in the Senate to put an end to this once and for all?

I hope the majority leader, Senator Reid, will allow us to get this up for a vote. It has been passed in the House of Representatives. It is very clear based on not only all the actuarial evidence but all those who have looked at it who are tasked with trying to put it into practice that it is not going to work. I hope before this goes any further we will get a vote here in the Senate that will echo what happened in the House of Representatives and that we will do the right thing by the American taxpayer and get rid of a program that, if it ever is resurrected, if it ever is reincarnated in some form, would be a terrible drain on American taxpayers, not only today but well into the future, and represent yet another unfunded liability that we will put on the backs of our children and grandchildren. It is time to end the CLASS Act once and for all.

I am going to continue to press for a vote on this and I hope Majority Leader Reid will allow us to get a vote on repeal of the CLASS Act so the American people do know exactly where their elected officials stand and whether they are going to stand on the side of the taxpayer, stand on the side of common sense, or stand on the side of using this budgetary gimmick to understate the cost of the health care bill and perhaps at some point in the future put a plan in place that literally is not going to work, is only going to continue to lead us on the pathway to bankruptcy.

I yield the floor.

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