CLASS Act Scandal: Bigger Than Enron?
The Administration’s Friday decision not to go forward with CLASS implementation means that the program has now been definitively exposed as an accounting gimmick, with $86 billion in “deficit savings” wiped away in an instant. Yet Democrats’ reaction to these vaporized savings has been decidedly ho-hum: HHS dumped their decision out on a Friday afternoon, leading Democrats in both chambers have not a thing on their websites about the CLASS developments, and liberal bloggers are even arguing that the government “worked exactly the way it ought to.”
Compare that (non-)reaction to the Enron scandal, which reached its peak almost exactly one decade ago. Enron’s accounting shenanigans wiped out $70 billion in shareholder value – $16 billion LESS than went “Poof!” when the CLASS Act collapsed on Friday. And in 2001, Democrats reacted with righteous fury to the Enron scandal. For instance, Henry Waxman established an “Enron tipline” on his website, called the company’s collapse “breathtaking,” and said the executives’ behavior was an “outrage.”
So where’s the outrage from Democrats here?
- Will Henry Waxman be establishing a “CLASS tipline,” to see whether any HHS employee whistleblowers might have insights into why the many independent warnings about CLASS were ignored?
- Why do liberals say the vaporization of tens of billions of shareholder equity is a massive outrage, but government $86 billion in “deficit savings” evaporating in an instant doesn’t merit a word of mention?
- If a private company – and not the government – announced that a Madoff-esque scheme wiped out more shareholder value than occurred with Enron, would liberals claim such a scenario meant the private sector “worked exactly the way it ought to…?”
There is however one big difference between Enron and CLASS: Democrats knew about the CLASS Act’s problems all along. The non-partisan Medicare actuary knew from Day One the plan wouldn’t work, and even Budget Committee Chairman Conrad called the program a “Ponzi scheme of the first order.” That fact makes Democrats’ deafening silence on the program’s entirely predictable failure that much more telling.