Chris Jacobs is policy director for America Next, a conservative think tank, and works a lot on health care issues. He has an op-ed in today’s Washington Examiner regarding Republican plans to find a new head of the Congressional Budget Office (CBO), replacing current director Doug Elmendorf.
The op-ed is mostly interesting to me in that it focuses on one of the more significant and more predictable failures of Obamacare, a program known as the CLASS Act. Here’s Jacobs explanation of what happened:
The program in question, Community Living Assistance Services and Supports, or CLASS, was designed to provide cash benefits for those needing long-term services and support. CLASS made it into Obamacare at the behest of then-Sen. Ted Kennedy, and over the objections of both Republicans and moderate Democrats, who considered it fiscally unsustainable; then-Senate Budget Committee Chairman Kent Conrad, D-N.D., famously dubbed CLASS “a Ponzi scheme of the first order, the kind of thing Bernie Madoff would have been proud of.” And so it proved — in October 2011, less than two years after the law’s passage, the Department of Health and Human Services determined CLASS could not be implemented in a fiscally solvent manner, and in January 2013, Congress repealed it entirely.
Jacobs explains how CBO failed to perform certain analysis that would have shown CLASS to be doomed, and he makes a good case. But the more interesting takeaway is that everyone paying attention (granted, that’s not many) knew CLASS was doomed. The reason it remained in Obamacare was pure and simple fraud – CLASS was expected to bring in far more revenue in the first ten years than it paid out in benefits, about $70 billion, which helped Obamacare be scored by CBO as reducing the deficit.
I don’t really have an opinion on whether Elmendorf should stay or go – I do know a big part of the problem with CBO’s numbers is that they’re required to take the language of the law as it stands, no matter how ridiculous it may be. Maybe instead of looking to replace Elmendorf, Congressional Republicans ought to be looking at replacing the rules they’re forced to operate under?
Sean Parnell ([email protected]) is a research fellow for health policy at The Heartland Institute.
