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stimulus

More proof the stimulus did its job in Iowa

by: desmoinesdem

Tue Sep 04, 2012 at 07:39:57 AM CDT

Voting for the so-called "failed stimulus" has become a stock phrase in Republican attack ads against Congressional Democrats. But as Bleeding Heartland has discussed many times before, the "Great Recession" would have been more devastating without the 2009 American Recovery and Reinvestment Act.

State budget cuts are a huge drag on the economy. Follow me after the jump for a picture that's worth a thousand words on how a favorite conservative punching bag helped soften the recession's impact in Iowa.

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7,000 long-term unemployed Iowans are out of luck

by: desmoinesdem

Thu Mar 10, 2011 at 22:20:30 PM CST

Approximately 7,000 Iowans who have been out of work for at least a year have lost their chance to receive an extra 13 weeks of unemployment benefits at the federal government's expense. The 2009 stimulus (American Recovery and Reinvestment Act) included a provision "to fund the entire cost of extended unemployment benefits through the end of 2011, rather than requiring states to pay half of the cost." States with unemployment rates of at least 6.5 percent could qualify for 13 weeks of extended benefits, and states with unemployment rates exceeding 8 percent could qualify for 20 weeks of extended benefits.

Iowa was among nine states that did not pass enabling legislation (a "Total Unemployment Rate trigger") to take advantage of that portion of the stimulus. Democrats in the Iowa Senate recently approved a bill on a mostly party-line vote and urged the Iowa House to act by March 10. New employment figures to be released on that date were expected to bring Iowa's three-month average unemployment below the threshold for qualifying for the federal stimulus program. Indeed, Iowa Workforce Development confirmed that the state's unemployment rate held steady at 6.1 percent in January, bringing the three-month average rate down to 6.1 percent.

Governor Terry Branstad didn't advocate for the enabling legislation, and House Republican leaders decided not to move the bill:

"[T]he House Republican caucus is not interested in making it harder to be an employer in the state of Iowa," said House Speaker Kraig Paulsen, R-Hiawatha. "What's going on with unemployment compensation right now is making it harder to be an employer."

I believe Republicans misunderstood the essence of this program. As the National Employment Law Project explained in a February report, the stimulus act included full federal funding for these extended benefits. Note: that report estimated that about 29,000 Iowans could potentially receive the 13 weeks of extended unemployment benefits. Iowa Senate Democrats estimated that about 7,000 would qualify. That's a relatively small percentage of the 102,000 unemployed Iowans, but roughly $14.5 million in benefits divided among 7,000 people would have meant a lot of extra disposable income in communities with high jobless rates.

It's lamentable that Republicans declined to act on behalf of Iowa's long-term unemployed. In addition to helping jobless individuals, unemployment benefits have a powerful multiplier effect in local economies, because the people who receive them tend to spend the money quickly on goods and services they could not otherwise afford.

Democrats in the Iowa House and Senate share the blame for not passing the Total Unemployment Rate trigger during the 2010 legislative session. When the stimulus went into effect in 2009, Iowa's unemployment rate was too low to qualify for that money (though state officials did secure unemployment benefits through a different part of the stimulus). But in early 2010, Iowa's unemployment rate exceeded 6.5 percent. If the Iowa House and Senate had passed enabling legislation, Governor Chet Culver surely would have signed it, and some jobless Iowans would already have received the extra federal funding.

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Iowa risks leaving $116 million in unemployment benefits on the table

by: desmoinesdem

Wed Feb 09, 2011 at 21:01:05 PM CST

An estimated 29,183 long-term unemployed Iowans could qualify for some $116.3 million in additional benefits, but only if state legislators act quickly, according to a new report by the National Employment Law Project. Federal dollars could cover an extra 13 weeks of benefits for those Iowans. Follow me after the jump for details and background on the federal stimulus money we may leave on the table.
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How well did Iowa use transportation stimulus money?

by: desmoinesdem

Mon Feb 07, 2011 at 10:14:02 AM CST

Last week the non-profit organization Smart Growth America released a report on "how successful states have been in creating jobs with their flexible $26.6 billion of transportation funds from the American Reinvestment and Recovery Act (ARRA)." The report demonstrates that "the states that created the most jobs were the ones that invested [stimulus funds] in public transportation projects and projects that maintained and repaired existing roads and bridges. The states that spent their [stimulus] funds predominantly building new roads and bridges created fewer jobs."

Table 2 of the full report (pdf file) ranks the states in terms of percentage of road spending allocated to "system preservation" (road and bridge repair) versus building new capacity. Here Iowa did well, spending 93 percent of the stimulus road money on repair work. Iowa ranked 12th in this category; seven states and Washington, DC spent 100 percent of their ARRA road funds on repair.

Iowa didn't score as well (30th place) on Smart Growth America's list of states by the percent of stimulus transportation funding spent on public transit or non-motorized projects. Just 3.5 percent of Iowa's transportation stimulus money went to such projects. That's not surprising; it has long been difficult to persuade Iowa policy-makers to invest more in passenger transit, even though we have an aging population, and many older Americans want alternatives to driving. A long-range transportation funding plan adopted in 2008 didn't require a single extra dollar to be spent on public transit in Iowa. The Republican-controlled Iowa House has already voted to scrap funding that would help bring passenger rail service to Iowa City, and Governor Terry Branstad didn't include passenger rail funding in his draft budget for the next two years.

After the jump I've posted excerpts from the full report, which explain why repair and transit projects create more jobs per dollar spent. A memo about the recent opinion poll findings references below can be downloaded here (pdf).

Smart Growth America's latest study didn't assess the rate at which states turned around their stimulus transportation funding to create jobs. A 2009 study by the U.S. House Transportation and Infrastructure Committee showed that Iowa was the second-best state in terms of allocating stimulus road funds quickly. At the end of July 2009, 85.1 percent of the $358 million Iowa received for highway and bridge projects was under contract, and 74.9 percent was for projects already underway. Those percentages were more than double the national average.  

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Weekend open thread: Back to school edition

by: desmoinesdem

Sun Aug 29, 2010 at 10:08:25 AM CDT

Iowa school districts are able to hire back more teachers as the academic year begins, thanks to the fiscal aid Congress approved earlier this month. That's the bill Terry Branstad avoided talking about for weeks, before finally admitting that he opposed extra federal money to support state education and Medicaid budgets. Republican governors who aren't in campaign mode understand how foolish it would be to turn down funding for schools and health care. Mitch Daniels of Indiana, whom Branstad seems to admire, is in full-blown Republican hypocrite mode. Daniels echoed the GOP talking points against the stimulus package this summer, but now that it's law he's asking for the education and Medicaid money.

I see why Branstad avoided advertising his opposition to the "one-time money"; the extra federal funding has real-world benefits for tens of thousands of Iowa children. In Des Moines public elementary schools, it means time for art, music and physical education will be restored to previous levels, with 13 jobs saved. We were thrilled to learn that the beloved music teacher at my children's school will be back. He had expected to be assigned elsewhere in the district because of the cuts announced in the spring.

In the third Congressional district race, Leonard Boswell's campaign highlighted Republican Brad Zaun's votes against education funding in the Iowa Senate, as well as his promise to try to shut down the federal Department of Education if elected. In contrast, Boswell

has more than doubled the maximum Pell Grant award for Iowa students attending college, and has made the largest investment in federal student aid since the first GI bill was passed. He has continued to support early childhood education programs like Early Head Start and child care services provided through Community Block Development Grants. Boswell has advocated for smaller class sizes in our public schools and voted to save education jobs threatened due to state budget shortfalls.

You can read the Boswell campaign press release at the end of this post. Zaun's campaign responded by accusing Boswell of "taking decisions away from our local school boards, and having Washington, DC dictate to us." In case Zaun hadn't noticed, local school districts are determining which jobs to restore using the additional federal funds. They're not all making the same decisions. I doubt that the staff at my son's school feel Washington has "dictated" anything to them. They are just relieved that more funding came through for the current academic year. Why should young kids get short-changed on art, music and p.e. just because they were in grade school during a recession?

Zaun also noted, "Being married to a teacher, I understand what's going on very well. Despite increased spending, we are witnessing constantly declining performance. We have a problem that Washington, DC can not and will not solve." That doesn't explain why he voted against so much state funding for education.  

Speaking of teachers, I was so touched when my older son's teacher called me on Friday afternoon. After eight months without a sniffle, he got sick this week and had to miss the first two days of school. She was planning to come in to work over the weekend, so she invited us to drop by the classroom on Saturday. She showed him what he missed on Thursday and Friday, and he was able to paint a picture she'll laminate and hang on his locker.

This is an open thread. What's up with you this weekend?

P.S. Todd Dorman is not a hobo. Not that there's anything wrong with that!

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Branstad opposes federal aid for education, Medicaid

by: desmoinesdem

Fri Aug 20, 2010 at 17:51:14 PM CDT

When Congress passed $26 billion in fiscal aid to the states, including $96.5 million in education funding and $128 million in Medicaid assistance for Iowa, Republican gubernatorial candidate Terry Branstad avoided commenting on the issue. Scott Keyes of Think Progress was in Iowa recently and got Branstad to speak on the record about the issue. Click the link for the audio and the full transcript. Excerpt:

[Think Progress]: They just passed that big state aid bill out in Washington. I was curious how you felt about that.

BRANSTAD: I have real concerns because there's strings attached to that. And it's one-time money, so it doesn't solve the problem, it just puts it off a year. And it increases the federal debt. I don't think they should have done it. I'm not sure, we've got to see what the strings are and whether or not we should even accept it or not.

Branstad added that he was against the 2009 stimulus bill and wasn't sure whether he would accept or reject stimulus funding for Iowa.

Perhaps Branstad has never heard of economic cycles. Congress approved the stimulus bill when the U.S. was in the middle of the worst recession since World War II, and state revenues were dropping at the sharpest rate seen in 60 years. Although the recession is technically over, and state revenues are increasing in Iowa, shortfalls are still projected in key social services.

Branstad says federal assistance "doesn't solve the problem, it just puts it off a year." But if the economy continues to improve, state budgets will be under less strain in the 2012 fiscal year. Branstad would rather give up an additional $96.5 million for Iowa schools during the current fiscal year, which would cost approximately 1,800 teachers' jobs. He would rather do without an extra $128 million for Medicaid, and I doubt he'll offer an alternative budget showing how he would meet the need for those services. Branstad can't explain how he would have balanced the current-year budget without stimulus funds, just like he can't explain how he would pay for his new spending promises.

Branstad is wrong about the $26 billion fiscal aid bill adding to the federal deficit, by the way. The Congressional Budget Office confirmed that the bill's costs are fully offset by closing tax loopholes and various spending cuts.

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Iowa likely to receive more federal Medicaid, education money

by: desmoinesdem

Wed Aug 04, 2010 at 15:51:26 PM CDT

Good news: the U.S. Senate overcame an attempt to filibuster a bill containing $26.1 billion in fiscal aid to state governments today. About $10 billion will support state education budgets in order to save teaching jobs. The other $16.1 billion will support state Medicaid budgets according to the Federal Medical Assistance Percentage or FMAP formula, which was originally part of the 2009 stimulus package. The Senate's final vote on this bill is set for August 5, and it will easily gain more than the 50 votes needed for passage. Speaker Nancy Pelosi plans to call the House of Representatives back from August recess in order to approve this bill next week.

Iowa's Senator Tom Harkin was a co-sponsor of this bill. Senator Chuck Grassley joined Republicans who tried to block it from getting an up-or-down floor vote. I haven't seen a statement from his office explaining why. The bill does not add to the deficit, because expenses are offset by revenue-raising measures:

Senate Democrats said the $26 billion bill would be paid in part by revenue raising changes in tax law. Senate Democrats said the modifications would curtail abuses of the U.S. foreign tax credit system. The bill would also end the Advanced Earned Income Tax Credit and would return in 2014 food stamp benefits to levels set before last year's federal stimulus plan.

I'm not happy about cutting future food stamp benefits, but there may be opportunities to restore that funding in other bills. This federal fiscal aid is urgently needed to prevent teacher layoffs in the school year that's about to begin.  

Republican gubernatorial nominee Terry Branstad has been touring Iowa this summer with a contradictory campaign message. On the one hand, he blasts education cuts that have eliminated some teaching positions (he exaggerates the number of teacher layoffs, but that's a topic for another post). On the other hand, Branstad criticizes the use of "one-time money" from the federal government to support the state budget. He promises to veto any budget that would spend more than 99 percent of projected state revenues. Branstad has never explained what he would have cut to make up for the federal stimulus money, but other questions are on my mind today, namely:

1. Does Branstad think Grassley did the right thing in trying to stop this fiscal aid package from reaching Iowa and other states?

2. Iowa's budget for fiscal year 2011 assumes about $120 million in additional Medicaid funding under the FMAP program. If elected governor, would Branstad try to return that money to the federal government?

3. Would Branstad reject federal education funding that is targeted for saving teachers' jobs in the upcoming academic year?

Share any relevant thoughts in this thread.

UPDATE: A statement from Senator Harkin's office says this bill would provide "at least $128 million in additional Medicaid funding" to Iowa in the current fiscal year. Harkin also said,

"This vote came down to one thing: priorities.  Today, a majority of Senators proved that our priority is helping those who are the backbone of this country, America's teachers and our families, to weather the continuing effects of the great recession.  And we provide this funding without adding one dime to the deficit.

"This is a crisis of the first order.  Not since the Great Depression have our public schools faced the prospect of such massive layoffs.  With this fund, we will preserve tens of thousands of education jobs that states can use for retaining or hiring employees at the pre-K and K-12 levels.

"Also with the funding, we provide critical assistance to states, whose budgets are already stretched to the limit, to protect Medicaid.  This six month extension of federally-matched funding will allow states to continue health benefits for some of the nation's most needy."

SECOND UPDATE: Jennifer Jacobs reported somewhat different numbers for the Des Moines Register:

A federal spending plan that advanced in Congress Wednesday would route $83.1 million in extra money to help Iowa pay for children's services and payments to hospitals and nursing homes.

But the Iowa Legislature banked on getting an $116 million in extra federal Medicaid money in the first six months of next year.

That means the state budget will be short $32.9 million - or short $116 million if the bill fails to pass Congress altogether, according to the non-partisan Legislative Services Agency. Medicaid is the government health insurance plan for the poor. [...]

The measure would give states $16 billion to help cover their Medicaid budgets, and $10 billion to extend programs enacted in last year's stimulus law to help preserve the jobs of teachers, police officers, firefighters and other public employees.

Iowa would get about $96.5 million in the jobs piece, which would protect about 1,500 jobs, said U.S. Sen. Tom Harkin, a Democrat.

Keep in mind that Iowa's budget for fiscal year 2011 has an ending balance of $182.6 million, providing a cushion in case some expected revenue doesn't materialize. Also, state revenues for the first month of the current fiscal year exceeded projections. Falling short $32.9 million in federal Medicaid assistance isn't ideal, but it is manageable and far better than falling $116 million short, as would happen if Grassley and other Republicans got their way.

THIRD UPDATE: The Senate gave final approval to this bill on August 5 by a 61-39 vote. Grassley voted no along with most of the Republican caucus.

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Congress passes unemployment extension, no thanks to Iowa Republicans

by: desmoinesdem

Thu Jul 22, 2010 at 15:13:31 PM CDT

President Obama is ready to sign a $34 billion bill to extend unemployment benefits to many out-of-work Americans after the U.S. Senate finally passed the bill last night and the House of Representatives followed suit today. Unemployment benefits for many Americans started running out in early June, but Senate Democrats failed in several attempts to overcome Republican filibusters of the measure. This week a cloture motion on the unemployment benefits bill finally passed 60-40, with Republicans Olympia Snowe and Susan Collins of Maine joining 58 Democrats to overcome a filibuster. (West Virginia now has a Democratic appointee filling Robert Byrd's old seat; his long illness and death this summer had left Democrats one vote short of 60.)

Iowa's Chuck Grassley joined the Republican filibuster again this week, and last night he voted no on the bill itself, which passed 59-39. Grassley's office sent out this statement yesterday:

"There's bipartisan consensus that Congress should extend unemployment insurance, but there's no reason we can't extend benefits and pay for it.  We've offered solutions, five separate times, on ways to pay, only to be rebuffed by the Democratic leadership.

"Iowans have told me time and time again that Congress must stop deficit spending, so I voted to extend unemployment insurance and pay for it."

Give me a break. When we had a Republican president, Grassley never hesitated to vote for tax cuts for the wealthy, Medicare part D, or war supplemental funding bills that added to the deficit. In fact, under President George W. Bush the Republican-controlled Congress passed unemployment extensions without making sure the additional spending was "paid for." Senator Tom Harkin got it right in his July 20 speech on the Senate floor:

"For far too long, the long-term unemployed have gone without the assistance they need because of political gamesmanship in the Senate.  Critics argue that we cannot help some of the most desperate workers in America if it adds a dime to the deficit, but in the next breath, they argue in favor of extending hundreds of billions of tax breaks for the most fortunate and privileged Americans was necessary.  Tell that to the working family in Iowa who, through no fault of their own, struggles with joblessness and cannot put food on the table.

"Some two and a half million unemployed Americans have seen their benefits terminated in recent weeks.  They are among the nearly 6.8 million Americans who have been out of work for more than half a year.  That's the highest number of long-term unemployed we've had since we started keeping track in 1948."  

The House approved the unemployment benefits extension by a vote of 272 to 152 (roll call). Iowa Democrats Bruce Braley, Dave Loebsack and Leonard Boswell all voted for the bill. Ten Democrats (mostly representing conservative districts) crossed the aisle to vote against the bill, and 31 House Republicans voted for it. That's a surprisingly high number of Republicans going against their leadership. Iowa Republicans Tom Latham and Steve King stuck with the majority of their caucus. Not only do they lack compassion for some long-term unemployed Iowans whose benefits have run out, they apparently don't understand that unemployment benefits are among the most stimulative forms of government spending.

It's good news that benefits will be restored to millions of Americans in the coming weeks, but in other respects this bill falls short of what's needed to address our long-term unemployment problem. Although the number of Americans out of work for at least six months is at its highest level in six decades, Congress still hasn't done anything for people who have exhausted the full 99 weeks of eligibility for unemployment benefits. The House has approved more infrastructure spending and other measures that would create jobs, but for now the Senate seems unable to overcome GOP filibusters of further stimulus.

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Exploring Paul McKinley's fantasy world (part 2, w/poll)

by: desmoinesdem

Mon Jul 19, 2010 at 13:14:15 PM CDT

Last week I highlighted the half-truths and misleading arguments that underpin Iowa Senate minority leader Paul McKinley's case against Democratic governance in Iowa. I wasn't planning to revisit the Republican leader's fantasy world until I read the July 16 edition of his weekly e-mail blast. McKinley claims to offer five "big ideas" to "make Iowa again a state where jobs and prosperity can flourish."

His premise is absurd when you consider that CNBC just ranked Iowa in the top 10 states for doing business (again), and number one in terms of the cost of doing business. Many of McKinley's specific claims don't stand up to scrutiny either, so follow me after the jump. There's also a poll at the end of this post.

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Has bogus "austerity movement" won over Obama?

by: desmoinesdem

Wed Jul 14, 2010 at 18:10:40 PM CDT

President Barack Obama has nominated Jacob "Jack" Lew as his new director for the Office of Management and Budget. Peter Orszag recently announced plans to step down from that position. Lew served as OMB director during Bill Clinton's administration. Announcing his choice at a July 13 press conference, Obama said,

"Jack's challenge over the next few years is to use his extraordinary skill and experience to cut down that deficit and put our nation back on a fiscally responsible path. And I have the utmost faith in his ability to achieve this goal as a central member of our economic team,'' Obama said.

The president pulled this line straight from Republican talking points:

"At a time when so many families are tightening their belts, he's going to make sure the government continues to tighten its own," Obama said in announcing Lew's selection at the White House.

"He's going to do this while making government more efficient, more responsive to the people it serves," Obama continued.

How will the government become "more efficient"? We know the Pentagon won't be asked to make any sacrifices, since Obama can't bring himself to request even a slight reduction in our defense budget. On the contrary, he keeps going back to Congress for more supplemental war spending.

I hope Obama doesn't believe what he's saying, because aggressive policies to reduce unemployment are much more urgently needed than "belt-tightening" by the government. The Clinton economic boom turned deficits into surpluses not only (or mainly) because of spending cuts, but because unemployment dropped to historically low levels across the country.

If the president was speaking sincerely yesterday, then Lew's appointment likely means less spending on infrastructure, social benefits and other domestic programs. The trouble is, we're not going to significantly reduce the federal deficit if unemployment remains high. More federal spending may be needed to stave off a double-dip recession and ease the strain on state budgets. Bonddad decimated the argument for "austerity" here. Click over to view the numbers he posted, which show that the U.S. has had a structural deficit for the last decade.

Notice this started a long time ago. Yet suddenly everyone is up in arms about the deficit. Please.

Secondly, the complete denial about the important beneficial effects of government spending (especially infrastructure spending and unemployment benefits) is maddening. Regrettably, everyone now talks in sound bites instead of facts. So here's a few inconvenient facts.

1.) The US economy grew at a solid rate in the 1960s. Why? A big reason was the US government building the highway system. Now goods and services could move between cities in a far easier manner. If you think that wasn't a big deal then you obviously don't get out much.

2.) Since 1970, government spending has accounted for about 20% of all US GDP growth.

Bonddad further explained here why austerity hasn't created economic expansion in European countries that have gone down that road.

Instead of echoing Republican messaging, which suggests the deficit should be the government's top concern, Obama should be out there making the case for more spending on job creation and economic relief (such as unemployment benefits, which yield more stimulus "bang for the buck" than most forms of government spending). He should also demand more federal fiscal aid to the states, particularly through the Medicaid program. If Congress cuts off further support now, state budget cuts could cost this country nearly a million jobs, according to Nicholas Johnson of the Center on Budget and Policy Priorities:

The [National Governors Association (NGA) and the National Association of State Budget Officers (NASBO)] report shows that federal Recovery Act [2009 stimulus bill] assistance has greatly helped states deal with their shortfalls in a responsible, balanced way. But that assistance will largely run out by the end of December, halfway through states' fiscal year and long before state budgets are expected to recover.

In the year ahead, state budget-closing actions could cost the economy up to 900,000 public- and private-sector jobs without more federal help. When states cut spending, they lay off teachers and police officers and cancel contracts with vendors. The impact then ripples through the wider economy as laid-off workers spend less at local stores, putting more jobs at risk.

If Obama stakes his presidency on bringing down the budget deficit in the short term, he may be looking for a new job in 2013.

LATE UPDATE: Chris Hayes wrote a good piece for The Nation called "Deficits of Mass Destruction":

Nearly the entire deficit for this year and those projected into the near and medium terms are the result of three things: the ongoing wars in Afghanistan and Iraq, the Bush tax cuts and the recession. The solution to our fiscal situation is: end the wars, allow the tax cuts to expire and restore robust growth. Our long-term structural deficits will require us to control healthcare inflation the way countries with single-payer systems do.

But right now we face a joblessness crisis that threatens to pitch us into a long, ugly period of low growth, the kind of lost decade that will cause tremendous misery, degrade the nation's human capital, undermine an entire cohort of young workers for years and blow a hole in the government's bank sheet. The best chance we have to stave off this scenario is more government spending to nurse the economy back to health. The economy may be alive, but that doesn't mean it's healthy. There's a reason you keep taking antibiotics even after you start to feel better.

And yet: the drumbeat of deficit hysterics thumping in self-righteous panic grows louder by the day.

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Grassley backs Republican filibuster, killing jobs bill

by: desmoinesdem

Fri Jun 18, 2010 at 07:38:00 AM CDT

The Senate version of a bill designed to create jobs, support state budgets and extend various tax credits and benefit programs failed to overcome a Republican filibuster yesterday. Tom Harkin was among 56 members of the Democratic caucus who voted for the cloture motion (which would end debate on the bill), but Ben Nelson of Nebraska and Joe Lieberman of Connecticut voted with all the Republicans present, including Chuck Grassley, to kill the bill (roll call here). Joan McCarter observed that Senate Majority Leader Harry Reid
voted yes, without changing his vote, signaling that this iteration of the bill is indeed dead.

Reid followed the vote by attempting to pass the emergency provisions of the bill, the "doc fix," unemployment benefits extension, and FMAP as well as the homebuyer tax credit, as separate bills under unanimous consent. McConnell objected to each, so we're stuck in further limbo.

Extending unemployment benefits should be a no-brainer when the percentage of unemployed Americans who have been out of work for more than six months is higher "than at any time since the government began keeping track in 1948." Without the "doc fix," medical providers' reimbursements for Medicare patients stand to drop about 20 percent. FMAP stands for Federal Medical Assistance Percentage funding, relating to federal government reimbursements for part of each state's Medicaid spending. The 2009 stimulus bill temporarily raised FMAP payments for states during the recession, with larger increases going to states with higher unemployment rates. Failing to extend this provision will put state budgets under further strain for the 2011 and 2012 fiscal years.

Republicans who blocked this bill claim we should not be adding to the federal deficit. A spokesman for GOP enabler Ben Nelson laid out his views here. Ezra Klein pointed out a few glaring problems with the analysis: the federal budget can't start approaching balance with unemployment at 9 percent, polls show Americans are much more concerned about jobs than the deficit, and the current rate of economic recovery is "far, far too slow to really dent unemployment." Meanwhile, the same senators who claim to oppose adding to the deficit also oppose rolling back tax cuts or tax loopholes for the wealthy in order to pay for extending unemployed benefits, state fiscal aid and tax credits.

I share John Aravosis' view that it was a terrible mistake for President Barack Obama to talk tough about reducing the deficit earlier this year. As Aravosis writes,

[T]he President didn't want to blame Bush and the GOP for the deficit, and he didn't want to sufficiently defend the stimulus and explain to people that they had a choice between a Great Depression and a bigger deficit. [...] If the public understood that the deficit was a) mostly caused by Bush, and b) not nearly as important as staving off a Depression and creating jobs, the GOP would be facing far more pressure not to launch these filibusters at all.

Perhaps no jobs bill passed this week would alter the economy enough to affect the November elections, but if we accept current unemployment levels and don't pass additional fiscal aid to the states, the economy may still be very weak leading up to the 2012 election.

Share any relevant thoughts in this thread. From where I'm sitting, the case for Harkin's filibuster reform proposal has never looked stronger.

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Senate to extend unemployment benefits, but Grassley votes no (again)

by: desmoinesdem

Tue Apr 13, 2010 at 07:00:00 AM CDT

The U.S. Senate defeated a Republican attempt to filibuster another month-long extension of unemployment benefits yesterday by a vote of 60 to 34. Four Republicans voted with all of the Democrats present on the cloture motion, but Iowa's Senator Chuck Grassley supported the filibuster, as did most of his fellow Republicans (roll call here). Senator Tom Harkin was absent but would have voted to overcome the filibuster.

Republicans claim they simply want the unemployment benefits to be "paid for" (though they never objected when supplemental spending for the war in Iraq, or tax cuts for the wealthy, added to the deficit). Senator Chuck Schumer of New York countered,

"Unemployment extensions have always been considered emergency spending, and there's a reason for that. [...] Unemployment insurance is a form of stimulus, but offsetting the extension of this program would negate the stimulative impact. It would be robbing Peter to pay Paul."

Governor Chet Culver had written to the entire Iowa delegation in Congress urging them to pass the benefits extension. Unlike Grassley, our governor understands how important these benefits are as economic stimulus:

The nonpartisan Iowa Fiscal Partnership released a study earlier this year showing the economic impacts of stimulus spending for unemployment benefits. Analysts found that direct spending for unemployment insurance included in the federal stimulus, along with ripple effects from that spending, produced $501.7 million increased economic activity and $112.1 million in income in 2009, creating or saving 3,727 jobs.

For the current year, the researchers also found direct and indirect benefits but in lower amounts, $314.6 million activity, $68.6 million income and 2,258 jobs.

So extending unemployment benefits doesn't just help the jobless and their families, it helps businesses in virtually every community. The bad news is that the bill the Senate is poised to pass this week is not retroactive, meaning that unemployed Americans whose benefits expired on April 5 won't get back the money they would have received this month had the Senate passed this bill before the Easter recess. It was a big mistake for Democrats to go home without taking care of this business in March.

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Braley, Loebsack co-sponsoring new jobs bill

by: desmoinesdem

Wed Mar 31, 2010 at 17:00:00 PM CDT

Representatives Bruce Braley and Dave Loebsack are among 105 co-sponsors of H.R. 4812, the Local Jobs for America Act. The bill "would provide direct funding to local governments to create, restore or save up to one million public and private jobs for the next two years." According to the House Education and Labor Committee, the bill includes "$75 billion over two years to local communities to hire vital staff" and "[f]unding for 50,000 on-the-job private-sector training positions." Some provisions that the House of Representatives approved in separate legislation are included in this bill too, such as $23 billion to "help states support 250,000 education jobs" and extra money for law enforcement and firefighters. Groups endorsing the bill include the U.S. Conference of Mayors.

Job creation needs to remain a top priority, because the latest recession saw the most severe employment drop the U.S. has experienced in the last seven decades. Congress recently approved a small jobs bill focused on tax credits and Build America Bonds, but direct support for state local budgets would probably have more stimulative effect. As the Center for Budget and Policy Priorities has warned, government spending cuts "are problematic policies during an economic downturn because they reduce overall demand and can make the downturn deeper." If the federal government can soften the blow for state and local governments, the risk of a double-dip recession will be reduced.

I am seeking comment from Representative Leonard Boswell's office about why he's not co-sponsoring H.R. 4812 and will update this post when I hear back.

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End of 2010 legislative session thread

by: desmoinesdem

Tue Mar 30, 2010 at 16:59:36 PM CDT

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."

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Barack Herbert Hoover Obama

by: desmoinesdem

Mon Jan 25, 2010 at 20:47:57 PM CST

Please tell me our president is smarter than this:

President Obama will propose freezing non-security discretionary government spending for the next three years, a sweeping plan to attempt deficit reduction that will save taxpayers $250 billion over 10 years.

When the administration releases its budget next week, the discretionary spending for government agencies from Health and Human Services to the Department of Treasury will be frozen at its 2010 level in fiscal years 2011, 2012 and 2013. [...]

Exempted from the freeze would be Pentagon funding, and the budgets for Veterans Affairs and Homeland Security.

Instead of delivering his State of the Union address this week, Barack Obama may as well hold up a big sign that says, "I want Democrats to lose Congress." Over at Daily Kos, eugene explains why:

That will be the equivalent of FDR's boneheaded move in 1937 to pull back on government spending. The result was a major recession that caused conservatives to win a lot of seats in the 1938 election and brought the New Deal to an end.

Yet FDR had already won his second term. Obama, on the other hand, is embracing a policy that has been proven to fail even before the midterm elections.

If he thinks this is even a realistic or economically feasible policy, he is out of his mind. If he thinks this will save his and Democrats' political bacon, he is very badly mistaken. Only greater government spending - MUCH greater spending - will pull us out of recession, create jobs, and produce lasting recovery.

Without greater spending, Obama is implying he is willing to live with high unemployment for the remainder of his first term. If one wanted to deal with the deficit, he could follow Bill Clinton's model of producing economic growth that would close the deficit in future years.

Economically, this course would be a disaster, but politically it's even a worse move. During the presidential campaign, Obama promised hundreds of times that we would be able to spend more on various domestic priorities because we wouldn't be spending $200 billion a year in Iraq. With the escalation in Afghanistan, the combined cost of our commitments there and in Iraq will now exceed Bush administration levels, and Obama isn't cutting fat from other areas in the Pentagon budget to make up for it.

It's as if Obama wants Democrats to stay home this November.

A month ago, I would have said Republicans had a 10 to 20 percent chance of retaking the House and zero chance of retaking the Senate. The Massachusetts election has already prompted several Democratic incumbents to retire and prospective challengers not to run. If Obama puts deficit reduction ahead of job creation this year, I give the GOP a good chance of winning the House and an outside shot at taking the Senate (which would require a nine-seat gain, assuming Joe Lieberman would switch parties).

Obama told Diane Sawyer today, "I'd rather be a really good one-term president than a mediocre two-term president." At this rate, he'll be neither.

UPDATE: So some people are claiming this is no big deal because the spending freeze isn't an across-the-board freeze, "would apply to a relatively small portion of the federal budget" and locks in a bunch of spending increases from last year. I am not interested in endlessly increasing the defense budget while holding the line on the EPA, Energy, Transportation, HUD and other areas. That's not the agenda Obama campaigned on, and it's not smart from any perspective.

Chris Bowers raises a better point, which is that "the people who actually write spending bills--members of the House Appropriation and Budget committees--say they won't be freezing or cutting social spending." So this is just window dressing for the State of the Union to show the wise men of the beltway that Obama is very, very concerned about the deficit. Still not the kind of leadership we need from our president.

SECOND UPDATE: Brad DeLong has a must-read post up on this proposal ("Dingbat Kabuki").

THIRD UPDATE: Turkana helpfully compiled excerpts from seven liberal economists' comments on Obama's new proposal. Spoiler alert: they're not impressed.

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Iowa Companies to Receive Over $10 million in Clean Energy Tax Credits

by: environmentiowa

Fri Jan 08, 2010 at 17:23:22 PM CST

President Obama announced today that the Department of Energy will issue $2.3 billion in clean energy manufacturing tax credits from the American Recovery and Reinvestment Act (ARRA) – the vast majority of which will be used to spur more energy efficient buildings, and wind and solar power. 183 projects in 43 states will receive tax credits to help create tens of thousands of high quality jobs and increase domestic manufacturing of advanced clean energy technologies. Among the leading recipients in Iowa is TPI Composites in Newton, which will get 3.9 million dollars to expand its production of wind turbine blades. (A list of all Iowa's recipients is available here.)
 
TPI's Newton plant, formerly a Maytag washing machine factory, is symbolic of clean energy’s potential to transform and revitalize Iowa’s manufacturing base and was the site of the President's 2009 Earth Day address. American Railcar Industries in Fort Dodge hopes to follow TPI’s lead and will receive 5.35 million dollars to transform a local rail car plant to produce 500 steel towers a year for large-scale commercial wind turbines.

Eric Nost, Environment Iowa state associate, released the following statement in response:

“Energy efficiency, wind, and solar power have the potential to revive the nation's economy, create millions of good jobs, and stop global warming. The President’s announcement today will help Iowa continue to lead the way toward a new, clean energy future.

“While the Administration’s actions and the American Recovery and Reinvestment Act are substantial first steps, Congress must follow the President’s lead and take immediate action. In order to create jobs and heal our ailing economy, right now the Senate needs to pass comprehensive clean energy and global warming legislation.

“We thank Senator Harkin for investing in Iowa through the ARRA and urge him to work now to pass strong legislation that further encourages these kinds of clean energy projects and the jobs they create, makes us more energy independent, and cuts pollution fast enough to stave off the worst effects of global warming.”

###

Environment Iowa is a state-wide, citizen-funded advocacy organization working for clean air, clean water, and open spaces.  
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Year in review: Iowa politics in 2009 (part 2)

by: desmoinesdem

Fri Jan 08, 2010 at 14:13:59 PM CST

Following up on my review of news from the first half of last year, I've posted links to Bleeding Heartland's coverage of Iowa politics from July through December 2009 after the jump.

Hot topics on this blog during the second half of the year included the governor's race, the special election in Iowa House district 90, candidates announcing plans to run for the state legislature next year, the growing number of Republicans ready to challenge Representative Leonard Boswell, state budget constraints, and a scandal involving the tax credit for film-making.

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

by: desmoinesdem

Fri Jan 08, 2010 at 08:08:56 AM CST

I expected 2009 to be a relatively quiet year in Iowa politics, but was I ever wrong.

The governor's race heated up, state revenues melted down, key bills lived and died during the legislative session, and the Iowa Supreme Court's unanimous ruling in Varnum v Brien became one of this state's major events of the decade.

After the jump I've posted links to Bleeding Heartland's coverage of Iowa politics from January through June 2009. Any comments about the year that passed are welcome in this thread.

Although I wrote a lot of posts last year, there were many important stories I didn't manage to cover. I recommend reading Iowa Independent's compilation of "Iowa's most overlooked and under reported stories of 2009," as well as that blog's review of "stories that will continue to impact Iowa in 2010."

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Year in review: national politics in 2009 (part 2)

by: desmoinesdem

Thu Jan 07, 2010 at 14:56:38 PM CST

Following up on the diary I posted this morning, this post compiles links to Bleeding Heartland's coverage of national politics from July through December 2009. Health care reform was again the number one topic. I wish there had been a happy ending.
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Iowans split on party lines over jobs bill

by: desmoinesdem

Thu Dec 17, 2009 at 11:13:17 AM CST

The House of Representatives approved the Jobs for Main Street Act yesterday by a vote of 217 to 212. No Republicans supported the bill; the nay votes included 38 Democrats and 174 Republicans (roll call here). Iowa Democrats Bruce Braley, Dave Loebsack and Leonard Boswell all voted for the bill, while Republicans Tom Latham and Steve King voted with the rest of their caucus. (This year has been a refreshing change from 2005-2007, when Boswell was often among 30-some House Democrats voting with Republicans on the issue of the day.)

More details are after the jump.

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