Many supporters of the Graham-Cassidy health-care legislation are calling it a “federalist” solution for Obamacare. It might be worth supporting–I think it is, as do NR’s editors–but it isn’t really federalist. A really federalist bill wouldn’t have the states asking the federal government for flexibility on regulations, and it wouldn’t have the federal government collect money from the whole country and then send it back in block grants to the states.
The point comes to mind because of Avik Roy’s argument that the bill should be amended to keep states from using their block grants to create single-payer systems. Roy might be too worried about this possibility, because the amount of money involved seems unlikely to get states very far toward financing a single-payer plan. But it’s not an answer to his argument to say that states should be allowed to do whatever they want. The question, under Graham-Cassidy, is what federal money should be spent on. There’s nothing wrong in principle with the federal government’s setting conditions on its spending (e.g., the money has to be spent on health care).