Editorial: Class Warfare
The Wall Street Journal
Repealing an entitlement that even the White House says won’t work.
The House votes today on repealing one of the Affordable Care Act’s major new subsidy programs, and the referendum deserves more attention than it will probably get. The important point is not merely eliminating one of ObamaCare’s worst abuses, but that the entitlement state might shrink for the first time in generations.
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. Class came with a five-year waiting period before it started to pay out benefits, but it started collecting revenues immediately. The front-loading helped ObamaCare appear to reduce the deficit in the short run–even though the Class Act was designed to go broke after a decade, which is outside the Congressional Budget Office’s 10-year budget windowâ€¦
â€¦If Congress can’t strike a zombie entitlement that has no constituency, that now even the Administration says is unworkable, and that its own deficit commission recommended eliminating . . . well, what hope is there for reforming other entitlements?
Repeal CLASS Act Already
By Douglas Holtz-Eakin
The Community Living Assistance Services and Supports Act is the poster child for President Barack Obama’s health care reform: bad policy, deceptive budgeting and stealth government expansion. It’s time to make it go awayâ€¦
â€¦The budgetary danger was passed via deception. The Congressional Budget Office estimated that the CLASS Act would reduce budget deficits by $81 billion over the next decade — an amount touted by the reform’s advocates. Alas, if it were only true.
The CLASS Act, unfortunately, showed only the tax collections in the first decade. Its explosive spending growth was hidden beyond the budget window to stealthily swell deficits in the long run.
Defend Freedom — Repeal CLASS
By Grace-Marie Turner
CLASS was a fiscal time bomb. It’s clear the program’s main initial function was to pump up Obamacare’s financing, since it would have collected premiums for five years before paying out a penny in benefits. As a result, the Congressional Budget Office estimated that it would reduce budget deficits by $81 billion over the next decade.
But the payouts would soon bleed red ink. The new entitlement program would have paid $50 a day for long-term-care services for anyone who had paid premiums for five years. It was inevitable that the program would attract older, sicker people, sending CLASS into a death spiral.
Congressional Research Service: Courts Could Force HHS to Implement CLASS Act, Despite Its Insolvency
By Avik Roy
Why, you might ask, should Congress bother to repeal CLASS, given that Sebelius has suspended its implementation? Because, according to the Congressional Research Service, courts could force her to implement the new entitlement, despite the fact that it will blow up the deficit.
According to the text of the Affordable Care Act, Secretary Sebelius is required to “designate a benefit plan as the CLASS Independence Benefit Plan” by October 1, 2012. Back in November, the House Energy and Commerce Committee asked CRS to evaluate the question: based on this language, could advocacy groups file suit against HHS for failing to implement the program? Would a court be likely to side with these plaintiffs? According to CRS, it’s a real possibility.
“If the Secretary does not designate a plan by October 1, 2012,” write the CRS staffers, “this failure to act would appear to be the type of agency action that could be challenged under the judicial review provision for agency action unlawfully withheld.” A court could grant deference to Sebelius’ finding that the program was unsustainable, but it could also force implementation of CLASS by “declaring the Secretary in violation of 5 U.S.C. Â§ 706(1) or issuing a write of mandamus to compel agency action, thus requiring the Secretary to renew her efforts to create a plan that is consistent with the statutory requirements.”