Patterico's Pontifications

10/17/2011

Obama threatens to veto CLASS Act repeal

Filed under: 2012 Election — Karl @ 11:55 am



[Posted by Karl]

Via AoSHQ’s Gabriel Malor, comes this from The Hill:

President Obama is against repealing the health law’s long-term care CLASS Act and might veto Republican efforts to do so, an administration official tells The Hill, despite the government’s announcement Friday that the program was dead in the water.

For those who didn’t follow healthcare arcana, the CLASS Act was a long-term care program folded into ObamaCare as a sop to Sen. Ted Kennedy and to score roughly $70-80 billion in bogus deficit reduction:

Senate Budget Committee chairman Kent Conrad (D., N.D) called it “a Ponzi scheme of the first order, the kind of thing Bernie Madoff would be proud of.” Health and Human Services secretary Kathleen Sebelius admitted it was “totally unsustainable” in its current form.

However, by collecting premiums for five years before paying any benefits, Dems got the CBO to score it as reducing deficits within the first decade of projected ObamaCare.

So why would the Obama White House threaten to veto a repeal of the CLASS Act?  After all, they got the political benefit when they passed ObamaCare.  The likely answer is that Obama is sending a message to Congressional Dems that they cannot afford the news coverage that: (a) part of ObamaCare has already been exposed as a Ponzi scheme; and (b) it was repealed on a bipartisan basis.  That’s also behind the administration’s fairy tale about finding a way to make the CLASS Act work.  The administration simply cannot afford a vote where Dems join the GOP in repealing part of his signature legislative accomplishment during Obama’s re-elect campaign.  Team Obama just told Sen. Maj. Ldr. Harry Reid to block a repeal, citing the administration’s imaginary efforts to “fix” the CLASS Act as his fig leaf.

–Karl

48 Responses to “Obama threatens to veto CLASS Act repeal”

  1. Ding!

    Karl (f07e38)

  2. This WH is simultaneously terrible at politics and overly political.

    What in the hell were they thinking? Veto protection of something they admit is unsustainable? Rekindling the Obamacare issue?

    My guess is they hope to reconsider the CARE act in 2013.

    Dustin (b2fb78)

  3. CLASS rather than CARE.

    These acronyms are stupid, btw.

    Dustin (b2fb78)

  4. How weird is this? Wikipedia says that “Ted Kennedy” person is from a large white trash family what is prominent in the exact same state wall street romney governed for one term.

    Coincidence?

    happyfeet (a55ba0)

  5. Romney thanked Kennedy first, ahead of all other folks, for his health care vision which Romney made reality.

    He even called Ted Kennedy his ‘collaborator and friend’. Of course, that was then, and this is now, and Romney tells us he actually governed as conservatively as he could manage.

    Dustin (b2fb78)

  6. the dots … the dots are connecting themselves!

    god help us

    happyfeet (a55ba0)

  7. Of course they cannot repeal it–Then they would have no CLASS.

    -rim shot

    BfC (2ebea6)

  8. Guess this sort of blows the meme that Urkel moved the Obamacare challenge to the SOTUS to remove a Congressional gorilla from his aching back.

    gary gulrud (d88477)

  9. Guaranteed he would veto it. It would be a crystalizing moment of bipartisan opposition to one of the pillars of his idiocy.

    JD (36b0e9)

  10. However, Hairy Reed will never let it see the light of day, and Team R is too feckless to force their hand.

    JD (36b0e9)

  11. gary,

    Obama likely thinks his odds with the Supremes are pretty good.

    Dustin, JD,

    The point is that this really isn’t a veto threat; it’s a signal to Reid to block repeal in the Senate, to prevent said vote in the first place.

    Karl (f07e38)

  12. However, Hairy Reed will never let it see the light of day, and Team R is too feckless to force their hand.

    Comment by JD — 10/17/2011 @ 12:17 pm

    True and true.

    Dustin (b2fb78)

  13. The point is that this really isn’t a veto threat; it’s a signal to Reid to block repeal in the Senate, to prevent said vote in the first place.

    Comment by Karl — 10/17/2011 @ 12:18 pm

    I’m sure you’re right (didn’t think of this until you and JD spoonfed me,though).

    Dustin (b2fb78)

  14. Karl – Great minds.

    JD (36b0e9)

  15. Karl keeps dinging and I keep imagining him as a runway model.

    Obama threatens to veto his presidency.

    Sounds better.

    DohBiden (d54602)

  16. This was one of the pillars of the financial deceit that was BarckyCare. It formed a large chunk of the illusory deficit reduction that they claimed, and highlights the extent of their dishonesty needed to proceed with this monstrosity. But, leave it to Team R to waste this.

    JD (36b0e9)

  17. A “Class Act”, Obama isn’t.

    Ipso Fatso (74cbec)

  18. Here is the Wall Street Journal article on abandoning the implementation of the Class Act

    http://online.wsj.com/article/SB10001424052970204002304576631302927789920.html

    Here is today’s editorial:

    http://online.wsj.com/article/SB10001424052970204479504576635200446357240.html?mod=googlenews_wsj

    The reason they had to do this, according to teh Wall Street Journal is that when Obamacare was passed in the Senate, Senator Judd Gregg (R-N.H>) succeeded in insertting a provision that said that it be only be couldn’t be legally implemented if “an actuarial analysis of the 75-year costs of the program that ensures solvency throughout such 75-year period,”

    Well, the mathematics doesn’t work any better now than it did in 2010. The plan would cost as much as $3,000 per month, (because of adverse selection? Enrollment is voluntary.) and on top of that the government would have to warn enrollees that the promised benefits weren’t contracts, and could be abrogated. They needed to “dispel any claims that the Class program had misled the public or had encouraged reliance on its programs under false pretenses.”

    Maybe it would work better if people were given money for hiring people on their own, including under the table, rather than having nurrsing home care paid for.
    here is Hot Air:

    http://hotair.com/headlines/archives/2011/10/17/the-gop-should-capitalize-on-the-collapse-of-obamacares-class-act/

    Sammy Finkelman (d3daeb)

  19. The CBO has now said that repealing it would have no budgetary impact. But does that mean estimates of the deficit in coming years are higher?

    http://www.nationalreview.com/corner/280321/cbo-scores-class-repeal-having-zero-fiscal-impact-avik-roy

    From the CBO:

    “To Interested Hill staff:

    On Friday, the Secretary of Health and Human Services (HHS) announced that the department does not plan to implement the Community Living Assistance Services and Supports (CLASS) long-term care insurance program under current law. Therefore, in its next baseline budget projections (which will be issued in January), CBO will assume that the program will not be implemented (unless there are changes in law or other actions by the Administration that would supersede Friday’s announcement).

    Furthermore, following longstanding procedures, CBO takes new administrative actions into account when analyzing legislation being considered by the Congress—even if it has not published new baseline projections. Beginning immediately, therefore, legislation to repeal the CLASS provisions in current law would be estimated as having no budgetary impact.”

    Sammy Finkelman (d3daeb)

  20. 11. Compromising photos of Anthony K. on vacation in Tijuana.

    gary gulrud (d88477)

  21. Oh Noez Cell Phones cause cancers!!!Eleventyone!!!

    DohBiden (d54602)

  22. Nothing could better show the dishonesty of Obama and his “health care reform” fraud than vetoing the repeal of something his admin has already announced the abandonment of.

    SPQR (26be8b)

  23. This Idiot has a no capitialist dialect.

    DohBiden (d54602)

  24. Yeah, yeah – but where was the conservative media when it mattered?

    Did anyone, during the fight to defeat Obamacare, specifically cite the actuarial problems that brought down CLASS? If so, where and when?

    if this was so obviously flawed, why wasn’t the fact shouted from the rooftops?

    Oh, and while you’re at it check out this:
    http://www.mcknights.com/class-act-math/article/158841/

    Amphipolis (b120ce)

  25. You’d need real bi-partisanship to overturn 0’s veto. That’s why Reid has to stop it before it happens.

    htom (412a17)

  26. 27. Ha, Deutsche Bank and Moody’s are tilting at French downgrade–and the big three banks are practically speaking, nationalized already.

    Just 6, six, days to go for that $8 Billion handout to Greece so we can all breath easy for a month. Bennie then begins re-capitalizing Europe on his Green initiative.

    gary gulrud (d88477)

  27. So let me guess this straight tea partiers can’t stay in parks but the OWS commies can.

    DohBiden (d54602)

  28. However, Hairy Reed will never let it see the light of day, and Team R is too feckless to force their hand.
    Comment by JD — 10/17/2011 @ 12:17 pm

    It wouldn’t matter how feckless they are;
    since Reid detonated the Nuclear Option,
    the Sen Minority has lost virtually all power to force embarrassing votes upon the Majority.

    Another Drew - Restore the Republic/Obama Sucks! (35c310)

  29. Amphipolis,

    I frankly don’t remember hearing about the CLASS Act during the ObamaCare legislation process. That’s probably because I wasn’t as knowledgeable as I should have been but it could also be because the details of the ObamaCare legislation weren’t well known, even to Congress.

    To his credit, Senator Judd Gregg filed an amendment to the ObamaCare legislation requiring an actuarial analysis of the CLASS Act, and the GOP reportedly used the results (unsuccessfully) to try to stop the legislation from passing. The CLASS Act specifically survived a December 2009 attempt to strip it from the ObamaCare legislation. By the time ObamaCare passed in March 2010, no one was sure what was in it as illustrated by this Media Matters/Washington Times debate over the status of the CLASS Act.

    DRJ (a83b8b)

  30. Gregg was amazing. Seems like EVERYone else was asleep.

    Amphipolis (e01538)

  31. that would make his bill “CLASS-less” — just like the man.

    john b (1c3ee4)

  32. Stunningly stupid; veto the repeal.

    Obama is in full campaign mode and so are all the democrats in the house and 23 donk Senators. The last thing any of these people want is to vote to sustain a veto of the CLASS Act. To make this idiotic program self sustaining, 230 million Americans would have to voluntarily pay for someone else’s coverage. According to the Bureau of Labor Statistics, the nation’s entire labor force is 153 million.

    Arch (0baa7b)

  33. Amen Arch.

    DohBiden (d54602)

  34. Did anyone, during the fight to defeat Obamacare, specifically cite the actuarial problems that brought down CLASS? If so, where and when?

    — Amphipolis, they first had to pass the bill so that then we would then know what was in it. Remember?

    Icy (d986bf)

  35. Too many “then”s

    Icy (d986bf)

  36. Amphipolis,

    I don’t agree that everyone was asleep. The GOP didn’t want this legislation but the Democrats did and they had the votes. I know that because in December 2009, Senator Thune introduced an amendment that would have eliminated the CLASS (Community Living Assistance Services and Supports) Act from ObamaCare. Sixty votes were needed for passage and the final vote was 51-47. The vote divided largely on Party lines, with a few Democratic defectors from purple states. Thune was still arguing for the repeal of the CLASS Act as recently as April 2011, and he introduced a Bill to repeal the CLASS Act along with Senator Lindsey Graham and 27 co-sponsors. My guess is this Bill was one reason Sebelius announced the end the CLASS Act program last week.

    DRJ (a83b8b)

  37. I was wrong. Here’s the main reason the program stopped. It lost its funding.

    The text of Senator Thune’s October 14, 2011, press release:

    HHS Finally Admits ‘Totally Unsustainable’ CLASS Act Cannot be Implemented

    Flawed entitlement should be re-scored and repealed

    WASHINGTON, D.C.–Senator John Thune today applauded the Department of Health and Human Services (HHS) for listening to Republican opposition and abandoning Obamacare’s fatally flawed Community Living Assistance Services and Supports (CLASS) Act.

    “This is a victory for the American taxpayer and future generations. After ignoring repeated warnings from my Republican colleagues and me about the fiscal solvency of the CLASS Act, the Obama Administration jammed Obamacare through Congress in order to score a political win,” said Thune. “Now, over a year later, the administration is finally admitting the CLASS Act entitlement is unsustainable and cannot be implemented. Simply setting aside the program for the near-term is not enough. Repeal is the only solution to ensuring American taxpayers will not be on the hook in the future for this disastrous entitlement.

    “Now that the administration has publicly stated the CLASS office will close and the program will not move forward, the Congressional Budget Office should remove the $86 billion in fake savings from the books and Congress should repeal the provision once and for all.”

    Last month, Thune led a bicameral working group in releasing a report revealing the Obama Administration ignored repeated warnings about the financial solvency of the massive new entitlement and suppressed information on the viability of the program in the effort to achieve a political victory with the passage of the health care law.

    The CLASS Act was rejected on a bipartisan basis last month when the Senate Appropriations Committee decided to provide no funding for the implementation of the program.

    Thune has led the effort in the Senate to repeal the CLASS Act and has introduced legislation to achieve that goal.

    Information about the Secretary’s decision, including internal analysis of the CLASS program by HHS, can be found at: http://www.hhs.gov.

    DRJ (a83b8b)

  38. It would be great if there were some way to get ObamaCare rescored now that the CLASS Act has been dropped. After all, the CBO said (at page 24) the main projected savings under ObamaCare would come from cuts to hospitals and doctors, and the CLASS Act:

    A few provisions of the legislation account for most of those projected savings: changes to Medicare’s payment rates in the fee-for-service sector and to Medicare Advantage plans; reductions in Medicaid and Medicare payments to “disproportionate share hospitals” (hospitals that treat a disproportionate number of low-income people); and establishment of a long-term care insurance program (the CLASS Act).

    The CLASS Act is gone, at least temporarily, and I suspect the Doc Fix will be back, which means the only way to finance ObamaCare would be cuts to hospitals. No wonder major medical institutions like the Mayo Clinic want no part of ObamaCare.

    DRJ (a83b8b)

  39. I disagree with Amph. It’s not like we were conned into supporting Obamacare. We knew this was BS. The American people pretty much rejected it.

    It was rammed through in the dead of night against America’s wishes, with promises we’d like it eventually (knowing people cry if their goodies are taken away).

    Amph is doubtlessly right that Obamacare opponents did not have full command of the details, which I think was the democrat’s plan. The legislation is impossible to read, and I gave up after a few pages, yet it’s comparable in length to a Bible.

    Apparently a few were able to figure out this detail early enough to complain, but I doubt any level of complaints would have made a difference. Even today, I doubt we know all the consequences of this mess.

    Dustin (b2fb78)

  40. This didn’t really become known till the Affordable care Act was getting very close to passage.

    New York Times blog post with comments, March 24, 2010:

    http://newoldage.blogs.nytimes.com/2010/03/24/a-new-long-term-care-insurance-program/

    It was actually going to give people the choice of how to spend the money, which was $50 a day, so they could indeed hire people off the books at below minimum wage, although this isn’t mentioned as one of the possibilities..

    One of the biggest unknowns, Mr. Firman pointed out, is how many people will take advantage of the Class Act — especially since most workers have not heard much about it yet. “You have to have enough healthy people in the pool to make this work,” he cautioned. Otherwise, premiums could rise too high to be attractive or practical.

    This seems to be exactly the case. Payouts would satrt low, but rise spectacularly with time, and eventually people would stop enrolling, even though employed people would have to opt out.

    Sammy Finkelman (d3daeb)

  41. from the Wazll Street Journal’s “Political Diary” Tuesday, October 18, 2011:

    ….Welcome to the wilderness of mirrors that is the budget process. During the health-care debate, CBO scored the Class entitlement as a fiscal benefit because of a Democratic gimmick: The program would have collected $81 billion more in premium taxes over the next 10 years than it would have spent on home health aides and the like — even though this huge new liability would then have started draining the federal fisc in the following decade. Under these rules, getting rid of Class “costs” $81 billion, which Republicans would have to offset.

    But then the white smoke rose up from CBO, and in an email to staffers it ruled that it would adjust its baseline to “assume that the program will not be implemented,” since the Administration itself junked Class. “Beginning immediately, therefore, legislation to repeal the CLASS provisions in current law would be estimated as having no budgetary impact,” the message continued. In other words, repealing what is now a vestigial program merely ensures that the Class program remains vestigial, while actually preventing future taxpayer dollars from being spent would have also erased the fake deficit reduction.

    This kind of non-logic shows why the budget process is so in need of reform…..

    I would assume that the increase in the future deficit is scored as being done by the Obama Admninistration.

    Joe Rago, who wrote this piece, also writes that “the veto threat comes because the White House knows that a repeal bill would also be a vehicle for also repealing some of the health-care laws more unpopular and harmful elements that Democrats would find it difficult to oppose — which is why Republicans should use this new lever to the maximum extent.”

    Sammy Finkelman (d3daeb)

  42. “You have to have enough healthy people in the pool to make this work,” he cautioned. Otherwise, premiums could rise too high to be attractive or practical.”

    What do they mean by this? They mean healthy young men, particularly those who take care of themselves and don’t do drugs or are otherwise foolish, are robbed. That’s what they mean. They want everyone in the pool, not just the ones who actually benefit from these programs. That way, money is taken from people like me and simply given to other people.

    The only health insurance I need is for catastrophes. Otherwise, I can go down to the ‘Redi-Clinic’ in my grocery store when I’m sick, every three years or so, and get some medicine at a total cost of 25 cents a month at this point.

    Dustin (b2fb78)

  43. The Class Act isn’t health insurance. It’s long term disability insurance, which supposedly would make it easier to stay out of a nursing home. The meximum benefit was $350 a week which many people could pay out of Social Security or other retirement income and which could nowadays probably not cover the full cost of a live in caretaker although maybe if you hired a nursing student to stay half the time you might come close. People really would need otehr hired or family help too. Premiums would have eventually gotten or neexded to get up to $2,000 or $3,000 a month and no benefits would be paid out until someone had been enrolled for 5 years. We’re talking about a $180,000 investment. An annuity could probably pay out more.

    Sammy Finkelman (d3daeb)

  44. I think the CLASS act was actually just a trick to prop up the financial reality of Obamacare, rather than a true benefit.

    Dustin (b2fb78)

  45. SF> We’re talking about a $180,000 investment. An annuity could probably pay out more.

    Wait, that’s wrong.

    The problem was adverse selection. The problem was also that initially, there would be many enrollees, since poeple would have to opt out, but gradually as premiums rose more people would drop out, and you’d have less total money being paid into it than was being taken out, before you';d have fewere and fewer people taking the insurance. I suppose it would reach a point where an annuity would pay more but even before that
    you could not charge new enrolees high enough to cover it.

    Comment by Dustin — 10/18/2011 @ 12:23 pm

    I think the CLASS act was actually just a trick to prop up the financial reality of Obamacare, rather than a true benefit.

    It seems to have been that too, but maybe it wasn’t the original intention to have it remain in the final bill, but they were going to do something else to make the budget math add up, but because a new version of the bill could never pass the Senate again, they had to use the old Senate bill.

    And when they passed the reconcilation bill after passed the Affordable care Act in both houses, they left it in because it was scored as making the budget more balanced.

    The budget calculations worked because the Congressional Budget Office uses a 10-year time frame. This is the same thing that resulted in the Bush tax cuts sunseting in the 10th year. It doesn’t make sense to do so, except that way the 10-year total costs less.

    Well, if you have 6 years of premiums and only one of benefits, the program generates money, especially since you make enrollment automatic for many people.

    The Senate bill, however, also contained a provision that this had to work under a 75-year time horizon, and that is what ultimaterly doomed it, since there was no way to even pretend this would work out all right even if you stretched the interpretation of some of the law’s provisions.

    Sammy Finkelman (d3daeb)

  46. What’s disturbing is that Sebelius simply has fiat discretion over whether CLASS is sustainable.

    To deprive the GOP of a chance to score a repeal of a part of Federal Romneycare as a huge savings, she just shuts it down and lets it stay dormant. And if they want it back in a few years (for the premiums) a bureaucrat can just reverse course.

    They could invent all manner of dishonest schemes to show how this is really OK on paper.

    Hopefully we can get democrats on record voting down this measure, even if it’s just an amendment to another bill.

    Dustin (b2fb78)


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