Politics & Policy

The Talented Mr. Nelson

The evolving justification for the Cornhusker Kickback.

Sen. Ben Nelson’s (D., Neb.) home-state Medicaid racket is, it appears, not long for this earth. Senate Democrats on both the progressive and moderate ends have signaled at town-hall meetings that the “Cornhusker Kickback” will be stripped from whatever health-care bill emerges from the Democrats’ closed-door negotiations.

But that hasn’t stopped Nelson from offering a series of curiously evolving explanations for the special deal — which would see the federal government pick up the tab for $100 million in Medicaid funding for Nebraska — in the face of withering criticism from his constituents. Nelson’s latest explanation is — get this — that the kickback was never meant to make it out of conference committee.

In an interview with the Fremont Tribune (which, as the Tribune notes, Nelson himself requested), the senator suggests his deal “was not intended to be a special perk for Nebraska, but rather a vehicle by which individual states could choose to opt out of federal funds for Medicaid in the future”:

“Several of us have been concerned about the funding of Medicaid because it’s an unfunded mandate from the federal government. The federal government pays a portion of it and the state pays the rest,” he said.

“Under this program,” he continued, “there would be a whole new group of individuals who would qualify for Medicaid coverage. Until 2017 the federal government would pay 100 percent of that.”

The state would then start picking up some of the costs in 2017.

“The Congressional Budget Office could not, in the time frame we had, figure out what states would opt in and what states would opt out, and couldn’t put a number to it,” Nelson said. “So what they did is just put $100 million on Nebraska in a line item in there. It’s really nothing more than a place holder for us to deal with the issue in conference, which I’ve already started doing.

“There was never a time when I fought to get something only for Nebraska; not then and not now,” he added.

These comments raise several questions. Why, if Nelson was confident that the deal would eventually be extended to all states, did he feel the need to secure a “place-holder” protecting only Nebraska? Why couldn’t the CBO score a bill with a state-by-state Medicaid-expansion opt-out clause? (It had, after all, already scored a bill with a state opt-out on the public option.) And, most important, why didn’t Nelson offer this latest explanation of his deal at the time he originally made it?

In December, when the deal was first announced, Nelson said only that he was “comfortable” that it took care of Nebraska, and deferred questions to majority leader Harry Reid (D., Nev.), who did little more than shrug.

“You’ll find a number of states that are treated differently than other states,” Reid said at the time. “That’s what legislating is all about. It’s compromise.” 

Indeed, a senior Republican Senate aide told National Review Online on Thursday that “nobody in the [Democrat] leadership called this a ‘place-holder.’”

But as criticism mounted leading up to the Christmas Eve vote, Nelson said that the deal was not his idea but came from Nebraska’s Republican governor, Dave Heineman, who had previously written to him expressing concerns about an unfunded mandate for Medicaid expansion. Nelson said that he’d merely shared Heineman’s letter with the Democratic leadership, and that they wrote in the Medicaid provision of their own accord. He even referred to the deal as “the Heineman exemption” on multiple occasions. But Heineman vigorously denied his complicity and urged Nelson to reconsider his vote on the Reid bill.

“That’s not the way we operate,” Heineman said, calling the deal an “attack on [Nebraskans’] integrity.”

Only then did Nelson begin in earnest to characterize his marker as part of a “legislative strategy” that would lead to a Medicaid opt-out provision for all states in the final version of the bill. He had first hinted at this in a phone call with Washington Post columnist Michael Gerson on Christmas Eve, and by the new year it figured prominently in his request that South Carolina attorney general Henry McMaster — leader of a group of 13 GOP state attorneys general considering legal challenges to Nebraska’s special treatment — “call off the dogs.”

Irrespective of Nelson’s evolving intentions, it appears likelier than ever that some form of the Nebraska deal will be extended to more states.

“As more and more governors . . . raise concerns with the unfunded mandates in the bill, I wouldn’t be surprised if they try to fix the problem for all states (but not allow any options) by spending even more money,” the GOP Senate aide told NRO.

– Daniel Foster is National Review Online’s news editor.

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