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State Attorneys General Question Health Care Bill

South Carolina Attorney General and Republican candidate for governor Henry McMaster gestures during a gubernatorial debate in Newberry, S.C., on Sept. 22.
Mary Ann Chastain
South Carolina Attorney General and Republican candidate for governor Henry McMaster gestures during a gubernatorial debate in Newberry, S.C., on Sept. 22.

At least 10 Republican attorneys general are lining up to challenge the Democratic health care bill, arguing it could be unconstitutional.

South Carolina Attorney General Henry McMaster is leading the charge. He questions the legality of a compromise exempting Nebraska from paying for an expansion of Medicaid.

"Why is it that Nebraska pays no taxes, pays no money as a state while the other 49 states do?" he asks.

McMaster, who is running for governor of South Carolina, says Republican attorneys general from Alabama, Colorado, Michigan, North Dakota, Pennsylvania, Texas, Virginia, Washington and Utah are part of a group looking into whether Nebraska's treatment in the bill is constitutional. He calls it "arbitrary and capricious spending."

South Carolina Republican Sens. Lindsey Graham and Jim DeMint asked McMaster to investigate. They complained that Sen. Ben Nelson (D-NE) got a $45 million-a-year break for his state in exchange for supporting the bill.

Nelson defends the deal.

"This wasn't a money grab for the state of Nebraska," he says. "This was a recognition that we have an underfunded federal mandate that will shift the cost of that program to the states in 2017."

Nelson says the Nebraska provision opens the door to other states' trying to do the same thing. "So it's a fair deal, not a special deal," he says.

Instead of suing, Nelson suggests that South Carolina lawmakers work their own deal.

"Look — if South Carolina doesn't want to get out from under that mandate, they don't have to. But if they want to then they ought to take the same action and push for the same thing that we've got for Nebraska," Nelson says.

That's part of the legislative process, according to Senate Majority Whip Richard Durbin (D-IL).

"It's not unusual. It has happened before and to say that it rises to some constitutional level I think is exaggerating it," Durbin says.

But Graham says the Constitution requires uniformity in taxation to avoid what he calls the "gang-up effect." He says it prevents lawmakers from hitting one state with a tax. "Now this is the reverse," Graham says. "This is one state basically being able to benefit because their vote was in play. The Founding Fathers understood if you don't have some uniformity concepts the passions of the moment can overcome reason."

But not all attorneys general are embracing the idea of a lawsuit. Mississippi's Jim Hood, a Democrat, says it's a tough argument in so-called beneficiary states, where federal spending exceeds what the citizens pay in federal income taxes.

"Other states are subsidizing Mississippi now. We get more subsidies on Medicaid than any other state in the nation," Hood says. "So certainly for states like us it wouldn't be good to take the position that everybody ought to be equal. I haven't seen their legal argument but I just don't think it would hold water because of that comparison."

McMaster says it's one thing to divide federal funds according to the greatest need, but he says that's not what's happening in the health care bill.

"This is based on nothing but a culture of corruption to get somebody's vote," McMaster says.

He acknowledges there's no law to challenge yet, but he says the attorneys general will be ready should Nebraska's favorable treatment remain.

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