Judd Gregg’s Ghost Cuts CLASS, Saves Taxpayers

This column first appeared in the New Hampshire Union Leader  on October 21, 2010:

by Fergus Cullen

Former U.S. Sen. Judd Gregg’s been out of office for nearly a year now, but last week his political ghost achieved what may be the most important policy victory of Gregg’s long career, saving taxpayers literally hundreds of billions of dollars. It’s a story about legislative sausage-making, bombs with long fuses, and — dare one say it — the good things it sometimes takes a career politician to accomplish.

Last Friday, the Obama administration cut CLASS. This was a huge, new middle-class entitlement program passed in the slipstream of Obamacare. It created a government insurance program to cover long-term care needs such as home health care and living in nursing homes.

On paper, CLASS was a feel-good, self-sustaining program: Younger, healthy people would pay affordable premiums for insurance covering long-term care benefits through a convenient, automatic payroll deduction. Should they ever become disabled and need long-term care, whether in the prime of their lives or as seniors, it would be covered. Never mind that private insurance companies offer similar products without government sponsorship.

Conservatives worried that CLASS would metastasize like Social Security and Medicare. The program would rack up surpluses in the early years — hence the “savings” generated by Obamacare — but what would happen when the cost of benefits started exceeding premium revenue?

Either benefits would be cut, eligibility reduced, premiums increased — or, more likely, politicians would expand benefits and eligibility and shift costs to taxpayers. Democratic Sen. Kent Conrad called the program “a Ponzi scheme of the first order, the kind of thing Bernie Madoff would have been proud of.”

In 2009, Gregg, always watchful for schemes to expand unsustainable entitlement programs, wanted to stop CLASS. But how? He could move to strike the language from the bill, but Republicans didn’t have the votes. He could vote against the bill, but that wouldn’t accomplish anything.

Early in Gregg’s political career, Minnesota Congressman Bill Frenzel gave Gregg some mentoring advice: Always work to improve a bill, even if you oppose it. This became a guiding principle for Gregg.

Gregg hatched an idea. During the month-long committee mark up of the draft legislation, Gregg proposed a clause requiring the secretary of Health and Human Services to certify CLASS was actuarially sound over a 75-year period — the same standard used to assess the sustainability of Social Security. If CLASS really was self-sufficient, this review would be a formality. Who could oppose that? After four hours of debate, Gregg’s amendment passed in committee on a voice vote.

“It was a win-win for us. I didn’t like the idea of setting up the program. But with this, it was either going to have to work or come down as a result of the amendment,” Gregg told The Washington Post this week.

In 2010, Gregg voted against the bill he had worked to improve, but CLASS and ObamaCare became law. Gregg soon retired with little fanfare after 32 consecutive years in public office.

But the fuse he’d quietly lit with a little-noticed amendment more than two years ago smoldered on. Last week the bomb went off. Try as they might, Obama administration officials could not get the CLASS math to add up to the actuarial standard Gregg defined. HHS Secretary Katheen Sebelius waved the white flag. The CLASS Act, one of the pillars of ObamaCare, will not be implemented.

“It took someone like Senator Gregg, who’d been around a long time, to see how this would work out,” David Fisher, the former Gregg staffer who handled health care policy for the senator, recounted to me.

Had the mild-mannered Gregg sought a fourth term, he may have drawn a primary challenge from a more ideologically-driven, Tea Party-affiliated conservative as Sen. Bob Bennett did last year and Sens. Dick Lugar and Orrin Hatch face now.

For every criticism made about career politicians, Gregg’s role in sinking CLASS tells a story about the value of experience, knowing how Washington really works, and the backfield blocking and tackling that advances a policy agenda. Would a Tea Party freshman have known what to do?

During one of laconic Gregg’s re-election campaigns, supporters wore self-aware T-shirts that read, “Judd Rocks — quietly.” Indeed.

Fergus Cullen, a freelance columnist, can be reached at fergus@ferguscullen.com.


Author: Fergus Cullen

Fergus Cullen is a former chairman of the New Hampshire Republican Party (2007-2008) and an editorial page columnist for the New Hampshire Union Leader.

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