# Budget



Mississippi River Floods -- The Branstad Connection

(State Senator Rob Hogg has been calling for more investment in watershed projects.   - promoted by desmoinesdem)

With floodwaters along the Mississippi River in the southern U.S reaching historic levels it’s time for Iowa to take a leadership role in helping prevent future flooding by investing in watershed improvement programs and conservation in Iowa.

Many people might not know what a watershed is. A watershed is basically a basin defined by highpoints and ridges that descend into lower elevations and stream valleys. A watershed carries water from the land after rain falls and snow melts. Drop by drop, water is channeled into soils, groundwaters, creeks, and streams, making its way to larger rivers and eventually the sea.

According to the EPA:

A watershed is the area of land where all of the water that is under it or drains off of it goes into the same place. John Wesley Powell, scientist geographer, put it best when he said that a watershed is:

“that area of land, a bounded hydrologic system, within which all living things are inextricably linked by their common water course and where, as humans settled, simple logic demanded that they become part of a community.”

Watersheds come in all shapes and sizes. They cross county, state, and national boundaries. In the continental US, there are 2,110 watersheds; including Hawaii Alaska, and Puerto Rico, there are 2,267 watersheds.

This is the connection between watershed and land management practices in Iowa and recent flooding on the Mississippi River. …more after the jump…

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Pulling the Plug on Medicare

Remember when Republicans were saying that Washington was going to pull the plug on grandma? Little did we know, they were on to something.

The newly released Republican budget does indeed threaten grandma – by dismantling Medicare and ending the guaranteed health care that so many seniors' lives depend on.

If House Republicans and Budget Chairman Paul Ryan get their way, they would privatize Medicare – getting rid of the government guarantee that makes the program accessible for all elderly Americans. Under this “brave” and “courageous” Republican plan, seniors would get a voucher to purchase insurance on the private market. This may sound like a reasonable plan until you consider that privatizing Medicare would cost seniors significantly more, almost doubling their out-of-pocket costs to more than $12,000 a year and leaving many unable to afford health care at all.

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Case Against Republican Deregulation

(And a case for oversight that will lead to wealth and job creation in Iowa. - promoted by desmoinesdem)

Iowa Deregulation Hearings:  Cedar Rapids & Burlington
Written full version of my oral testimony in Burlington.
I’m Brad Wilson, a Springville area farmer, and I sell local food.  I’m the representative from Iowa CCI to the board and executive committee of the National Family Farm Coalition.
I’m a big fan of Norman Rockwell’s painting “Freedom of Speech,” and I appreciate the opportunity to testify orally.  
I’m for balanced regulation.  Some regulations create tremendous wealth and jobs.  Some regulations destroy wealth and jobs.  
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Help Save Service In America

In its recent budget for FY 2011, the House of Representatives voted to defund the Corporation for National and Community Service.  This is the organization that administers the popular AmeriCorps, Senior Corps, VISTA, and NCCC programs.  The new Congress is essentially trying to kill service in America

These programs, which are cheap, efficient and tailored to local needs, are designed to address some of our nation's most pressing problems.  Child literacy, elder care, environmental conservation, homelessness, affordable housing, disaster recovery, public health…I could go on and on.  The pay is peanuts and the work is difficult but nevertheless, year after year, Americans enroll to help serve their communities.  

 The new Congress though, in a fit of austerity (that does not include eliminating tax breaks for corporations or raising taxes on the rich) has decided that we simply cannot afford such extravagances. This comes at a time when the recent economic downturn is exacerbating exactly the problems the CNCS is designed to combat.

Further underscoring the perversity of these cuts is the fact that less than two years ago, in an exceedingly rare display of bipartisanship, Congress passed the Serve America Act, which greatly expanded service.  It seemed as if the 15 year-old organization would finally be taken off the chopping block.

But…no

 Bafflingly, this new class of legislators, after having been swept into office on a wave of bitterness and low voter turnout, believe it is their mission to singlehandedly save American civilization.  This sacred crusade seems to include preventing government from helping citizens help themselves.

 But in any case, a final budget has not been negotiated, so the battle is not over.  I urge all of you to call this number:

 1-855-US-SERVE.

This number is provided by the website:http://www.saveservice.org/ .  It will connect you directly to your Senators as well as provide you with talking points, if you feel you need them.

Of course there are other things you could do.  You could write a letter to the editor, attend a town hall meeting or meet with your legislator personally. We need grassroots pressure to make this happen.

There are a lot of members that would like to stand up for service. We just have to make them.  

 

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State of the Union discussion thread

President Barack Obama delivers the State of the Union address tonight. Share any comments about his speech or his presidency in this thread.

I find the prospect of a Democratic president arguing for austerity budgeting deeply depressing. A domestic budget freeze is a bad idea, and an earmark ban is just a waste of time. Earmarks don’t add to the deficit; they just give members of Congress more power to control how certain pots of money are spent.

I cannot believe how much media coverage has been wasted on plans for some Democrats and Republicans to sit together for the State of the Union. Who cares?

The “revisionist history” blaming Rahm Emanuel for Obama’s mistakes during his first two years sounds pathetic, even though I am not at all an admirer of Emanuel.

UPDATE: John Deeth is liveblogging at his place.

SECOND UPDATE: I don’t know why Obama is so intent on repeating the “great mistake” of 1937.

I’ve posted statements released by Iowa’s Congressional delegation after the jump.

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New Culver ad starts conversation about Branstad's values

Governor Chet Culver’s campaign released a second television commercial spotlighting Terry Branstad’s record. Like the Culver tv ad that debuted last week, the new commercial mentions Branstad’s dismal record on fiscal issues. It also mentions eight pay raises that Branstad signed for himself, some of them during very tight budget years:

Transcript:

As Governor, Terry Branstad admitted “his books were never balanced.” According to the State Auditor, Terry “cooked the books.” And when state unemployment hit a record high, Branstad asked for a raise. When Terry cut foster care, Branstad took another raise. When the state couldn’t pay its bills, Branstad raised our taxes and raised his pay once again. Terry Branstad: Cooked books, Raised Taxes, Eight pay raises. A past we can’t repeat.

A Culver campaign press release with supporting facts and citations from news reports is after the jump.

We all know Branstad wasn’t a good manager of state finances, but I like the way this ad touches on his deeply flawed priorities as well. Branstad started seeking a pay raise during his very first year in office, when unemployment peaked at 8.5 percent. A few years later, this guy wasn’t ashamed to take home more money even as he was cutting foster care programs.

I hope future Culver ads will underscore how cutting state assistance to vulnerable Iowans has long been Branstad’s knee-jerk preference, rather than his last resort. The foster care cuts highlighted in Culver’s new commercial occurred in 1987. When Iowa faced a budget crisis in 1992, Branstad brought two money-saving ideas to a meeting with state lawmakers in advance of a special legislative session: first, cut spending on foster care, and second, cut Medicaid programs that helped children buy eyeglasses and keep senior citizens out of nursing homes. During this year’s campaign, when asked an open-ended question about how he would cut state government, Branstad

said he’s still looking for ideas but did mention reforming the state’s mental health system and rolling back Medicaid, which has been expanded to cover more people, including children. He said state employees should pay for their health insurance like private sector employees.

That’s classic Branstad. Gee, I haven’t figured out yet how to make the budget numbers add up, but why not change Medicaid so that fewer people qualify? While we’re at it, let’s stop helping tens of thousands of families send their four-year-olds to preschool.

Branstad’s record of incompetence should be at the center of the gubernatorial campaign, but let’s not forget about his skewed priorities.

UPDATE: Conservative blogger Gary Barrett claims the Culver ad distorts the facts on Branstad’s pay hikes. The Culver campaign released a response to Barrett’s post, which you’ll find after the jump.

The Branstad campaign cited a Des Moines Register report from 1982 on how Branstad didn’t want a pay raise and might veto such a bill. Culver’s campaign leaped on that as evidence Branstad “said one thing and did another on pay raises.”

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Culver ad: Branstad's record "not worth repeating"

Governor Chet Culver’s campaign launched its first television commercial of the general election:

Transcript:

When the Republican State Auditor says a Republican Governor ‘Cooked the books’ and “kept two sets of books”… you take notice.

As Governor Terry Branstad admitted, “the books were never balanced.”

The state was so broke they couldn’t pay their bills.

Branstad doubled state spending, raised the state’s sales tax, raised the gas tax, even wanted to tax social security.

Cooked books, deficit spending, increased taxes.

Terry Branstad, a record not worth repeating.

If Culver were in a stronger political position, he’d probably lead off with a commercial highlighting his own record–something like the ad his campaign briefly ran last fall. However, Branstad’s been above 50 percent in several recent polls, and that number needs to come down. Branstad has been offering Iowans an airbrushed version of his own record, and this commercial brings up what Branstad wants Iowans to forget. The Culver campaign presents supporting facts and background here.

After the jump I’ve posted the Branstad campaign’s reaction to this ad and the Culver campaign’s rapid response. Note that Branstad’s people are yet again lying about an alleged billion-dollar budget gap.

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Memorial Day weekend open thread: Guns, not butter edition

Since Memorial Day was established a few years after the Civil War, Americans have marked the holiday every year by remembering our war dead (ok, almost all our war dead). In his weekly address, President Barack Obama asked Americans to honor “not just those who’ve worn this country’s uniform, but the men and women who’ve died in its service; who’ve laid down their lives in defense of their fellow citizens; who’ve given their last full measure of devotion to protect the United States of America.”

Every so often I read the I Got The News Today profiles of Americans killed in Iraq and Afghanistan. According to an old Jewish teaching, saving one life is equivalent to saving the whole world. The IGTNT diaries, like “Six More Lost to All Who Loved Them,” are a crushing reminder that the death of one person is like the death of the whole world to the people left behind.

The IGTNT series will likely continue for many more years. The number of Americans killed in Afghanistan recently passed 1,000, and we are preparing to send an additional 30,000 troops there. Although we have fewer troops in Iraq now than we did for most of the past seven years, we have more troops deployed in Iraq and Afghanistan combined now than we did when Obama became president.  

The price of these wars is also enormous in monetary terms. On May 30 the estimated cost of U.S. military involvement in Afghanistan and Iraq exceeded $1 trillion. We could have done lots of things with that kind of money. On May 27 the U.S. Senate passed yet another war supplemental funding bill, this time for $58.8 billion. On May 28 the House passed the $726 billion Defense Authorization Bill for 2011 (roll call here). Iowa’s House members split on party lines, with Democrats Bruce Braley (IA-01), Dave Loebsack (IA-02) and Leonard Boswell (IA-03) supporting them and Republicans Tom Latham (IA-04) and Steve King (IA-05) voting no.

Meanwhile, Congress adjourned for the Memorial Day weekend without extending unemployment benefits or passing another jobs bill. This economic relief bill had already been watered down because of “concerns” about deficit spending. You’ll notice few members of Congress are concerned about deficit spending to fund our endless war machine.

For many, Memorial Day is a time to remember lost loved ones, regardless of whether they served in the military. Cedar Rapids Gazette columnist Todd Dorman’s mother recently died, and he wrote this tribute to her.

For some people, Memorial Day is first and foremost the unofficial beginning of summer. Feel free to share any fun plans or picnic recipes in the comments. We’ve been invited to a potluck tomorrow, and I haven’t decided whether to make my favorite chick pea dish (from Madhur Jaffrey’s Indian Cooking), a North African potato salad with olive oil and spices, or a pasta salad with a Chinese-style peanut butter sauce. I like to bring vegan dishes to potlucks so I don’t worry if they sit outside for a few hours. Also, the party I’m attending tomorrow may include some vegetarians and people who keep kosher (they don’t mix meat with dairy in the same meal).

This thread is for anything on your mind this weekend.

UPDATE: Graphs showing number of days in Iraq and number of U.S. deaths in Iraq before and after President George W. Bush announced “Mission Accomplished.”

Let's see how Republicans spin this

To hear Iowa Republicans tell it, our state has suffered terribly under the leadership of job-killing, overspending Democrats. The reality, as measured by the conservative U.S. Chamber of Commerce, is quite different:

Iowa’s focus on entrepreneurship, innovation and exports has led to an eighth-place ranking on a list of top economic-performing states compiled by the U.S. Chamber of Commerce and National Chamber Foundation.

Iowa ranked high overall as “a solid performer across most of our metrics,” according to the chamber’s newly released Enterprising States survey, largely because “Iowa’s strength is perhaps its stability. The state’s largest cluster, agribusiness, food processing and technology, grew at a 1 percent rate since 2002, significantly better performing than the same group of industries nationally.”

The business group also listed Iowa seventh under “top export performers” due to overseas trade offices that provide help to Iowa companies looking to tap international markets. According to the study, “efforts are paying off, as the state places fourth in growth of exports as a share of gross state product.”

Read more at the Des Moines Register’s site, or download the whole report here.

Governor Chet Culver’s office recapped some other favorable reports by outside analysts looking at Iowa’s economy:

[E]arlier this year, Forbes Magazine, the national economic and business journal, named Des Moines as the No. 1 city in America for businesses and careers, and ranked Cedar Rapids as the No. 1 city for projected job growth.

In 2008, Iowa had the eighth-fastest growing economy in the nation, according to the Bureau of Economic Analysis. CNBC’s 2009 “Top States for Business” survey ranks Iowa the fourth best in the nation and No. 1 for low costs of doing business. Finally, last year MarketWatch, another national financial publication, named Des Moines No. 1 in the country for doing business.

Unemployment is too high as we come out of the worst recession since World War II, but Iowa’s unemployment rate is still low by national standards. Contrary to what Republicans would have you believe, our state’s budget is balanced, and our per capita debt burden is low, which is why every major credit rating agency has given Iowa top marks in the past year.

So far I haven’t seen any Iowa Republican reaction to the Chamber of Commerce report. I’ll update this post with any relevant comments.

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Culver with Biden in Cedar Rapids thread

Vice President Joe Biden headlines Governor Chet Culver’s re-election rally today in Cedar Rapids. If you are watching in person or online, please share your impressions in this thread. I will update the post later with more coverage of the event. Adam Sullivan is live-tweeting for Iowa Independent.

Yesterday the governor kicked off his campaign at Hoover High School in Des Moines, followed by stops in Ames, Marshalltown and Waterloo. Kathie Obradovich felt Culver’s speech “salvaged” the otherwise low-energy event in Des Moines. After the jump I’ve posted excerpts from Culver’s remarks, which his campaign released. He frames the race as a choice of going backwards “to policies that created this recession” or forward to continue the investments his administration has begun. Culver outlined some goals for the next five years, such as completing rebuilding efforts from the 2008 floods, “making quality pre-school available to every Iowa child whose parents want to take advantage of it,” pursuing stem cell research in Iowa, and “increasing the percentage of our energy production coming from alternative sources from 20% to at least 30%.” Culver chided Republicans who “just say no,” think corporate tax cuts are the answer for every problem and “continue to preach the failed doctrine of trickle down economics.”

In addition to the excerpts you’ll find below, the governor spoke up for protecting a woman’s right to make her own health-care decisions and against writing discrimination into the Iowa constitution. Later in Marshalltown, Culver noted that discrimination is “not the Iowa way […] We’ve always been at the front when it’s come to civil rights.”

Any comments about the governor’s race are welcome in this thread. Speaking of Republicans who want to take us backwards, Terry Branstad’s campaign started running a new ad today, which portrays the former governor as “the change we need now.” I’ll have more to say about Branstad’s campaign message in a different post, but for now I wonder whether he will get away with repeating his lie about Iowa running a “billion-dollar deficit.”

UPDATE: Um, what the heck? Someone get the governor a driver who won’t try to chase another driver down for a stupid reason.

John Deeth liveblogged the Biden event here. Kathie Obradovich tweeted here. Key points of Biden’s message: he’s known Chet Culver since he was seven years old and knows he has “the gumption to handle the job at this time.” Also, with Culver in charge “Iowa is better off than almost every other state in the nation … Iowa is still moving forward.” Biden praised Culver for being ahead of the curve in establishing the Power Fund in 2007:

“Government is not the answer but it can prime the pump and encourage the private sector.”

“45 out of [50] governors, Democrat and Republican, are sitting on their hands. Because of Chet’s leadership Iowa is better prepared.” […]

“What are Republicans FOR? Not a joke. Tell me one affirmative thing the Republican Party is for.”

Good question, Mr. Vice President. Biden also noted that the stimulus bill brought $3.3 billion to Iowa, and said Culver had used $4 billion in federal and state flood recovery money well. Biden said Iowa is on the upswing and has an unemployment rate well below the national average, which is “no accident, it’s because of Governor Chet Culver.”

SECOND UPDATE: Todd Dorman found Biden’s praise for Culver a bit over-the-top. Tom Beaumont’s story for the Des Moines Register is here. Kay Henderson’s liveblog for Radio Iowa is here. She’s captured more quotes from the vice president.

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New Branstad ad airbrushes his record

Terry Branstad’s campaign launched its third television ad today, about a month after his first commercials started running statewide in Iowa. The new commercial depicts Branstad as “the real conservative change we needed then… and now.”

Here’s the ad script:

The farm crisis … Budget deficits… Skyrocketing unemployment…

That’s what Terry Branstad faced when he was elected governor.

But this Winnebago County farm kid put his rural values right to work, recruiting thousands of jobs, cutting out half the state agencies and taxes $124 million – leaving us record employment, and a $900 million surplus.

Terry Branstad is the real conservative change we needed then… and NOW.

Time for a reality check.

Branstad was first elected governor near the bottom of one economic cycle (at that time the most severe recession since World War II) and was fortunate to retire near the peak of the Clinton boom years. However, job gains during Branstad’s tenure as governor did not fulfill promises he made during his campaigns.

Iowa reorganized state government in 1985, eliminating some agencies and merging others into larger departments. On the other hand, total state government employment increased from 53,342 in 1983 to 61,400 in 1999. Total receipts in the state’s general fund increased from $1.899 billion in 1983 to $4.881 billion in 1999. That 166 percent increase was more than the rate of inflation during the same period, and Iowa’s population was no larger when Branstad retired than it was when he was first elected.

The huge growth in the general fund budget would not have been possible without various tax increases Branstad signed into law. Increased revenue from two sales tax hikes dwarfed the $124 million in tax cuts highlighted in Branstad’s new commercial. Those cuts came primarily from reducing income and estate taxes, delivering most of the benefits to wealthier Iowa families. Unfortunately, Branstad’s sales tax increases disproportionately hit lower-income families, who spend a greater share of their money on essentials.

Branstad was far from reluctant to raise taxes. He asked the state legislature to increase the sales tax in his very first budget address, within days of being inaugurated in 1983.

I expect Branstad to win the Republican primary on June 8 despite his accountability problem. Bob Vander Plaats is a strong speaker but doesn’t have the financial resources to publicize his case against the former governor. Rod Roberts isn’t trying to make a case against Branstad, as far as I can tell. His function in the campaign seems to be to prevent Vander Plaats from consolidating the conservative vote in the primary.

However, during the general election campaign, Branstad will face an opponent with the resources to compare his record with his rhetoric. I wonder how many conservative Republicans will either stay home in November or check the Libertarian box in the governor’s race.

UPDATE: Kathie Obradovich says the $124 million figure “is the campaign’s calculation of the net result of all the tax changes enacted under Branstad – an overall reduction of $124 million, in 2008 inflation-adjusted dollars.” I would like to see a calculation of all the Branstad-era sales and gas tax increases in 2008 dollars. Hint: it would work out to a lot more than $124 million.

SECOND UPDATE: Branstad “had an elective heart procedure” today to put a stent in a partially blocked artery. I hope he feels better soon. His campaign released a statement from his doctor saying, “Governor Branstad should be able to resume his normal campaign schedule within the next few days and should quickly return to his normal lifestyle without limitations. He should be fully capable of performing the activities of a candidate and a Governor.”  

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Republican debate and budget hypocrisy thread

At 1 pm today Terry Branstad, Bob Vander Plaats and Rod Roberts will face off in the first of three debates before the gubernatorial primary in June. I won’t be able to watch the live stream at KTIV’s site, so I’ll have to catch the repeat on Iowa Public Television, whenever that will be shown. I wanted to put up this thread so Bleeding Heartland readers can chat about the debate. I will update this post later with early write-ups about the event. Rod Roberts seems to have the most to gain from this debate, since he is the least-known candidate in the field.

The Republicans will throw around lots of numbers about taxes and spending, and those will need a lot of fact-checking. The truth is that Iowa doesn’t have a budget deficit, and the independent analysts who have given our state the highest bond rating recognize our relatively strong fiscal position. Like every other state, Iowa experienced a steep drop in revenues because of the recession, but unlike most other states, we have not fully depleted our cash reserves.

Which Republican candidate will come across as the most fiscally responsible person today? Will it be:

Terry Branstad, whose mismanagement was so legendary that a number of elected Republicans favored his primary challenger in 1994?

Bob Vander Plaats, whose management skills don’t seem to have helped his non-profit thrive financially, and who did a 180-degree turn on tax credits between March 2009 and January 2010?

Or Rod Roberts, who is so very serious about the governor’s responsibilities that he thinks adopting a state budget is of secondary importance to stopping same-sex marriage?

The floor is yours.

UPDATE: I still haven’t had a chance to watch the debate, but fortunately, Iowa Public Television will air it tonight at 8 pm. Over at Iowa Independent, Jason Hancock thought Vander Plaats won but “never achieved the game-changing moment his campaign needed.” Todd Dorman didn’t see a lot of substance or new ideas on display and partly blamed the debate format.

End of 2010 legislative session thread

The Iowa House and Senate adjourned for 2010 today, wrapping up the legislative session in just 79 days. In the coming weeks I will post about various bills that passed or failed to pass during the session. For now, you can read wrap-up posts at Iowa Independent, IowaPolitics.com, the Des Moines Register and Radio Iowa.

Democratic legislative leaders said the House and Senate “succeeded in responsibly balancing the budget without raising taxes while laying the groundwork for Iowa’s economic recovery.” Governor Chet Culver described the session as “a real victory for Iowans, particularly hardworking Iowa families.” He also hailed passage of an infrastructure bill including the final installment of the I-JOBS state bonding program. AFSCME Iowa Council 61 praised several bills that passed this year, such as the government reorganization bill, the early retirement program and a budget that saved many public employees’ jobs.

Republicans and their traditional interest-group allies saw things differently, of course. House Minority Leader Kraig Paulsen, Senate Minority Leader Paul McKinley and Iowans for Tax Relief all emphasized the use of one-time federal dollars to help cover state spending. Their talking points have made headway with Kathie Obradovich, but the reality is that much of the federal stimulus money was intended to backfill state budgets, and rightly so, because severe state spending cuts can deepen and prolong an economic recession.

Overall, I am not satisfied with the legislature’s work in 2010. Despite the massive costs of reconstruction after the 2008 floods, legislators lacked the political will to take any steps forward on floodplain management. Despite the film tax credit fiasco, not enough was done to rein in tax credits. Many other good ideas fell by the wayside for lack of time during the rushed session. (It strikes me as penny-wise and pound-foolish to save $800,000 by shortening the legislative calendar from 100 to 80 days.) Some other good proposals got bogged down in disagreements between the House and the Senate. Labor and environmental advocates once again saw no progress on their key legislative priorities, yet this Democratic-controlled legislature found the time to pass the top priority of the National Rifle Association. Pathetic.

On the plus side, the 2011 budget protected the right priorities, and most of the projects funded by the infrastructure spending bill, Senate File 2389, are worthwhile. Some good bills affecting public safety and veterans made it through. In addition, Democrats blocked a lot of bad Republican proposals. Credit must also go to the leaders who held their caucuses together against efforts to write discrimination into the Iowa Constitution.

Any relevant thoughts are welcome in this thread.

UPDATE: Read Todd Dorman on the Iowa House’s “parting gift to local government officials who like to play secret agent on your dime.”

Weekend open thread: Legislative preview edition

The legislative session begins this week, and budget issues are likely to dominate the proceedings.

Some state tax credits will be scrapped and others curtailed if lawmakers enact recommendations released on Friday by a commission Governor Chet Culver appointed. State Senator Joe Bolkcom, who chairs the Ways and Means Committee in the upper chamber, has vowed to pass as many of the recommendations as possible. I expect major pushback from corporate lobbyists against many of the proposals, however.

House Speaker Pat Murphy is not ruling out significant layoffs of state workers. It really is unfair to balance the budget mostly on the backs of state workers, especially since demand for state services increases during a recession.

I was surprised to see Culver’s chief of staff, John Frew, suggest a scaled-back version of “fair share” legislation could pass this session. If Democrats don’t have the votes for a prevailing wage bill, I can’t imagine they’ll get 51 votes for fair share, but I hope I’m wrong.

Kathie Obradovich previews other issues that are likely to come up during the legislative session.

Democratic leaders insist a constitutional amendment to ban same-sex marriage is off the table, but Republicans will use every trick in the book to try to bring the issue to the floor.

Roxanne Conlin plans to visit all 99 counties in her Senate campaign, just like Senator Chuck Grassley has been doing every year for the past three decades.

In other news, Iowa may be on the verge of coming out of the deep freeze. I read today that the highest temperature recorded anywhere in Iowa since January 1 was 20 degrees Fahrenheit one day in Keokuk (southeast corner of the state). How are you surviving the cold? I’ve been wearing slippers, wool sweaters and extra layers. My kids still insist they are comfortable running around the house in pajamas and bare feet. Our dog could walk for miles, even on the days when it’s been below zero F when I’m out with him.

This thread is for anything on your mind this weekend.

Year in review: national politics in 2009 (part 1)

It took me a week longer than I anticipated, but I finally finished compiling links to Bleeding Heartland’s coverage from last year. This post and part 2, coming later today, include stories on national politics, mostly relating to Congress and Barack Obama’s administration. Diaries reviewing Iowa politics in 2009 will come soon.

One thing struck me while compiling this post: on all of the House bills I covered here during 2009, Democrats Leonard Boswell, Bruce Braley and Dave Loebsack voted the same way. That was a big change from 2007 and 2008, when Blue Dog Boswell voted with Republicans and against the majority of the Democratic caucus on many key bills.

No federal policy issue inspired more posts last year than health care reform. Rereading my earlier, guardedly hopeful pieces was depressing in light of the mess the health care reform bill has become. I was never optimistic about getting a strong public health insurance option through Congress, but I thought we had a chance to pass a very good bill. If I had anticipated the magnitude of the Democratic sellout on so many aspects of reform in addition to the public option, I wouldn’t have spent so many hours writing about this issue. I can’t say I wasn’t warned (and warned), though.

Links to stories from January through June 2009 are after the jump. Any thoughts about last year’s political events are welcome in this thread.

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UPDATED: Branstad is robocalling Democrats

An alert Bleeding Heartland reader got a recorded phone call around dinnertime today (Monday), featuring former Governor Terry Branstad.

Apparently there were a couple of questions about how Governor Chet Culver is doing and his handling of spending and the budget. Branstad’s recorded voice touted his own record on economic policy.

The call also asked if the listener would support a constitutional ammendment limiting marriage to between one man and one woman, and if the listener would vote for Branstad in the upcoming Republican primary.

According to my e-mail tipster, the call said it was paid for by the Branstad for Governor comittee, and gave a phone number as well as the address for Branstad’s campaign website.

This particular household has two registered Democrats and no registered Republicans, and the homeowner has had the same phone number for more than 15 years. Either the calling firm was using a bad list, or Branstad’s campaign is reaching out to find Democrats who aren’t happy with Culver.

Have any other Bleeding Heartland readers received this call? If so, please post a comment with details, or send me an e-mail at desmoinesdem AT yahoo.com.

Remember, it’s helpful not to hang up on political robocalls or surveys. Stay on the line and take notes, if possible, about the content of the call, who paid for the message, and so on.

UPDATE: Another reader tells me he got the call but hung up on it, and there are two registered Democrats in his household as well.

SECOND UPDATE: If Branstad’s campaign is trying to identify Democrats willing to cross over to vote for him in the Republican primary, it makes me wonder what their internal polling says about Branstad’s prospects against Bob Vander Plaats.

THIRD UPDATE: State Representative Tyler Olson of Cedar Rapids got the call too.

Pawlenty appealing to "Party of Hoover" set

Not content to push for a balanced-budget constitutional amendment in his own state, Minnesota Governor Tim Pawlenty has endorsed the idea of a federal constitutional amendment to require Congress to pass balanced budgets every year. The Wall Street Journal’s Amy Merrick observes,

Previous efforts to pass a national balanced-budget amendment have foundered in Congress. Many lawmakers believe deficit spending can help boost the U.S. economy during downturns, and calls to balance the budget sometimes fade as other priorities surface.

It would be insane to restrict the federal government’s ability to run deficits during a recession. That’s not just something many members of Congress “believe,” it’s a consensus view among economists. But don’t worry, Pawlenty isn’t entirely rigid on the subject of deficit spending:

Mr. Pawlenty’s proposal for a federal amendment would include exceptions for war, natural disasters and other emergencies. The U.S. has been at war for most of the past decade.

No self-respecting Republican ever let spending worries stand in the way of a blank check for war.

Although it’s tempting to laugh at Pawlenty’s proposal, I think highlighting the budget amendment could boost his standing in the 2012 presidential race. His idea isn’t outside the GOP mainstream; leading Republicans proposed a federal spending freeze instead of the stimulus bill Congress passed in February. Republican politicians in Iowa have also embraced Hoovernomics.

The idea could prove popular with the GOP rank and file too. Mike Huckabee gained a lot of traction in Iowa during the summer of 2007 by being the only Republican to endorse the so-called “fair tax.” That idea is even wackier than a federal spending freeze during a recession, but many caucus-goers embraced it.

Any comments about Pawlenty’s prospects or the Republican presidential field are welcome in this thread.

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Revisionist history watch: Branstad budget edition

The editors of the conservative Fort Dodge Messenger are ecstatic about Terry Branstad’s gubernatorial campaign, and they got a little carried away in this Sunday editorial:

Iowa must return to a pay-as-you-go approach to budgeting. Government spending should be carefully aligned with anticipated revenues. As governor, Branstad rigorously adhered to that philosophy. He pledged it will once again become central to state budgeting if he is elected.

Who are they kidding?

Branstad’s sleight of hand on the budget was so notorious that as a three-term incumbent, he almost lost the 1994 GOP primary to Fred Grandy. That campaign centered on “the Mastercard governor” and his record of fiscal mismanagement, including keeping two sets of books to hide deficits.

As State Representative Chris Rants has noted, Branstad likes to take credit for budget reforms that were not his idea and were intended to prevent future governors from repeating his mistakes.

That’s to be expected from a politician, but I expect more reality-based commentary from newspaper editors.

By the way, did you notice how the Messenger editors suggested that Iowa is no longer doing “pay as you go” budgeting? That Republican talking point is supposed to make people believe that Democrats have borrowed money to fund budget line items. In fact, the I-JOBS state bonding program was for capital investment projects. Investors understood that distinction. That’s why the bonds were sold at lower interest rates, and the Bond Buyer daily rated I-JOBS one of the country’s top 10 best financing deals for 2009.

Even after factoring in the I-JOBS program, Iowa’s state debt per capita is low by national standards.

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Mr. President, please ignore the deficit hawks

Barack Obama’s job approval in Iowa fell to 49 percent according to the latest statewide poll by Selzer and Co. for the Des Moines Register. His lowest marks were for his handling of the budget deficit (30 percent approve, 61 percent disapprove), leading Kathie Obradovich to suggest that “Cut spending and balance the budget” should be at the top of Obama’s to-do list.

No matter what today’s polls say about the deficit, it would be poor economic policy and foolish politics to make deficit reduction a priority now.

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Events coming up during the next two weeks

I’m looking forward to the Iowa Democratic Party’s Jefferson-Jackson dinner this weekend. It will be live-streamed for those who can’t be there in person. The Iowa branch of Organizing for America is having a grand opening on Saturday as well, right before the JJ dinner.

Details for those and other events are after the jump. Post a comment or send me an e-mail (desmoinesdem AT yahoo.com) if you know if something I’ve left out.

Linn County Dems: Don’t forget that November 24 is the special election in Iowa House district 33.

One more “save the date”: the Culver-Judge campaign’s holiday party will be on Saturday, December 5 at the Val-Air Ballroom in West Des Moines from 7:30 pm to 11:00 pm. Tickets are just $35 for an individual, $10 for students and $50 for a family. Call 515-244-5151 or go to www.chetculver.com for more information.

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Layoffs for some, furloughs for others as Culver announces budget cuts

This afternoon Governor Chet Culver announced the next steps toward cutting $565 million from the 2010 budget. I’ve posted the governor’s statement after the jump, and you can find pdf files with more details about the cuts here. (UPDATE: The Des Moines Register posted this chart showing the cuts Culver approved.) Highlights:

Culver is ordering all of the 3,258 non-contract (that is, non-union) employees in the executive branch “to take seven days without pay between now and the end of the fiscal year. I do not believe it is fair for any state employee to not contribute toward our solution.”

Culver approved spending cut plans submitted by 28 department heads and approved, with minor changes, spending cut plans submitted by 6 other department heads. The Des Moines Register’s Jennifer Jacobs summarized the impact:

Altogether, the 34 approved plans will save the state’s general fund about $520 million, he said.

The approved plans call for a total of 180 layoffs and the elimination of 229 open positions. The total job loss, so far, is 410.

Here’s where there the layoffs will be: 79 from the Department of Human Services, 35 from the Department of Revenue, 10.8 from the Department of Inspections and Appeals,  13 from the Department of Education, eight from Iowa Public Television, eight from the Department of Public Health, seven from the Department of Economic Development, seven from the Department of Cultural Affairs, four from the Department of Administration, four from the Department of Management, two from the Alcoholic Beverages Division, two from the Department of Veterans Affairs, and one from the Iowa Ethics & Campaign Disclosure Board.

Forty-three state employees tentatively set for layoffs in the Department of Commerce will be spared. The 10 percent across-the-board cut will not be applied to the divisions of banking, credit union, insurance and utilities divisions, which are agencies within the commerce department.

Culver rejected the $45 million spending reduction plans offered by the directors of the Department of Corrections and the Department of Public Safety, saying,

I reject these two plans because I am hopeful that we can find an alternative to laying off hundreds of correctional officers, state troopers and law enforcement personnel.

I am rejecting these plans because public safety is essential to our daily lives.

That is why yesterday I sent a letter to the state’s three bargaining units – AFSCME, Iowa United Professionals, and the State Police Officers Council – who represent more than 16,000 state employees – asking them to join me in negotiations for amending their current contract.  This past Saturday, I met with AFSCME’s bargaining unit – which represents more than 13,000 state employees – to discuss ideas for moving forward.  We followed that meeting with a three hour session yesterday morning and the talks have been very productive.  And earlier today, I met with the State Police Officers Council representatives and those talks were productive.  Finally, I will meet with the Iowa United Professionals union leadership as soon as schedules permits, but our staff has been in daily contact with their representatives.

I seek substantive discussions with all three unions on issues that may impact our state budget cuts.  Our goal is to do everything we can to prevent layoffs related to essential public safety.

If we cannot reach agreement with the unions, then I will implement the layoff plans submitted by these two departments.

Unfortunately, we do not have an endless amount of time in which to reach an agreement and to have it ratified by each respective union. I expect to know by Friday, November 6 whether we will move forward in discussions with the unions or implement the layoff plans.

The president of AFSCME Council 61 issued a statement saying his union will negotiate with the governor in the hope of avoiding layoffs. Both sides are promising not to release any details about the discussion until the talks conclude, but no doubt some proposed alternatives to layoffs will leak out before then.

The Des Moines Register’s Tom Beaumont covered Republican gubernatorial candidates’ ideas for cutting the budget here.

Share any relevant thoughts in this thread.

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Previewing the Vander Plaats case against Branstad

Bob Vander Plaats was the clear front-runner in the Republican field of gubernatorial candidates a few months ago. He’s been campaigning for the job longer and more actively than anyone else. He had contacts statewide from his 2006 campaign for lieutenant governor, and from Mike Huckabee’s presidential campaign. He also had several endorsements from state legislators and a big lead in a Republican poll taken in July.

During the past six months, various potential Republican candidates have ruled out a campaign for governor, including Secretary of Agriculture Bill Northey and State Auditor David Vaudt. Efforts to recruit a business leader (like Mary Andringa) failed too. Some Iowa politicos believe that these people backed off not because they thought Governor Chet Culver was unbeatable, but because they couldn’t see a way to defeat Vander Plaats in the Republican primary.

Most people would now agree that Vander Plaats is an underdog. Branstad will have more money, more media coverage and more support from Republican power-brokers. He’ll be able to cite last week’s Research 2000 poll, showing Branstad narrowly ahead of Culver, but Vander Plaats way behind the incumbent.

Vander Plaats won’t give up without a fight, though. He has promised to stay in this race through the June primary, and he has some strong cards to play, as I’ll discuss after the jump.  

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Culver orders 10 percent budget cut (updated)

Governor Chet Culver announced today that he is cutting spending 10 percent across the board in the 2010 budget. The move follows yesterday’s Revenue Estimating Conference report, which projected that revenue will drop by 8.4 percent this fiscal year, leaving state government with $414 million less to spend. Culver said he doesn’t support any tax hikes or increasing the amount drawn from the state’s cash reserves during the current fiscal year.

Republicans have hammered Democrats for allegedly overspending in the 2010 budget, but Culver rightly noted in a statement on Wednesday,

I proposed and the legislature approved a balanced budget for fiscal year 2010, which began on July 1. This budget was based on the official REC estimates from their March meeting last spring. The budget included a nearly $100 million ending balance, and $373 million in reserves.

During an economic recession, it is not prudent to slash government spending by more than is absolutely necessary. Government cuts themselves can become a drag on the economy, and demand for government social services goes up along with unemployment. The 2010 budget was based on the latest REC estimate during the legislative session, so Republicans are wrong to charge that Democrats overspent.

On the other hand, I agree with Republican critics who say Culver should have convened a special session of the legislature to make targeted cuts. An across-the-board cut is the governor’s only way to reduce spending without legislative approval. It’s faster and cleaner than a special session, but in my opinion an across-the-board cut this large will affect essential services at some agencies.

Culver said he will try to find money in December or January to beef up staffing at Iowa Workforce Development, which helps unemployed Iowans find new jobs. He will also try to backfill money for certain areas of public safety, he said.

This midyear cut is off the charts compared with what any governor in recent history has faced, and it will mean unprecedented turmoil for state employees and state agencies.

Part of the reason the cut is so deep is that Culver said he wants to leave a cushion of around $100 million. The current ending balance for this budget year is $97 million. […]

He will appoint Joni Klaassen, deputy chief of staff for aministration, to help unions to address reduction in the state government workforce.

And he will ask the Legislature to require school districts to spend money from their cash reserves rather than raise property taxes.

After spending 24 hours to think about his options, Culver chose an across-the-board cut option, rather than calling state lawmakers back for a special session.

It would have taken too long to bring the lawmakers back to the Capitol, then to secure 51 votes in the Iowa House and 26 votes in the Iowa Senate.

“We would’ve had 150 different opinions on where to cut. […] But the fact is we need to act. We need to move,” Culver said. I was concerned it would literally take weeks and weeks to reach an agreement.”

I understand the need to move quickly, but it seems unfair to make state employees bear almost all of the pain, instead of imposing a combination of spending cuts and reductions in tax breaks. In that context, I agree with yesterday’s statement from AFSCME Iowa Council 61, which I’ve posted after the jump.

Iowa Republican leaders say Culver’s move will lead to higher property taxes, and I wouldn’t be surprised if they’re right about that. What they don’t tell you is that the Republican-proposed spending cuts of $300 million also would likely lead to higher property taxes.

Share any relevant thoughts in this thread.

UPDATE: I should have emphasized that Culver cut spending by more than the amount needed to take the Revenue Estimating Conference’s projections into account. That means that even though he didn’t call a special legislative session, lawmakers will have some wiggle room during the regular 2010 session to restore funding to certain agencies.

I am tired of reading about the “unsustainable” growth in state government spending (e.g. in Todd Dorman’s latest column) that doesn’t acknowledge the unsustainable growth in tax breaks for business in Iowa. Spending on tax credits has risen far more sharply than spending from the general fund.

Click here and scroll down to view the Iowa Policy Project’s report on Iowa’s real spending problem: “tax expenditures on autopilot.” Excerpt from that pdf file:

State business tax expenditures have been one of the fastest growing parts of the state budget. Business assistance tax credits, a major component of business tax expenditures, increased from $144.3 million in  FY2006 to $242.7 million in FY2008, alone. The Department of Revenue has projected that these credits will grow to $405.9 million in FY2010, a 181 percent growth in just four years.1 Once enacted, these business tax credits are not subject to annual reauthorization and can grow well beyond their intended size and for activities well beyond their intended purpose.

This report doesn’t even include the growth in Tax Increment Financing, which I believe accounted for more than $200 million statewide last year. Tax Increment Financing was intended to spur redevelopment of blighted urban areas but during the last decade was expanded to include lots of suburban sprawl development, including Glen Oaks and Jordan Creek Town Center in West Des Moines. The developers get a big tax break, and city and county governments need to collect more property taxes from individuals. I am hoping to get a guest diary posted here that explains this problem in more detail. My point is that the legislature needs to look beyond simply cutting spending and services to make up for the expected revenue shortfall.

In addition to being unfair, it’s not even wise to slash government spending more than you need to during a recession, because that can prolong and deepen the recession. You’ll never get the party of Hoover to acknowledge that, however.

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Setting the Branstad record straight

UPDATE: Branstad did file papers to form an exploratory committee today.

The Iowa Republican blog reported today,

This morning, former Governor Terry Branstad will file paperwork with the Iowa Ethics and Campaign Disclosure Board (IECDB), essentially launching his campaign for governor.

All state candidates are required to file with the IECDB once they spend or raise more than $750.00. While some candidates have claimed that filing this paperwork is like opening an exploratory committee, there are no special distinctions allowed under Iowa law for such committees, meaning that when you file with the IECDB, you are announcing that you are a candidate.

Branstad announced this summer that he would decide in October whether to run for governor again. It’s been clear he was planning to be a candidate since the Draft Branstad PAC started raising big money and running statewide radio ads last month, so why wait? Some people think Branstad, now president of Des Moines University, wanted to make his decision known to that university’s Board of Trustees at this month’s scheduled meeting before announcing his candidacy.

I have been wondering whether Branstad wanted to remain outside the campaign during September so that the Des Moines Register’s Iowa poll by Selzer and Co. would measure his support at the highest possible level. After he formally enters the race, his record will face tougher scrutiny, and his favorability ratings are likely to go down. The Register’s poll (released on September 20 and 21) showed that 70 percent of Iowans approved of his performance as governor, but only 48 percent thought it would be a good idea for him to run again. That poll did not include a head to head matchup against Governor Chet Culver. Republican firm Rasmussen conducted a one-day poll on September 22, which showed Branstad leading Culver by 20 points.

In the coming months, rival Republican candidates are likely to open three main lines of attack on Branstad:

1. During his first three terms as governor, Branstad kept two sets of books in order to run illegal deficits. His fiscal mismanagement was the main factor driving support for then Congressman Fred Grandy during the 1994 Republican primary. State Representative Chris Rants has already started hitting Branstad on this front. Last week he asserted,

“Culver’s repeating the mistakes Branstad made in the 80’s. He moved money on paper and delayed payments from one fiscal year to another until it finally caught up to him and he raised the sales tax to square the books. He could only hide his deficits for so long. It’s these kinds of accounting gimmicks that caused the fallout between Auditor Johnson and Branstad.”

“We Republicans need to be better than that if we expect to earn the trust of Iowans,” added Rants.

Richard Johnson, state auditor during most of Branstad’s tenure, is now co-chairing Bob Vander Plaats’ campaign. Expect to hear more from him in the future.

2. During his four terms as governor, Branstad didn’t deliver on various issues of importance to conservatives. Branstad selected a pro-choice lieutenant governor and didn’t get an abortion ban through the legislature even when it was under Republican control during his final term. Vander Plaats has already promised not to balance his ticket with a moderate, and if Branstad announces a pro-choice running mate, a lot of the Republican rank and file will be furious.

Branstad campaigned every four years on a promise to reinstate the death penalty, but he never got it done as governor.

Last week Rants promised to press for an amendment on gun rights to the Iowa Constitution. Perhaps we’ll hear more in the future about Branstad’s failure to do enough on this front.

3. Branstad raised sales taxes, the gas tax, and favored other tax increases as well.

Tax hikes are never popular with the GOP base, and Rants and Vander Plaats are certain to educate primary voters about Branstad’s record. If Christian Fong decides to stay in the race, we’ll be hearing from him about this issue too. Ed Failor, head of Iowans for Tax Relief, is one of Fong’s key political backers and fundraisers.

The Iowa Democratic Party has already started responding to the Draft Branstad PAC’s revisionist history, and will continue to call attention to how Branstad governed. I’ve posted the Iowa Democratic Party’s response to the first pro-Branstad radio ad after the jump. The IDP has also created the entertaining Iowa Knows Better website, with information about all of the GOP candidates for governor. Here is the page on Branstad, with details on Branstad’s two sets of books, tax increases, use of state bonding, and failure to pay state employees what they had earned.

Branstad will have more money and institutional support than the other Republican candidates and will be heavily favored to win the primary. But I doubt public approval for his work as governor will still be at 70 percent six months from now.

UPDATE: Swing State Project is now calling the Iowa governor’s race a tossup.

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Tramontina resigns over problems with film tax credits

Talk about a bolt from the blue:

A memo from auditors investigating irregularities in a state tax-credit program for filmmaking paint a picture of movie producers and film executives taking personal advantage of the program and state administrators paying little attention.

The director of the Iowa Department of Economic Development, Mike Tramontina, abruptly resigned Friday after allegations of mismanagement of the program surfaced. The department oversees the Iowa Film Office. The manager of that office, Tom Wheeler, was placed on paid administrative leave.

The departure of Tramontina, who was appointed to the post by Gov. Chet Culver in 2007, came after preliminary findings from auditors looking into allegations that filmmakers had purchased luxury vehicles for themselves.

According to the memo obtained by The Des Moines Register, auditors found a long list of bookkeeping lapses and poor oversight in the program, which has spent $32 million on tax credits for 20 film projects since its inception in 2007. The program was aimed at promoting filmmaking in Iowa as a way to contribute to the local and state economy.

The governor’s office announced Tramontina’s resignation at 4:56 pm on Friday. Culver also suspended the tax credit program until auditors complete a review of it.

State Senator Tom Courtney, a Democrat from Burlington, told the Des Moines Register “he talked to state officials about problems with the movie tax credits about a month ago, when labor officials complained that few Iowans were getting hired to work on the movies.” Courtney raised those concerns again in a meeting with the Iowa Economic Development Board the day before Tramontina resigned:

“I’m hearing nothing but complaints that workers are being brought in from other states” during film productions in Iowa, Courtney said. “I don’t imagine we have a lot of Clint Eastwoods running around, but with a little training, we could be doing many of those jobs.”

Michael Tramontina, the state’s economic development leader, said he couldn’t put a number on how many jobs are created, since many are temporary – from contractors used to build sets to caterers and “extra” actors.

“Anecdotally from the film industry, it ranges from 20 to 60 percent Iowans” employed on films produced in Iowa, Tramontina said. […]

Tramontina said the agency is working to develop “employment thresholds” for a film, but hitting a number is complicated.

Employment requirements should depend on the kind of film being made – whether it’s a feature film being made over three to six months or a TV series that might run for years. […]

Courtney said lawmakers might need to address closing what he called “an open door” in film tax credits if Tramontina’s agency is unable to do it. He said most Iowa economic development incentives carry job-creation requirements. “Iowa has a bright future in the film industry, but we have to help the people who live here.”

While Republicans harp on the need to cut spending further, it’s equally important to subject every tax credit to scrutiny. The Iowa Policy Project has found that expenditures on tax credits for business have “skyrocketed” in recent years, far outstripping the rate of increase in spending from Iowa’s general fund. These tax credits should be on the table as legislators look for ways to balance the budget.

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Bob Vander Plaats has real talent

Like Spinal Tap’s amp that goes up to 11, Bob Vander Plaats can ratchet up the demagoguery that little bit more than the competition. While other conservatives warn against compromising the Republican Party’s core principles, Vander Plaats says Republican moderates make voters want to throw up, like Jesus when confronted with “lukewarm” followers.

While other conservatives back a constitutional amendment to ban same-sex marriage (which would take years to adopt), Vander Plaats promises to stop gays and lesbians from getting married on his first day as governor of Iowa.

While other conservatives warn against a “government takeover” of health care, Vander Plaats isn’t just against a new public health insurance plan, he wants to protect Iowans from the tyranny of federal-run Medicare and Medicaid.  

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Nice work if you can get it

Have you gotten four raises in the past six years? Jefferson County supervisor Stephen Burgmeier has, I learned after writing about the Republican’s first television ad for the September 1 special election in Iowa House district 90. Burgmeier is highlighting alleged overspending by Democrats, but if he’s so stingy with the people’s money, why did he keep voting to raise his own pay?

The “check the facts” page on Democratic candidate Curt Hanson’s website contains other useful information too. In addition to raising his own pay repeatedly, Burgmeier voted five times to raise taxes on Jefferson County residents. Did Iowans for Tax Relief know about this record when the group took responsibility for running Burgmeier’s campaign?

The Iowa Democratic Party is running this ad backing Hanson:

Share any relevant thoughts about phony Republican posturing in this thread. You can sign up here to volunteer for the Hanson campaign.

Republican ad for special election targets Culver, borrowing

UPDATE: Curt Hanson has already posted a rapid response at his campaign website.

Two and a half weeks before the September 1 special election in Iowa House district 90, Republican Stephen Burgmeier’s campaign launched its first television commercial:

The producers fit quite a few misleading statements into one 30-second ad. The visual suggests Iowa has taken on “a billion dollar debt,” and the voice-over emphasizes the word “billion,” even though the I-JOBS infrastructure bonding initiative was for $830 million.

The commercial accuses “Governor Culver and his allies” of borrowing “almost a BILLION dollars to pay their bills.” However, the I-JOBS program was created to fund infrastructure projects and has nothing to do with meeting state government’s ongoing spending obligations. (Click here for a breakdown of how the money will be spent.)

During this recession, several other states have been forced to borrow money to pay their bills, but Iowa is borrowing for capital investments. Credit analysts and national institutional investors understand the difference, even if Iowa Republicans don’t. That’s why “investor enthusiasm and high market demand” drove down the interest rate on the I-JOBS bonds.

Next, Burgmeier’s ad shows a man saying, “That’s money taxpayers are on the hook for,” implying that taxes will go up to repay the debt. In fact, existing gaming revenues will provide the approximately $43.2 million in annual payments on the bonds.

The ad begins with a voice-over asserting that “red ink is rising in Des Moines” and later shows a woman saying, “Stop the red ink.” Those statements, along with the cartoon of red ink drowning Culver and the capitol, wrongly suggest that the infrastructure borrowing is deficit spending.

The second part of the ad promises that Burgmeier will vote for a new budget law “to make it harder to waste tax dollars.” I’d like more details about how such a law would work, and I’d also like Burgmeier to specify which of these investments he considers wasteful.

The ad promises Burgmeier will “serve as a check and balance to Governor Culver’s runaway spending” and closes by saying Burgmeier will bring “balance and spending restraint back to our government.” Iowa Republicans may believe Culver is very unpopular in district 90, or they may have decided to run against him in order to rile up their base. It’s notable that the ad never uses the word “Republican” and doesn’t identify the candidate’s political party. I guess the outside interest groups running the Burgmeier campaign don’t have much confidence in the Republican brand to carry the day.

The Iowa GOP didn’t announce the size of the ad buy, which networks would run the ad or which programs have been targeted. If you live in the viewing area for this district, let us know whether you’ve seen the ad, and if so during which television shows. If you prefer not to post a comment here, you can send me a confidential e-mail at desmoinesdem AT yahoo.com. Please also report on any radio ads you’ve heard.

I’m curious to see whether this will be Burgmeier’s only television commercial or if his campaign will mention other issues, including same-sex marriage, in later ads.

Having spent no time in this district lately, I have no idea whether Burgmeier or Democrat Curt Hanson has an edge. Political scientists will tell you that as a general rule, the party out of power does well in low-turnout by-elections and special elections. Both Democrats and Republicans are working hard to get out the vote in district 90. State GOP Chairman Matt Strawn and some other Republicans view this race as a must-win.

Share any relevant thoughts in this thread.

Comparing Branstad and Culver: budgets and floods

I stand by my prediction that former Governor Terry Branstad will not seek his old job again, but I can’t resist responding to these comments by Republican blogger Constitution Daily:

Now back to Branstad, his credentials as a governor are amazingly good. He governed during the farm crisis and floods of 1993, all while balancing a budget and even having a surplus. […]

Branstad against Culver will be a great campaign. Culver has shown no leadership skills even within his own Party. The flood will be a defining issue. Branstad led us through that with ease where Culver still has us wading through the muck. Culver has no excuses and no one to shift blame to. This is a big advantage for Branstad.

Also with Culver, the budget is massively in the red. Whether or not you agree, the perception is that Branstad always had a balanced budget and didn’t grow government. That is what people want and dream of returning to. Can you imagine the debates between the two? How would Branstad not come out smelling like a rose not just on rhetoric but actual experience?

If Constitution Daily is old enough to have been politically aware during Branstad’s tenure, he is suffering from serious memory loss. I’ll explain why after the jump.

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Branstad for governor? Not so fast

Like Cityview’s Civic Skinny, I’ve been hearing some chatter about former Governor Terry Branstad considering another gubernatorial bid. Branstad ruled out running for governor in May but has made ambiguous comments more recently. He may be encouraged by The Iowa Republican poll’s finding that he leads Governor Chet Culver 53 percent to 37 percent in a hypothetical matchup. In a hypothetical Republican primary, Branstad has 35 percent support to 31 percent for Bob Vander Plaats, with 19 percent of respondents unsure and all other candidates in single digits.

I’m skeptical about a Branstad resurgence. First, I doubt he would give up his prominent, lucrative job as president of Des Moines University. Second, the Iowa electorate has become much more Democratic than it was in Branstad’s day.

Third, I don’t think the Republican field would clear for him. I am not convinced the evangelical conservatives who were his base of support in the 1980s and 1990s will remain loyal. Branstad appointed two of the seven Iowa Supreme Court justices who cleared the way for same-sex marriage rights, including Mark Cady, who wrote the Varnum v Brien decision. Moreover, he declined to condemn those justices after the ruling.

Most important, Branstad nearly lost his own party’s primary as a three-term incumbent in 1994. There’s a reason so many elected Republicans, like then State Auditor Richard Johnson, backed Congressman Fred Grandy in that race. The phrases “two sets of books” and “cooking the books” may ring a bell with Bleeding Heartland readers of a certain age.

I don’t expect Branstad to run for governor again, but if he does he should expect his management of state finances to come under a lot more scrutiny. Likely candidate Chris Rants told The Iowa Republican blog this month,

I am worried that we are backsliding to those days in the late 80’s when the governor and legislature fudged the numbers to look good for an election. They didn’t abide by generally acceptable accounting principles. That led to bigger problems and late payments to local school districts.

It’s frankly a joke to portray Branstad as more fiscally responsible than Culver. Branstad managed this state during tough times by keeping two sets of books and digging us into a hole. Under Culver, Iowa still has a healthy reserve fund and a AAA bond rating. He has made budget cuts when necessary and is ready to do so again if need be after final revenue figures come in.

Share any thoughts about the governor’s race in this thread.

UPDATE: Fascinating comment thread under Craig Robinson’s post at The Iowa Republican. It didn’t take long for someone to post news clippings from 1994 about Branstad “cooking the books” and Johnson endorsing Grandy. Also, I noticed a few social conservatives predicting that people would not abandon Vander Plaats for Branstad.  

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Do Iowa's budget problems warrant a special legislative session?

Iowa’s 2009 fiscal year ended on June 30, and if the Legislative Service Agency’s projections are correct, net revenues will fall well short of what legislators anticipated when they approved the 2009 budget. The Legislative Service Agency puts the possible shortfall at $161 million, whereas Iowa’s budget director Dick Oshlo says things don’t look that bad:

Total gross receipts for FY 2009 are $6.921 billion, which is only $57.7 million lower than the Revenue Estimating Conference’s official estimate of $6.979 billion.

Dick Oshlo, state budget director, said: “With yesterday marking the end of the fiscal year, we now know the state’s gross receipts for FY 2009. While the state’s tax receipts deteriorated more than expected during the last two months of the fiscal year due to the ongoing effects of the national economic recession, this is a manageable number. Fortunately, receipts improved during the final days of June.  At this point we see no legitimate reason for a special session to balance the state’s budget.”

Meanwhile, Republican State Representative and gubernatorial candidate Chris Rants says Governor Chet Culver should call legislators back to the capitol:

“It is time to quit worrying about the political ramifications of admitting that we have a deficit and get about the business of fixing it,” Rants said. “Gov. [Tom] Vilsack put aside partisan politics and called a special session in 2001 and 2002 to balance the budget after revenues declined. Culver needs to do the same.”

I wasn’t living here during Vilsack’s first term and don’t know how bad the projected shortfalls were in those years, compared to what Iowa is facing now. Culver’s office argues that we won’t know the real picture for a while yet:

The LSA’s figures are just estimates, and true net receipts won’t be known until September when the Department of Management closes the books on the fiscal year 2009 budget.

There is also revenue that will be collected within the next 90 days but allocated to the fiscal year that ended Tuesday, money that will improve the state’s financial situation and is not included in the LSA projections.

Culver Press Secretary Troy Price told the Iowa Independent last month that until accruals, expenditures and refunds are all taken into account there is no way of getting an accurate picture of the 2009 budget.

Like Chris Woods, I felt a special session was warranted last year to address flood relief and recovery issues, but that never happened. Incidentally, many Iowa Republicans opposed calling the legislature back in response to the flooding.

I’d like to hear from others in the Bleeding Heartland community. Should Culver call legislators back in light of the possible budget deficit?

I’ll update this post later today after Culver’s press conference with State Treasurer Mike Fitzgerald. According to Lynn Campbell of IowaPolitics.com, they will discuss the budget and “new info” on state finances.

LATE UPDATE: Forgot to update yesterday. As you can see from ragbrai08’s comment below, Vilsack called a special session in October 2001. Like Culver, he waited until all the numbers were in (rather than calling the legislature back shortly after June 30). It’s quite misleading for Rants to suggest Culver is being less prudent here than Vilsack.

At yesterday’s press conference, Culver said he is “very confident” the 2009 budget is balanced. He and Fitzgerald emphasized Iowa’s AAA bond rating:

“In a very partisan way, the Republicans running for governor are misleading people,” Culver says. “…So I think it’s very important to make sure that we hold those people accountable that are misleading Iowans. It’s just not fair. It’s not appropriate and there’s no need for alarm.” […]

Culver is also stressing that the Wall Street firm “Standard and Poors” just “reaffirmed” Iowa’s triple-A bond rating.

“What a timely testimonial from (Standard and Poors.)  They’re just looked at our books inside and out,” Culver says.  “They’ve looked at our debt.  They’ve looked at our revenue streams.  They’ve determined…that Iowa is one of the best-managed states in America.”

That triple-A bond rating (the highest on the Standard and Poors scale) means Iowa will be able to borrow money for the I-JOBS program at favorable interest rates.

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Iowa Republicans more like "Party of Hoover" than party of future

The Republican Party of Iowa is celebrating its “rising stars” tonight at an event featuring Mississippi Governor Haley Barbour. Judging by what we’ve heard lately from Iowa GOP leaders, they’re gonna party like it’s 1929.

Case in point: Iowa Senate Minority leader Paul McKinley. The possible gubernatorial candidate’s weekly memos continue to whine about spending and borrowing by Democrats (see also here). Republicans would rather slash government programs and provide “targeted” one-year tax credits.

The lessons of Herbert Hoover’s presidency are still lost on these people. I apologize for repeating myself, but excessive government spending cuts can turn an economic recession into a depression. Since state governments cannot run budget deficits, it makes sense for the federal government to help the states “backfill” their budgets. That was the express purpose of the state transfer funds in the stimulus package.

In addition, it is prudent to spend federal funds on projects with long-term benefits. Energy Secretary Steven Chu was in Des Moines on June 23 to highlight the first installment of what will be $41 million in stimulus funds for renewable energy and energy-efficiency projects in Iowa. Energy efficiency programs in particular will have huge collateral benefits, saving consumers money while helping the environment.

No matter how many times Republicans repeat their misleading talking points about the I-JOBS state bonding initiative Democrats passed this year, it is prudent to borrow money for worthwhile projects when interest rates are low. I don’t hear McKinley or other Republican leaders telling businesses not to borrow money to make capital improvements.

Share any thoughts about Republican ideas, rhetoric, or career lobbyist Haley Barbour in this thread.

Republicans still don't get the point of the stimulus

The Republican Party opposed President Obama’s economic stimulus bill earlier this year, instead advocating a federal spending freeze in response to the recession. The misguided Republican proposal would have repeated Herbert Hoover’s big mistake, ignoring consensus among economists that deficits help end recessions.

The stimulus bill wasn’t perfect, but it contained some valuable provisions, notably aid to state governments, which can’t run deficits. While Governor Chet Culver imposed two rounds of cuts to fiscal year 2009 spending, federal stimulus funds helped lessen the severity of those cuts and avoid drastic reductions in the 2010 budget.

That’s good, because state budget cuts can further weaken an already weak economy, as the Center on Budget and Policy Priorities explained in this review of state fiscal stress across the country:

When states cut spending, they lay off employees, cancel contracts with vendors, eliminate or lower payments to businesses and nonprofit organizations that provide direct services, and cut benefit payments to individuals. In all of these circumstances, the companies and organizations that would have received government payments have less money to spend on salaries and supplies, and individuals who would have received salaries or benefits have less money for consumption. This directly removes demand from the economy. […]

Federal assistance can lessen the extent to which states take pro-cyclical actions that can further harm the economy. The American Recovery and Reinvestment Act recognizes this fact and includes substantial assistance for states. The amount of funding that will go to states to help them maintain current activities is approximately $135 billion to $140 billion – or about 40 percent of projected state deficits. Most of this money is in the form of increased Medicaid funding and a “Fiscal Stabilization Fund.” This funding will reduce the depth of state budget cuts and moderate state tax and fee increases.

Leave it to the Republicans to miss the point of stimulus aid to state governments, as I’ll discuss after the jump.

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Iowa GOP building new machine to sell old ideas

Thomas Beaumont wrote about the Republican Party of Iowa’s revamped outreach strategy in Monday’s Des Moines Register. GOP chairman Matt Strawn is working on several fronts to bring the party back to power after three consecutive losses in Iowa gubernatorial elections and four consecutive elections in which Republicans lost seats in the Iowa House and Senate.

Strawn’s strategy consists of:

1) meeting with activists in numerous cities and towns

2) using social networking tools to spread the Republican message

3) building an organization with a more accurate database

After the jump I’ll discuss the strengths of this approach as well as its glaring flaw.

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Open thread on Obama's 100th day in office

Please share any thoughts about President Barack Obama’s first 100 days in office in this thread. Are you thrilled, satisfied, or disappointed? What have been his best and worst decisions so far, in your opinion?

Congress marked the occasion by approving the president’s $3.5 trillion budget outline in the House and in the Senate.

I will update later with highlights from the president’s press conference this evening.

UPDATE: The consensus seems to be that Obama did very well at the press conference. Over at Popular Progressive, Gark says the president hit a home run on the question about what surprised, troubled, enchanted and humbled him.

Huffington Post has the full transcript from the press conference here. I particularly liked his comments about bipartisanship, and I’ve bolded my favorite remarks:

I do think that, to my Republican friends, I want them to realize that me reaching out to them has been genuine. I can’t sort of define bipartisanship as simply being willing to accept certain theories of theirs that we tried for eight years and didn’t work and the American people voted to change.

But there are a whole host of areas where we can work together. And I’ve said this to people like Mitch McConnell . I said, look, on health care reform, you may not agree with me that I — we should have a public plan. That may be philosophically just too much for you to swallow.

On the other hand, there are some areas like reducing the costs of medical malpractice insurance where you do agree with me. If I’m taking some of your ideas and giving you credit for good ideas, the fact that you didn’t get 100 percent can’t be a reason every single time to oppose my position.

And if that is how bipartisanship is defined, a situation in which basically, wherever there are philosophical differences, I have to simply go along with ideas that have been rejected by the American people in a historic election, you know, we’re probably not going to make progress.

If, on the other hand, the definition is that we’re open to each other’s ideas, there are going to be differences, the majority will probably be determinative when it comes to resolving just hard, core differences that we can’t resolve, but there is a whole host of other areas where we can work together, then I think we can make progress.

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Final results from the Iowa Legislature's 2009 session

The Iowa House adjourned for the year a little after 5 am today, and the Iowa Senate adjourned a few minutes before 6 am. I’ll write more about what happened and didn’t happen in the next day or two, but I wanted to put up this thread right away so people can share their opinions.

Several major bills passed during the final marathon days in which legislators were in the statehouse chambers nearly all night on Friday and Saturday. The most important were the 2010 budget and an infrastructure bonding proposal. Legislators also approved new restrictions on the application of manure on frozen or snow-covered ground. Another high-profile bill that made it through changes restrictions on convicted sex offenders.

Several controversial bills did not pass for lack of a 51st vote in the Iowa House, namely a tax reform plan that would have ended federal deductibility and key legislative priorities for organized labor.

Not surprisingly, last-minute Republican efforts to debate a constitutional amendment banning gay marriage also failed.

More details and some preliminary analysis are after the jump.

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Newt Gingrich's pitch to small donors

Last week Jane Hamsher wrote a good piece at FireDogLake about Newt Gingrich’s big spending on private planes. She noted that Gingrich’s organization American Solutions paid $3,360,346 to Moby Dick Airways, which charters private planes, during 2008 alone. American Solutions raised a total of $25,489,668 last year, and donations below $200 made up $7,343,986 of that amount.

Hamsher asked a good question:

On their contributions page, it says “American Solutions is here to serve as your voice in the political process.” Did the people who gave this money think they were donating so Newt and Company could jet around on private planes?

I’m pretty sure they didn’t, because last night I received a fundraising call from American Solutions. As I always do when I am a respondent for any political survey, I grabbed a pen and took notes, which you’ll find after the jump.

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Open thread on Obama's press conference

I’m not watching it live, but I will update this post later with some clips and commentary.

In the meantime, share your thoughts about what the president is saying tonight.

UPDATE: I am swamped with preparations for the Natural Living Expo and didn’t watch the replay of the press conference.

Sam Stein wrote up the story for Huffington Post.

TomP had an interesting take on Obama’s comments about how we should not demonize investors.

Beltway journalists seem to think the big story of the night was whom the president didn’t call on, as opposed to what he said. They do like to make everything about themselves.

SECOND UPDATE: Todd Beeton’s liveblog at MyDD was good.

Vilsack axes $500K in USDA consulting contracts

Good for him:

Agriculture Secretary Tom Vilsack says he killed about half a million dollars worth of consulting contracts approved by Bush administration political appointees near the end of President Bush’s term.

“The career folks who watched this process unfold in the last waning days of the last administration were very concerned about the process-the connections and relationships between people receiving this half a million dollar contract and what they intended to do with the resource which the career folks felt was unnecessary and inappropriate,” Vilsack said during a guest appearance at the daily White House press briefing. “They made a very strong and powerful case to me that the process was not followed as it should have been.”

Vilsack did not explain precisely what consulting the contract was to involve, but he said it seemed unnecessary.

“I didn’t see any value to USDA from it. I will tell you it was rather startling to see that a substantial amount of money had already been spent on foreign travel under circumstances we did not think was appropriate,” the secretary said.

More details are at the Politico. Thanks to my fellow Iowa blogger Chris Woods for bringing the story to my attention.

This news is obviously related to President Barack Obama’s directive to all the heads of government agencies to restrict no-bid contracts and crack down on wasteful contracts.

(cross-posted at La Vida Locavore, which you really should be reading)

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Obama moves to curb wasteful spending

Ever notice how Republicans love to complain about “wasteful government spending” but never do anything about it when they’re in power?

Less than 100 days into his new job, President Barack Obama is taking a big step in the right direction:

Obama today issued a memorandum to the heads of all the executive departments agencies directing them to restrict no-bid contracts; to rein in outsourcing of “inherently governmental activities”; and to, if necessary, cancel wasteful contracts outright. The crucial paragraph, even if it’s written in bureaucratese, particularly calls out the Defense Department […]

Clearly, this has applications far beyond the Pentagon. But the list of big-ticket defense items that have experienced huge cost overruns is a long one. Future Combat Systems in the Army; the Littoral Combat Ship in the Navy; the Joint Strike Fighter in the Air Force – all of these programs, near and dear to the services, have run massively over budget. If I was a lobbyist for Lockheed or Boeing, I’d be dialing my contacts in the Pentagon and the Hill to figure out what the prospective damage to my company was. And then I’d come up with a strategy to fight this forthcoming Office of Management and Budget review.

Obama went further in remarks at the White House, calling it a “false choice” to say that protecting the country requires acquiescence to Pentagon waste. “In this time of great challenges,” he said, “I recognize the real choice between investments that are designed to keep the American people safe and those that are designed to make a defense contractor rich.” He also lent support to Sens. Carl Levin (D-Mich.) and former presidential rival John McCain’s (R-Ariz.) legislation to create new procurement oversight positions at the Pentagon. “The days of giving defense contractors a blank check are over,” Obama said.

Music to my ears: no more blank checks for crooked defense contractors.

The White House estimates that changing the way the government does business will save about $40 billion a year.

According to Citizens Against Government Waste, the total cost of approximately 11,610 earmarks in fiscal year 2008 was $17.2 billion. In fiscal year 2007, earmarks cost American taxpayers an estimated $13.2 billion. Republicans howl about earmarks (when they’re not busy getting them for their own constituents), but will they get behind Obama’s new effort to reduce huge cost overruns and no-bid contracts?

Obama could save even more money by cutting obsolete Cold War-era weapons systems, but I don’t expect him to take on that battle anytime soon.

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Please, somebody make him stop

Why is Iowa Senator Dick Dearden so obsessed with legalizing dove-hunting? I know he’s introduced this bill many times before.

It doesn’t seem smart to let the state legislature get tied up in a divisive debate over mourning doves. We don’t want to give the impression that Democrats are wasting time on trivia during an economic meltdown.

Apparently Democratic statehouse leaders need to find non-spending issues to debate while they’re waiting for revised budget forecasts. Great–there are lots of things they could consider that would either boost the economy or improve the quality of life.

For instance, they could pass an ambitious renewable electricity standard to create more incentives for increasing wind and solar-power generating capacity.

Or, they could give county officials zoning authority over agricultural operations. After all, the Iowa Democratic Party’s platform does endorse the concept of “local control” over large hog lots. This measure would be popular and would address a significant issue in the lives of many Iowans.

If Senator Dearden is suffering from a shortage of winged animals to hunt, put him to work on preserving and expanding the habitat for other game birds in Iowa.  

Culver endorses big spending cuts, no tax increases

Details about Governor Chet Culver’s proposed 2010 budget will come on Wednesday morning, but today the governor’s office announced plans to impose 6.5 percent spending reductions on 205 state programs in next year’s budget. According to the Des Moines Register,

“We’re not going to tax our way out of a tight budget,” [Culver] said. […]

Culver will continue to ask lawmakers not to raise taxes. His budget will propose no tax increases, according to a copy of the governor’s remarks provided before a speech at the Iowa Business Council’s annual meeting.

Culver would like to protect certain areas from the full effect of the 6.5 percent cut: public safety, workforce development, human services, disaster relief, the teacher quality program, and early childhood education.

He will recommend that $200 million from the state’s cash reserves be used during the next budget year.

Via e-mail I received this joint statement from Senate Majority Leader Mike Gronstal, Senate President Jack Kibbie, House Speaker Pat Murphy, and House Majority Leader Kevin McCarthy:

“In these tough economic times, we appreciate Governor Culver and Lt. Governor Judge taking another step to ensure a balanced state budget by releasing this proposal.

“Because of the deepening national recession, this year will be very tough for many Iowans.  While Iowans had little to do with the mismanagement, greed, and financial carelessness that is causing the worst national economic situation since the Great Depression, we will be sharing in the pain.

“In the coming weeks and months, we are committed to:

·        Listening to our constituents

·        Working with the Governor, Lt. Governor and Republican legislators, and

·        Passing a fiscally responsible state budget that attempts to protect the progress we’re making on creating good-paying jobs, improving student achievement and teacher quality, and ensuring affordable health care.”

As you can see, the Democratic statehouse leaders did not unconditionally endorse the governor’s proposal or the principle of relying solely on spending cuts and tapping reserve funds to balance the budget. Some statehouse leaders have advocated raising the gas tax to help pay for road works.

As I have written before, I think it would be a big mistake to rule out any tax increases for next year.

As a political sound bite, it’s appealing for a governor to say, “I balanced the budget without raising a single tax.” But seriously, does Culver believe that Iowa has no obsolete tax loopholes that cost the state far more than they benefit the economy? The Iowa Policy Project has identified “wasteful, secret subsidies to big companies through the tax code.” (pdf file) How about asking those companies to share in the sacrifices that need to be made in the coming year?

Borrowing money to pay for certain infrastructure projects is reasonable, but a modest gas tax increase could reduce Iowa’s debt burden in future years without much pain. There may be other tax increases that make sense, if the funds raised could be linked to specific spending priorities that create jobs.

Politically, it’s risky for any governor to raise taxes, but Culver should balance those considerations against the risk that large spending cuts could prolong the recession:

Almost every single economist agrees, the last thing we want to do in a recession is slash government spending. We want, in fact, to increase that spending so that it is a counter-cyclical force to a deteriorating economy. So the question, then, is how to most safely generate the revenue to maintain or increase that spending. By  “most safely” I mean how to raise the revenue in a way that will minimize any negative economic impact. And the answer comes from Joseph Stiglitz:

 

“[T]ax increases on higher-income families are the least damaging mechanism for closing state fiscal deficits in the short run. Reductions in government spending on goods and services, or reductions in transfer payments to lower-income families, are likely to be more damaging to the economy in the short run than tax increases focused on higher-income families.”

So, first and foremost, you don’t want dramatic spending cuts (beyond the usual rooting out of waste/fraud) and you don’t want to raise taxes on middle- and lower-income citizens who both need the money for necessities, and are the demographics that will most quickly spend money in a stimulative way. That leaves taxes on the super-rich, and Stiglitz – unlike anti-tax ideologues – has actual data to make his case.

For more information, see Budget Cuts or Tax Increases at the State Level:

Which is Preferable During an Economic Downturn?

I’m sure the Iowa Business Council will applaud Culver’s promise this evening to balance the budget with no tax hikes of any kind.

But economic considerations as well as basic fairness dictate that taxes should be on the table when the legislature drafts the 2010 budget. We should not let the fear of Republican-funded attack ads scare us away from sensible steps to increase revenues.

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Obama for Sensible Priorities

If you attended any political events leading up to the Iowa Caucuses you know about Iowans for Sensible Priorities. They are the ones that handed out the pens with the pull out charts, had the pie chart car, and passed out cookies with pie charts on them. There goals were to…

Increase funding to meet the needs of our children and children around the world (at no additional taxpayer expense) by reducing money spent on the Pentagon for Cold War weapons systems no longer needed to protect America.

Rahm Emanuel, Obama's Chief of Staff, has recently said that the Obama administration plans to cut Pentagon spending

Withdrawing from Iraq, and cutting $300 billion in other defense spending, would wipe out the increases in military spending under the Bush administration. It would even reduce military spending to a smaller percentage of the federal budget than it was during the Clinton administration.

It is great to have a President with sensible priorities.

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Borrow money for infrastructure, but fix what we have first

The highlight of Governor Chet Culver’s “condition of the state” address yesterday (video here and prepared text here) was a proposal to issue state bonds to borrow up to $700 million over the next few years:

Thousands of new jobs will be created, Culver said. Every $100 million spent on highway construction alone means more than 4,000 new jobs, he said.

“We’re cutting back on the day-to-day expenditures of state government,” Culver said in his Condition of the State speech this morning. “But, at the same time, we will be investing in bricks and mortar – to create jobs and keep our economy going.”

Culver said Iowa won’t need to raise taxes to pay for the plan. The state is in the position to issue bonds, which is essentially borrowing money. Existing gaming revenue would repay the bonds, he said.

Predictably, road industry lobbyists like the spending plans while expressing some doubts about the borrowing plans.

Republicans also don’t seem to like the bonding proposal, while statehouse Democrats think it’s a good idea. State Auditor David Vaudt, who may be a Republican candidate for governor in 2010, said he needed to study the details before expressing an opinion, but noted, “What we’ve got to remember is we’ve got to dedicate and set aside a piece of revenue stream to pay that principal and interest.”

Senate Majority Leader Mike Gronstal made a great point:

Gronstal deflected Republican criticism by pointing out that [Senate Minority leader Paul] McKinley, in his opening day speech, talked about a business he once owned.

“He borrowed every nickel he could and leveraged himself as far as he could because he believed in his future. I believe in Iowa’s future. I believe it makes sense now to borrow money and move this state forward,” Gronstal said.

He added: “This is probably one of the best times in our history to go out and borrow money with a dedicated repayment stream. Do you own a home? Did it make sense for you to borrow money? Or did you just pay cash?”

Gronstal is absolutely right. Iowa has a triple-A bond rating, interest rates are fairly low, and creating jobs is essential to bringing the economy back. Two-thirds of our economy depends on consumer spending, and good jobs generate the money people then spend at businesses in their communities. Construction jobs tend to be good jobs too.

Des Moines Register columnist David Yepsen, who is usually a deficit hawk, also likes the infrastructure bonding idea:

The money will be borrowed over the next few years, supervised by an oversight board and repaid with gambling profits, so no tax increases will be necessary. (If we have to have all this gambling in Iowa, wouldn’t it be nice to see something tangible in return?)

It will be the modern-day equivalent of the Depression-era Works Progress Administration, which built infrastructure we still use today, such as dams, sewers, parks and shelters. Previous American generations left us wonderful systems of interstates, canals, railroads, river locks and dams. What are we leaving our kids? Potholes, bridge collapses and sewers that pollute river ways.

Iowans are a frugal people. Perhaps we are too frugal. According to state Treasurer Mike Fitzgerald’s office, Moody’s Investors Service says Iowa’s per-capita level of public debt ranked 48th in the country last year. Iowa has $98 of state public debt per person. The national average of state debt is $1,158. You could double Iowa’s $98 of per-capita state debt to $200, and we would then rank 46th.

Culver should have told us that. Clearly, most other states saddle their citizens with more debt than is proposed here. And many are more attractive places to live, too, as our children attest when they leave for the better jobs and brighter lights elsewhere.

It’s funny to watch all these Republican legislators, who borrow all sorts of money to buy, expand or repair homes, businesses and farms, now turn prune-faced when Culver suggests doing the exact same thing in state government.

The Des Moines Register explained how Culver’s plan would work:

* Borrow $700 million in 20-year tax-exempt state revenue bonds

* Secure the bonds with about $56 million a year in gaming tax revenues

* Create a Rebuild Iowa Infrastructure Authority to issue the bonds. It will be overseen by a five-member board.

* The authority would be administered and staffed by the Iowa Finance Authority.

How money will be spent:

housing

trails

highways

roads

bridges

mass transit

railways

airports

water quality and wastewater treatment improvements

flood control improvements

energy infrastructure

disaster-relief infrastructure

public buildings

Projects will be judged on:

Whether they are ready to proceed

How quickly the project can be started and completed

Number of jobs to be created by the project

Contribution to sustainability

On the whole, I support the idea. My main concern is that infrastructure money be spent on fixing what we already have, not on building every new road on developers’ wish lists. In the past, our legislators and state officials have focused too much on funding new roads instead of a balanced transportation policy.

The housing slump is likely to continue for at least two more years, and there is no reason to spend large sums to build new highway interchanges and major new roads through undeveloped farmland now. We should spend the money to fix stretches of existing major roads and highways and crumbling bridges, as well as on modes of transit that allow alternatives to driving. These projects will improve the quality of life for large numbers of Iowans while also creating jobs.

As for airports, I would only support spending money on needed repairs and improvements to existing airports. This is not the time to start building a bunch of small regional airports that would benefit a handful of corporate executives.

Culver emphasized that he did not plan to raise taxes, but Gronstal indicated that raising the state gas tax is still on the table.

I would like to hear more lawmakers talk about closing various tax loopholes that mainly benefit wealthy Iowans. The Iowa Policy Project has documented this and various other flaws in our current tax policies.

If you’ve got the time and the inclination, the governor’s official website has a video Culver showed during his address, called “In Deep Water: The Flood of 2008.” Iowa Public Television has House Minority leader Kraig Paulsen’s response to Culver’s address.

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Open thread on Culver's "condition of the state" address

I have to be away from my computer this morning, but please use this thread to discuss Governor Chet Culver’s annual “condition of the state” address to members of the state legislature.

Citing Lieutenant Governor Patty Judge and Senate Majority Leader Mike Gronstal, the Des Moines Register reported that Culver is expected to announce some new proposals. Presumably those will address flood recovery and the state budget.

I’ll be interested to see whether Culver goes out on a limb to back anything really controversial. If he wants to go down in history as one of the all-time greats, he’ll need to take some risks.

Gronstal and Kibbie set the tone on the Iowa Senate's opening day

The Iowa Legislature opened its 2009 session today, and Senate Majority Leader Mike Gronstal let the members of the upper chamber know that he has “never seen such a tough situation” with the state budget and economy in his 26 years at the statehouse.

In his opening address the the Iowa Senate, Gronstal listed some of the biggest challenges facing legislators, in particular rebuilding communities damages by last year’s natural disasters and leading Iowa “through these tough times without sabotaging the commitments we’ve made on economic growth, health care and education.”

He warned that a lot of legislators won’t get what they want this year:

Our resources are limited.  We will say “no” to many good ideas.  We are going to disappoint some people and frustrate others.

If your idea of being an elected official involves being loved by everyone, the next few months will be pretty rough.

Gronstal also noted that bipartisan majorities approved many key policies in Iowa during the past few years, and called for finding “bipartisan solutions” to this year’s challenges.

In his opening address to the chamber, Senate President Jack Kibbie echoed Gronstal’s warning that leaders will be saying “no” to a lot of requests from legislators.

He also advocated some policies that are anything but bipartisan: a gas tax hike and the expansion of workers’ bargaining rights.

Kibbie said increasing the gas tax would create jobs and boost economic development:

First, we can no longer put off the challenges to our transportation infrastructure. It is vital that we begin to clear the backlog of projects that play a  significant role in future economic development. In my district my constituents, Republicans and Democrats, all tell me that we need to get to work and if the only impediment to that progress is money they are willing to pay a few more cents at the pump. I support efforts that result in a gas tax increase. Success in that endeavor will mean better roads, jobs, and an economic boost to Iowa’s families and communities.

I’ve supported a gas tax increase since John Anderson proposed it during his 1980 presidential campaign, but I don’t expect that measure to get through the legislature without a bruising battle.

Here’s a piece listing the many potential benefits of a federal gas tax increase. Kibbie is talking about a smaller increase in the state gas tax, but many of the same benefits would apply.

Kibbie also said Iowa workers need good wages, and therefore “we should not fear passing Legislation that help[s] workers bargain for a better future.”

Kibbie could be referring to the “fair share” bill that Democrats didn’t have to votes to get through the Iowa House in 2007, or to the collective bargaining bill that Governor Chet Culver vetoed last spring. Either way, Republicans and corporate interest groups will put up a fight.

Getting labor legislation through the Iowa House, where Democrats have a 56-44 majority, is likely to be more difficult than getting it through the Iowa Senate, where Democrats have a 32-18 majority.

The complete texts of the opening statements by Gronstal and Kibbie (as prepared) are after the jump.

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What kind of politicians make history?

The Des Moines Register ran a piece on New Year’s Day called Culver resolves to leave as premier Iowa governor:

Gov. Chet Culver, who plans to run for re-election in 2010, gave himself overall high marks for his first two years in office during an exclusive, year-end interview with The Des Moines Register this week.

Some of the accomplishments he touted include improvements to health care coverage for children, expanded preschool, alternative energy incentives and efforts to help Iowa in flood recovery.

Culver has a picture of former Iowa Gov. Horace Boies on the wall of his office at the Capitol, which he uses as inspiration.

“Some people say he’s the best governor we ever had and that’s my goal: To try to be the best governor we ever had, and I’ve got a lot of work to do to achieve that goal,” Culver said.

I don’t know a thing about Horace Boies, but the piece got me thinking about what Culver would have to do to go down in history as the best governor Iowa ever had.

What makes a governor, or any elected official, memorable in a good way for decades after leaving office?

Some politicians make history instantly by being the first something-or-other to reach a particular position. Whether Barack Obama turns out to be a great president or achieves as little as Millard Fillmore, he’ll be remembered for centuries as the first black man elected president.

Culver’s not going to be remembered for being the first of anything.

Some politicians are good at winning elections but don’t leave much of a legacy. Terry Branstad never lost an election and served four terms as governor of Iowa, but he’s not going to make anybody’s “best governors ever” list.

Bob Ray was a good man and had a lot of crossover appeal. He was re-elected by big margins. (He was the only Republican who ever got my mother’s vote, as far as I know.) He was tolerant and even encouraged foreign immigrants to move here, which may be hard to believe if you’ve only ever known Republicans since 1990. I don’t know whether Ray had any big accomplishments historians will be talking about far into the future, though.

If Culver does an adequate job governing Iowa through a difficult economic stretch, he should be able to win re-election. But if he wants to be remembered 50 or 100 years from now, he’s going to have to do something big to change business as usual in this state.

On January 1 former Senator Claiborne Pell of Rhode Island passed away at age 90. He’s been out of the Senate for more than a decade, he represented a small state, and according to his obituary he was a weak chairman of the Senate Foreign Relations Committee.

Nevertheless, people remember him because Pell Grants have helped thousands and thousands of Americans go to college. Millions of Americans have a friend or relative who received a Pell Grant. The grants may not be large enough to meet the need and have not increased at the same rate as college tuition, but they have improved people’s lives in a tangible way.

Lots of people serve in Congress for decades without ever achieving anything as significant as establishing the Pell Grant program. They may be more politically skilled than Claiborne Pell, but they won’t be remembered in the same way. He was passionate about expanding opportunities for children of modest means, and he made lasting change toward that end.

I don’t know what issues are particularly important to Culver. From my perspective, he needs to be ambitious about achieving some goal that benefits large numbers of Iowans. He’s more fortunate than Tom Vilsack, because the Republicans are not in a position to block his agenda in the legislature. He may need to spend political capital to get the Democratic leaders in the statehouse to back him, but he’s got a better chance than Vilsack to make big changes.

I haven’t seen Culver take a lot of political risks during his first two years. He’s done good things, like raising the minimum wage, making health care accessible for more children and allocating more money to the Main Street program. He’s tried to do other good things, like expand the bottle bill to include juice, water and sports drinks (the legislature did not approve that measure).

But Culver is not out there on any controversial issue. He said he was for local control over siting of large hog lots (CAFOs) when he was running for governor, but he hasn’t done anything to get the legislature to pass agricultural zoning. I don’t expect that to change, even though the Iowa Democratic and Republican party platforms ostensibly support “local control.”

When the legislature debated the TIME-21 proposal to increase transportation funding, Culver did not get behind efforts to increase the share of funds devoted to freight and passenger rail, public transit or maintaining existing roads. As a result, it’s possible that new road construction will consume all of the extra money allocated to transportation.

Culver supports renewable energy, but he hasn’t taken a position on the new coal-fired power plants proposed for Waterloo and Marshalltown. Nor has he leaned on the legislature to pass an ambitious renewable electricity standard (for instance, requiring that 20 percent of electricity come from renewable sources by 2020). That kind of mandate would require utilities to ramp up clean energy production more quickly.

Faced with a major revenue shortfall, Culver took the relatively safe path of imposing a hiring freeze, reducing out-of-state travel, and then cutting spending across the board by 1.5 percent.

Perhaps the Popular Progressive blog was right, and Culver should have spared some state agencies from cuts while imposing deeper cuts on the agencies that are not performing as well.

Depending on what Culver cares about most, and what he views as achievable, he could secure his legacy in any number of ways.

He could become the governor who made sure Iowa’s water was cleaner when he left office than when he arrived. But that would require addressing some conventional agricultural practices that cause runoff problems. Obviously, the groups backing the status quo in agriculture are quite powerful.

Culver could become the governor who took the climate change problem seriously and put us on track to reduce our carbon-dioxide emissions. That means getting behind the recommendations of the Iowa Climate Change Advisory Council and making sure budget constraints don’t become an excuse for doing little to promote clean, renewable energy.

Culver could become the leader who helped solve our budget problems by restructuring government to save taxpayers money without reducing essential services. That might require treading on politically dangerous territory. Maybe Iowa needs to take radical steps to save money, like reducing the number of counties.

My list is not exhaustive, so feel free to add your ideas in the comments.

I’ll wager that anything big enough to put Culver on the all-time great governors list would be risky for him to pursue. He might fail to secure the legislature’s backing and come out looking ineffective. Also, some policies with long-term benefits may be unpopular in the short term, either with the public or with well-funded interest groups.

Playing it safe may give Culver a better chance of being re-elected, but at a cost to his potential legacy.

What do you think?

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Selling the Iowa Lottery should be off the table

Iowa voters handed Democrats the keys to run the state in 2006 and expanded the Democratic majority in the legislature this year. Now we have to prove that we are capable of governing well. Like almost every other state, Iowa is facing a deteriorating revenue base while demands for government services rise in a tough economy. Governor Chet Culver has already imposed two rounds of budget cuts, and more difficult choices will need to be made during the upcoming legislative session.

There is no perfect solution to the budget problem, but some proposals are so bad that they should be ruled out immediately.

Selling the Iowa Lottery is a terrible idea on every level.

I don’t often agree with Des Moines Register columnist David Yepsen, but he is right about this:

Why would anyone want to sell their seed corn? And why would Iowa want to do something that may lead to expanded gambling? […]

We should privatize those governmental functions that cost the taxpayers, not the ones that make them a profit. […]

Since 1985, the Iowa lottery has netted state government $1 billion. Why would we turn some of those profits over to the gambling industry? It’s short-term thinking to give up $50 million in annual lottery profits for a lump sum now.

Also, this idea breaks faith with the promise made to Iowans when we started down the path of expanded gambling: If Iowa was going to get into legalized gambling, it was going to be heavily regulated.

Now we’re going to invite casino owners and others in the gambling industry to run our lottery? I’m sorry; the history of the gaming industry is just too checkered to put people from it in charge.

I have never bought a lottery ticket, and I hate to see the state encouraging people to throw their money away on the lottery. But now that Iowa has a lottery, we should keep the profits in state hands. Selling the lottery would bring in cash this year, but we’d need to replace the lost revenue in future budgets. It wouldn’t solve the problem, and it would make Democrats look incompetent.

By the way, State Auditor David Vaudt described the idea as “a very short-term Band-Aid approach.” The plan he described would involve

a lease of the lottery for up to 50 years in exchange for a lump sum payment of $200 million and some annual lease fee.

The lottery generates more than $50 million a year in profits for the state’s budget, and Vaudt predicted the lump sum would quickly evaporate.

Of course it would.

Vaudt may be the Republican nominee for governor in 2010, and he was warning about budget problems long before Culver and the Democratic leadership in the legislature started talking about budget cuts. Do we want to hand him another talking point on Democrats’ alleged fiscal irresponsibility?

If selling the lottery is bad policy and bad politics, why would anyone consider it? Here is Yepsen’s theory:

[T]he fact that Culver is entertaining sale of the lottery is an example of how big gambling money and influence slosh around Iowa politics.

The delegation that called on him to promote the idea included former Iowa Attorney General Bonnie Campbell, who is a longtime friend, adviser and donor of Culver’s, and Jeff Link, a leading Democratic campaign strategist who also runs referenda campaigns for gambling interests.

Culver will need to show how selling the lottery is a good deal for taxpayers and not just his cronies and campaign contributors on the gambling industry’s payroll. Watch to see how much gambling money starts showing up in Culver’s re-election warchest – and in those of Democratic legislative leaders.

Democrats helped gambling interests last session by putting an unjustified exemption for casino floors into the smoking ban bill. If we care about workers’ health, why should casino employees be less protected than those who work in restaurants and bars?

Handing over the lottery would play right into Republican talking points about “special interests” controlling the Democratic Party.

Culver, House Speaker Pat Murphy and Senate Majority Leader Mike Gronstal should nip this speculation in the bud by ruling out any plan to sell the lottery for short-term gain.

What else, if anything, should be “off the table” in the context of balancing the budget? I agree with Culver that going into debt should be considered.

I also believe that shared sacrifice requires some kind of action on the revenue side, such as closing tax loopholes that primarily benefit the well-off. When middle-income and lower-income Iowans bear the brunt of cuts in services, wealthier Iowans should also be asked to help bring the budget into balance. Some economists have shown that during an economic downturn, raising taxes on the wealthy does less harm to the economy than cutting government spending.

I understand the political arguments against raising taxes in any form now. There will be plenty of time to debate that later. For now, Democrat leaders should make the easy call: keep the Iowa Lottery in state hands.

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Culver should release details about proposed budget cuts

Governor Chet Culver announced on Tuesday that he will reduce Iowa’s general budget by $40 million during the current budget year (which runs through June 2009) and will ask the state legislature to retract an appropriation of $37 million to replace the Wallace Building, which houses many state offices.

The Des Moines Register reported that the $40 million in cuts will come from “freezing most hiring, halting out-of-state travel, reducing purchases and making cuts to the state’s public universities.”

Culver asked state departments last month to recommend cuts to help trim the current fiscal year’s budget. His request was that each agency try to cut roughly 3 percent from its operating budget.

After reviewing those recommendations, Culver decided how to reduce spending by $40 million, which represents about two-thirds of one percent of the current-year $6.1 billion budget.

The Des Moines Register has requested documents showing which spending cuts were recommended by state agencies, but

The governor’s attorney, Jim Larew, said in a letter to The Des Moines Register that the documents are privileged communications between the governor and officers of the executive department. He acknowledged that there is no statute or case law in Iowa that supports that position, but he said such a privilege exists in some states. […]

Several taxpayer and open-record advocacy groups have argued that the information is a public record and should be made available to citizens.

I see no reason to consider recommendations on spending cuts privileged information. Citizens have an interest in learning which proposed spending cuts Culver approved and which he discarded. More spending cuts may be needed in the next few months, and those recommendations would indicate where the ax is likely to fall if necessary.

This information should be a matter of public record.

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Who's going to the Culver-Judge holiday party?

If you don’t already have plans on Saturday night:

2nd Annual Culver – Judge Holiday Party

Saturday, December 6, 2008

7:30p – 11:00p

Val Air Ballroom, 301 Ashworth Rd. West Des Moines

$35 per person / $50 family / $10 Student

Sponsor Levels: $100, $250 and $500

Host Level: $1000

For more information and to RSVP go to:

http://www.chetculver.com/rsvp…

I went to this party last year, and it was fun. I am battling a head cold, so I’ll probably stay home tomorrow night. If anyone out there attends, please put up a diary or a comment in this thread afterwards to let us know how it was.

Governor Culver may as well enjoy the holiday season. He’s got a tough year ahead, with bleak prospects on the revenue side and a lot of pressing needs for spending.

In the good news column, Culver has a slightly larger Democratic majority in the state legislature, and he happens to be governor while the Republican Party of Iowa is at its lowest ebb in decades. This week I spent a little time reading Iowa conservative blogs, which reminded me of the mess that party is in. While the State Central Committee is supposed to be finding a new party chair, a group of Republicans in the second Congressional district are trying to get Kim Lehman removed as RNC committeewoman.

I can’t see any of the people vying for state GOP chair leading them out of the wilderness soon. One of the leading contenders, Gopal Krishna, is an extremely divisive figure, judging from this post and the comments below it.

All the more reason for Democrats to celebrate at the Val Air Ballroom this weekend.

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Will Nussle get grilled by the Senate?

I’ve blogged about it before over at Political Forecast, but I’m not too enthusiastic with the way that Senate Democrats have responded to Jim Nussle’s nomination to be Director of the White House’s Office of Management and Budget (OMB).  Maybe it is all of the work I did during the gubernatorial race talking about Nussle’s failed leadership on the House Budget Committee as it’s chair–leading us into horrible deficits, uncontrollable spending, and ridiculous tax cuts for the richest Americans.

Or maybe it is just that we know he’s a confrontational hack who shouldn’t be charged with leading such a complex and tough office, one that requires someone with some kind of expertise is actual management and appropriate budgeting techniques.  The reality, however, is the that OMB is largely a political office and it made sense for Bush to pick someone who was willing to give up the next two years to fight with Congressional Democratic leadership about the Republican President’s budget.

Still, the least the Democrats could do is raise objections to Nussle’s past experience–deficits and debt–and instead call for someone more inclined to have positive budget experience, yet be known for compromise and hard work, not hackery.

I guess that’s why I’m slightly surprised at today’s Register story where Jane Norman reports that Sen. Kent Conrad (D-ND), the chair of the Senate Budget Committee, is not all that enthusiastic about Nussle’s nomination and has some reservations.  Maybe that’s just political cover for the left flank by telling grumpy activists like me that they’re not planning for anything great coming from, but are going to confirm him anyway.

Or maybe it is some serious action that would make Conrad more inclined to grill him during confirmation hearings.  Conrad is no liberal in the way that people consider Iowa’s Tom Harkin (who has indicated he’ll likely vote to confirm Nussle), but Conrad has a strong populist streak on trade and labor issues.  Nussle’s record on those issues, particularly with the budget, is not good at all.  Kudos to Conrad for stepping up, and I hope he takes it to another level.

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