The U.S. Supreme Court ruled against five states suing the federal government over the costs they are forced to incur under the Bush administration's new Medicare prescription drug program.
The justices declined to hear the case without comment. The states had requested that the court issue an injunction to stop the federal government from collecting funds from the states while the court considered the case.
The five states suing the federal government were Kentucky, Texas, New Jersey, Mississippi and Maine. The states claim that Washington overstepped its authority and violated the Constitution by mandating a state contribution to the new federal Medicare drug program.
The new federal program requires states to pay a percentage of the outpatient prescription drug costs for the low-income elderly and disabled, whose medication coverage was switched in January from the state Medicaid program to the new Medicare Part D drug plan.
New Jersey, for example, has been paying an average of $20 million per month under the new federal program. That money now goes directly to the federal government.
New Jersey Attorney General Zulima Farber explained the state's position. 'This is the first time Congress has expanded its power to include direct taxation of the sovereign states,' Farber said.
A total of 10 states filed briefs with the U.S. Supreme Court in favor of the five state government plaintiffs. They were Alaska, Arizona, Connecticut, Kansas, Mississippi, New Hampshire, Ohio, Oklahoma, South Carolina and Vermont.
The case was filed directly before the U.S. Supreme Court. The states will now have to bring their arguments before a lower court to have it heard.
Solicitor General Paul Clement, writing on behalf of the Bush administration, argued that 'The states cannot establish that the (law) ... will cause them any financial hardship at all. By contrast, an injunction barring implementation of (the law) would deprive the Medicare Part D program of an important source of the funding necessary to furnish prescription drugs to individuals over 65 or who have disabilities.'
It is uncertain what action, if any, the states will take next.
