October 25 2011
Apply The CLASS Test to the Rest of Government
Carrie L. Lukas
Senator Judd Gregg's thirty years in public office—as a member of the House of Representatives, then governor of New Hampshire, and then, from 1992 through early this year, as senator—had many highlights. He was a consistent advocate for fiscal responsibility, and a pioneer in raising awareness about our elderly entitlement programs' dire fiscal situation and the urgent need for reform.
Yet now we can safely count his amendment to the CLASS Act as one of his finest hours. The amendment to the long-term care program, which was included in the Patient Protection and Affordable Care Act (aka ObamaCare), stipulated that the secretary of Health and Human Services could not proceed in implementing the program unless it was certified financially sound. This amendment did more than just prevent American taxpayers from being saddled with another albatross entitlement program, one that would have inevitably led to exploding public costs and undermined private-sector long-term care insurance. It also has reminded the American people of government's habit of creating generous programs with unpayable benefits.
Administration defenders are attempting to pass this off as good government at work: A program that was not sustainable was recognized as such, and was dutifully shuttered. However, it's clear that, absent Senator Gregg's foresight, no one would have hesitated to create a costly program that would ensnare tens of thousands of Americans, generate its own bureaucratic web, fundamentally change the existing private sector, and become a fiscal train wreck in less than a decade. That's government's business-as-usual.
That shouldn't be the case moving forward. Senator Gregg's amendment should become a model for future legislation. No program predicated on a financially-unsound premise should be allowed to proceed. And legislators should think of additional kill-measures that will prevent financially ill-conceived programs from coming to pass, and, just as importantly, to shut down programs that prove ineffective.
Many government programs currently operating couldn't pass the test that brought down CLASS. The United States Postal Service, for example, is currently spiraling toward bankruptcy, and lawmakers are considering how to prop up this government institution. Yet as Gary MacDougalrecently reported in the Wall Street Journal, USPS lost $9 billion last year, needs to make a $5.5 billion payment to prop its retiree health plan, and first class mail, its bread-and-butter revenue source, has dropped 22 percent since 2006.
It may be taboo to admit it, but the post office, which still enjoys a government monopoly for regular mail delivery, has long stopped making sense. Today's conversations about the post office's future seem to revolve around keeping the half million postal workers employed, rather than it makes sense to have a government-sponsored postal service. That's not fair to taxpayers. Lawmakers can figure out a way to compensate the displaced postal workforce, but taxpayers shouldn't be forced to continue sinking resources into a fundamentally-unsound, and unnecessary, government program.
Social Security's financing challenges are more manageable, but the pressure that this program will soon place on the general budget (as payroll taxes become insufficient to cover ballooning benefit payments) should set off alarms and force lawmakers to make timely changes. For more than a decade, politicians on the left and right have acknowledged that Social Security isn't sustainable in the long-term...and yet the status quo continues. This shouldn't be acceptable.
Other aspects of Obamacare and existing health care programs should face the same evaluation as CLASS. Programs destined for fiscal ruin should be halted before they begin whenever possible, and reform should be mandatory for programs already underway.
Ironically, the CLASS initiative, which has now been fully exposed as a would-be fiscal disaster, was included in ObamaCare for the very purpose of masking the extent of the health care law's true deficit. CLASS was a money-saver for purposes of evaluating or “scoring” that legislation, which simply confirms that the current scoring system is a sad—and indeed, very damaging—joke.
Reforming the scoring system or creating safe-guards to phase out financially-unsound programs may not make for slick campaign ads or slogans. Yet this should be an urgent priority for this Congress and the next. Thanks to Senator Gregg, taxpayers have been spared another costly, ill-conceived program. The experience of CLASS shouldn't be the outlier, but should be standard procedure for future programs and for reviewing those already in existence.