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".