CBO: Repealing CLASS won’t impact the budget

posted at 12:05 pm on October 17, 2011 by Ed Morrissey

The Congressional Budget Office made quite an admission this morning on a key component of ObamaCare, after the White House signaled that it would abandon it.  In an e-mail sent to members of Congress, the CBO said that repealing CLASS would create no budgetary impact after the White House’s reversal, allowing Congress to repeal it without finding budgetary offsets for the supposed savings found by the CBO in 2010:

I have obtained a copy of an email that the Congressional Budget Office just sent to “interested Hill staff,” stating that, “beginning immediately, legislation to repeal the CLASS provisions in current law would be estimated as having no budgetary impact.” This clears the way for CLASS to be quickly repealed by Congress, because Congress won’t have to find offsetting budget cuts for CLASS’ mythical “savings.”

CLASS, you will recall, is the Obamacare long-term care entitlement that was known by all parties to be a fiscal time bomb, due to a structure that is designed to create an adverse selection death spiral in which only sick people use the program, driving up premiums and making them unaffordable and/or requiring a taxpayer bailout.

This news also has strategic importance for overall repeal of Obamacare. As I discussed on Friday, the CBO scored the Patient Protection and Affordable Care Act as reducing the deficit by $210 billion in the years 2012-2021. $86 billion of these savings comes from CLASS, because the program takes in premiums for five years, before it pays out claims, thereby making the program appear to be “deficit-reducing” in the near term.

Why is this important?  CBO’s original score had it saving $86 billion over the next ten years, which meant that a repeal under that scoring wouldn’t have been budget-neutral.  That would have required Republicans to offer offsets in increased revenues to cover the shortfall under Pay-Go rules, or frame the repeal as an emergency measure.   The savings were illusory in the first place, although the CBO doesn’t quite make that explicit.  The CBO now accepts the White House admission that CLASS would never have saved money — as its critics insisted in 2009-10 while Democrats shoved  ObamaCare down the throats of voters.

In other words, this was an Emily Litella moment.

That also reduces the “savings” Republicans will have to offset in order to repeal the rest of ObamaCare, almost by half from CBO’s last score of the PPACA.  That figure now drops from $210 billion to $124 billion over ten years, and given the admission by HHS on CLASS, we’re undoubtedly going to find that some of the other assumptions that led to the “savings” the CBO found will eventually also get the Emily Litella treatment.

Update: One commenter says it’s more like a Joe Isuzu moment:

Yeah, I think that pretty much describes ObamaCare.  Want to save $210 billllllllllllyun?

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It’s more of a Joe Izuzu moment. The dems were lying from the word go.

tommyboy on October 17, 2011 at 12:10 PM

Are you lying now, or were you lying then?

forest on October 17, 2011 at 12:11 PM

It’s almost like someone wasn’t being truthful, or something

a capella on October 17, 2011 at 12:13 PM

Um, why shouldn’t Republicans use this to snag $86 billion in further spending reductions anyway? Am I missing something here?

Lawdawg86 on October 17, 2011 at 12:13 PM

But the non-partisan CBO estimates are the “Gold Standard”, no?

SlaveDog on October 17, 2011 at 12:15 PM

It’s almost like someone wasn’t being truthful, or something

a capella on October 17, 2011 at 12:13 PM

Bingo!..:)

Dire Straits on October 17, 2011 at 12:15 PM

Color me unsurprised.

Bob's Kid on October 17, 2011 at 12:17 PM

a capella on October 17, 2011 at 12:13 PM

Also another clue was that Team Obie announced the scuttling of CLASS during the Friday Night News “Dump”..:)

Dire Straits on October 17, 2011 at 12:18 PM

The rest of it is the same…

Actually, repealing Obamacare shouldn’t require finding any offsetting budget cuts because we all know obamacare will *cost* money – repealing Obamacare *IS* a budget cut, ffs.

Midas on October 17, 2011 at 12:20 PM

$86,000,000,000 Denied or Misplaced

RalphyBoy on October 17, 2011 at 12:20 PM

Shocked! Shocked I tell you!

SPGuy on October 17, 2011 at 12:27 PM

And they wonder why no on trusts them. Any of them.

Cindy Munford on October 17, 2011 at 12:27 PM

Cindy Munford on October 17, 2011 at 12:27 PM

Good to see you..:)

PS..I am glad to make it back to the HA bunker..:)

Dire Straits on October 17, 2011 at 12:30 PM

Are you lying now, or were you lying then?

forest on October 17, 2011 at 12:11 PM

Both.

rbj on October 17, 2011 at 12:39 PM

Any thought that the timing of this is suspicious, coming on the heels of SCOTUS agreeing to review Obamacare? Maybe, just maybe, Obama is trying to influence the case by proving to the Justices that signing off on the Constitutionality of the mandatory participation clause of his “signature success” is essential to the future of the planet – OK, Obamacare. The oceans will stop rising, etc., etc.

in_awe on October 17, 2011 at 12:39 PM

Dire Straits on October 17, 2011 at 12:30 PM

Great to see you! I hope all is well. I wasn’t around all the time to quiet everyone’s concern about you but hopefully it was enough to get around. You were missed.

Cindy Munford on October 17, 2011 at 12:43 PM

Cindy Munford on October 17, 2011 at 12:43 PM

You are the best!..I am glad to be back..:)

Dire Straits on October 17, 2011 at 12:44 PM

But what about all the jobs the CLASS Act woulda saved or created or supported?!?!!

Akzed on October 17, 2011 at 12:47 PM

Any thought that the timing of this is suspicious, coming on the heels of SCOTUS agreeing to review Obamacare? Maybe, just maybe, Obama is trying to influence the case by proving to the Justices that signing off on the Constitutionality of the mandatory participation clause of his “signature success” is essential to the future of the planet – OK, Obamacare. The oceans will stop rising, etc., etc.

in_awe on October 17, 2011 at 12:39 PM

Actually, I think it’s a preemptive jab at the separation clause they forgot to include in ObamaCare. The part that supposedly allows certain parts of the law to be struck down without affecting the entire thing. I think they are doing this so they can say “See, it’s OK if we get rid of part of it! The mandate? Who cares!”

preallocated on October 17, 2011 at 12:56 PM

… and let’s just keep this on file for future reference in pointing out that the CBO is wholly incompetent, untrustworthy, and not to be relied upon for any sense of reality in ‘scoring’.

Midas on October 17, 2011 at 1:10 PM

No, really. We need this program.

BobMbx on October 17, 2011 at 1:19 PM

It’s almost like someone wasn’t being truthful, or something

a capella on October 17, 2011 at 12:13 PM

Well, it depends on what your definition of the word “truthful” is…

JohnGalt23 on October 17, 2011 at 1:21 PM

Do not lose sight of the target!

The CBO has admitted it made PARTISAN lies both at the time the healthcare bill was scored and with this very announcement!

The CBO estimates are nothing but WORTHLESS political propaganda!

Freddy on October 17, 2011 at 1:22 PM

CBO eh? Anybody catch Chris Wallace pestering Herman Cain for his “independent economist or CBO” schtick when asking Cain if his plan had been scored by a Harvard economist yet?

DanMan on October 17, 2011 at 1:44 PM

Wasn’t this scamcare sold as a economic solution to our money problems? Isn’t this the part that was supposed to do much of the savings?

So, I await for the GOP establishment to attack the left for pulling away the economic savings of Obamacare hence the need to drop the 3exxpesive part- or- attack them for hurting the very peole they claimed to wish to help -the old and take that message to Florida and see how it sells.

Did I say that I expected the GOP to attack the left? I suppose when Obama calms the seas from rising or something they might. What can they do with Mittcare now -is everything they do a Ponzi scheme?

If Mitt’s running , I am too -away from the GOP.

Don L on October 17, 2011 at 1:45 PM

I have a position for the conservative candidate to make -defund the CBO due to its partisanship aned incompetence. Who can argue but the foolhardy -if they try merely ask if they support it’s incompetence or its political games?

Don L on October 17, 2011 at 1:49 PM

There are so many clowns in charge of so many things. It’s going to take a tanker car full of Mr. Clean to tidy up the mess we’ve made over the years.

HomeoftheBrave on October 17, 2011 at 2:05 PM

ACRES OF PANTS ON FIRE IN WASHINGTON D.C!!!

landlines on October 17, 2011 at 2:21 PM

2 + 2 doesn’t equal 5? This Obama math is hard.

Kissmygrits on October 17, 2011 at 3:00 PM

How can they remove part of Obamacare when there’s no Severability clause?
There’s no Executive Severability clauses.
Don’t they need a majority of congress also?

Kini on October 17, 2011 at 3:59 PM

That also reduces the “savings” Republicans will have to offset in order to repeal the rest of ObamaCare, almost by half from CBO’s last score of the PPACA. That figure now drops from $210 billion to $124 billion over ten years, and given the admission by HHS on CLASS, we’re undoubtedly going to find that some of the other assumptions that led to the “savings” the CBO found will eventually also get the Emily Litella treatment.

Given the initial CBO score of PlaceboCare covered the time frame from FY2010-FY2019, and any new rescore will cover FY2012-FY2021, that means it’s even less than $124 billion. Remember, the payments to the government were front-loaded while the costs were back-loaded, and 2 fiscal years of the 4 where there wasn’t any real “cost” has aged off.

Steve Eggleston on October 17, 2011 at 4:10 PM

How can they remove part of Obamacare when there’s no Severability clause?
There’s no Executive Severability clauses.
Don’t they need a majority of congress also?
Kini on October 17, 2011 at 3:59 PM

This was my first thought….even a partial repeal still has to make it past harry reid, and since it would be a pretty big admission of failure I don’t think he’d do it….even if the white house insisted.

runawayyyy on October 17, 2011 at 5:00 PM

How can they remove part of Obamacare when there’s no Severability clause?
There’s no Executive Severability clauses.
Don’t they need a majority of congress also?

Kini on October 17, 2011 at 3:59 PM

Severability only applies to a judicial strikedown of a part of a law. A lack of severability is (or at least typically leads to) the strikedown of an entire law if a part of it is found unconstitutional.

Congress is free to rip out any part (and just those parts) it chooses.

Steve Eggleston on October 17, 2011 at 5:05 PM