Right turn: a new Congress intent on fiscal discipline means states can expect little budget help from Washington.

• Author: Ornstein, Norman J.
• Position: Cover story

A few weeks after the November elections, a news story triggered a national controversy: In Arizona, state officials decided summarily to deny organ transplants to Medicaid patients, including snatching a new liver away from a dying recipient.

Shortly thereafter, another flap arose in Indiana, with a decision by the state government to deny a 6-month-old on Medicaid a life-saving treatment that works in more than 90 percent of such cases, calling it experimental.

These decisions--made in Arizona by the administration of newly elected Governor Jan Brewer and in Indiana by that of Governor Mitch Daniels--were caused by the excruciating budget pressures hitting every state. The need to balance budgets in a sagging economy, coupled with ballooning Medicaid costs driven in part by stubbornly high unemployment, are precipitating unpleasant, even embarrassing, administrative decisions and actions for well-regarded and less-well-regarded state governments alike.

These Medicaid controversies had nothing to do with the Affordable Care Act, the health care reform Republicans like to call "Obamacare." And they were unrelated to the election results. Their implications, however, are very much affected by the midterm elections and the political alignments they will produce.

They may be a harbinger of the problems states will face as a cadre of Republican fiscal hawks take power in Congress; challenges to federal health care reform work their way through the courts; and state lawmakers--many of them new to office--try to close deep budget gaps. Even in the face of high unemployment and increasing demand for state services, legislators can expect little in the way of a fiscal helping hand from Washington.

HISTORIC GAINS

The 2010 midterm elections were by every standard an historic partisan sweep. The GOP gained the most seats by either party in the U.S. House of Representatives since 1948 (the most in a midterm since 1938), a victory that also included handsome gains in the U.S. Senate, governorships, state legislatures and further down the ballot. To be sure, Republicans fell short of their standard set in 1994, when they captured not just the House after 40 years of wandering in the desert of the minority, but the Senate as well. This time the Senate proved elusive. But the huge gains across the board were more impressive since they came only two years after the Republican Party had been declared nearly dead by a coterie of pundits.

There also were...