Really, Senator Nelson

In Bluff or Blunt? I looked at whether the decision on the part of13 state’s Attorney Generals to question Nelsons special consideration for Nebraska was little more than political posturing. Power Line now says that Nelson is claiming that it’s not only Nebraska that was to get the opt-out for the expense:

With 13 Republican state attorneys general threatening to commence suit over the kickback, Nelson is now waving a white flag. Politico reports that Nelson reached out Thursday evening to South Carolina GOP Attorney General Henry McMaster, the leader of the group of 13 attorneys general and urged him to forgo any legal action. According to a copy of the memo sent by McMaster’s chief of staff to the other state attorneys general regarding the call, Nelson asked McMaster to “call off the dogs.”

According to the memo, Nelson told McMaster that the Medicaid deal had not been his idea, and that the same Medicaid exemption would be extended to other states. Politico quotes the memo: “Senator Nelson insisted that he had not asked for the Cornhusker Kickback to be placed in the U.S. Senate version of the health care bill to secure his vote. Senator Nelson told the attorney general that it was simply a ‘marker’ placed in the U.S. Senate version of the bill and assured the attorney general that it would be ‘fixed.'”

How would the kickback be fixed? The memo explains: “Senator Nelson said it would be ‘fixed’ by extending the Cornhusker Kickback (100% federal payment) on Medicaid to every state.”

If this is true, then the ramifications are absolutely huge–and more than a little frightening. The only way that this would be supportable, from a financial perspective, is to raise taxes. In essence, what it would mean is that no state would need to dip into its own coffers for the extended cost of Medicaid. However, this cost must then be borne by the federal government–which gets all of its money from us. Therefore, we would be on the hook for the difference. As the Power Line article notes, this reality would mean that the CBO scoring of the bill does not even come close to what it ought to be.