THE TREATMENT JANUARY 8, 2010
Under heavy political fire from left and right for his so-called “Cornhusker Kickback,” Ben Nelson said Thursday that he has begun negotiating with the Senate leadership to expand his Medicaid funding deal to all states. According to Nelson’s spokesperson, the Nebraska Senator “had always intended to push for other states to receive the same arrangement, which involved the federal government forever picking up Nebraska's share of the Medicaid expansion,” Politico reported.
Such a change to the legislation would not only take the heat off of Nelson; it would also ease the pressure on the Democratic leaders of the reform effort. As I wrote this week, state officials from both red and blue states have blasted the bill’s Medicaid provisions—though for distinctly different reasons. In theory, at least, Nelson’s proposal could help state governments facing fiscal difficulties and put reform on a more solid footing. As Paul Waldman explains:
Because they have to balance their budgets every year (unlike the federal government), states have often looked to cutting Medicaid when times get tough. Though they will no longer be able to do so if this reform passes, that just means they'll be more likely to cut other social services. The federal government has much more flexibility with spending, and can borrow when it needs to in order to maintain services.
But does Nelson’s proposal really have a chance of passing? Fully financing the Medicaid expansion for all states would cost about $25 billion to $30 billion. Financing is one of the biggest political hurdles that the Democrats still have to resolve, given the huge differences between the House and Senate bills, and there’s extremely little wiggle room.
I’m guessing that Nelson’s latest statement is more of a political gesture than anything else, and that the leadership will ultimately remove the Nebraska carve-out from the bill. In the meantime, the White House has been trying to win over the Democratic governors upset with the bill, convening a conference call with them on Thursday. Though there are still signs of discontent, Pennsylvania Governor Ed Rendell vowed that the governors would “be a lot clearer” about supporting health-care reform and explaining how expanded federal subsidies and other measures in the bill would actually help state governing. If such outreach can help quell a Democratic revolt over the Medicaid expansion, simply eliminating Nelson’s carve-out could be enough.