Branstad names Paul Trombino to run Department of Transportation

Governor Terry Branstad finally announced his choice to head the Iowa Department of Transportation today. Paul Trombino III has been serving as Bureau Director of Transit, Local Roads, Rails, and Harbors for the Wisconsin Department of Transportation. Before this year he was Region Operations Director of the Wisconsin DOT. After the jump I’ve posted the press release announcing Trombino’s appointment, which includes some details on his education and work experience. Trombino’s appointment is subject to Iowa Senate confirmation, but he is well qualified for the job and should not run into any trouble.

I hope that in his new position, Trombino will be able to target state resources toward repairing Iowa’s many deficient bridges and roads, as opposed to spending the lion’s share on new road construction.

I also hope he will help the governor see the benefits of expanding passenger rail in Iowa. Representing the Wisconsin DOT at a high-speed rail conference last year, Trombino depicted passenger rail as part of a “robust, diverse transportation system that meets the public need,” not something to be pursued instead of repairing state highways. (Wisconsin’s Republican Governor Scott Walker rejected federal high-speed rail funding shortly after taking office this year.) Passenger rail was a goal of former Governor Chet Culver’s administration, but Branstad has made clear that roads will be his top concern, funded with a higher gas tax if necessary. Branstad didn’t include any passenger rail money in his draft budget, although he hasn’t definitively rejected federal funds allocated last year to extend a rail link from Chicago to Iowa City. Rail advocates have been working on funding plans that would require certain local communities to cover part of future passenger rail subsidies.

Branstad announced most of his picks to lead state departments in November and December, but he delayed choosing a head for the Iowa DOT. Instead, he asked Nancy Richardson to stay on through the 2011 legislative session. Governor Tom Vilsack originally named Richardson to that position, and she was one of the few Vilsack department heads that Culver left in place.

Branstad’s administration is nearly complete, but he has a few other significant personnel decisions to make. Earlier this month the Iowa Senate rejected his choice to lead the Department of Human Rights and one of his appointees to the State Judicial Nominating Commission. Branstad also needs to fill one more vacancy on the state Environmental Protection Commission. He withdrew one of his nominees to that body after the Sierra Club’s Iowa chapter pointed out the governor’s choices would leave the commission with too many Republican members.

UPDATE: Branstad nominated Nancy Couser for the last open spot on the Environmental Protection Commission. She is a cattle feeder from rural Nevada who also serves on the Iowa Beef Industry Council.  

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Grassley votes no again as Senate sends small jobs bill to Obama

The U.S. Senate gave final approval to a small jobs bill today by a vote of 68-29. Eleven Republicans and the Senate’s two independents joined 55 Democrats (including Iowa’s Tom Harkin) to pass the bill. The only Democrat to vote no was Ben Nelson of Nebraska (roll call here). The motion to invoke cloture on this jobs bill passed the Senate on Monday by a 60-31 vote, with six Republicans voting with all Democrats but Ben Nelson (roll call here). Senator Chuck Grassley voted with the Republicans who tried to filibuster the bill on Monday and with those who opposed the bill today. From the Washington Post:

The centerpiece of the bill is a new program giving companies a break from paying Social Security taxes for the remainder of 2010 on any new workers they hire who had been unemployed for at least 60 days. Employers would also get a $1,000 tax credit for each of those workers who stays on the payroll for at least one year.

Aside from that program, the measure includes a one-year extension of the law governing federal transportation funding, and would transfer $20 billion into the highway trust fund. The bill also extends a tax break allowing companies to write off equipment purchases, and expands the Build America Bonds program, which helps state and local governments secure financing for infrastructure projects.

Last month the Senate approved a similar jobs measure; Grassley voted no at that time as well. After the House made minor changes to the legislation, the bill had to clear the Senate again before going to the president’s desk.

Most House Democrats support a larger job-creation bill with more money for infrastructure projects, but there may not be 60 votes in the Senate for such a measure.

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Senate passes jobs bill; Grassley votes no

The U.S. Senate passed a scaled-back jobs bill today by a 70-28 vote (roll call here). 57 of the 59 Senate Democrats voted for the bill; Ben Nelson of Nebraska voted no and Frank Lautenberg of New Jersey was absent. 13 Republicans voted for the bill. Five of them helped Democrats break a Republican filibuster on Monday: Olympia Snowe and Susan Collins of Maine, Scott Brown of Massachusetts, and the retiring Kit Bond of Missouri and George Voinovich of Ohio. Two Republicans who were absent for Monday’s cloture vote also voted yes today: Orrin Hatch of Utah and Richard Burr of North Carolina. Six other Republicans tried to block this vote from going forward on Monday but turned around and voted for the bill today: Lamar Alexander of Tennessee, Thad Cochran and Roger Wicker of Mississippi, James Inhofe of Oklahoma, George LeMieux of Florida, and Lisa Murkowski of Alaska.

Senate Democrats and the media are calling this a $15 billion jobs bill, but David Dayen notes, it’s really a $35 billion measure: “the extension of the Highway Trust Fund would add $20 billion for infrastructure projects, but because of the way it’s financed, through a fund shift, it doesn’t count as an expense.”

In addition to the highway fund money, the main features of the jobs bill are a tax credit for small businesses that hire new workers, “Build America Bonds” that help state and local governments to borrow money, and a provision to allow small businesses to write off more expenses.

Senator Chuck Grassley voted against today’s bill and against the cloture motion on Monday. He and Senate Finance Committee Chairman Max Baucus had agreed on a different jobs bill, which Senate Majority Leader Reid abandoned. In a statement submitted to the Senate record on Monday, Grassley slammed Reid’s “disregard for bipartisanship” and noted that tax-extending provisions in the Baucus-Grassley bill had enjoyed broad support from both parties in the past.

The House passed a larger jobs bill in December that included many of the tax-extending provisions Reid omitted from the Senate bill.

Mark Zandi, chief economist at, said last week that Reid’s jobs bill was “a good first step” but not nearly large enough to address the unemployment problem:

A failure to provide additional funding to struggling states, for example, would lead to job losses that would “overwhelm” all the other job-creating efforts being tried, he said. And while the Schumer-Hatch tax credit would create between 200,000 and 300,000 new jobs, Zandi estimated, that number is a drop in the bucket relative to the roughly 11 million new jobs needed to get the country back to pre-recession jobless levels.

Reid has promised to introduce more jobs-creating legislation soon. Meanwhile, House Speaker Nancy Pelosi will try to move quickly on the bill the Senate just approved, Roll Call reported.

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Braley outlines Populist Caucus "Blueprint for Recovery"

Representative Bruce Braley advocated a four-point "Blueprint for Recovery" in Politico yesterday. The House Populist Caucus, which Braley formed last year, has endorsed these proposals to "require Wall Street to pay for economic development on Main Street and to pay down our nation’s deficit."

Compensation. We need to change the culture of limitless bonuses by passing the Wall Street Bonus Tax Act (H.R. 4426). America’s middle-class families saw their savings wiped out by Wall Street’s gambling addictions and then watched as their tax dollars went to save troubled banks. The targeted tax would apply only to executives at banks that received Troubled Asset Relief Program funding who took bonuses in excess of $50,000. The Bonus Tax Act would generate billions of dollars of new revenue that would be directed exclusively to reward small businesses that are investing in new jobs.

Speculation. We need to stop excessive and risky speculation on Wall Street by passing the Let Wall Street Pay for the Restoration of Main Street Act (H.R. 4191). This legislation would reinstate a tiny transaction fee on speculative stock transactions by Wall Street traders, creating $150 billion annually in new revenue that would be dedicated to job creation and reducing the deficit.

Job creation. A “jobless recovery” is not a recovery for the middle class. With a national unemployment rate hovering around 10 percent, it’s clear America’s middle-class families are still struggling to make ends meet.

That’s why we need to take the following two-pronged approach to creating good-paying jobs that can’t be outsourced: We need to pass the National Infrastructure Development Bank Act (H.R. 2521), which would establish a wholly owned government corporation to prioritize infrastructure improvement projects that would create good-paying jobs. We also need to pass the Buy American Improvement Act (H.R. 4351) to eliminate loopholes in existing domestic sourcing laws and ensure that taxpayer money is used to purchase American-made products and support American jobs whenever possible.

Click here for more details on the Wall Street transaction fees the Populist Caucus supports. The idea is worthwhile, but I am skeptical that the current economic team in the Obama administration would get behind it.

I’m not clear on why a new government corporation on infrastructure projects needs to be created (as opposed to just appropriating more funds for existing agencies to spend on high-speed rail, affordable housing or other infrastructure needs). I asked Braley’s office for comment on that part of the blueprint and received this reply:

The Populist Caucus believes we need a National Infrastructure Bank (NIB) now to invest in merit-based infrastructure projects-both traditional and technological-by leveraging private capital. In recent years, the private sector has raised more than $100 billion in dedicated infrastructure funds, but most of that money is being invested overseas.  We need an NIB to attract those funds into a U.S. market for infrastructure development.

It’s notable that the Populist Caucus is not backing broader populist measures, such as tax hikes for corporations and the top 1 percent of individual earners. Then again, Braley’s caucus prepared and approved this “blueprint” before Oregon residents approved two tax-raising ballot initiatives this week.

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Iowa turning stimulus road funds around quickly

The U.S. House Transportation and Infrastructure Committee has been keeping track of how states are spending the stimulus funds allocated for roads. On September 2 the committee released a report ranking the states according to how much of the American Recovery and Reinvestment Act funding for highways and bridges had been put to work as of July 31. This pdf file contains the state rankings.

Iowa ranked second overall, having put 75 percent of its stimulus road funds to work by the end of July. Join me after the jump for more details from the report and analysis.  

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Iowa taking full advantage of stimulus unemployment funds

When Congress was debating the stimulus bill earlier this year, Mark Zandi, the chief economist for Moody’s, compared various forms of government spending and tax cuts in terms of economic stimulus "bang for the buck." He concluded (pdf file) that various forms of government spending did more to stimulate the economy than various kinds of tax cuts.

The best kinds of spending in terms of stimulative effect were food stamps and extending unemployment benefits. Every extra dollar the federal government spends on food stamps generates approximately $1.73 in economic activity, and every dollar the federal government spends to extend unemployment benefits generates approximately $1.63 in economic activity. People who need these services are likely to spend additional money quickly, helping preserve jobs in the retail sector.

With this in mind, you might imagine that the states would take full advantage of money allocated to unemployment benefits in the American Reinvestment and Recovery Act. But you would be wrong, according to this article by Olga Pierce from ProPublica:

So far, only about half of the $7 billion included in the stimulus package [for expanding unemployment insurance] has been claimed by states. […]

Four states have explicitly rejected the funding, but many others have so far failed to pass legislation qualifying them for incentive payments. […]

Under the stimulus bill [2], states can qualify for the extra funding by extending unemployment insurance to new categories of workers. To receive a third of the funding, they must begin using something called an alternative base period, which would allow more low-wage workers to receive unemployment benefits. […]

To get the other two-thirds of the cash, they must adopt at least two other changes from a list that includes covering part-time workers and offering $15 extra per week for each dependent.

If states meet the requirements, they qualify for a federal lump sum payment that will cover the cost of expansion for at least three years, or longer in many cases. It was on those grounds – that after the federal funding runs out states will have to find another way to cover the cost – that Louisiana Gov. Bobby Jindal [3], Mississippi Gov. Haley Barbour [4] and others [5] that said they would reject the funding.

Bleeding-heart liberal that I am, I believe basic fairness justifies extending unemployment benefits to more part-time and low-wage workers. But even if you don’t care about fairness, Zandi’s analysis shows that extending unemployment benefits will get money circulating in the economy.

Click here for a map and a chart showing how much federal unemployment money each state has claimed.  

As of mid-June, 17 states had claimed none of the stimulus funding for unemployment benefits, and another 12 states and the District of Columbia had claimed only part of that money. In some of those states, Democrats are in charge. Progressives who have ridiculed Republican governors for rejecting stimulus money for unemployment benefits should also hold Democrats accountable on this score.

Fortunately, Iowa is among 21 states that have fully used these stimulus funds as Congress intended. Thousands of Iowans struggling to get by will benefit from the $70.8 million the stimulus bill appropriated to our state for unemployment benefits. Democrats in the state legislature and Governor Chet Culver deserve credit for enacting the necessary legislative changes to collect this funding.

Many of the states that have left stimulus money on the table have significantly higher unemployment rates than Iowa, by the way.

Speaking of boosting the economy, Zandi’s report showed that infrastructure projects were the third-most stimulative form of government spending. Every extra dollar spent on infrastructure generates an estimated $1.59 in economic activity. Remember that next time Iowa Republicans bring out their misleading talking points about the the I-JOBS program. Also remember that Iowa has used the stimulus bill’s transportation funding wisely compared to many other states, according to a recent review by Smart Growth America.

In contrast, most kinds of tax cuts Republicans advocate generate less than one dollar of economic activity for every dollar they cost the government. As a gesture to Republicans, Democrats replaced some spending in the stimulus bill with $70 billion allocated to fixing the alternative minimum tax, even though Zandi’s analysis found that a dollar spent on fixing the alternative minimum tax generates only about 49 cents in economic activity.

It’s too bad the Obama administration made a number of concessions to Republicans on the stimulus bill. Like Bob Herbert wrote a few months ago, when the GOP talks about the economy, nobody should listen.

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