A day after issuing a statement that equated Social Security with welfare and touched off a wave of political criticism, Gov. Paul LePage sought to clarify the statement Thursday, saying he doesn’t actually believe that.
LePage criticized the Portland Press Herald for making an “erroneous interpretation” of a media release that his office issued Wednesday. It dealt with a report from the U.S. Bureau of Economic Analysis showing that Maine’s personal income growth was below the U.S. average and last in New England in the first quarter of 2014.
The newspaper’s story directly quoted parts of Wednesday’s release, which said:
“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 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. 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. Democrats can obfuscate the numbers any way they want. The fact is that we have created thousands of jobs, more Mainers are working, and their income is going up.”
LePage, whose re-election campaign is grounded on the issues of job growth and welfare reform, said Wednesday that a more accurate indicator of income growth would look strictly at net earnings, and exclude “personal current transfer receipts.”
Under LePage’s definition, Maine’s growth for the first quarter of this year was 0.8 percent, in line with its New England neighbors and above the national average.
Adrienne Bennett, the governor’s spokeswoman, said Thursday that the bottom line is that LePage disagrees with the Bureau of Economic Analysis report that Maine’s economic climate would be improved if the state expanded its Medicaid program, something LePage has rejected five times.
Maine is one of only four states that had decreases in the personal current transfer receipt category in the first quarter. All four have rejected Medicaid expansion.
Bennett said LePage was referring to Medicaid when he used the word “welfare,” which appeared 10 times in Wednesday’s release.
In an interview with WGAN Morning News on Thursday, Bennett told hosts Mike Violette and Ken Altshuler that the Press Herald got it wrong when it reported that LePage lumped Social Security and Medicare into the category of welfare.
When pressed by Altshuler, she acknowledged that she “can see where there is confusion.”
The federal economic report showed that Maine received about $12.33 billion in personal current transfer receipts in the first three months of 2014. Social Security and Medicare accounted for 60 percent of the total, $7.3 billion. Medicaid accounted for 18 percent, $2.28 billion. That number would be considerably higher had Maine expanded Medicaid.
If LePage did not consider Social Security and Medicare welfare programs, and those federal payments were included in the administration’s definition of personal income, the growth figure for Maine would differ from the figure LePage cited Wednesday.
Asked if the governor is considering re-evaluating his interpretation of the Bureau of Economic Analysis’ data, Bennett said, “It’s a good question.
“The governor is on a plane traveling back from China, so I haven’t had the chance to talk to him directly about that,” she said.
The governor’s opponents in the Nov. 4 election, Democrat Mike Michaud and independent Eliot Cutler, pounced on LePage’s media release Wednesday, calling it an insult to Mainers who paid into the Social Security and Medicare systems for years before they retired.
Cutler issued a second statement Thursday, after LePage sought to clarify his remarks, saying, “The governor clearly remains confused about what is and isn’t welfare and what to do about it.”
LePage’s follow-up statement Thursday is an indication of the political stakes of potentially offending seniors, Maine’s largest and most engaged voting bloc. His statement sought to assure seniors that he is working for them.
“While my opponents are fighting for welfare expansion, my administration is committed to preserve funding and resources for Maine’s elderly,” he said. “Some seniors may be forced out of their homes because of financial troubles within Maine’s nursing homes and it is why I have pushed so hard to adequately fund those facilities. Furthermore, I have advocated for the elimination of income taxes on pensions to protect our seniors.”
James Breece, an economist and professor at the University of Maine who is a member of the Bureau of Economic Analysis advisory group, said it’s not unheard of for people to pick apart components of the bureau’s personal income reports for political or other purposes.
“It depends on what you’re after,” he said Thursday.
Breece said a narrow focus, such as LePage’s use of only net earnings, offers perspective on how commerce, industry and governments are doing, as reflected in the pay that employees are receiving.
Including other figures compiled by the bureau, he said, such as dividends, interest and rental income, in addition to the transfer receipts, offers the broader perspective of “the economic resources of a household.”
That, he said, provides a fuller picture of what “drives the economy” because most of people’s earnings – whether from a paycheck, income from rental property or a Social Security check – are spent and spur further economic activity.
Staff Writer Edward D. Murphy contributed to this report.