Federal Budget Reductions Continue to Push More Welfare Costs onto Maine Taxpayers

September 24, 2013

For Immediate Release: Tuesday, Sept. 24
Contact: Adrienne Bennett, Press Secretary, 207-287-2531

AUGUSTA – Governor Paul R. LePage released the following statement today about a reduction of federal funds for the Supplemental Nutrition Assistance Program (SNAP), commonly known as “food stamps.” SNAP will reduce the amount of money low-income Mainers receive to purchase food beginning on Nov. 1 because one-time stimulus funding is running out.

“The federal government used stimulus spending to prop up welfare spending for food stamps, and that funding is coming to an end,” the Governor said. “This is another example of the federal government reducing funds for welfare programs. Liberal politicians who keep promising that the expansion of Medicaid welfare will be ‘free’ should take notice.

“The federal government has steadily forced Maine taxpayers to pick up more and more of the tab for welfare reimbursement to hospitals,” said Governor LePage. “The Social Security Disability Insurance program is expected to run out of money in 2016. Regardless of which political party is in charge down in Washington, we cannot ignore the fact that the federal government is nearly $17 trillion in debt.

Combined with uncertainty over debt limits and welfare funding, this has put all states in a tough position when it comes to planning.” “Hard-working Maine people should brace themselves as the federal government keeps putting more burdens back on the states,” the Governor said. “There is no evidence that the federal government will be able to keep its promise of ‘free’ welfare expansion under Obamacare. The money must come from somewhere, but Washington is already buried in IOUs.”

Just last week, Governor LePage made good on his 2010 campaign promise to pay back the half-a-billion-dollar debt to Maine’s hospitals—a debt racked up because of the last expansion of MaineCare welfare. MaineCare is Maine’s Medicaid program.

Even though Medicaid is a federal program that the states have to administer, the federal government only pays part of the bill to doctors and hospitals. The federal government’s reimbursement rate has been falling since 2004. This fact cannot be avoided. The matching rate was 69.17 percent in 2004 and has dropped to 62.57 percent in 2013. The rate is expected to drop again in Fiscal Year 2014 to 61.55 percent.

“The federal government keeps lowering their share of the bill, which is why this ‘free today, pay tomorrow’ welfare expansion is so worrisome,” said the Governor. Additionally, Medicare's hospital fund is predicted to run out in 2024, and Social Security's retirement trust fund is estimated to run out by 2035.

The Governor added that while liberal politicians claim that welfare expansion will be “free,” Maine’s Department of Health and Human Services estimates that the administrative costs of welfare expansion would cost millions from the state almost immediately, and then cost $75 million a year after that. This money would have to be taken from other places in the Maine budget.

“Washington and some liberal politicians like to ignore economic realities,” Governor LePage said. “The federal government pays less and less to Maine’s doctors and nurses for their work, food stamps are being reduced, funding for disability insurance is running out, and money for Medicare and Social Security is being exhausted.

“But liberals still keep promising the federal government will provide billions of ‘free’ dollars for MaineCare welfare expansion, even though the federal government is $17 trillion in debt,” the Governor said. “There is only one place for the money to come from, and that is from the pockets of hard-working, middle-class Maine people who cannot afford to pay more federal or state taxes.”