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 This clears the way for CLASS to be quickly repealed by Congress, because Congress won’t have to find offsetting budget cuts for CLASS’ mythical “savings.”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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