Tag Archives: John Thune

Why the Motion to Proceed Is a Sucker’s Bet

In trying to win support for their Obamacare “repeal-and-replace” bill, Republican Senate leaders are making a process argument to their fellow senators: We know you don’t like the bill, but work to mend it, rather than ending the process. As Sen. John Thune (R-SD), the chairman of the Senate Republican Conference, argued, “We gotta get on the bill.…If we don’t at least get on the bill, we’re never going to know.”

It’s a typical leadership argument: The promised land is only one bad vote away, not two bad votes, not ten bad votes, only one bad vote away. (Until the next bad vote crops up.) But to skeptics of the bill—whether moderate or conservative—that argument should sound like a sucker’s bet.

Without a clear vision of the final legislation and an agreement from 50 Republican senators to preserve that vision on the Senate floor regardless of the amendments offered—both things that Senate Majority Whip John Cornyn (R-TX) last week admitted Republicans do not have—proceeding to the bill will result in a policy morass that could make the confusing events of the past week look tame by comparison.

As things stand now, a successful motion to proceed will result in an amendment process under which various provisions of the bill get struck—due to guidance from the parliamentarian, dissension within the Republican conference, or both. Then, a last-minute substitute amendment from Majority Leader McConnell (R-KY) will attempt to win over or buy off votes (or both), with the hope that he can dare enough Republicans not to kill the legislation just before the finish line. Here are the likely ways the bill could change—and not for the better.

The ‘Byrd Bath Bloodbath’

As I have previously written, the prior versions of the Senate bill had not gone through the “Byrd bath” testing which provisions comply with the Senate’s “Byrd rule” for budget reconciliation. Late last Friday, the Budget Committee minority staff released a list of provisions that could get stricken from the bill for not complying with the “Byrd rule,” including pro-life protections ensuring no taxpayer funding of abortion, or plans that cover abortion; funding for cost-sharing subsidies; a prohibition on Medicaid funding to certain entities, including Planned Parenthood; and a provision imposing waiting periods on individuals lacking continuous health coverage.

Multiple sources indicate that the list produced by Budget Committee Democrats comprised preliminary guidance on a prior version of the legislation. Therefore, that list should not be considered definitive—that all the enumerated provisions will get stricken.

Conversely, provisions not on the list released Friday could fail to pass Byrd muster, not least because the parliamentarian’s guidance can change. In 2015, a provision repealing Obamacare’s risk corridor program was stricken from that year’s reconciliation bill on the Senate floor, because the parliamentarian was persuaded by Democrats’ last-minute arguments.

Regardless of the specifics, the “Byrd bath” will doubtless make it more difficult for Republicans to present a coherent policy vision through budget reconciliation legislation, meaning the bill could change significantly from its introduced version on procedural grounds alone.

Death by Amendments

In calling for Republicans to vote to begin debate on the bill, Sen. Lamar Alexander (R-TN), a close McConnell ally, has argued that senators will “have a virtually unlimited opportunity…on the floor to make amendments to the bill and try to improve it.”

Alexander’s key phrase is “try to,” because the numbers are strongly stacked against Republicans wishing to offer amendments. If three of 52 Senate Republicans—only 5.8 percent of the Republican conference—defect on an amendment vote, the amendment sponsor will have to rely on Democrats to approve the amendment. And why would Democrats vote for any amendment that might help Republicans pass an Obamacare “repeal” bill?

The most likely answer: They won’t. As a result, it appears more likely that the amendment process could see Republicans stripping out other Republicans’ amendments—from Cruz’ “consumer freedom” provision to the various “side deals” included in the bill—than inserting provisions into the bill to win support. After all, if a provision is so popular that it could attract the votes of 50 Senate Republicans, why didn’t McConnell include it in the base bill to begin with?

The ‘Wraparound Bait-and-Switch’

As Politico notes, the myriad amendment votes don’t represent the end of the process—they’re merely the beginning: “At some point, [Senator] McConnell will introduce a substitute that will represent the Senate’s draft bill. It may be different than what is introduced…and could be subject to amendment on the Senate floor next week. The bill, in other words, will be a work in progress until the final vote.”

That’s exactly what happened the first time the Senate considered Obamacare legislation under reconciliation, in 2015. At the end of the process, McConnell laid down a “wrap-around” amendment—essentially, a whole new version of the bill replacing the prior substitute. Reports suggest McConnell could well do the same thing this time round: introduce a new bill just prior to the vote on final passage, then dare recalcitrant Republicans to vote against it.

Conservatives in particular should fear the “wrap-around,” for the new “goodies” potentially lurking in it. With McConnell having roughly $200 billion in taxpayer funds to distribute in the form of “candy” to members, and staff brazenly telling reporters they plan on “making it rain” on moderates by including additional cash for home-state projects, the “wrap-around” could well include all sorts of new last-minute spending intended to buy votes, and not enough time to scrutinize its contents. (Will we have to pass the bill to find out what’s in it?)

If this process works as outlined above, Alexander’s argument about amendments seems less an invitation to offer suggestions in an open process than a call for senators to go to McConnell’s office and work out a special deal behind closed doors in exchange for their vote.

Willing Disbelief

If the Senate votes to proceed to the bill and McConnell’s office turns into a trading floor, with staff “making it rain” taxpayer funds just like they promised, senators will claim themselves “Shocked—shocked!” that the process took an ugly turn.

They shouldn’t be. The signs are as plain as day. If senators have objections to the bill now, they should vote down the motion to proceed, for the bill—likely on substance, and certainly on process—isn’t going to get much better, and almost assuredly will get worse.

This post was originally published at The Federalist.

What We Learned About the CLASS Act Today

This morning the Energy and Commerce Committee held a hearing regarding the demise of the CLASS Act Ponzi scheme.  Here’s just some of what we learned about the program, and the regulatory and actuarial debacle the Administration announced earlier this month:

Robust Debate on Scoring:  Assistant Secretary Glied attempted to defend the Administration’s decision to disregard the warnings of the many independent experts regarding CLASS’ solvency by saying that there is always a “robust debate” about modeling and scoring issues related to any piece of legislation.  If that’s the case, and there’s always a significant margin of error when it comes to fiscal scorekeeping, then why are Democrats so absolutely certain that the rest of the law will reduce the deficit…?

Administration Misinformation:  Assistant Secretary Greenlee announced that HHS has in fact closed the CLASS Act office, and ceased all CLASS-related implementation activities.  This admission comes one month after a White House official called a report that the CLASS office was closing “flat-out false” and a “false rumor.”

Wasteful Government Spending:  Assistant Secretary Greenlee testified that HHS spent $5 million in taxpayer dollars in 2010 and 2011 attempting to implement what even Democrats called a “Ponzi scheme of the first order.”  This is a more than 100% increase in spending over the last three months; in August, HHS said in a letter to Senators Thune and Shelby that HHS had spent only $2.2 million on CLASS.

Timing is Everything:  Assistant Secretary Greenlee admitted that CLASS actuary Bob Yee’s report was received on September 20 – and two days later, Yee announced in a now-famous e-mail that he would be leaving the Department.  The timing raises obvious questions about whether Yee was forced out due to his report, along with why the CLASS actuary left the Department at a time when all other CLASS employees were merely re-assigned.

Sebelius Asleep at the Switch?  Assistant Secretary Glied declined repeated requests to admit that Secretary Sebelius was ever informed about the inadequacies of her own Department’s modeling of CLASS.  If that’s the case, why did HHS officials publicly claim in October 2009 that HHS was “entirely persuaded that…financial solvency over the 75-year period can be maintained?”  Just as important, how can Secretary Sebelius implement a 2,700 page law if she was so detached from fundamental questions about whether or not an $86 billion program was actually solvent?

Hiding Internal Dissent:  Assistant Secretary Glied declined repeated requests to admit that the concerns of HHS staff about CLASS’ solvency were relayed to the public or to Congress prior to PPACA’s enactment.  In other words, no one told Congress prior to the bill’s passage that the career employees trying to implement CLASS thought the program was a “recipe for disaster.”

More Mandates Ahead?  In one exchange, Assistant Secretary Glied and former Chairman Waxman agreed that the reason several proposals to “fix” CLASS would have imposed pre-existing condition exclusions was because all Americans would not be covered – in other words, individuals could opt-out of CLASS.  The implicit “solution” to that problem would be another unprecedented – and constitutionally dubious – mandate requiring all Americans to participate in the program, a step which former Obama Administration Cabinet official Peter Orszag has endorsed.  Of course, Glied herself has written that a mandate would be largely “symbolic,” meaning that any impact of a mandate to participate in CLASS – or to buy health insurance – would be largely ineffective.

The hearing as a whole did not answer the fundamental questions about what the Administration knew, and when, regarding this massive debacle – particularly given that experts have been predicting the program’s failure for years.  Moreover, the frequent bureaucratic bungling regarding the CLASS Act outlined this morning raises broader questions about how HHS can effectively and efficiently implement the sprawling $2.6 trillion health care law.

How Liberals Would “Fix” CLASS: Another Mandate

Most readers have probably already seen this morning’s Congressional Budget Office blog post indicating that CBO would not score a budgetary impact of repeal of the CLASS Act, given the Administration’s announcement last Friday that it was suspending program implementation.*  But you may not have seen an article by the New Republic’s Jonathan Cohn, who starts off by eating at least a little bit of proverbial crow by admitting that he and other liberals “ignored” CLASS’ fiscal flaws:

[Senator] Thune has a point – in part. The official budget estimates for CLASS suggested it would save money in the first ten years, accounting for about half of the deficit reduction that the Affordable Care Act was supposed to yield during that time.  But the estimates for CLASS were never that reliable.  More important, after those first ten years, CLASS was likely to pay out more in benefits than it collected as premiums.  For these reasons, conservatives like Peter Suderman who criticized CLASS as unsustainable were right to raise alarms, while liberals like me were wrong to ignore them.

But Cohn goes on from that welcome concession to argue that what would “fix” the CLASS program is requiring every American to purchase long-term care insurance:

The sustainability of CLASS would not have been in such question if everybody had to sign up for it.  In other words, if long-term care insurance were subject to an individual mandate, old and sick people would not have been the only people enrolling.

Cohn makes the point that the rest of Obamacare, unlike CLASS, is not in fiscal danger precisely because it has an individual requirement to purchase health insurance.  But in many respects, that’s the point – the mandate IS in jeopardy, because multiple federal courts have ruled the unprecedented requirement unconstitutional.  And if one mandate is unprecedented – and constitutionally dubious – why include a second mandate to boot?

For months, conservatives have asserted – just as they asserted CLASS would be proven insolvent – that if the individual mandate is ruled constitutional, there is little the federal government could not require from its citizens.  Peter Orszag first referenced the idea of mandatory participation in CLASS over the summer.  The Justice Department likewise conceded in a Pennsylvania courtroom that mandatory long-term care insurance would be constitutional.  And the blithe way with which the left has been willing to suggest additional mandates – even before the Supreme Court rules on Obamacare’s individual mandate – proves that conservative concerns about proliferating requirements on individuals to obey liberals’ manifold (and multiplying) commands may soon prove as prescient as those concerns raised about CLASS two years ago.

 

* For those of you who have wondered how HHS could decide not to implement a law, Obamacare requires the Secretary to certify CLASS’ solvency before moving forward with the program.  So HHS was not breaking the law by allowing a fiscally unsustainable program to go forward – indeed, HHS would have been breaking the law had it allowed the program to go ahead, given the statutory requirement to certify solvency.

Fast Facts: Obama Throws Good Money After Bad

Taxpayer-funded PR for Unsustainable CLASS Act

 “We very much share the concerns that have been expressed that, as written into the law, the framework of the program was not sustainable.”

Secretary Sebelius, 2/16/11

At a time when the federal government is running trillion-dollar deficits, the Obama Administration has proposed spending yet more taxpayer dollars to launch a PR campaign aimed at promoting the CLASS Act—a new Obamacare entitlement that even Secretary Sebelius admits is at risk of becoming “immediately insolvent.”

  • Non-partisan experts and actuaries have consistently warned that the program could become unsustainable without a massive taxpayer bailout.
  • The independent Medicare actuary concluded that there is a “very serious risk” of the CLASS program becoming unsustainable, and the President’s own Fiscal Commission recommended that the “financially unsound” program be significantly reformed or repealed entirely.
  • Senate Budget Committee Chairman Kent Conrad famously called the program “a Ponzi scheme of the first order, the kind of thing Bernie Madoff would have been proud of.”
  • Senators Shelby and Thune wrote last week to Secretary Sebelius to express concern that the Administration plans to “use federal resources on television ads in an effort to mislead Americans that the CLASS Act is fiscally sound.”

The Administration has provided no details about how it believes it can turn a totally unsustainable entitlement into a solvent program, yet it already has plans to spend more taxpayer funds for a PR campaign to promote the program.  It’s just another sign that Obamacare will prove to be a budget-buster for the federal government.

Is Secretary Sebelius Hiding Information on CLASS?

Several senators this afternoon sent a letter to Secretary Sebelius asking that her Department provide information on the participation and premium modeling conducted by the Administration on the CLASS Act prior to the enactment of the health care law.  In exchanges with Senator Thune at recent Finance Committee hearings, the Secretary admitted that the program is “totally unsustainable” as written in the law – and she pledged to disclose to Congress the information that was available to HHS prior to the law’s enactment.  However, several months later, she has failed to provide that information to the Senate – and also failed to disclose the same information to House Labor-HHS Subcommittee Chairman Rehberg, who requested similar documents from HHS nearly a month ago.

The participation models are important because, as Secretary Sebelius herself testified last month, if only the disabled community enrolls in the CLASS Act, “this program is immediately insolvent.”  It’s entirely possible that HHS knew through participation analyses that the program would be “totally unsustainable” and BEFORE the bill became law – yet did not publicly alert Members of Congress to the fact that they were passing a fiscally unsound and “immediately insolvent” new entitlement.

Multiple Members of Congress have requested these documents – and the President said as recently as this morning that he’s interested in engaging in bipartisan discussions around entitlement reform.  In that case, why haven’t the documents been released?  What exactly does HHS not want to disclose?

What Did Secretary Sebelius Know About the CLASS Act?

At the Senate Finance Committee hearing today, Senator Thune and Secretary Sebelius discussed what was heretofore not publicly known: Reports that HHS had conducted actuarial modeling on the CLASS Act Ponzi scheme BEFORE the health care law was enacted.  (Footage will be posted on our blog here as soon as it’s available.)  Secretary Sebelius repeatedly declined to admit – or answer – whether she was aware that HHS had studied the program prior to its enactment.  This exchange raises questions related to the Department’s actions (or inactions) on this matter:

  • Did modeling within HHS support the conclusion of the Medicare actuary that the program had “a very serious risk” of becoming unsustainable – and the similar conclusions of the non-partisan Congressional Budget Office that the program “could be subject to considerable financial risk in the future?”
  • If preliminary HHS modeling concluded the program was sustainable, then why did the Secretary state last month that the program was “totally unsustainable” as written in the law?  What so fundamentally changed in HHS’ actuarial assumptions that the modeling went from solvent to “totally unsustainable?”
  • Conversely, if internal HHS modeling before the law was passed raised significant questions about the CLASS program’s solvency – as has every other independent analysis of the program – why didn’t the Secretary disclose this information to Congress, so that Congress could fix the program prior to the bill’s enactment?
  • Did Secretary Sebelius – or other HHS officials – conceal materials about the CLASS Act’s fiscal shortcomings from Congress for ostensibly political reasons, so that Blue Dog Democrats and others would lack information about the program’s unsustainable nature that might lead them to vote against enactment of the bill in the first place?

To borrow a prior analogy, the fundamental question about HHS’ actuarial studies on the CLASS Act is simple yet profoundly important:  What did the Secretary know – and when did she know it?

Bill Summary: H.R. 3962, Six Month, Fully-Offset “Doc Fix”

A few moments ago, the Senate passed by unanimous consent a six month doc fix extension.  The legislation would provide a six month doc fix extension, fully paid for through 1) pension provisions included in the Thune substitute amendment Republicans voted for yesterday, 2) language clarifying the three-day payment window (a pay-for included in the Baucus substitute), and 3) a CMS-IRS data match included in both the Thune and Baucus extender packages.  To be clear, the bill ONLY addresses the SGR – it does NOT include unemployment compensation, Medicaid FMAP funding, COBRA insurance subsidies, or any of the other Medicare/health provisions (e.g. Section 508 hospital extension, etc.) included in the Baucus substitute.

A summary follows below.  As a reminder, because the House adjourned last night for the weekend, that body must consider the legislation early next week before the payment changes take effect.  With regard to the broader extenders package, Sen. Reid did not indicate when or how the majority intends to proceed on that measure.

 

Medicare Physician Payment:  Provides a 2.2% increase in reimbursement levels for June-November of 2010.  Stipulates that the payment increase shall be disregarded for purposes of calculating SGR rates for periods after November 30, 2010.  Spends $6.4 billion over five and ten years.

Hospital Payments:  Prohibits Medicare from reopening or adjusting claims made by hospitals during the three days preceding a patient’s inpatient admission.

Pension Relief:  Offers the same relief from pension funding obligations for companies as contained in the Republican fully paid for alternative. This relief raises $2.1 in revenue, because it will result in fewer tax-preferred contributions to pension plans and therefore more taxable income for the firms, and generates $675 million in outlay savings due to lower than expected payments by the Pension Benefit Guarantee Corporation (PBGC).  Saves $2.8 billion over ten years.

IRS Data Match:  Includes provisions allowing the IRS and CMS to co-ordinate data matching efforts with regard to delinquent tax debts owed by Medicare providers, and to take such information into account when releasing reimbursement payments and accepting new providers.  These provisions were originally included in Section 1303 of the substitute amendment for the reconciliation bill (H.R. 4872), but were stripped out at the House Rules Committee due to Byrd rule concerns.  Saves $175 million over five years and $425 million over ten, according to JCT.

On Fiscal Responsibility and the “Doc Fix”

The Wall Street Journal has an article this morning outlining how Democratic dithering over the “doc fix” has harmed physicians, who are turning down patients amidst all the uncertainty; Roll Call carries a separate piece explaining some of the politics behind the Medicare SGR issue.  To be clear: Republicans SUPPORT reforming Medicare physician payments – provided it is done in a fiscally responsible manner.  As Senator Thune points out in the Roll Call piece, a long-term SGR solution “should have been done in health care” – when there were more than enough savings within Medicare to pay for an SGR repeal had that money not been “raided” to pay for new entitlements.  (As a further reminder, the Thune Republican alternative to the extenders package, which may be voted on today, provides a 12-month longer “doc fix” than the Baucus substitute – and does so while reducing the deficit, not increasing it.)

Various press reports appear to suggest that Democrats have once again retreated behind closed doors in an attempt to cobble together a legislative package that can win 60 votes.  Amidst all the talk of what’s “realistic” in terms of the “doc fix,” many Republicans may agree that it’s not realistic to finance new Medicare spending for America’s seniors by adding to the crippling debt burden that their children and grandchildren already face – we can find a better way to pay for the “doc fix,” and we must.

Democrats Reject Fiscally Responsible “Doc Fix”

Senator McConnell just asked for unanimous consent to pass a 30-day extension of expired programs, including the Medicare “doc fix,” as part of Senator Grassley’s PAID FOR legislation (S. 3421).  The legislation would extend unemployment benefits, the Medicare “doc fix,” and other provisions WITHOUT raising the federal budget deficit – the legislation is fully paid for by unspent stimulus funds.

Unfortunately, Majority Leader Reid rejected this unanimous consent request for a paid-for extension of the Medicare “doc fix.”  This timing is curious, as the President attempted to blame Republicans over the weekend for allowing Medicare physician payment provisions to lapse.  It’s also interesting that the majority said they wanted a longer-term solution to the Medicare “doc fix” – in that case, Leader Reid might want to support the Thune Republican substitute amendment, which includes a “doc fix” extension one year longer than the Democrat extenders legislation (H.R. 4213), and reduces the deficit by $55 billion, as opposed to the approximately $80 billion increase in the deficit under the Democrat proposal.

Weekend Update: On Fiscal Responsibility and the “Doc Fix”

By now many of you will have heard about the President’s weekly radio address, in which he criticized Republicans for supposedly blocking a vote on passing a short-term Medicare “doc fix,” and pledged to find a “fiscally responsible” way to address the physician payment formula in the longer term.  Unfortunately, when it comes to the Medicare payment issue, the President’s rhetoric does not match the reality:

Democrats Removed the “Doc Fix” from the Health Care Bill, Creating the Current Problem:  Section 3101 of the original Reid health care bill (H.R. 3590) provided for a one-year Medicare “doc fix,” which would have prevented the sustainable growth rate (SGR) cuts from taking effect at any point during 2010.  However, Majority Leader Reid struck this provision in a manager’s amendment written behind closed doors, because the majority, rather than spending $11.3 billion to ensure seniors had access to physician care this year, wanted instead to spend yet more money on unsustainable new entitlements.

Democrats Have Not Offered a “Fiscally Responsible” Plan for the “Doc Fix”:  In his nearly 18 months in office, neither the President nor Democrats in Congress have advanced ANY type of fiscally responsible, long-term solution for Medicare physician payments the President now claims to want.  The Administration’s budget this year proposed $371 billion in new deficit spending over the next ten years – essentially making the problem go away by busting the budget.  While that proposal’s ten-year impact would be bad, the long-term impact would be even worse – an analysis by former Medicare trustee Tom Saving found that Democrats’ plans to pass a permanent “doc fix” increasing the deficit would raise Medicare’s unfunded obligations by up to $1.9 trillion over the next 75 years.

Democrats Cannot Agree Amongst Themselves on Deficit Spending and the “Doc Fix”:  The President’s budget proposal to “solve” the SGR problem through more deficit spending was effectively rejected by a bipartisan majority in the Senate last October.  At that time, 13 Democrats voted with all 40 Republicans against the consideration of a bill (S. 1776) that would have frozen physician payments for 10 years at a cost of $247 billion.  And consideration of the current “doc fix” legislation (H.R. 4213) has taken more than a month, as Blue Dog Democrats in the House and moderate Democrats in the Senate continue to bicker with their more liberal colleagues about whether or not new spending for Medicare physician payments and other so-called “emergency” spending should be offset.

Republicans Supported a Fiscally Responsible, Long-Term Solution to the “Doc Fix”:  While Democrats attempted to ignore Medicare’s funding woes during the health care debate to focus instead on creating new entitlements, Republicans offered amendments to address the physician payment issue.  Specifically, Senator Gregg offered an amendment requiring that Medicare savings be directed towards protecting and strengthening the Medicare program—through changes such as a permanent “doc fix.”  Had this amendment been adopted, the $528.9 billion in Medicare savings in the health laws would have been more than enough to pay for a permanent, fiscally sustainable “doc fix.”  Unfortunately, in both December 2009 and March 2010, Senate Democrats rejected this fiscally responsible approach to health care reform.

Republicans Have Offered Fiscally Responsible, Short-Term Solutions to the “Doc Fix”:  In recent months, Republicans have offered numerous proposals to pay for short-term extensions of Medicare physician payments and other expiring provisions, to allow Congress time to debate these issues without adding to skyrocketing budget deficits.  On March 2, Republicans offered a paid-for, one-month extension of the “doc fix” and other provisions that would have reduced the deficit by more than $13 billion; Democrats rejected this proposal.  On March 25, Republicans offered another one-month extension of the “doc fix” and other provisions, which Democrats again rejected.  And Senator Thune’s substitute to the pending legislation would provide a LONGER extension of the “doc fix” than the Democrat bill, while simultaneously reducing the deficit by $55 billion.  If President Obama is interested in fiscal responsibility, he should endorse the Thune Republican substitute and its “doc fix” provisions.

Amidst the President’s rhetoric this weekend, it’s also worth pointing out once again the mailings and other taxpayer-funded propaganda efforts the Administration has recently been using to sell its unpopular health care legislation.  Despite the rhetoric of the Medicare leaflet saying that the health law “will keep Medicare strong and solvent,” in reality the legislation ignored many of Medicare’s chronic long-term funding problems (such as the “doc fix”) to focus instead on creating unsustainable new entitlements.  And of course, the $18 million the Administration claims it spent to send out those leaflets promoting its health care law is money that WON’T be used to ensure Medicare beneficiaries have access to physician care.

As Democrats are discovering, taxpayer-funded leaflets and rhetoric regarding fiscal responsibility won’t change the reality of skyrocketing federal budget deficits and an unpopular and unsustainable health care law.  The true alternative lies in Republican proposals that would control federal deficits and put spending on a more responsible, sustainable path.