"When the people find they can vote themselves money, that will herald the end of the republic." - Benjamin Franklin;
"And when politicians find that honor and character matter less than buying votes and a constituency, that too will herald the end of the Constitution. When that happens we must work tirelessly to change their minds, or their occupation!" - Hoping The Blind Will See

Monday, March 15, 2010

The CLASS Act and Obamacare

This from my Representative, Congressman Bill Posey. He is helping to defend this nation one bill at a time and NEVER fails to respond to a letter or email I send him. He has never let me down in his unwavering position to protect liberty and the Constitution. Here's what he says about Healthcare, and in particular the CLASS Act. You'll see that this has the makings of becoming the next Social Security "Lock Box" - with no funds to pay out when the time comes. It's just another hidden tax dressed up pretty and wrapped in a bow so we think we're getting something from the government. Don't be fooled. Get on the horn, or email your Senators and Reps once again about Healthcare. Don't get lazy or sloppy now. Stay focused and engaged. Now more than ever we need EVERY voice contacting their congressmen!

From Bill Posey:
While the Congressional Budget Office (CBO) estimates that the Senate bill would generate $118 billion in savings over the next decade, that analysis has a number of fundamental flaws. First, let's remember that CBO can only estimate the costs associated with the exact language that is put before them. So, if CBO has a bill before them that contains budget gimmicks CBO has to include that in their estimate rather than correct for them.

One of the most glaring examples of this gimmickry is the way that the CBO treats the costs of the CLASS Act. The CLASS Act is a new program created in the Senate health care bill that would provide a very limited long-term care benefit. Under the bill the federal government will start collecting premiums for long-term care benefits in 2012, but would not begin paying out benefits until 2017 at the earliest. The result of this is that CBO is required to estimate nine years of premium payments and only a few years of expenses on the CLASS Act benefits. CBO estimates that this would have a net increase in payments to the Treasury of $72 billion. However, the Department of Health and Human Services estimates it would generate only half as much from premium payments. You can guess which cost estimate the Senate picked for their budgeting purposes - the higher $72 billion in net premiums paid - which they then call a "health care savings."

Importantly, CLASS Act premium payments are not put into a trust fund where they are protected in order to pay future benefits. Instead they are spent on other health care programs beginning in 2011. So, when the bill comes due to pay for the CLASS Act benefits for which seniors would have paid premiums, there will be no money left in the account to pay the bills. This will be another unaffordable and unfunded burden placed on future generations of Americans.

In fact, Senator Kent Conrad (D-ND) called the CLASS Act "a Ponzi scheme of the first order, the kind of thing that Bernie Madoff would have been proud of." In the private sector those convicted of running ponzi schemes end up going to jail.

I would be remiss if I did not point out that the authors of the Senate bill recognize that this is a budget problem so they have added "Sense of the Senate" language in Section 1563 of the Senate bill stating that CLASS Act revenues should be dedicated to those programs "and not spent in this Act for other purposes." But, this is worthless language and does not carry the force of law. It's a nice statement, but the provisions of the bill direct that CLASS Act premium payments be used to pay for other health care programs created in the Senate bill.

This is just one of the many glaring examples of how this bill and the CBO estimate fails to reflect the true costs of this bill and is yet another reason why I have been opposed to this legislation from the beginning and will continue to stand in opposition to it.

Lot's Of Work Still Ahead America! Don't Let Liberty Down!

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