The Nebraska Compromise and California Killer

image
Author: Chad Peace
Published: 04 Jan, 2010
Updated: 21 Nov, 2022
2 min read

Following Senator Nelson's infamous "Nebraska Compromise", which forces the other 49 states to pay for Nebraska's new Medicaid recipients, journalists, legislators, and citizens have lashed out for what has been labeled a "sleazy back-room deal" by many folks across the political spectrum. The heat of the anger towards ex-Governor Nelson comes from an innate sense of fairness; why should the rest of the country pay for the increased health care cost of Nebraska?

While the anger is newfound, State-to-State subsidization is nothing new. And if you're from California, you've been buying lunch for the rest of the country for a long time. California, through its federally mandated charity, gives anywhere from $50-$100 billion dollars a year to our friends in Washington D.C. that never comes back. To put this in perspective, California's entire budget is only $100 billion.  And we wonder why California is in financial trouble.

What California should do is demand a repeal of Alternative Minimum Income Tax (AMT) which disallows Californians to make deductions on their taxes to compensate for our higher cost of living. Abolishing the AMT alone would reduce our massive donation to the rest of the nation by a whopping 75%. That would be enough money to eliminate the state deficit and still cut taxes for Californians!

What California should do is follow the example of ex-Governor Nelson of Nebraska who is pressuring feds to pay for federal mandates through the health care negotiations. He is a much smarter guy than observers are giving him credit for; he is using the health care bill to force the feds to confront UNFUNDED FEDERAL MANDATES. He knew his "Nebraska" amendment would cause a firestorm. That's what he wanted. The only way Congress can "score" their health care expansion as "revenue neutral" or as a cost saving to the federal budget is to mandate the costs onto the states.

Note following quote from the Wall Street Journal:

"Under President Clinton, we got 94 cents back on every dollar we sent," said gubernatorial spokesman Aaron McLear, citing data compiled by the nonpartisan Tax Foundation. "Now it's 78 cents on every dollar. It makes no sense that California should be subsidizing programs in other states."

This is TRUE. And it is 75% the result of AMT. The other 25% is the federally mandated ABC -- "Anybody But California".

Latest articles

CA capitol building dome with flags.
Why is CA Senator Mike McGuire Trying to Kill the Legal Cannabis Industry?
California’s legal cannabis industry is under mounting pressure, and in early June, state lawmakers and the governor appeared poised to help. A bill to freeze the state’s cannabis excise tax at 15% sailed through the State Assembly with a unanimous 74-0 vote. The governor’s office backed the plan. And legal cannabis businesses, still struggling to compete with unregulated sellers and mounting operating costs, saw a glimmer of hope....
03 Jul, 2025
-
7 min read
I voted buttons
After First RCV Election, Charlottesville Voters Back the Reform: 'They Get It, They Like It, They Want to Do It Again'
A new survey out of Charlottesville, Virginia, shows overwhelming support for ranked choice voting (RCV) following the city’s first use of the system in its June Democratic primary for City Council. Conducted one week after the election, the results found that nearly 90% of respondents support continued use of RCV....
03 Jul, 2025
-
3 min read
Crowd in Time Square.
NYC Exit Survey: 96% of Voters Understood Their Ranked Choice Ballots
An exit poll conducted by SurveyUSA on behalf of the nonprofit better elections group FairVote finds that ranked choice voting (RCV) continues to be supported by a vast majority of voters who find it simple, fair, and easy to use. The findings come in the wake of the city’s third use of RCV in its June 2025 primary elections....
01 Jul, 2025
-
6 min read