While the budget busters in Washington struggle to tame trillion-dollar deficits for years to come, they keep getting thrown. The Obama administration took a particularly nasty spill yesterday, announcing that the Community Living Assistance Services and Supports (CLASS) program, a long-term care initiative embedded in Obamacare, is beyond salvage. “Despite our best analytical efforts, I do not see a viable path forward for CLASS implementation at this time,” Kathleen Sebelius, secretary of health and human services, said in a letter to congressional leaders.
As AP reports, CLASS was supposed to function as a voluntary and self-sustaining long-term care health plan. But the program was fatally flawed: 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.
Now the O Team has to write off $80 billion of the “deficit reduction” it expected from Obamacare over the next 10 years. During the early years, when far more people were paying into the program than taking benefits from it, CLASS would have run a positive cash flow. Those revenues were credited for purposes of calculating the fiscal impact of Obamacare. As enrollees aged and started availing themselves of the service, the program would have cost the government money. But the impact wouldn’t felt until after the 10-year budget scoring, so no one but anal-compulsive CPAs and Republicans cared.
Now that the O Team has abandoned the fiction that the CLASS program is financially sustainable, it will have to delete the $80 billion net revenue from its 10-year budget forecasts. That may not seem like much in comparison to the $7.2 billion in projected deficits, but it will make the job of closing the gap that much harder. Boomergeddon looms a little bit closer.
— JAB
