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Landrieu Notices the Obvious

Facing immense criticism for her role in the “Louisiana Purchase,” Senator Mary Landrieu (D-LA) last week defended her principled stance of changing her vote on Obamacare in exchange for $300M in special favors for Louisiana. Her “defense,” if it may be called that, was essentially that without that kickback, Louisiana would have to raise taxes or cut services in order to afford Obamacare:

Obama’s plan — and the health care bill passed by the Senate — would expand Medicaid programs in the states as a way to move some of the uninsured onto insurance rolls. State and federal governments share the costs of the Medicaid program.

Levine said the Senate bill would cost Louisiana an extra $130 million annually in state funds and Obama’s proposal outlined this week could cost Louisiana as much as $260 million each year in additional Medicaid costs. An estimated 370,000 Louisiana residents would be added to the Medicaid rolls under the proposals, so nearly 37 percent of the state’s population would be covered under Medicaid, according to DHH estimates.

“The state’s going to figure out how to afford it because it’s the state’s responsibility, not just the federal government’s responsibility, to help all of the people in the state get adequate health insurance,” Landrieu said.

She said under the president’s proposal, the federal government would pick up the full cost of the Medicaid expansion for two years and then give states another two years at a lesser cost-share to give states the time to “adjust their budgets.”

“I think that’s pretty reasonable,” she said.

I haven’t seen a study recently showing how many states are operating in the black in the middle of the current recession, but if the number is greater than 5, I’ll eat my favorite Red Sox hat. Yet one of the untold stories about the current Obamacare bill (and Obama’s newest proposals) is that in addition to the fact that they’ll almost certainly lead to Federal tax increases, they will also lead to massive State tax increases, as state governments that are already struggling to get financing for their debt have to find some way to meet the Obamacare mandate. Of course, it’s possible in the alternative that states will pay for Obamacare by enacting massive cuts in other services, but given the recent history of state fiscal responsibility in this country, that result is neither desirable nor likely.

Democrats have been desperately hoping that they can get the bill passed now, in the hope that people won’t notice this extra cost that they’ve kicked down the road to state budgets. Thankfully, Mary Landrieu is there to remind them.

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