Paul LePage wants to turn back BILLIONS in Federal funding

Average, in 2009 the feds sent Maine $650,000 million just to paper over the budget deficit in Maine, according to the information distributed by the Office of Fiscal and Program Review.

Already in 2010 (fiscal year beginning July 1, 2010) the feds have plugged another $139 million into the state, for state and local spending.

Get a clue. This is not only a sound fiscal policy, but also a sound ethical and moral one as well.

This from MECEP:

"The total state operating budget included over $2.3 billion in funding from the federal
government in 2008. In Maine over one-third (36%) of all state revenue comes from the
federal government."

About a third of that third might be considered to be "over-compensation." So the budget would have to be reduced by one-ninth to keep it balanced.

It would be interesting to see LePage actively campaign on an “ethical and moral” platform against taking Federal money. He’d be lobbing up another hanging curve ball to the opposition.

Some more thoughts: Would money from the feds include disaster relief, let's say for an oil spill in the Gulf of Maine when offshore drilling starts there?

Since I'm sure many would like to see the budget cut by 10%, how will limiting federal funding work to reduce taxes on Mainers? Or are we talking about cuts more in the 15% to 20% range?

Hes right…the purpose of the federal government was never to redistribute wealth between states…it was to facilitate interstate trade…

The consequence of a state gets billions more than they put into the coffers…is that there are states which have lost their money…so because Maine gets a handout…what part of the country has had 3.3 billion taken from them…? Do they not need it…? Do we so badly need it…?

This is the same as all those people who do nothing for a living…pay no taxes…and get tax credits and stimulus money…donated by force…by those of us who work two jobs...

I am happy to see the GOP candidate standing on principle…and I hope he doesnt back down on this one…

Just by bringing Maine into line with federal guidlines and residentcy requirements regarding welfare and medicare we can save quite a bit..There was a story in the BDN about the state not knowing where all the Lottery money is going and potential fraud...I'm SURE that's par for the course in most state programs..We already know DHHS lost hundreds of millions as well...Once the light of day is shown of the dealings of the state when LePage takes office , we will all be shocked at the waste and fraud...Mark my words...

Military bases have been closed at an accelerating rate in Maine. About all we have left is a few National Guard, reserve and recruiting offices along with Portsmouth Naval Shipyard. It is not useful to compare military spending with over-all state expenses. There will always be military bases and their costs should not be used to claim benefits to the state.

DM you've right it is about adults standing on their own two feet and not taking from others.

Morals and ethics aside, I'm curious about the impact of this proposed policy on Maine and its taxes. And I think a good point is made by Northarrow for the fodder it provides for the campaign. Is this a good idea for LePage to be advancing in his quest for the Blaine House?

Morals and ethics aside,

Hmmm...

"Morals and ethics aside..."

And therein...lies the problem...

Yeah, it's a problem if Paul LePage decides that his concept of morals and ethics precludes his being elected Maine's governor.

Average Joe is just trying to stir the poop here, but it is an interesting fact that I don't know 2 conservatives in the state who have figured out that cutting welfare RAISES Maine's deficit, by decreasing Fed matching monies. LePage may be aware of this, hence his plan to increase welfare spending with a tiered system that will lead to a lessening of dependency over time. Tommy Thompson's reforms cost MORE in the short term - the payoff was breaking the cycle of dependency.

As for spurning Fed money, this will obviously not be a factor in the first budget, but it is wise for someone to raise the issue with the Federal government heading for bankruptcy. It may not be possible for the Feds to continue printing money much longer.

Maybe it's stirring the poop, but it seems to me that this can be made a campaign issue much more easily and legitimately than, say, Libby Mitchell's age or creationism.

And isn't this what Paul LePage's campaign is all about, i.e. cleaning up the financial mess the state is in? I just want to know how this is going to work for Maine and for LePage's campaign. My guess is not well for either.

If this is his plan, then he needs to address the assertion that I have heard quite often that Waterville balanced their budget with the aid of Federal funds.

Maine has received more from Washington than it has sent there in taxes since 1981 (link. In 2005, for every dollar Maine sent to Washington, we received $1.41 in return. Vermont was the only other New England state to receive more in return ($1.08). The others? Connecticut ($0.69), Mass ($0.82), New Hampshire ($0.71), and Rhode Island received back exactly one dollar for every one sent to D.C.

Of course, the Land of the Midnight Tea Party lives up to its ideals, receiving only $1.84 in return for every dollar it sends to D.C.

What is of interest is that it is typically "blue states" that are net senders to D.C., while "red states" receive more in return.

I don't know 2 conservatives in the state who have figured out that cutting welfare RAISES Maine's deficit, by decreasing Fed matching monies.

I discussed this problem here.

Maine has shrunk its private economy to pay for the expansion of its government, creating a fiscal trap analagous to the dilemma of welfare dependence: Maine faces a steeply progressive tax on gaining its economic independence from federal transfers. On average, when Maine cuts taxes by $1 it loses $1.40 in revenue.

Average Joe -

The problem isn't a static trade-off between taking federal funds or not.

Rather, if one accepts that fostering conditions of economic growth is a proper goal of fiscal policy, then a dynamic, long-term relationship between fiscal policy and federal transfers must be considered. Let's be clear about this: the fiscal policies that have created Maine's reliance on federal matching funds are the same policies that have hobbled Maine's economic growth.

In a sense, Maine's high proportion of federal transfers is a symptom of fiscal morbid obesity, in which excess fat reduces the motivation for healthy exercise.

If Lepage is to be successful, he must send credible messages, like this one, that he will break the vicious cycle by reducing both expenditure and taxes.

I can understand that if the economy of Maine can be turned around to be more vibrant such that Maine becomes a negative receiver state like California (!), New York, or New Jersey, then the stated goal of neutral or negative federal dependence is realized.

But my understanding of the Tenth Amendment initiative is to immediately create state by state parity. If this is the case, I'll repeat my question: Is this good for Maine and/or the LePage campaign?

Joe:

It doesn't matter what the 10th Amendment says - the 16th Amendment supersedes it regarding taxation and apportionment:

The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.

Gerald, watch the video linked in my first post to see what I'm talking about.

Joe:

If you mean the interview with MaineWebNews, I tweeted about this last Thursday here, here, and here.

I don't tweet.

In the video, LePage seems to make loosely related points - first, that federal funding with mandates and matches has encroached on state sovereignty and, second, that federal funding (except for infrastructure) should be distributed on the basis of population-adjusted receipts, and not by other formulae that create "net winner" and "net loser" states.

I think the first proposition is true, in the sense that national government expansion has tipped the federal balance against the states. I submit Maine's fiscal straits as Exhibit A.

But the second idea has little bearing on fiscal realities. A formula that requires transfer parity based on proportional tax receipts is not a formula that will immediately require tax cuts among the "winner" states. Instead, a consequence of such a formula would be to render most federal transfer programs politically unpalatable.

So let me please ask again: Is this good for Maine and/or the LePage campaign?

You all forget the federal government has been in deficit mode for some time. In other words, the fed is doling out more money than it collects in taxes or fees.. We are fast approaching the fate of the Weimar Republic after World War I. The real problem is that the time is fast approaching that even if we put on the brakes there will not be enough distiance between us and oblivion. I think that braking date is Nov 2 and I am not optomistic about the outcome.

Is this good for Maine and/or the LePage campaign?

Average Joe -

I'm not trying to quibble here; I just don't understand your question:

Is *what* good for Maine and/or the LePage campaign?

You all forget the federal government has been in deficit mode for some time.

pmconusa -

Speaking for me alone, I hadn't forgotten the federal government has been running deficits for some time.

I agree with Thrasybulus;

"As for spurning Fed money, this will obviously not be a factor in the first budget, but it is wise for someone to raise the issue with the Federal government heading for bankruptcy. It may not be possible for the Feds to continue printing money much longer."

If LePage were to rephrase the comment to say we needed to work toward being able to stand on our own feet it would resonate with a lot of people I know.

The fed can continue printing money, they don't even have to print it!

Maybe Maine should consider itself a conquered country, in need of reconstruction, a couple of billions? What is that when you consider each soldier overseas in Iraq Afghanistan costs us about a million a piece when all is said and done. 4 bill is just 4000 soldier, hey that is chump change right.

Maybe we should consider the over payment from the feds as tribute for putting up with all the retirees who come here and don't want Maine to change?

There are many ways you can justify the payment, I'm thinking considering that jobs are pretty well cooked here as well as other states, as party time, give me a guvmint check before the party is over, whether it be SSI, SS, Medicare, unemployment, or early retirement! YAHHOO

It's time to deregulate the enviro laws and scale our military budget way back. That will save us trillions and generate trillions.

I'd be careful if I was Lepage in rejecting money from the feds to this cash strapped and hand-out constituency.

Is this good for Maine and/or the LePage campaign?

Average Joe -

I'm not trying to quibble here; I just don't understand your question:

Is *what* good for Maine and/or the LePage campaign?

Excuse my obtusity. I was referring to the topic of this thread, to Paul LePage's quote about taking from the Feds no more than the Feds are given and to the consequences of that policy, both for Maine and for his campaign.

So far, I've heard a couple of responses indicating that it (referring to the previous paragraph) may be bad for Paul LePage's campaign.