Why the 'Louisiana Purchase' Isn't a Dirty Backroom Deal

Sweetheart deals and backroom brokering have become rallying points for opponents of health-care reform. Republicans have been bashing Democrats about these deals for weeks. Its been effective, bolstering notions of rotten, dysfunctional governance in the minds of voters. And there are few things voters respond more negatively to than process stories about how bills become laws. But, as Rep. Anthony Weiner indignantly pointed out on last week, that's just how legislating works in this town.

Weiner is only partly right. There are agreements, like the infamous Cornhusker Kickback, that are beyond the pale. That was a blatant payoff for Ben Nelson in Nebraska, and it was too much for even voters in his state, the ones likely to benefit, to stomach. But the so-called Louisiana Purchase is a different creature. It's part of the legislating process that Weiner referred to. Yes, it results as additional $300 million for Louisiana. Yes, the senator who pushed for it, Mary Landrieu, is a moderate Democrat in the politically precarious position of voting for Obama's signature policy item while her state overwhelmingly voted against him. But that doesn't mean the Louisiana Purchase (which I won't call it from here on in) is bad politics or bad policy. Here's why it's different from Ben Nelson's cash cow.

The federal government calculates the amount of money it will grant to states to pay for Medicaid, the program that helps poor people access health care, based on the income levels in each state. Louisiana is one of the poorer states in the Union and has large numbers of Medicaid recipients. Because eligibility for Medicaid in Louisiana is tough, these people are the poorest, most disadvantaged groups: children, poor pregnant women, and people with disabilities, to name a few.

It's common knowledge that Hurricane Katrina devastated the state, destroying homes, livelihoods and entire communities. But in the wake of Katrina, millions of dollars flooded into the state, in insurance payments, aid, and money for new construction and repairs. Although thousands of people were, and are, still suffering from Katrina's impact, on paper it looked like the state had gained millions of dollars. On paper, incomes went up by 40 percent. Yes, some people, mainly those in engineering and construction, did well out of the unfortunate building boom, but in reality, thousands had lost their jobs, their homes, and their savings. That sort of thing isn't accounted for in income calculations.

The result was that because of this perceived increase in income, the funding formula compels the federal government to cut its Medicaid funding to Louisiana. (The federal calculations are done on a three-year rolling average, so there's a lag time between the post-Katrina income spike, which continued for some time, and the changes to federal funding.) The state government, already stretched from all the other post-Katrina demands on spending—repairing roads, schools, basic infrastructure—is looking at paying far more than its historic share of Medicaid payments.

Even before Obama took office, Landrieu promised to seek a fix for this problem, arguing that it would not only have blown an enormous hole in the state's budget, but threatened the ability of the state's poor to access care. Louisiana's Republican governor and possible presidential aspirant, Bobby Jindal, agreed with her, as did Louisiana's health secretary, Alan Levine. 

The fix that Landrieu negotiated during the health-care debate would work for any state experiencing a natural disaster of significant proportions. If that state, like Louisiana, sees an 8 percent drop in its federal Medicaid payments, it too would be eligible for the fix, which would make up for imminent shortfalls. The Louisiana Fix is perhaps more appropriately called the Giant-Devastating-Natural-Disaster Remedy to Ensure Medicaid Doesn't Go Bust.

Landrieu's deal is not an example of corrupt backroom dealing. It's an example of a member of Congress advocating for her constituents, which after all is her job. She's not advocating for a special interest group. A $300 million shortfall in a state's budget would reverberate across the state. This isn't just about helping poor people get health insurance, it's about helping Louisiana avoid California's fate as a government living beyond its means. This is exactly the reason we elect senators from each state: to lobby for the interests of that state. It's not Landrieu's fault that her counterpart, David Vitter, isn't interested in helping his state remedy this problem. It's not her fault either, that Governor Jindal has gone into hiding on the issue, throwing her under the bus even though he's the one who stands to gain from it. 

So, the skeptical reader asks, why would Landrieu seek to do this in the enormous reform bill rather than as a stand-alone piece of legislation? Because on its own, a bill like the Louisiana Fix would have a tough time getting voted on. That's not an indictment of its merits, it's just the way the Senate works. Not every bill is created equal.

Landrieu would find it difficult to get other senators to help her steer this to the floor, not because it's a bad idea, but because it doesn't immediately help their states, and they're more inclined to work on things they can pitch as benefits to voters back home. Without the momentum that numerous senators provide, Landrieu would find it tough to get the fix considered, especially in a time when health-care reform is taking up all the oxygen and Republicans are threatening filibusters all over the shop. Landrieu saw a chance to get this issue fixed through the broader health-care plan—and the fix is, after all, materially about health care—and she took it. That's not backroom dealing. That's legislating. And Landrieu has proved to her voters that she's good at the game.

All signs point to the passage of health care in the House tonight. From there, the Senate will take up the reconciliation bill, which does strip out some backroom deals, like the irritating Cornhusker Kickback. As the Senate debate progresses, we'll no doubt be bombarded with conservative pundits telling us that the bill is full of pork and sweetheart deals. But the Louisiana Fix isn't really either of those things. It's good policy, it's politically appropriate, and it deserves to be portrayed fairly.

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