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Public Statements

Repealing Unsustainable CLASS Act is the Responsible Thing to Do

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Date:
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Thomas Jefferson once opined, "History convinces me that most bad government has grown out of too much government." Never has this sentiment proven to be more true than today. Certainly, I could point to numerous examples of the ill effects of bureaucratic largesse. One such example gaining attention in Congress is a provision of President Obama's unpopular health care law called the Community Living Assistance Services and Supports, or CLASS Act.

The purpose of CLASS was to establish a voluntary, government-run insurance program which would cover home health care options for adults who become disabled. CLASS was the brainchild of former Senator Ted Kennedy (D-MA), and like many other government programs, arose out of good intentions. The fiscal realities of this program, however, are another story.

The budgetary problems with CLASS were well understood during the health care debate. It made the overall legislation appear to decrease the deficit through a budget gimmick. By collecting premiums for five years before any benefits were offered, then providing most of its benefits beyond the timeframe used by non-partisan budget experts to evaluate legislation, CLASS appeared to be less expensive than everyone involved with its development knew it actually would be. Richard Foster, President Obama's top Medicare budget analyst, said in 2009 the program was not "actuarially sound." Senator Kent Conrad (D-ND), who chairs the Senate Budget Committee, called CLASS a "Ponzi scheme of the first order, the kind of thing Bernie Madoff would be proud of." Everyone knew CLASS was a budget gimmick and a budget buster, but it was included in the legislation anyway because it gave the bill's supporters favorable numbers to sell their program politically.

The fiscal problems with CLASS have proven so profound the Obama Administration has now walked away from the program completely. However, there is no sense leaving a bad law on the books even if the current government chooses not to implement it. Without full repeal, CLASS could be resurrected in the future. Non-partisan legal experts at the Congressional Research Service warn a federal judge could potentially force the Administration to revive CLASS if the law remains intact beyond October of this year. After this deadline, anyone who stood to benefit from CLASS would likely have grounds to sue the government to reinstate the program.

Because repealing CLASS is so critical for our nation's fiscal health, I have cosponsored H.R. 1173, the Fiscal Responsibility and Retirement Security Act. The House Ways & Means Committee, on which I serve, voted this bill out of committee this past week. I was pleased to be joined by colleagues on both sides of the aisle in voting for its passage. You can track the progress of H.R. 1173 on my website http://adriansmith.house.gov. This legislation boasts bipartisan support in both chambers of Congress and the President should sign it when we send it to his desk. Last year we were successful in repealing the health care law's burdensome 1099 tax reporting requirement on businesses, and I am hopeful repealing the CLASS Act can be another area of bipartisan cooperation going forward.

The insolvency of the CLASS Act is just the tip of the iceberg. Unless we repeal and replace the entire law, we will continue to encounter new problems for years to come. Though the current balance of power in Washington prevents this from happening, I remain committed to chipping away at this misguided law piece by piece.


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