Alaska Governor Follows Obama’s Example: Uses Pen to Make Policy

The Alaska Governor unilaterally expands Medicaid after the legislature wouldn’t do it.

Barack Obama famously (or infamously) said that, if Congress refused to do his will, he had a pen and phone and would act without them.

Now we find the Alaska governor is following the President’s example. The headline at makes the issue clear: “What Legislature? Alaska Gov Expands Medicaid Solo.”

Alaska’s legislature didn’t move to expand Medicaid, so Gov. Bill Walker is doing it on his own. Walker says he plans to accept $146 million in federal funds that his state has access to under the Affordable Care Act in order to cover some 42,000 residents who qualify under the program, Reuters and the New York Times report. Walker, who is just seven months into his term, had made expanding Medicaid a campaign priority. “This is the final option for me,” he says. The Legislative Budget and Audit Committee will now have 45 days to act before Walker accepts the funds; he says he can proceed regardless of how the committee responds.

I do not understand how all of this can be legal. What is the point of acknowledging that the Legislative Budget and Audit Committee has 45 days to do something if the governor has the authority to simply expand Medicaid no matter what they say?

And it isn’t just about free money. It is about getting residents used to a level of service and then leaving future politicians to deal with the need for more revenue.

The federal government will take on the full cost of the expansion at first, then shave its cut to 90% by 2020.

Of course, point here is that Walker probably doesn’t worry about what might be the case five years from now. Assuming he runs for office in 2018 and is re-elected, his second term will be halfway over. And he is not allowed to have a third consecutive term. So he gains immediate political benefit from taking the money and doesn’t really need to worry about the state’s budgetary obligations that far in the future.

This is the problem with elected rulers. These people hold temporary office and only remain in power by attracting voters. They have every incentive to use public funds in unsustainable ways that will benefit them in the present and buy votes as long as possible.

I know we can’t have kings, but it is worth pointing out that dynastic rulers, for all their problems, had an incentive to worry about the future—the desire to pass on a viable kingdom to an heir. It is similar to the situation with a family-owned business compared to a publicly traded corporation. CEO’s in publicly traded corporations are much more likely to embrace debt as a strategy for growth because they can use the money to make stockholders happy. Eventually, they will move on and someone else will have to figure out how to pay the debt.

When it comes time for Alaska to start paying a greater share, it is quite likely that someone else will be governor. Medicaid is very much like a pension that was funded on the basis of faulty calculations.