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« on: March 16, 2010, 01:24:44 AM »

March 15, 2010


The President has announced that he wants the Congress to pass his health care bill this week.

I have very serious concerns about the bill that was passed by the House in November and the Senate on December 24th. Not only are these bills financially unsustainable, but they also represent a massive federal takeover of more than one-sixth of the U.S. economy. I voted against the House bill and will vote against the Senate bill should it come up for a vote next week - or anytime for that matter.

In my view these bills are full of budget gimmicks that hide the true costs of the bill. The Speaker has pledged to bring the Senate bill to the House floor for an up or down vote. That bill will be matched up with a second health care bill that is being negotiated behind closed doors and which no one has seen. Given that, it is important that we take a closer look at the Senate bill, which will serve as the basis for their health care bill. Yesterday - two months after it passed - we got a final cost estimate of the bill as passed by the Senate.

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.

It is an honor to serve you in Congress. For more information on my work in Congress or to sign up to receive my E-newsletter, please visit my website, If I may be of service to you in the future, please do not hesitate to contact me.


Bill Posey
Member of Congress
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