How surprising is it that LePage called Social Security, Medicare “welfare”?

BDN photo by Gabor Degre.

BDN photo by Gabor Degre.

See updates at the end of the post.

Social Security and Medicare are very popular programs that vastly reduced the rate of poverty among the elderly.

So maybe you’d think that, in the nation’s oldest state, a major party candidate wouldn’t categorize those programs as “welfare.”

At the same time, the current administration in Augusta is very fond of the term “welfare,” which carries a negative connotation.

As I once wrote:

[W]ith Gov. Paul LePage’s administration and conservative Republicans, every sort of government program they don’t like is called “welfare.”

They’ve even called municipal revenue sharing, which sends tax dollars that were collected from towns and cities back to them, “welfare.”

It’s a wonder the “w” keys on their keyboards haven’t worn out.

So, despite the fact that so many Maine seniors rely on Social Security and Medicare, the “w” key just got more use in a gubernatorial press release on the growth of personal income in Maine.

Here’s what the press release states:

The U.S. Bureau of Economic Analysis (BEA) claims the other five New England states saw higher personal income growth than Maine, but that growth was driven by an increase in welfare benefits, especially in the form of Medicaid expansion. The BEA conceals welfare benefits by calling them “Personal Current Transfer Receipts.”

These “Transfer Receipts” include: Social Security benefits; Medicare payments; Medicaid; and state unemployment insurance benefits.

In this formulation, Social Security and Medicare are among the “transfer receipts” which are purportedly concealed within this broader category of “welfare benefits.”

But it’s not only Social Security, Medicare, Medicaid, and unemployment insurance that’s called “welfare.”

Remember when Maine Republican party leaders said that a number of Mainers who would have been eligible for MaineCare if it was expanded had another option?

Rep. Ken Fredette, the Republican Leader in the Maine House, suggested that people getting subsidies to get private health coverage through the state insurance exchange instead of having MaineCare coverage would avoid “dependency” and “welfare.”

But LePage says that this alternative (which isn’t available to people with incomes under the poverty level), well, it’s welfare, too.

According to the press release:

In addition to counting welfare benefits as personal income, the BEA includes another category called “all other personal current transfer receipts.” These are the health insurance premium subsidies paid as tax credits to enrollees of the Obamacare exchanges.

“It doesn’t matter what liberals call these payments, it is welfare, pure and simple,” said Governor LePage. “Liberals from the White House all the way down to Democratic leadership in Augusta believe that redistribution of wealth—taking money from hard-working taxpayers and giving it to a growing number of welfare recipients—is personal income. It’s not. It’s just more welfare expansion.”

Thus:

  1. Social Security is welfare.
  2. So are Medicare and Medicaid.
  3. Unemployment insurance is also welfare.
  4. And so are tax credits to subsidize premiums for private insurance, which LePage allies once said was the way some low-income working people should get health coverage.

Besides nearly wearing out the “w” keys, there’s an odd economic argument embedded in LePage’s contentions.

It’s that Social Security, Medicaid, Medicare, subsidies, and unemployment insurance don’t contribute to people’s personal incomes, nor to states’ economies.

If anyone really believed that, he or she should sit down and talk to a person on Social Security. Ask that senior if Social Security contributes to his or her personal income. That question would probably produce some puzzlement.

Of course, a healthy economy has many different elements that produce jobs and growth, and they don’t just involve manufacturing. In Bangor, one of the few areas of the state that’s producing jobs, the Waterfront Concert series is creating $30 million in economic activity over three years.

But let’s not forget that Maine is a net importer of federal funds. We pay less in federal taxes than flows in from federal revenues.

That money is as real as any other money. Those funds, when spent by seniors and other Mainers, including health providers like doctors and lab techs and nurses and hospitals, flow into the broader Maine economy. People buy food and fuel, upgrade their heating systems, build decks, repair roofs, and go to concerts.

Maine needs more economic activity than what flows from those funds, but they certainly have a real economic impact. Calling them “welfare” not only doesn’t illuminate anything, but is negative and divisive.

But how surprising is that rhetoric?

Update 1: The LePage campaign has put out a press release saying that Gov. LePage “does not think Social Security is welfare.”

Now, the logic of the initial press release is very clear. Social Security is classified as one of the programs among the “transfer receipts” termed “welfare.”

LePage’s campaign now says he really didn’t mean to call Social Security “welfare.”

Even assuming that’s so, it begs the question of what LePage does think is welfare and what he thinks about their impact on the economy.

A number of specific programs — Social Security, Medicare, Medicaid, unemployment insurance, and subsidies for private insurance — were listed in his press release on the Maine economy and the word “welfare” was used multiple times.

Which did LePage mean to refer to when he used the word “welfare”?

Update 2: And now the governor’s office has put out a press release saying that LePage doesn’t think Social Security and Medicare are “welfare.” With his reference to Medicaid expansion — which can be done through payments to private insurers or via a traditional Medicaid system, he’s pulled back from the more expansive claims about income transfer payments.

However, the governor continues to reject the reality, as the Alexander Report did, that Medicaid expansion contributes to economic growth, even as it reduces uncompensated care for hospitals, improves health and reduces preventable deaths.

It’s also puzzling and illogical that, as LePage now says that, Medicaid is not “a reliable, nor is it a sustainable income source for personal growth income earnings.” If people who don’t have health coverage can get it through Medicaid, this most certainly increases their personal income, just as receiving Medicaid does. 

Amy Fried

About Amy Fried

Amy Fried loves Maine's sense of community and the wonderful mix of culture and outdoor recreation. She loves politics in three ways: as an analytical political scientist, a devoted political junkie and a citizen who believes politics matters for people's lives.