I’m going to let real experts on the federal budget tear apart President Obama’s bloated proposal, and focus instead on something I know a bit about: Medicaid.

The federal government and the states share both funding responsibility and policymaking authority over Medicaid, itself a weird amalgam of several different programs (inefficient health insurance for the poor and near-poor, long-term care for a large swath of the elderly, and high-priced services for the disabled). The arrangement creates the worst of all possible worlds. Governors and legislatures can expand the program and claim to be bringing more federal dollars into their states. But if they save Medicaid money, most of it flows back to Washington. The incentives point in the wrong direction.

Of course, the distinction is political, not fiscal. All state taxpayers are, by definition, federal taxpayers. A real problem, however, is that Washington can paper over deficits with borrowed money while most states cannot. So when Congress included a massive Medicaid bailout of the states in last year’s “stimulus” bill, what effectively occurred is that Washington used its borrowing authority to assist states in circumventing their constitutional requirements to enact balanced budgets.

The new Obama budget continues the practice, according to this Wall Street Journal report, to the tune of $25 billion. Most of that amount represents debt that states could not legally issue themselves. It represents Medicaid savings that won’t happen (or, in fairness, state tax hikes that won’t immediately happen). It represents, in other words, a continuing assault on constitutional government.

It’s not good.