…For six years, the Weld administration has made a concerted effort to chase every federal dollar in sight, shifting a host of costs from Beacon Hill to Capitol Hill through a variety of creative accounting maneuvers. As a result, federal reimbursements have leapt from 11 percent to 16 percent of state revenue since Weld took office, a $2 billion surge that has helped him balance six budgets without breaking his no-new-taxes pledge.
Now Weld wants to go to Washington, vowing to slow the federal spigot that has helped save his administration from fiscal meltdown. But some analysts warn that Massachusetts, during his State House years, may have developed an unhealthy reliance on federal largesse.
“The money is great,” said Michael Widmer, president of the Massachusetts Taxpayers Foundation. “But Massachusetts is more dependent on federal funds than ever, as we enter an era of federal cuts. And these fiscal games states play contribute to the awful deficits at the federal level.”
In other words, one reason Washington looks like Massachusetts did in 1990 is that states like Massachusetts have used Uncle Sam as a sugar daddy. The commonwealth has gone after federal accounts for transportation and special education, foster care and health care, mental illness and mental retardation — and budget observers said it has been no more aggressive than other states.
The federal government, saddled with a $5 trillion debt, sent more than $200 billion directly to states last year. But administration officials as well as Democratic legislators said that in an era of tight budgets, no state can afford to sit out the drive for dollars…
Even Weld Administration and Finance Secretary Charles D. Baker, the driving force behind the Weld push for federal money, admitted that he and his 49 compatriots in other states are “bleeding the feds dry.”
“It’s crazy! Absolutely crazy! But I didn’t write the rules; I just play by them,” Baker said with a grin. “Look, if the feds really want to balance the budget, they need to stop this foolishness.”
The administration has searched feverishly for new money, with high-priced consultants helping in the hunt. The results — especially in human services — have been impressive. The taxpayers foundation estimates that without the push, Weld would have had to cut $750 million worth of services — or raise $750 million worth of taxes.
“It’s a lot like drilling for oil,” said Baker, whose last job was as Weld’s health and human services secretary. “It’s hard work, and sometimes it doesn’t pan out. But every now and then, you hit a gusher.”
Every now and then, you do.
usergoogol says
It would seem like the whole point of the bill is defeated if states just stuff the money in their rainy day funds, and since this is money specifically allocated for the purpose of Medicaid and education one would assume that states are simply not allowed to do other things with it. It would not make very much sense otherwise.
usergoogol says
Oh, in the actual press release he proposes this merely for money that does not have to be spent right away. That’s reasonable enough I suppose.
johnd says
against George Bush and the Republicans against the deficit spending while he criticizes Obama and the Dems for not having much higher deficit spending. The excuse by Krugman supporters is “the situation has changed which makes his opinion change”. Is there any chance “the situation from 1996 (14 years ago) which makes his opinion change”?
johnd says
trickle-up says
do you spend your time?
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p>“Is there any chance ‘the situation from 1996 (14 years ago) which makes his opinion change?'”
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p>Clearly Baker’s flip-flop has nothing to do with the economy and everything to do with his campaign talking points.
stomv says
(and empirical analysis). Deficit spending by government during a down economy helps it get back on track. Contractionary policy (higher taxes than spending) is appropriate during a hot economy to keep inflation under control and avoid a flame-out. You’ll note that Clinton’s fiscal policy was exactly this — remember the surplus? GWB’s massive tax cuts for the rich along with increased government spending was proposed during a stable and growing economy, which is exactly the wrong policy to enact for that economy. Obama’s policy of increased spending, particularly directly on jobs (the non-tax-cut portion of stimulus bills) follows this theory quite well.
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p>So, what’s the problem again?