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Obama Clings To CLASS Act Corpse

On Friday, the Obama Administration finally admitted what absolutely everyone knew all along: the CLASS Act, a major component of ObamaCare sold with transparent lies as a miraculous piggy bank full of “deficit reduction” money, is actually an unsustainable fiscal nightmare that not even HHS Secretary Kathleen Sebelius can pretend is solvent.  As Bloomberg News explains:

A long-standing priority of the late Sen. Edward M. Kennedy, it was supposed to function as a self-sustaining voluntary insurance plan, open to working adults regardless of age or health.

Workers would pay an affordable monthly premium during their careers and could collect a modest daily cash benefit of at least $50 if they became disabled later in life. The money could go for services at home or to help with nursing home bills.

But a central design flaw dogged CLASS. Unless large numbers of healthy people willingly sign up during their working years, soaring premiums driven by the needs of disabled beneficiaries would destabilize it, eventually requiring a taxpayer bailout.

That’s right, folks: it was another Ponzi scheme.  It would only have worked for the short time that healthy people throwing money into the CLASS Act pit could sustain the benefits for a steadily growing pool of beneficiaries.  The ridiculous claims of $86 billion in deficit reduction came from anticipating lots of early “contributors” and few expenses.  Nobody was supposed to think about what would happen when the ratio of suckers to beneficiaries inevitably declined.

Unfortunately for the Administration, the event horizon of CLASS Act collapse moved forward to the point where they couldn’t even keep up the laughable pretense that the program was solvent, never mind a printing press that would spew money into the Treasury and blow those deficit IOUs right out the window:

After months insisting that could be fixed, Sebelius finally acknowledged Friday she didn’t see how.

Despite our best analytical efforts, I do not see a viable path forward for CLASS implementation at this time,” she said in a letter to congressional leaders.

Officials said they discovered they could not make CLASS both affordable and financially solvent while keeping it a voluntary program open to virtually all workers, as the law required. The law also mandated that the administration certify CLASS would remain financially solvent for 75 years before it could be put into place.

In its ruling, CBO said repealing CLASS would have no impact on the deficit. Absent a viable program, the government would not see savings of more than $80 billion from premiums that would have been collected in the early years, before CLASS started paying benefits on a large scale.

(Emphasis mine.)  So, America has finally escaped from the top legislative priorities of the late Senator Ted Kennedy!  But wait… not so fast.  There is one person still willing to pretend this absurd boondoggle can be salvaged.  Guess who?

“We do not support repeal,” White House spokesman Nick Papas said Monday. “Repealing the CLASS Act isn’t necessary or productive. What we should be doing is working together to address the long-term care challenges we face in this country.”

He declined to answer if the president would veto a repeal bill.

Republicans said at a time of record deficits, the administration is now in a position of saying it wants to keep alive a program it acknowledges would probably go bust.

“It defies logic for the White House to admit this part of their health spending bill would put an unsustainable burden on taxpayers, yet demand it stay on the books,” said Senate Republican Leader Mitch McConnell of Kentucky.

Ah, but this has nothing to do with “logic,” Senator McConnell.  Nothing about ObamaCare ever did.  Trillion-dollar legislation passed in the dead of night, its thousands of pages riddled with “insert law here” blank spaces, should not be confused with rational problem-solving efforts.  The undead CLASS Act can take its place in the ObamaCare zombie horde, leaving a trail of rotting waivers as it shuffles across the land.

The Hill reports that the CLASS Act remains in a political voodoo trance, kept from a proper burial by the same President who endlessly hectors us about the need to give him more money so he can work economic wonders:

Over the weekend, The Hill has learned, an administration official called advocates of the Community Living Assistance Services and Supports (CLASS) Act to reassure them that Obama is still committed to making the program work. That official also told advocates that widespread media reports on the program’s demise were wrong, leaving advocates scratching their heads.

Health and Human Services Secretary Kathleen Sebelius announced Friday in a blog post on the liberal Huffington Post website that the administration did not see a way to make the program sustainable. Sebelius indicated her agency hadn’t been able to figure out a way to ensure the program providing long-term care paid for itself as required by law. 

Later in a call with reporters on Friday, an HHS official said work on the program was being suspended. 

We won’t be working further to implement the CLASS Act. … We don’t see a path forward to be able to do that,” Assistant Secretary for Aging Kathy Greenlee told reporters on Friday.

When you hear businessmen talk about the climate of “uncertainty” that President Downgrade has created to sustain his high unemployment rates, this is exactly the kind of insanity they’re talking about.  One more rusty guillotine blade hangs over America’s neck, held there by a President who doesn’t want to officially concede that a big chunk of his signature legislation was a lie that even his own HHS Secretary can’t bring herself to repeat any more.

Senator John Thune (R-SD) pointed out in an interview with Neil Cavuto of Fox News that Obama is very nervous about giving the dwindling number of Americans who don’t already hate ObamaCare a good reason to change their minds:

Cavuto asked Thune whether CLASS repeal brings the survivability of ObamaCare — the constitutionality of which could end up before the Supreme Court during its present judiciary term — into question.

“It does and it makes you wonder what other parts of the healthcare bill — what did they know that they are not telling us about other elements of this healthcare bill — because this was a massive new entitlement program that wasn’t paid for,” Thune said. “And they tried to get some premium revenue in the first few years that they could use to help pay for the healthcare bill, knowing full well that when they got into the later years and the demand on this program started to come in, that it was going to add to the deficit.

“The Congressional Budget Office came to that conclusion — the actuary came to that conclusion — these guys, the Obama administration repeatedly ignored the warnings that were coming out of their own administration that this will not work,” he said. “And so it does draw into question other elements of this bill now — but first and foremost what we ought to do is repeal this, get this off the book. Do not give them an opportunity at some point in the future to try and reactivate this — because this in its current incarnation, this doesn’t work.”

Like any other zombie, ObamaCare will be easiest to take down with a head shot in the Supreme Court.  The President will never allow its rotting limbs to be chopped away.  Your money is no object to his intransigence. 

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Written By

John Hayward began his blogging career as a guest writer at Hot Air under the pen name "Doctor Zero," producing a collection of essays entitled Doctor Zero: Year One. He is a great admirer of free-market thinkers such as Arthur Laffer, Milton Friedman, and Thomas Sowell. He writes both political and cultural commentary, including book and movie reviews. An avid fan of horror and fantasy fiction, he has produced an e-book collection of short horror stories entitled Persistent Dread. John is a former staff writer for Human Events. He is a regular guest on the Rusty Humphries radio show, and has appeared on numerous other local and national radio programs, including G. Gordon Liddy, BattleLine, and Dennis Miller.

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