[Congressional Record (Bound Edition), Volume 157 (2011), Part 11]
[Senate]
[Pages 15824-15825]
[From the U.S. Government Publishing Office, www.gpo.gov]




                               CLASS ACT

  Mr. THUNE. Madam President, I rise to speak to an issue that I think 
has been on the minds of a lot of people here and hopefully people 
across this country too; that is, this failed CLASS Act Program, which 
last week we finally got some--I would characterize it as good news 
because I think this is a program that was destined to fail.
  On Friday last week, Secretary of Health and Human Services Kathleen 
Sebelius came out and said: Despite our best analytical efforts, I do 
not see a path forward for CLASS implementation at this time.
  Essentially, what came with that and what accompanied that was a big 
volume of analysis that had been done that essentially supports the 
conclusion that it doesn't add up. We can't make the math work. I think 
that is something that hopefully my colleagues, as what we know now, 
will recognize; that we ought to eliminate and we ought to repeal this 
CLASS Act once and for all. That is something I tried to do as we were 
debating the health care bill almost 2 years ago. I offered an 
amendment in December of 2009 that would repeal the CLASS Act, 
believing at the time it wasn't going to work. We had, at that time, 
plenty of evidence to that effect. Unfortunately, it was included as a 
part of the health care reform bill to help pay for it. At that time, 
it was estimated it would generate about $70 billion in revenue to be 
used to offset the cost of the health care bill or at least to put it 
in balance and to claim there was some deficit reduction associated 
with it.
  I think the more recent estimate of what it would generate in terms 
of revenues in the early years is on the order of about $86 billion. 
But we--those of us who have been skeptics about this program--
suggested at the very beginning that this was not, in fact, the

[[Page 15825]]

case, that it was a budgetary gimmick, and that it was going to saddle 
the Nation with additional debts. That was what the Congressional 
Budget Office concluded. There would be revenue in the early years, but 
as you got into the outyears, as the premiums came in there would be 
some revenues, but in the outyears, when the demands on the program 
started to come in, it just didn't add up and would add significantly 
to the Federal deficit. I think that is a conclusion now that has been 
drawn even by those who supported the program.
  So my thinking at this time is that we, as a Senate--and hopefully 
the House of Representatives--ought to move to repeal the CLASS Act 
once and for all. We should not leave this on the books and allow it to 
become an opportunity at some point in the future for someone to say we 
ought to try to reactivate this or implement this, knowing full well it 
does not work.
  There were a lot of warning signals along the way that were ignored. 
There were repeated warnings by the Actuary and the administration that 
this was not going to work that were ignored by the Obama 
administration in their push to pass health care reform.
  We did a report not that long ago. There was a working group that 
examined this. The report was called ``CLASS's Untold Story.'' It was 
myself and some of my colleagues in the Senate and some of my House 
colleagues who requested it and delved into a lot of the e-mail traffic 
that occurred prior to its inclusion in the health care reform bill. We 
came across a number of warnings that were issued by the HHS Actuary.
  The Chief Actuary predicted at the time that this would result in an 
``insurance death spiral.'' He said:

       This could be a terminal problem for this program. The 
     program is intended to be actuarially sound, but at first 
     glance this goal may be impossible. The resulting premium 
     increases required to prevent fund exhaustion would likely 
     reduce the number of participants, and a classic assessment 
     spiral or insurance death spiral would ensue.

  That was in May 2009. In May 2009, that warning was coming from the 
Actuary at HHS.
  Some time passed. This continued to be part of the discussion with 
regard to the health care bill. Come August or July of 2009--and this 
was again after additional analysis, review, and examination of this 
particular proposal--the Actuary went on to say:

       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.

  It would collapse in short order. That is what was said by the HHS 
Actuary in July of 2009.
  So they continued to plow forward, thinking that somehow they were 
going to be able to salvage this program, figure out a way to make it 
work.
  In the August and September timeframe of 2009, the Actuary again 
says:

       As you know, I continue to be convinced that the CLASS 
     proposal is not actuarially sound.

  That was the expert advice that was given to the administration about 
this proposal way back in 2009. Yet they plowed ahead and in December 
2009 added it to the health care bill, assuming it would help offset 
the cost of that health care legislation.
  At the time, many of my colleagues here on the floor talked about 
what a great program it was and how it all was going to pay off and was 
all going to balance out. We had people say it was a critical program, 
it was a breakthrough program, it was a win-win. We had Democrats come 
over here and talk about the virtues of this program--I believe knowing 
full well there were questions about it.
  Having said that, there was a big push on at the time to pass health 
care reform. As a consequence, this piece of that reform was included 
notwithstanding our efforts to repeal it or to strike it at the time. 
So we went forward. Here we are now 18, 19 months later, and there is 
full recognition of the fact that this does not pencil out, it does not 
add up, the math flat does not work.
  Where do we go from here? In my view, what we ought to be doing is 
repealing this bill, which is why it seems mystifying to me that the 
administration is now suggesting that if Congress were to repeal the 
CLASS Act, he would veto the repeal bill. You have all this actuarial 
data; you have all these statements; you now have all this analysis 
that has been done that demonstrates the very point we were making at 
the initial consideration of this; that is, it was just not going to 
work.
  So I hope and invite my colleagues here on both sides of the aisle to 
join me in the effort to repeal this legislation. I introduced a bill, 
along with Senator Graham, back in April of this year that would repeal 
the CLASS Act. It has 32 cosponsors. I hope we get enough cosponsors 
here in the Senate to where we can put an end to this once and for all.
  We are going to be looking for opportunities to do that in the weeks 
and the months ahead because, as I said, this is something that clearly 
does not work. It now not only has all the arguments that were being 
made at the time prior to its passage, but subsequent to its passage 
all the analysis that has been done comes to the same conclusion; that 
is, the numbers just do not add up.
  What does that mean for the future of long-term care? I submit there 
are other things we should do. I don't think this is an issue which is 
going to go away. We have more people who are living longer in this 
country. Long-term care is a very serious issue. But going about it and 
trying to fix it in a way that would burden future generations with 
more and more mountains of debt piled on their backs--the cost of this 
over time--is the wrong way to go about it, and that is precisely what 
this particular approach would do.
  We have had many discussions about various remedies for the long-term 
care issue. We will continue to put our ideas forward in hopes we can 
address it as part of some bill that would take a look and examine 
these issues but do it in a way that is fiscally responsible, fiscally 
sound, that is actuarially sound, and that does not create the massive 
amount of borrowing, the massive amount of debt, and that does not put 
in place a flawed program that we knew at its inception was not going 
to work.
  I hope we will put an end to this, that we can get colleagues on both 
sides together to agree to that, and that we will be able to add 
cosponsors to that piece of legislation and look for the first 
opportunity to repeal this legislation and make sure we end it once and 
for all, knowing full well this was ill-conceived and ultimately would 
be a failed program.
  I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Kansas.
  Mr. MORAN. I ask unanimous consent to address the Senate for up to 10 
minutes.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.

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