Legal attack on 'Cornhusker Kickback' raises constitutional questions

WASHINGTON, D.C. - In appearances around the nation’s capital this week, South Carolina Attorney General Henry McMaster has argued against the constitutionality of a provision in the proposed federal health care bill that would provide unique Medicaid funding benefits to Nebraska.

McMaster, leader of the group of 13 Republican state attorneys general who launched the effort just before Christmas, got a boost when Oklahoma Attorney General Drew Edmondson, a Democrat, joined critics of the provision, which was apparently designed to gain the support of Nebraska Democrat U.S. Sen. Ben Nelson for the controversial federal bill.

McMaster spent Wednesday in the nation’s capital. He had a session at the weekly American Spectactor media luncheon, then a briefing at the National Press Club for other reporters. In an interview with CapitolBeatOK and in response to questions from other reporters, McMaster detailed the whirlwind of attention he has received since beginning the challenge to the so-called “Cornhusker Kickback.”  

McMaster said, “This effort has received a lot of support and a lot of attention. What amazes me about the situation is that it illustrates so well the culture of corruption in Washington, D.C. There is virtually no pretense from anyone involved that the money for Nebraska was given for any reason other than to secure Sen. Nelson’s vote.

“There are aspects to this that are historically different than other situations and that would present a challenge to the Supreme Court in deciding the case. This was different than a decision over the location of a base or an expenditure on a general public purpose, or something like that. It was extension of a benefit exclusively to the people in one state and to no one else.

“The courts are deferential toward Congress. The U.S. Supreme Court is deferential toward Congress, and that makes this a difficult case, but that’s not a reason to avoid bringing the case. We would focus on the fact that the powers of Congress are not limitless. Although I don’t want to limit our ability to argue and discover every aspect of this to challenge, I believe one reason this is unconstitutional is that it does flow from the customary power of Congress to promote the general welfare.”

McMaster made it clear the joint letter of the attorneys general signed by Edmondson is limited to the Nebraska Medicaid provisions. However, speaking for himself, he adds, “Other potential constitutional problems include the mandate on individuals to buy insurance. The coercion in that could be problematic. Yes, Congress has the powers of taxing, spending, of regulating interstate commerce and so forth. But where does it derive the authority to do something like this bill? It’s just not there.“

McMaster said language benefitting solely the states of Florida and Louisiana might also be constitutionally suspect, but noted some have argued those provision pass constitutional muster, whether or not they are good public policy.”

McMaster reported, “On Dec. 31, thanks to Sen. Lindsey Graham [also a South Carolina Republican], Sen. Ben Nelson of Nebraska and I talked. It lasted for less than 10 minutes. He said he had not asked for the provision. He said he hopes that at the end of the day every state gets the same kind of provision. I said then, and repeat now, that would be the end of the constitutional question but, my goodness, it raises other questions of costs and practicality. The CBO estimates that would cost at least $23 billion.

“The letter at this point deals only with the Cornhusker Kickback, and that is the focus of the effort to increase the number of signatories through the joint memo with Attorney General Edmondson. We did that letter and set a deadline for response of Jan. 8. We don’t have answers from anyone new except the AG of American Samoa.“

McMaster continues, “It seems to me that Congress is shredding the Constitution in this process. If the offending provision is not removed and the law is ultimately passed, we would seek an injunction to block its enforcement. The case will present challenges, as no law has ever been struck down under the general welfare clause. This would be a case of ‘first impression’ for the U.S. Supreme Court.

Asked if any other attorneys general have responded, favorably or otherwise, to the memo he and Edmondson sent through the National Association of Attorneys General, McMaster replied, “We have several who have wished us luck but don’t at this time want to be on the letter. I must say I believe this provision is an enormous political liability to the Democrats.

“Every one of these Attorneys General has the obligation to serve as the chief legal officer of the people in their state. Besides the Cornhusker Kickback and the individual mandate, some of us believe the government exchanges in the health care proposal could be an example of the federal government commandeering a state function.

“Because of the Supreme Court’s proper deference to Congress, this is a hard and uphill battle. But that’s not a reason to avoiding fighting it. The court has taken 138 cases of disputes like this. The last one was a water rights dispute between South Carolina and North Carolina.

“In terms of how we challenge it, we have lots of options to consider. It could be brought in a lower court, perhaps a court that feeds into the fourth circuit, or it could be brought directly to the US Supreme Court.

In the original Dec. 30 letter, the attorneys general assailed the Patient Protection and Affordable Care Act, HR 3590, in its Senate version. Excerpts from the letter follow:

* “As chief legal officers of our states we are contemplating a legal challenge to this provision and we ask you to take action to render this challenge unnecessary by striking that provision.”

* “In addition to violating the most basic and universally held notions of what is fair and just, we also believe this provision of H.R. 3590 is inconsistent with protections afforded by the United States Constitution against arbitrary legislation.”

* Analyzing the 1937 Supreme Court precedent in the case of Helvering v. Davis, the state AGs argue “The spending power of Congress includes authority to accomplish policy objectives by conditioning receipt of federal funds on compliance with statutory directives, as in the Medicaid program. However, the power is not unlimited and ‘must be in pursuit of the “general welfare.” ‘ “

* “It seems axiomatic that the federal interest in H.R. 3590 is not simply requiring universal health care, but also ensuring that the states share with the federal government the cost of providing such care to their citizens. This federal interest is evident from the fact that this legislation would require every state, except Nebraska, to shoulder its fair share of the increased Medicaid costs the bill will generate. The provision of the bill that relieves a single state from this cost-sharing program appears to be not only unrelated, but also antithetical to the legislative federal interests in the bill.”

* “Since the only basis for the Nebraska preference is arbitrary and unrelated to the substance of the legislation, it is unlikely that the difference would survive even minimal scrutiny.”

“By singling out the particular provision relating to the special treatment of Nebraska, we do not suggest there are no other legal or constitutional issues in the proposed health care legislation.”

About the author: Pat McGuigan, editor of CapitolBeatOK in Oklahoma City, also serves as Capitol Editor for Tulsa Today.