Free Money is NOT Free

As the saying goes, "There is no free lunch."  Such is the case with Spenda-porkolus Maximus, the massive stimulus bill signed into law by President Obama last week. Because while the bill gives states some short term money, it commits them to long term payments that may bankrupt the state governments in the long term.

Here is an example of the entitlements that will now be burdening state treasuries:

Consider South Carolina. Its annual budget is roughly $7 billion and the stimulus will send about $2.8 billion to the state over two years. But to spend the hundreds of millions of dollars allocated to the likes of Head Start, child care subsidies and special education, the state will have to enroll thousands of new families into the programs. "There's no way politically we're going to be able to push people out of the program in two years when the federal money runs out," Mr. Sanford says.

The Medicaid money for states is also a fiscal time bomb. The stimulus bill temporarily increases the share of state Medicaid bills reimbursed by the federal government by two or three percentage points. High-income states now pay about half the Medicaid costs, and in low-income states the feds pay about 70%. Much of the stimulus money will cover health-care costs for unemployed workers and single workers without kids. But in 2011 almost all the $80 billion of extra federal Medicaid money vanishes. Does Congress really expect states to dump one million people or more from Medicaid at that stage? Source WSJ

When you read about governors refusing to take the stimulus money its not due to partisan posturing, but it is all about saving state budgets down the road. In fact as of now 11 states have said no to the "free money" and they say the US Constitution is on their side:

Eleven States Declare Sovereignty Over Obama’s Action

by A.W.R. Hawkins 

State governors -- looking down the gun barrel of long-term spending forced on them by the Obama “stimulus” plan -- are saying they will refuse to take the money.  This is a Constitutional confrontation between the federal government and the states unlike any in our time.

In the first five weeks of his presidency, Barack Obama has acted so rashly that at least 11 states have decided that his brand of “hope” equates to an intolerable expansion of the federal government’s authority over the states. These states -- Washington, New Hampshire, Arizona, Montana, Michigan, Missouri, Oklahoma, California, Georgia, South Carolina, and Texas -- have passed resolutions reminding Obama that the 10th Amendment protects the rights of the states, which are the rights of the people, by limiting the power of the federal government. These resolutions call on Obama to “cease and desist” from his reckless government expansion and also indicate that federal laws and regulations implemented in violation of the 10th Amendment can be nullified by the states.

When the Constitution was being ratified during the 1780s, the 10th Amendment was understood to be the linchpin that held the entire Bill of Rights together. The amendment states: “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."

The use of the 10th Amendment in conjunction with nullification garnered much attention in 1828, when the federal government passed a tariff that southerners believed affected them disproportionately. When the 1828 tariff was complemented by another in 1832, Vice President John C. Calhoun resigned the Vice Presidency to lead his home state of South Carolina in pursuit of an “ordinance of nullification,” which was no less a declaration of the sovereignty of each individual state within the union than the declarations now being made.

Calhoun was simply exercising what he recognized to be his state’s right to defend liberty within its borders by rejecting the dictates of an overbearing central government. While his efforts culminated in a tense affair referred to as the “nullification crisis,” which witnessed everything from threats of a federal invasion of South Carolina to an ongoing and near union-rending debate over national power vs. state’s rights, they also succeeded in turning back the tariffs that had been passed in spite of the Constitutional limits on federal power.

This time around, in 2009, appeals to the 10th Amendment are not based on tariffs but on unfettered government expansion in Obama’s “stimulus bill,” federal mandates on abortion that violate state laws, and infringements on the 1st and 2nd Amendments, among other things.

For example, Family Security Matters reports that Missouri’s “House Concurrent Resolution 0004 (2009) reasserts its sovereignty based on Barack Obama’s stated intention to sign into law a federal ‘Freedom of Choice Act’, [because] the federal Freedom of Choice Act would nullify any federal or state law ‘enacted, adopted, or implemented before, on, or after the date of [its] enactment’ and would effectively prevent the State of Missouri from enacting similar protective measures in the future.”

The resolution in Montana grew out of concerns over coming attacks on the 2nd Amendment, thus its preface describes it as, “An Act Exempting From Federal Regulation Under The Commerce Clause Of The Constitution Of The United States A Firearm, A Firearm Accessory, Or Ammunition Manufactured And Retained In Montana.”

New Hampshire’s resolution actually references certain federal actions that would be nullified within that state were they pushed by Obama’s administration, according to americandaily.com. Among these are “Any act regarding religion; further limitations on freedom of political speech; or further limitations on freedom of the press, [and any] further infringements on the right to keep and bear arms including prohibitions of type or quantity of arms or ammunition.

Regardless of the specific reason behind each of the resolutions in the 11 states, all of them direct the federal government to “cease and desist” in its reckless violation of state’s rights. In this way, South Carolina’s resolution is typical of the others issued to date:

“The General Assembly of the State of South Carolina, by this resolution, claims for the State of South Carolina sovereignty under the Tenth Amendment to the Constitution of the United States over all powers not otherwise enumerated and granted to the federal government by the United States Constitution…

Be it…resolved that this resolution serves as notice and demand to the federal government, as South Carolina's agent, to cease and desist immediately all mandates…beyond the scope of the federal government's constitutionally delegated powers.”

What these state assemblies and congresses have hit upon here is key to our entire conservative interpretation of the Constitution, for these states understand that the Constitution limits the federal government, not the people. Or to put it another way, it guarantees the freedom of the people by limiting the government.

Every conservative should relish the call for the federal government to “cease and desist all mandates that are beyond the scope of [its] constitutionally delegated powers.” In this way, we honor the Constitution that enumerates a number of our liberties yet also guarantees us other liberties that are neither enumerated nor denied in the document.

Liberals don’t respect the Constitution, and liberals in Congress don’t hesitate to propose legislation that would clearly violate it.  The current push to give Washington, D.C. a voting representative in the House of Representatives is a good example; even liberal Prof. Jonathan Turley told a Congressional hearing that this bill is patently unconstitutional.  But they press on with it.

Our Constitutional system of checks and balances is always thought of as enabling two of the three branches of the federal government to keep the third within its constitutional bounds.  But there is a fourth check, the states, which also have a Constitutional function.  It is to them this burden now falls.  The states can choose between allowing the federal government to impose untenable conditions on them if they accept the stimulus money, or to reject it.

These eleven states have the right to reject the stimulus plan.  And they must.

There is no other option. For this federal expansion will not stop unless we stand in its way with courage in our hearts and the Constitution in our hands.