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Topics: CBO

CBO paves way for the repeal of CLASS Act

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Politics,Beltway Confidential,Education,Philip Klein,CBO

An announcement by the Congressional Budget Office has paved the way for Republicans to formally repeal Obamacare's CLASS program, the troubled long-term care insurance program the administration pulled the plug on last Friday.

In a letter to Congress reported by Avik Roy, the CBO said it would score the budgetary impact of repealing the program at "zero." As I noted previously, the CLASS Act was one of the key accounting gimmicks Democrats used to claim the health care law would reduce deficits. Becuase the program was slated to collect five years of premiums before paying out any benefits, it produced surpluses during the CBO's 10-year budget window. Ultimately, it accounted for about half of the deficit reduction claimed by Democrats. Though it was a charade, this accounting quirk made it harder to repeal the program, because CBO said doing so would increase deficits by $86 billion from 2012 to 2021.

However, now that the administration has said it won't implement the program, the revised CBO baseline assumes it won't be implemented, so repeal will be scored as having "zero" budgetary impact. This makes it easy for Republicans to move ahead with definitively wiping the CLASS Act off the books.

As Roy also explains, the new score could also make it easier to repeal all of Obamacare, because the CBO-scored deficit reduction would be reduced.

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