SENATORS SEND LETTER TO SC AG ASKING FOR INVESTIGATION OF NELSON BILL

South Carolina’s top prosecutor will be leading a group of attorneys general from across the country in reviewing a controversial deal that gave Senate Democrats a necessary 60th vote for their health care reform bill.

Atty. Gen. Henry McMaster said on Tuesday that he had received a letter from Sens. Lindsey Graham and Jim DeMint requesting an investigation into the legality of “the special funding arrangements” agreed to by top Senate Democrats, the White House and Nebraska Sen. Ben Nelson.

Senate Majority Leader Harry Reid (D-Nev.) agreed to a concession that gives Nelson’s state a significant financial break in return for weakening abortion language in the bill, something for which Nelson had been holding out.

“The language of the Nelson provision appears to give the State of Nebraska a permanent exemption from paying the Medicaid expenses all other states in the nation will be required to pay,” said McMaster. “In other words, if this amendment stands, taxpayers from South Carolina and other states will be paying the bills for the increase in Nebraska’s Medicaid population.”

McMaster said Attys. Gen. Rob McKenna of Washington and Mike Cox of Michigan had agreed to join him in investigating the constitutionality of the deal and “exploring the options that may be available to South Carolina and other states to defend taxpayers should this provision ultimately become law.”

As part of the compromise, Medicaid will be expanded to cover uninsured Americans. The cost of the expansion will be paid for by both federal and state money, except in Nebraska where the federal government will foot the entire bill forever.

The deal will save Nebraska an estimated $45 million over the first decade alone, courtesy of taxpayers in the other 49 states.

“Quite obviously, this issue raises very serious concerns about equity, tax fairness as well as the constitutionality of having federal tax levies and mandates that treat one state differently from all the others,” McMaster said. “In my judgment, Democrats and Republicans alike from every state in the union should be outraged by this deal.”

Graham seemed to agree with that position on CNN Sunday, calling the deal “seedy Chicago politics” and “backroom deals that amount to bribes.”

“There’s one state in the union where new enrollees for Medicaid will be signed up and it won’t cost anybody in that state money,” Graham said. “It’s not my state, I’ve got 30 percent African American population — a lot of low income African Americans on Medicaid. I don’t know what the numbers are in Nebraska, but there are a lot of people — Republicans and Democrats — who are upset by this.”

Nelson told the FOX News Channel on Tuesday that he is considering asking the Senate to strip the deal from the bill. Doing so may be difficult, though, as the amendment has already been passed.

The full health care reform deal is expected to pass the Senate on Christmas Eve.

McMaster has made the letter from Graham and DeMint available online.

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UPDATE: The attorneys general of Alabama, Colorado, South Dakota, and Texas have joined the group reviewing the health care deal.