Democrats engineered the program known by the acronym Class with front-loaded premiums and back-loaded benefits so that on paper it threw off a lot of revenue early on but then bankrupted itself later. This design made it possible for the Congressional Budget Office to score the program as a money-raiser during its first decade and thus make ObamaCare look like it reduced the deficit. And sure enough, CBO, in its final estimate at passage, said that Class would reduce the deficit by $70 billion through 2019—or more than half the bill's supposed $124 billion 10-year "savings" to the federal fisc. Well, goodbye to all that.This was just one of the fantasies underlying the entire program. Of course, if you collect taxes for ten years, but pay out the benefits only for 5 years, you're going to save some money. This was cleverly designed to manipulate the rules of the CBO which analyze the first ten years of a new program. Just don't ask them what happens when that ten years is up.
During the health-care debate Washington insisted on treating CBO's cost estimates as if God Himself had carved them into stone tablets, but as Class's mercy killing shows all they proved was that Democrats were good at manipulating its assumptions and synthetic budget conventions. HHS's own experts were warning Democrats all along that Class was a fiscal time bomb, so including it in the bill was a special act of fiscal corruption.
As Allahpundit and Andrew Stiles point out, just like in Solyndra, the administration had been warned about the weaknesses in their proposal but they went ahead anyway.
Long after Obamacare was passed and signed into, even prominent supports of the bill acknowledged that the CLASS Act was a financial disaster waiting to happen. Senate Budget Committee chairman Kent Conrad (D., N.D) called it “a Ponzi scheme of the first order, the kind of thing Bernie Madoff would be proud of.” Health and Human Services secretary Kathleen Sebelius admitted it was “totally unsustainable” in its current form. But again, that was after Obamacare had been enacted. In fact, under the new law, HHS has until Oct. 1, 2012 to finalize the program’s requirements, to be imposed through regulation. Because the law (no doubt intentionally) left vague many of the plan’s key provisions, there is currently no way to reliably assess the program or estimate its potential cost.Hmmm, when the nonpartisan chief actuary for Medicare gives them such a severely critical analysis, you'd think they'd pay attention just as they might have paid attention to the analyses they received about the Solyndra business model. But, in both cases they went ahead because out of ideological and political reasons.
As the investigative report reveals, administration officials had been warning about the program’s long-term sustainability in the months before the law was passed, yet ignored, and in some cases marginalized these concerns as the White House pushed ahead with its landmark legislation. E-mails uncovered by the working group show that such concerns were first raised back in May 2009, nearly a year before Obamacare’s passage, by Medicare chief actuary Richard Foster. “At first glance this proposal doesn’t look workable,” he wrote in an e-mail to other HHS officials. “Due to the limited scope of the insurance coverage, the voluntary CLASS plan would probably not attract many participants other than individuals who already meet the criteria to qualify as beneficiaries.” Even so, Foster estimated that the CLASS program would have to enroll about 234 million people, which is greater than the entire U.S. population aged 20 and above, in order to sustain itself.
In late June, Sen. Kennedy’s office sent Foster two studies purporting to show that the CLASS would actually reduce the deficit. Foster remained unconvinced. In another e-mail to an HHS official, he wrote: “I’m sorry to report that I remain very doubtful that this proposal is sustainable…Thirty-six years of actuarial experience lead me to believe that this program would collapse in short order and require significant federal subsidies to continue.” Foster noted that one of the studies was based on the assumption that the CLASS program would be mandatory, as opposed to voluntary. He said the numbers might ultimately work in that case, but that’s not what the administration was proposing.
The second study, commissioned by the AARP, relied on wildly optimistic estimates regarding participation in the program. For instance, it assumed that nearly 50 million individuals would join it, far greater than the current population of private long-term care insurance subscribers. But even with these unrealistic assumptions, the AARP study concluded that the CLASS program as designed “will ultimately lead to…an unsustainable situation with respect to the program’s design flaws.”
They needed that supposed surplus in the CBO analysis of Obamacare in order to pretend that the program was actually "bending the cost curve down." Republicans warned about this at the time, but they were ignored in favor of the fantasy.
And this is quite the pattern with Obama policies from the failed stimulus to Obamacare to the myth of green jobs. Add in internal memos from agents warning about Fast and Furious.
The ads will simply write themselves. All the RNC has to do is compile a few Obama quotes with his pie-in-the-sky promises about these programs from the time when they were being debated. Then contrast a few criticisms from the Republicans at the time calling attention to the problems inherent in the proposals. Then flash forward to the time when the Obama promises were shown to be dust and the Republican predictions are shown to be what actually happened. Dang, most conservative bloggers would just have to dig their posts from the time each of these proposals were under discussion to supply the material.
It could be a whole series of ads and they could all have the tag line: Should a man with such a poor record of judgment be trusted with another four years?
UPDATE: I missed some of the Friday news dumps from this past Friday. As Guy Benson notes, it was actually was a fourfer. In addition to getting rid of the CLASS Act and the military involvement in Central Africa, the Treasury also announced the second-highest deficit in American history and that Obama bundler and Solyndra investor George Kaiser paid almost zero in taxes for the past decade.