In the pantheon of American entitlements, is there any better candidate for repeal than the CLASS Act, the long-term care benefit passed last year as part of ObamaCare? Programs like Medicare and Medicaid may present bigger long-term fiscal threats, but they're also far more entrenched and politically protected. The Community Living Assistance Service and Supports (CLASS) Act, by contrast, has few defenders left.
Initially, it was attached to ObamaCare as a deficit-reduction sweetener. Thanks to a quirk in its financing, the Congressional Budget Office scored the program as reducing the deficit over the next decade—a score that helped pad out ObamaCare's supposed deficit reduction. But CBO's score, which counted early premium revenue but not the eventual cost of paying out beenfits, didn't reveal the program's long-term fiscal problems.
Even still, it was hard to ignore the program's structural flaws. Earlier this year, Health and Human Services Secretary Kathleen Sebelius admitted that, after ObamaCare passed, the administration "determined pretty quickly that it would not meet the requirement that the act be self-sustaining and not rely on taxpayer assistance.” More recently, a GOP committee released documents showing that prominent Democrats had been warned by Medicare actuaries long before the law passed that CLASS was probably a "disaster."
HHS responded by letting the program's chief actuary go, assigning CLASS staffers elsewhere, and asking Congress not to fund the program. The program is now all but shut down. So why not repeal it entirely, as Obama's own fiscal commission recommended last year?
An editorial in this morning's Wall Street Journal's suggests a likely explaination why the administration, despite having effectively closed the program, is eager to keep up the fiction that the program is still alive, and why even some Republicans aren't sure if they want to repeal it either:
Since the CBO says Class's front-loaded collections cut the deficit to the tune of that $86 billion, HHS has to pretend that the program is still alive to preserve these phantom savings.
Some Republicans are also nervous about repealing Class because, under CBO's perverse scoring, they'll be adding $86 billion to the deficit. Others would prefer not to repeal any of ObamaCare until they repeal all of it, on grounds that some of it might survive if the worst parts go first.
At this point, then, Obama administration officials and Republicans are more or less agreed that the program's financial structure is unworkable. Nevertheless, they don't seem to want the budget to reflect this. They'll admit to ObamaCare's budget fictions, but they're committed to perpetuating them anyway.