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Does the “Cornhusker Kickback” Unconstitutionally Preference Nebraska Seaports?

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As health care reform lurches towards enactment, yet another argument against the constitutionality of the proposed legislation has arisen, this one even more farfetched than the ones that preceded it. This argument is that the provision in the Senate bill that funds Medicaid expansion indefinitely in Nebraska with 100 percent federal money after 2016 when the federal share would begin to drop in other states is unconstitutional. This provision is obviously politically motivated—it seems to have been part of the package offered to attract Senator Nelson’s vote for the bill—and it does seem to be unfair to the other states, although Medicaid funding has never been uniform throughout the states and the Senate bill contains a host of other Medicare and Medicaid provisions that favor or disfavor other states in particular ways. But is the provision unconstitutional? A group of Republican attorneys general apparently think so.

Let us leave aside questions of ripeness, standing, or issues of justiciability that would obviously arise if the provision is challenged. What exactly is the provision of the Constitution on which this argument is based? The claim is, as best I can parse it, to quote the constitutional argument presented in one of my favorite legal movies, the Castle, “It’s the vibe of the thing.” One account states that the claim is based on the proposition that uniformity is a value found throughout the Constitution. It is there, for example, in provisions requiring Congress to enact uniform rules for naturalization and bankruptcy, although the Nebraska Medicaid provision concerns neither naturalization nor bankruptcy, and there are obvious reasons for uniformity in both of these areas that don’t apply to spending clause provisions. A slightly more credible argument is based on the constitutional provision requiring uniformity of indirect taxation, discussed in an earlier post, but of course, this is a spending, not a taxation provision.

The most frequently cited argument against the constitutionality of the Nebraska preference is based on Article 1, sec. 9, the ports preference provision, which provides “No Preference shall be given by any Regulation of Commerce or Revenue to the Ports of one State over those of another: nor shall Vessels bound to, or from, one State, be obliged to enter, clear, or pay Duties in another.” It is not clear which port in Nebraska is being favored over ports of other states by the Medicaid funding provision, or what indeed, Medicaid has to do with ports. This provision has rarely been litigated, but when litigants have attempted to apply it broadly, modern courts have limited it to the problem that it addressed, literal discrimination in favor of one state’s seaports against those of another. One recent case suggested that if the litigant had a problem with favoritism for a particular geographic area, the problem should be raised with Congress, not the courts.

The strangest thing about this argument is that it would seem to call into question a long tradition of enacting “earmarks” or other legislative provisions favoring one state, or even one congressional district, at the expense of others. It might be good public policy to move toward greater uniformity in legislation and to largely eliminate special provisions for particular parts of the country. But does Congress really want to make this a constitutional issue? Whereas other constitutional arguments involving health reform, such as the challenge to the individual mandate, are arguably based on principle, this one really smells of political hypocrisy.

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