Federal Transfer Payments to States

Federal transfer payments to state and local governments totaled some $444 billion in 2013; these included payments of $282 billion for Medicaid, $3.4 billion for LIHEAP, $80 billion for SNAP, and some $78 billion for other transfers to the states.

The payments often are synergistic, not at all fixed, too.  For instance, LIHEAP payments are used by the states to magnify SNAP payments, since SNAP contains an energy allowance, a “standard utility allowance.”

Governor Dannel Malloy [D] last week announced that Connecticut would “expend $1.4 million in available federal energy assistance funding” to raise minimum LIHEAP payments for 50,000 beneficiaries, or about a quarter of its food-stamp rolls.  The increase…will “preserve approximately $66.6 million” a year in food-stamp benefits.  So Connecticut will leverage $1 in additional federal LIHEAP funds to reap $48 more from Washington for food stamps.

Mr Malloy’s neighbor Andrew Cuomo jumped for the free lunch the next day by declaring that New York would “dedicate approximately $6 million in additional federal” heating assistance to maintain $457 million in food-stamp payments.

Of course, this is done with taxpayer money, so the money transferred to, say Connecticut, comes in part from nearly bankrupt California, in part from bankrupt Illinois, in part from nearly bankrupt New York, etc.

It would help if the synergies were done away with.  It would help even more, and more permanently if the transfers were done away with, and the States required to see to their own responsibilities without freeloading off other States’ citizens.

Sanctions and Boomerangs

Russian Foreign Minister Sergei Lavrov says that sanctions applied by us against Russia “would inevitably hit the United States like a boomerang.” But will they, or will they to any serious degree?  Polish Foreign Minister Radoslaw Sikorski doesn’t think so.  Sikorski had some thoughts on the matter in Monday’s Spiegel International Online.

SPIEGEL: The European Union imposed very mild sanctions against Russia on Thursday.  Isn’t it true that Putin, with his gas exports, has far more effective means for countering that pressure?

Sikorski: Only about 30% of the natural gas in the EU originates from Russia.  Norway is a larger supplier.  I do not believe Russia can use it to put us under pressure.  Moscow needs our money.

Indeed.

And

SPIEGEL: Why are the Poles so highly engaged in this conflict?

Sikorski: The Ukrainians are our neighbors. They are fighting for the same things we did back in 1989 – for a country that is more democratic, less corrupt and is European.

On what, then, is President Barack Obama waiting?  What is it of a Russian counterstroke that he fears so?