Governor John Baldacci talks about how to fix the $16 trillion national debt

Baldacci streamlined and consolidated agencies in state government- those successes could be used as examples on a national level


January 18th, 2013 


“Because of the interest payments (on the debt) we have less to spend on programs that could stimulate the economy and help create jobs— $600 billion less, " said former governor John Baldacci at the Chamber of Commerce in Bangor

Governor John E. Baldacci gave the keynote address to the Chamber of Commerce in Bangor on January 15, 2013. The focus of his speech was the nation’s $16 trillion debt. Baldacci said that at the core of the issue is the inability of Congress to take meaningful action to get the country’s books in order.

“It’s a serious issue,” said Baldacci. “Because of the interest payments we have less to spend on programs that could stimulate the economy and help create jobs— $600 billion less. These interest payments are crowding out a lot of expenditures in healthcare, in education in economic development and for Department of Defense issues. It hurts our ability to protect our country, to protect the programs our citizens, especially our most vulnerable, need, and to invest.”

Baldacci co-chairs Maine’s Fix the Debt campaign with former state Senate President Rick Bennett, a Republican. In 1994 they ran against each other for Congress. Fix the Debt is a nationwide, nonpartisan effort to engage legislators, community leaders and businesses across the country who want to see elected officials step up to solve our nation’s fiscal challenges. The two men are dedicated to raising the awareness of the national debt so politicians in Washington, D.C. will be encouraged to take action.

“I wanted to send a message that I’m willing to work together with someone I campaigned against in a difficult hard fought campaign that left us both with a lot of scars,” said Baldacci.

When the former governor was a congressman he served, the majority of his time, under President William Jefferson Clinton. It was a time when Baldacci was directly involved in dealing with the nation’s debt.

“The first time we addressed the nation’s debt was with President Clinton and Speaker of the House Newt Gingrich. We went through the same sort struggles in order to get the different parties to sit down and talk about the debt and deficit which was about $4 trillion,” said Baldacci.

Back in the 90’s both parties were able to come together to work out solutions, though there was stiff partisan divide on a number of issues. The U.S. Government worked according to how the founders prescribed it to. When Clinton left office there was a budget surplus and the economy was booming.

“We were successful in 95’ and 96’. The key then was to get the parties together to work things out,” he said.

He thinks that is also the key now.

“I don’t think anyone knows what the exact solution is this time but I know it’s going to require leadership to sit down and be respectful towards each other recognizing that opinions will differ. They have to understand we have to compromise on both sides to move the country’s agenda forward,” said Baldacci. “It’s really about getting on a fiscal path towards balance. Fiscal matters impact monitory matters which impact the overall economy.”

When Baldacci became governor he walked into having to run a state in recession.

“I not only had the structural gap of $1.3 billion — they (the King administration) had taken out a loan of $250 million for hospital reimbursement issues, and paper mills were closing. It was a very difficult time,” said Baldacci. “At that time we had one the highest tax rates in the country so we couldn’t raise taxes, and with the recession we couldn’t cut back on programs people depended upon. We had to figure out ways to grow and invigorate our economy and at the same time not cut people who needed assistance off from benefits.”

He turned the situation around and after two years the state had a surplus with a rainy day fund.

“Measures that we underwent in Maine in terms of reorganizations and integrations could be done nationally,” said the former governor.

When his eight years ended the country was in the midst of the worst recession since the Great Depression but he managed to actually leave a surplus of over $100 million behind for his successor, Governor Paul LePage. That was important to him.

“I didn’t want anyone to have to deal with what I did when I got into office,” he said.

While in office he took on school administrations by consolidating districts. Too much funding was being funneled into administration positions and not enough was being used to go directly towards a child’s education. There was stiff opposition but by taking his proposals around the state to different districts he garnered support to pass the legislation.

He consolidated the prison and jail system streamlining services. Cumberland County’s jail system is a prime example of how the new program has been successful. State government was also streamlined and agencies merged to bring better services to the people of Maine and to save funds that were being wasted as agencies had been duplicating their efforts. In 2011 he went to Poland when he was invited by their Commissioner of Education to explain how Maine consolidated schools.

To invigorate the economy he invested in research and development with voter-approved bonds, in education creating the community college system, and in transportation improving the state’s ports, rails and roads. By the end of his service Maine’s tax rating had gone from the fifth worst in the nation, compared to other states, to fifteenth according to state figures.

“When you make investments in research and development what you are really doing is helping business and industry have the latest technologies so they can compete more successfully in the global market,” said Baldacci. “These private sector companies that get help to develop their products create secure jobs and growth.”

In 2011 Baldacci worked for the Department of Defense (DoD) in Washington, D.C. to bring his expertise in healthcare issues to help DoD programs. He researched and reported on DoD best practices so they could implement changes.

“The recommendations are under review and could be a part of the cost savings they are currently looking at,” he said.

He also saw how the DoD could consolidate healthcare departments.

“The DoD spends a $1 billion in services, if we could consolidate purchasing, electronic data keeping, and human resources then healthcare services and quality would improve using the best practices that each of our military branches have,” said Baldacci.

Baldacci is in favor of the right kind of consolidation policies but he says that cutting back expenditures alone will not help the economy and inevitably hurts the most vulnerable. He’s troubled by LePage’s policies and manner in which he governs.

“I’m only seeing one side of the equation. They’re talking about cutting and consolidation, which I’ve done probably more than anybody. At the same time there is no talk about investing in research and development or in education,” he said. “You have to balance the equation with investments so the quality of life of our citizens improves.”

LePage’s refusal to allocate voter-approved bonds goes against the oath of governor.

“He’s allowing other states to get ahead of Maine. We loose huge opportunities every day. Holding jobs hostage by not releasing voter-approved bonds is wrong. Whatever the people’s wishes are as governor you have an obligation to execute the will of the voting public. Holding back bond allocations is holding back economic development.”

Baldacci talked to the director of the MRRA – the organization responsible for managing the transition of Naval Air Station Brunswick and its Topsham Annex from military to civilian use – about the bond funds they have yet to receive.

“Steve Lévesque needs those resources so he can continue to refurbish and make the former navy base ready to show prospective clients. Because of the negative economic impact of the base closure we need to work aggressively to help the region get back on their feet,” said Baldacci. “Every day is lost opportunity.”

As governor, Baldacci eased Brunswick and region’s transition when the base closure was announced by making the entire area a Pine Tree Zone, which gave businesses tax incentives to expand or start up. He also created a bond package that helped the Southern Maine Community College establish a branch to teach composite technologies, working with the University of Maine, at Brunswick Landing. And helped UMaine establish engineering programs there.

Baladcci said Maine has a tradition of working in a bipartisan way. All his major initiatives, bonds, programs and budgets were.

“In Maine it takes a two-thirds majority to pass budgets and bonds which makes it a necessity for lawmakers to work together,” said Baldacci. “You need someone in leadership that has the ability to sit down and meet regularly with over breakfast, coffee or dinner. You need that kind of access to build a relationship so whatever a crisis comes up you can pick up the phone and comfortably talk with each other to work out solutions and garner support.”

The former governor is upset that there is a lack of leadership that lifts up people coming from the Blaine House.

“Now there are battles between regions, and between groups over state funding,” said Baldacci. “We’re a small state we shouldn’t be fighting with each other— we should be looking for ways to work together. We need each other in order to get the job done weather it’s harvesting potatoes or implementing effective policies.”

At the Chamber event the former governor confirmed that he is considering running for the Blaine House in 2014.

“I’m concerned about the state and the direction that the state has taken,” said Baldacci. ”I’m tired of the boisterous attitude and all the negative comments that don’t reflect who the people of Maine are or what they believe. It makes it hard to attract businesses to the state which hurts our economy and reputation around the world.”

Baldacci said that he would give U.S. Rep. Chellie Pingree or Rep. Mike Michaud the first crack at a Democratic return to the Blaine House. The race would likely include the incumbent LePage and independent Eliot Cutler, who both ran in 2010.

“Our party will have a strong candidate who can work for a democratic legislature and a democratic president accessing the resources and support in Washington to help us. We need to make sure we have universal health care and that we are educating our children for the jobs of the 21 century,” he said.

Today Baldacci is senior advisor for economic development and government relations at the Pierce Atwood law firm in Portland.

The former governor said he and Bennett have more Fix the Debt appearances planned around the state in the coming months.