Regime Admits Obamacare Won't Work
October 17, 2011
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RUSH: Meanwhile, in Realville, the regime says that it is unable to implement a long-term care insurance program that was part of Obamacare, effectively ending the program before it started. They did this late in the afternoon on Friday. Document dump Friday, it's called. You put out the bad news when nobody's paying any attention, it gets ignored, not commented on over the weekend.
This is the CLASS Act. It was included in Obamacare to help Americans cover the cost of aid for daily living needs if they became unable to care for themselves. Now, this was one of Senator Kennedy's top priorities, and it's the first big part of Obamacare to get killed. And it was killed by the regime, by the secretary of Health and Human Services. Kathleen Sebelius dumped it herself. Now, you might want to say, why? Why they get rid of it? Because this program requires healthy people to voluntarily enter it and pay premiums. And if they don't, there isn't any money to pay for it.
Wall Street Journal editorial. "Now that one of ObamaCare's major new benefit programs has been scrapped, liberals are trying to make stone soup by claiming that the Obama Administration merely committed an act of "good government." They claim that when this long-term care insurance program proved to be unworkable, the Administration conceded as much, and now it's gone. So let's review the evidence, not least because it so perfectly illustrates the recklessness that produced the Affordable Care Act," which, there's nothing about this act that's affordable, and that's why this program got pulled. What happened, "Former New Hampshire Senator Judd Gregg succeeded in inserting a proviso that required the Class program's reality to match Democratic promises as a matter of law. If HHS couldn't provide 'an actuarial analysis of the 75-year costs of the program that ensures solvency throughout such 75-year period,' it couldn't be legally implemented." Well, the program couldn't stand up to that scrutiny, and so they had to pull it.
Now, the CLASS Act was said to be 40% of the savings in Obamacare, and now it's gone, yanked out of there, no longer part of it. Participation in the CLASS Act was to be voluntary, but that wasn't gonna produce enough revenue. "So to fix this 'adverse selection,' the plan was for Congress to eventually make participation mandatory, with the so-called premiums converted into another payroll tax and the benefits into another entitlement. In other words, HHS had to prove that the Class program wouldn't go broke the way it was designed to -- and actuarial analysis is a matter of math, not politics," said that it would go broke. So they had to pull it out.
Now, the Wall Street Journal says: "At a minimum the GOP could begin by repealing the Class program altogether, since its legal authority is still intact." They're pulling it but they have not pulled the authority for it. They're just saying they're not going to implement it. There are a lot of stories on this today. For example this from Politico: "The decision to abandon the CLASS Act announced Friday is a sharp U-turn for an administration that -- just a few weeks ago -- claimed it was not giving up on the long-term care insurance program. When reports surfaced last month that the CLASS office at the Department of Health and Human Services was closing down, the Obama administration pushed back hard. It claimed that it was paring back staff but continuing to study how to implement the program created by President Barack Obama’s health reform law. Now, three weeks later, CLASS is dead, supporters are devastated, and critics are dancing on its grave."
Here's the AP version. "Obama Pulls Plug on Part of Health Care Overall Law." The CLASS Act had the same problem as Medicare and Social Security, not enough people voluntarily paying in to support the services it provides and so guaranteeing it will go bankrupt. Now, I'll tell you what confuses me. They've known all along that this was gonna be the result. They've known all along that this program, the CLASS Act, was not gonna fund itself. And yet to sell it and to have it scored properly and to get the votes for it they had to claim that it was gonna be responsible for 40% of the savings. Now, they have known from the get-go this was never gonna save any money and it was never gonna be self-funding. So I am puzzled as to why they pulled it out now.
I wouldn't be surprised -- and I said this two weeks ago -- I wouldn't be surprised if the regime hopes they lose this appeal at the Supreme Court and they just had this whole thing ruled unconstitutional, the mandate, everything just ruled unconstitutional so that Obama can salvage his reelection and turn this into, "Oh, look what the Republicans and their court took away from you, free health care, affordable health care for all. I already had to cancel the CLASS Act because the Republicans wouldn't fund it." I can see all of this happening. I can hear all of this now. I don't know what the Supreme Court's gonna do, I'm just postulating the theory that if they did rule this thing unconstitutional, this would not be greeted behind closed doors with shock and sadness at the White House. It would be the equivalent of a albatross being removed from their neck.
The reason it's called the CLASS Act, that stands for Community Living Assistance, Services and Supports program. As I said, it was a long-standing priority of Senator Kennedy and it became the first casualty to reality. There wasn't any money to pay for it, and there weren't enough volunteers, meaning citizens, who would volunteer to buy into the program. John Thune, Senator, Republican, South Dakota, "This is a victory for the American taxpayer and future generations. The administration is finally admitting (the long-term care plan) is unsustainable and cannot be implemented."
Here's the central design flaw, and this was from the beginning. "Unless large numbers of healthy people willingly sign up during their working years, soaring premiums driven by the needs of disabled beneficiaries would destabilize it, eventually requiring a taxpayer bailout." What does that sound like to you? Does that sound exactly like Medicare? Does that not sound exactly like Social Security? "Unless large numbers of healthy people willingly sign up during their working years, soaring premiums driven by the needs of disabled beneficiaries would destabilize it."
"'If healthy purchasers are not attracted ... then premiums will increase, which will make it even more unattractive to purchasers who could also obtain policies in the private market,' Kathy Greenlee, the lead official on CLASS, said in a memo to Sebelius. That 'would cause the program to quickly collapse.'" So the regime is admitting that a huge, huge element of Obamacare is dead, can't be paid for, would cause financial problems, deficit spending, debt like you can't believe, and 40% of the savings were to come ostensibly from this aspect of Obamacare.
RUSH: Christopher in Roseland, New Jersey, you're next. Great to have you on the EIB Network. Hi.
CALLER: Hey, Rush. A little bit totally unrelated, but one of the best falafel parks in the city parks is Zuccotti Park. It's not that bad. So I just thought you might want to know that. But, hey, I was calling about the whole CLASS Act discussion that you were having --
RUSH: What a second. What is a colossal park?
CALLER: No, a falafel park.
RUSH: Falafel. Oh, okay, okay.
CALLER: There's great falafel there.
RUSH: There's great falafel in Zuccotti Park. Is there great sushi down there is as well?
CALLER: Yeah, yeah. So it can't be that bad, right?
RUSH: So it's a vegan delight. Cool.
CALLER: Yeah. Hey, on this whole CLASS Act thing, where is the public outcry gonna be about this? If people had really studied the CLASS Act when the health care legislation was being passed, they would know that this was nothing more than, to use an overused phrase, a Ponzi scheme. The word "savings" has got to be used loosely when you relate the CLASS Act relative to the affordable act, because the way the plan was really gonna work was people were gonna put their premiums in for five years, and they couldn't get benefits for those first five years.
RUSH: That's right.
CALLER: So the government was gonna take that money and that's what they're calling savings in the overall health care plan.
RUSH: Right. Well, that's how they were doing everything in this health care plan. The taxes started immediately, the benefits phased in over four to five years, and that's how they got the CBO to lie about this thing being revenue neutral in order to come in under a trillion dollars.
CALLER: So when does the CBO reprice it? I mean when does the public outcry come out that health care just went up 40% on Friday, our debt just went up 40% on Friday.
RUSH: Don't look for it. The story is being reported as it's a sad thing for the Obama administration, but they had no choice. It's being blamed on the public. There just weren't enough people volunteering to sign up.
RUSH: You know all this garbage about the CLASS Act being particularly meaningful to Senator Kennedy. The CLASS Act was nothing more than a ruse. Remember, they were using budget reconciliation to get a lot of the health care law passed, and this CLASS Act was a ruse. It was a lie, and the CBO had to be in on the lie. They tried to tell us that the CLASS Act, which was what the regime canceled on Friday, just pulled it out of Obamacare, they tried to tell us that's where 40% of the savings in health care would come from, but the problem is nobody signed up for it. And it's the same thing with the high-risk pools. The high-risk pools, it would be cheaper to get in the high-risk pool, and nobody's signing up for those, either. So this whole thing was a sham, fraud, hoax, scam, what have you.
The news it was gonna come in under a trillion dollars, all of it was bogus, folks. I, frankly, am shocked that they pulled it 'cause what do they care that it's unfunded, what do they care that it runs the deficit way up? What the hell do they care? This must be so bad that it's too much destruction too soon. They had to pull it 'cause normally this regime, as noted, this is what they're all about. For them to admit they have to pull this out of there because it would not work... could be something else going on here, too. Like I remember, we talked about this two, maybe three weeks ago, that it's possible Obama wouldn't be unhappy at all if this thing is ruled unconstitutional by the Supreme Court. So we'll see how it shakes out down the road.
RUSH: "The Treasury Inspector General for Tax Administration said the IRS developed outreach plans to notify tanning salons the 10% federal tax would be due on ultraviolet light services paid for as of July 1, 2010. But, while the agency also updated tax forms and tax return processing systems to prepare for the new levy, the IRS had difficulty determining the actual number and contacts for businesses required to collect the new tax from customers. The IRS initially projected the tax would be due quarterly from roughly 25,000 stand-alone tanning salons, plus spas, health clubs and beauty parlors. But the inspector general report found that actual tax returns filed for the first three quarters through March 31 averaged just above 10,300."
The bottom line here is tanning tax revenues have fallen short of estimates, which always happens because they never score this stuff dynamically. They just assume that everybody will keep going, and everybody will just bend over and pay the tax. Well, fewer people are visiting the tanning salons and fewer people, therefore, are paying the tanning tax, and so the amount of money expected to be collected from the tanning tax is running way below what was projected. Shazam, isn't it amazing how this all works out?
RUSH: Richmond. Tom, hi. Glad you waited. You're next on the program, sir.
CALLER: Hi, Rush. Mega dittos.
RUSH: Thank you very much.
CALLER: I'll get right to the point. When you were talking about the CLASS Act being pulled out of Obamacare and all that, you got me thinking that they are, the regime is worried that the court's gonna find it unconstitutional, and they want to help their friends on the court by pulling out this thing to illustrate that the individual mandate would be severable also.
RUSH: Well, now, I'd have to ask some legal beagles about that, because it's an interesting idea. So your theory is they pulled this to protect themselves at the Supreme Court?
CALLER: Yes, basically, it will give the court an excuse to enforce whatever's left of Obamacare once --
RUSH: Yeah, but the problem with that is that this was 40% of the savings. I know it's BS. I'm telling you the problem they have is what they've said. This was 40% of the savings. This was 40% of how this whole thing was gonna be paid for. And now it's gone, at least temporarily. What I'm thinking here is that this kind of sends a signal, just tear the whole thing apart, if they're not even fighting to save this thing. But without the mandate, how does any of it get paid for? The mandate was the primary funding mechanism, everybody buy insurance. That's how we're gonna pay for the 32 whatever it is million that don't have it. Of course they're gonna tax the rich after we tattoo 'em, after we brand 'em. Look, there's a rich person! (laughing) "Look, mommy, look, there's a rich person, run over 'em, mommy, run over 'em. Call the cops, mommy, it's a rich person." You know what they ought to do? These rappers that wear those giant gold chains, get these giant dollar sign gold chains and make the dollar sign like five inches high and you make them wear that around your neck.