HHS, which was required to certify that the program was sustainable, couldn't, and thus it is no more. The program has taken about half of ObamaCare's projected deficit reduction to the grave with it. Conservatives are having a field day, but Kevin Drum argues that this is actually good news:
Yesterday the Obama administration finally abandoned the CLASS Act, a program to subsidize long-term elderly care that was part of the healthcare reform bill. Conservatives are in full war whoop mode over this, and I suppose I don't blame them. The budget forecasts for CLASS were always dodgy, and conservative concerns about this have now been vindicated.It is of course, great news that the administration has not actually gone forward and implemented an unsustainable program that would have had disastrous effects on the federal budget. But it's not great news that HHS has found that the program was just as disastrous as conservatives said it was . . . yet a Democratic Congress, deep in the passion of their historic moment, passed the damn thing anyway. It's in fact deeply troubling. The problems with CLASS were known from day one, but no one listened, because it gave them good numbers to sell their program politically.
But they should contain themselves anyway. What happened here is that government worked exactly the way it ought to. The CLASS Act was passed in a fog of rosy estimates and emotional appeals (it was one of Ted Kennedy's longstanding priorities), and the Department of Health and Human Services immediately began the detailed work of writing the implementing regulations to get it up and running. And guess what? They did their work honestly and conscientiously. Even though it was a liberal program promoted by a longtime liberal icon, HHS analysts eventually concluded that its conservative critics were right and the program as passed was flawed. So they killed it. And most of the liberal healthcare wonks that I read seem to agree that, unfortunately, HHS was right.
This is how we all want government to work.
Now it turns out that ObamaCare reduces the deficit over ten years by about $70 billion instead of $140 billion. Only . . . what about all the other stuff that had problems, like the reimbursement cuts that both Medicare's chief actuary and the head of the CBO warned might very likely prove too deep to sustain medically or politically? Can we assume that Democrats exercised the same thought and foresight about the other parts of ObamaCare that they did with the CLASS Act? How come all of those liberal health care wonks that Kevin cites were unable to identify the problems with this program before it passed?
Last March, I did a retrospective on the law's first year anniversary, wherein I pointed out that there had been a lot of bad news, and no upside surprises. Six months later, we've had more nasty surprises, and the "upside" consists of the entirely unsurprising revelation that forcing insurers to cover kids up to 26 results in more kids under the age of 26 being covered, at some cost in rising premiums.
During the debate over health reform, a lot of liberals were suggesting that ObamaCare's deficit reduction was just as likely to be larger than projected as less--or even that the CBO's scoring process systematically underestimated the savings from new health care programs. Jonathan Cohn professed himself "baffled" by the belief "that, rather than try and craft a fiscally responsible program, the Democrats instead figured out the CBO's accounting methods, came up with ways to make an expensive program seem deceptively cheap, and then fiddled with the numbers to get the result they wanted."
But how else do we explain the CLASS Act, which the Washington Post warned about in December 2009? Or the utterly moronic provision forcing small businesses to give 1099s to all their vendors? Are we really to assume that these were not stupid gimmicks put into the law to, erm, "make an expensive program seem deceptively cheap", but rather, represent the sober and considered judgement of Democratic legislators and the Obama administration about sound fiscal policy?
That's a far scarier thought, actually. For if the CLASS Act is genuinely what those legislators and that administration consider a good idea, we might as well just hand over our wallets and pray.
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