Red State Swindlers

In Jonathan's post on the deal struck by the Democratic leadership in the Senate to secure the votes necessary for cloture, Jerome pointed to sweeteners that the Senator Ben Nelson extracted. Among them was a deal in perpetuity that will fund Nebraska's Medicare spending. While Medicaid is usually paid for with a mix of Federal and state funding, Senator Nelson has secured for his state quite the subsidy. Here's the justification:

You'll find a number of states that are treated differently than other states. That's what legislating is all about. It's compromise." - Harry Reid on behalf of Senator Ben Nelson, The Swindler from Nebraska

After I stopped laughing and composed myself, I am still incredulous over this remark. No, it's not compromise. It's highway robbery. It is a legalized swindle, an extortion most foul. It is populous blue states subsidizing sparsely populated red states who instead of thanking us for our generous grants hold us hostage to their petty demands. They deny us the options we seek yet expect us to pay for their programs.

As Paul Krugman noted recently in the New York Times, "states that vote Republican benefit from federal government redistribution far more than those that lean Democratic." Nor is this a new development. Blue states have been picking up the tab for red states going on two decades. We pay out and yet we pay the price of their intransigence.

Paul Krugman cites the work of Gary Richardson of the University of California, Irvine who recently wrote in the The Economist's Voice that while Republicans campaign against redistribution of wealth, they govern by redistributing money from Democratic states to Republican states.

In 2004, the average Alaskan received $1.84 in federal benefits for each $1 he or she paid in federal taxes. The Republican presidential candidate, George W. Bush, received 62 percent of the vote.

Now consider the state of Massachusetts. In 2004, the average resident received only $0.82 in federal benefits for each $1 paid in federal taxes. Yet less than 38 percent of all voters pulled the lever marked George W. Bush. And this was not an effect of John Kerry's candidacy in particular. Four years before, when his opponent was Al Gore, Bush received only 33 percent of the vote.

The pattern holds true across all 50 states: In 2004, the 28 states in which George W. Bush received more than 50 percent of the vote received an average of $1.32 in federal benefits for each $1 their citizens paid in federal taxes. In contrast, the 19 states in which George W. Bush received less than 50 percent of the vote received an average of $0.93 on the dollar.

In 2005, Paul Krugman found that blue states subsidized red states to the tune of $90 billion per year. The red states secure this largesse because in the Senate the smallest 26 states in terms of population, which are mostly red, have a majority despite accounting for only 17.8 percent of the US population as of the 2000 US Census. A minority continues to thwart the will of a majority. My patience with red state swindlers is, frankly, at an end.

Update [2009-12-20 9:12:8 by Jerome Armstrong]:I concur, but please, lets not make this something that Nelson alone has done. With this agreement made by Reid and the other Democrats, this Senate bill has reached a level of corruption that is unacceptable. This isn't compromise, its bribery. I have to hand it to Harry Reid though, he figured out a way to get me to agree with Andrew Breitbart. Now, Breitbart's populism may be rightwing conservative, preferring the government do nothing rather as opposed to our progressive populism that wants government to help others, but the outrage is shared and shouldn't be looked over just because it has a D next to it.

Update [2009-12-20 17:15:41 by Charles Lemos]: Many of you are overlooking my main point. You are not getting a return on your investment. Those of us who live in blue states are being held hostage by red states senators. To the tune of $90 billion + a year, we subsidize their lifestyle and yet we are denied the options we seek.

If you go by population, the GOP is overrepresented in the Senate. I did the math. They hold 40 percent of the seats but the states they represent hold just 35 percent of the population. That 5 percent difference is 5 Senate seats.

And when you look at the power of the 26 least populated states who constitute a majority in the Senate and then find that those states hold just 17.8 percent of the population combined with legislative outcomes that thwart the will of the majority time and again, you have a recipe for disaster. And this ratio is increasing getting worse perhaps not dramatically but it is increasing. I went back and ran the numbers for 1960 when we first had 50 states and then the least 26 least populated states had 18.4 percent of the population.

There are more people in San Francisco than there are in Wyoming and SF isn't a large city. They get two senators and we get a sliver of two senators that we have to share with 35 million other Californians.

Those of you who believe that this is the first step to single payer or some broader reform are likely deluding yourselves. There is no reason to believe that the stranglehold that a minority now possesses can be somehow ameliorated. In fact, we are probably at our peak of power and yet we are stymied. When 70 percent of Americans want a public option and they are denied this by a bizarre coalition of the whole entire GOP caucus in league with Democratic Senators largely from red states (the sole exception being Connecticut's Joe Lieberman) then I think the scope of the problem is evident. If this is the best deal that a super majority can come with up, then it is time to admit that the United States is fast becoming a failed state.

You and I are being held hostage and we are effectively powerless to change this reality. To expect a different outcome based on the experience of the past 20 years is simply not logical. The stranglehold that red states have in the Senate is likely going to increase, not decrease. There are now 11 Democratic Senators from states that voted for McCain compared to 8 GOP Senators from states that went for Obama. Nor am I sure that we can hold seats in states like Nevada, Illinois, and Delaware. The political reality is that the Democratic party is probably at the peak of its power for the foreseeable future and yet we arrive at legislative outcomes that fly in the face of long-held Democratic principles.

I will oppose this bill. This is a gift for insurance companies. It enhances their power, not lessens it and given that the course of history in the country over the past 40 years has been one of increasing corporate power and our inability now to stem that tide, there is little reason to believe or to hope that in the future we may yet correct the gross liabilities in this bill.

Update [2009-12-20 19:24:23 by Charles Lemos]: Let me amend that last paragraph. My inclination is to oppose the bill. I am open to persuasion.

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