S.C. attorney general: Medicaid deal could 'represent corruption'

South Carolina Attorney General Henry McMaster on Monday stressed that Senate Democrats' move to cover Nebraska's new Medicaid patients in full could represent "corruption."

In an interview with Fox News this morning, McMaster said Democrats included the provision in the chamber's healthcare bill purely to buy Sen. Ben Nelson's (D-Neb.) much-needed vote. It is ultimately unconstitutional, McMaster added, as it places a disproportionate burden on the 49 other states to cover Nebraska's Medicaid costs.

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"As far as we know, the only distinction made for Nebraska with Sen. Nelson was to buy his vote," said McMaster, who announced he would probe the constitutionality of that deal last week.

"We think that represents corruption, a culture of corruption, [and] we're very concerned about it," he said. "It's going to cost 49 states money to have to pay Nebraska's share, and we think that is unconstitutional."

McMaster is one of 10 Republican attorneys general who have banded together in opposition to Nebraska's Medicaid deal, at the beckoning of South Carolina Republican Sens. Lindsey Graham and Jim DeMint.

Together, they argue the provision -- referred to in some GOP circles as the "Cornhusker Kickback" -- defies longstanding constitutional precedents on taxes and fees. According to them, the government must levy those excises uniformly to prevent lawmakers from "ganging up" on one state, which means Congress should avoid distributing the fees of a program -- in this case, Medicaid -- to every state but one. 

But there's also an implicit economic argument motivating states' legal action against Democrats' healthcare reforms. All told, states faced billions in budget gaps they had to close before the beginning of the 2010 fiscal year, and many resorted to spending cuts and tax increases in order to stay out of the red. Many governors thus argued that a Medicaid expansion during a national budget crisis could further hamstring their finances, but only one state -- Nebraska -- was able to avoid the mandate.

McMaster hinted at that objection during his interview on Monday, dismissing suggestions that his investigation was a political stunt. He then chided Democrats for failing to even rationalize the Medicaid deal in the days leading up to their passage of healthcare legislation.

"This is the first time we've had a situation where no one has even attempted to give a reason other than it is to buy a particular senator's vote in order to move the bill forward," McMaster said. "That's not the kind of reason the Constitution allows."

"The political stunts are going on in Washington; this is a matter of law for the states' attorneys general," McMasster added.