Sunday, February 6, 2011

The states can't afford Obamacare

From George Melloan of The Wall Street Journal on Feb. 4:
Behind this week's ruling by U.S. District Court Judge Roger Vinson overturning ObamaCare on constitutional grounds, there is a deeper economic reality. The states can't afford it. That's a primary reason why 26 states joined in the Florida lawsuit to nullify the federal law. It also would be a good reason for the Supreme Court to uphold Judge Vinson's ruling.

For decades, the federal government has presumed increasingly to make policy in health, education, welfare, business regulation, law enforcement and other areas beyond the powers enumerated in the Constitution. Up until recently, the courts have largely viewed this intrusion benignly, partly because the states have acquiesced, bargaining their sovereignty away in return for federal aid.

This once-happy marriage is on the rocks. While designing the Patient Protection and Affordable Care Act, the Pelosi-Reid-Obama troika tried desperately to present a fa├žade of federal fiscal prudence where none actually existed — so they off-loaded massive costs on the states. By opening Medicaid to applicants 33% above the poverty line in 2014, ObamaCare could expand Medicaid enrollment by as much as 25%, according to the plaintiffs in the Florida suit. Medicaid, also rife with fraud in part because of its hybrid federal-state management, is already one of the biggest items in state budgets.

Thanks to the recession and their own spending excesses, nearly all states are suffering budget shortfalls, some to the point where there is no clear idea where the money will come from to meet pension and bond obligations, let alone operating expenses. The prospect of adding a further huge burden down the line, even with Washington kicking in over half the cost, is appalling.

The 26 states party to the Florida suit were saying, in essence: enough! Washington can borrow from the Chinese or call on the Federal Reserve to buy its bonds. But states' only recourse in a budgetary bind is further painful cuts in services.

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