Sebelius admits the CLASS Act is flunking out

Secretary of Health and Human Services Kathleen Sebelius quietly pulled the plug last Friday on an alleged federal long-term care program for the disabled. We use the word “alleged” in this odd way only because the Community Living Assistance Services and Supports Act, a key component of Obamacare, was in reality little more than an accounting fiction designed to conceal the actual cost of health care reform.

The Washington Examiner warned Congress about CLASS many times, most recently last month when we called for its repeal. Sebelius’ action last week notwithstanding, however, it is unclear this week where President Barack Obama stands on the future of CLASS, thanks to some curious word-parsing by White House officials.

What is clear is that CLASS was a fiscal sleight of hand. By collecting premiums from voluntary enrollees for five years before paying out any benefits, CLASS helped foster the appearance of significant budget savings ($70 billion over a decade from enactment) resulting from Obamacare. But there simply was no way to accumulate enough funding to cover promised benefits. This is why Sebelius said she saw “no viable path forward” for the program.

During the debate over Obamacare in 2009 and 2010, Senate Democrats claimed the CLASS Act’s finances were just fine. Senate Majority Leader Harry Reid claimed CLASS was “fully paid for,” while Sens. Tom Harkin, D-Iowa, and Bob Casey, D-Pa., were among the many others who praised the CLASS Act and claimed that the program was actuarially sound. This claim wasn’t true at the time, and its falsity has now been definitively exposed by Sebelius’ concession.

How many other false claims are still to be found in Obamacare, beginning with the biggest falsehood of them all — “If you like your health insurance, you can keep it”? Not only did Democrats use the CLASS Act as an accounting gimmick to create a claimed $70 billion savings, but they also double-counted about $800 billion in savings from Medicare over the 10-year period starting in 2012. In fact, according to the Medicare program’s chief actuary, a large share of these savings should not have been counted even once, because they could not happen.

The question now is what is the president’s view. A spokesman said yesterday Obama opposes repealing CLASS. But the Congressional Budget Office has announced that the measure’s repeal by Congress would not add a dime to the federal budget deficit.

This should make it easier for Republicans to repeal it. If the presidential spokesman is correct that Obama opposes repeal even though his Health and Human Services secretary sees no future for CLASS, the president is digging himself into a political hole. He should remember the first rule of holes: When you find yourself in one, stop digging.

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