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.

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.

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.

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.  

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!

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.

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.

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.

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.

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.

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.

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.

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.

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.”

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.

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.  

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.

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.”

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.

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.

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.

Iowa has relatively good money-management practices and is among the states “least like California” in terms of budget problems, according to a report released yesterday by the Pew Center on the States.

In the report, Pew’s researchers identified factors that have contributed significantly to California’s difficulties, then determined the degree to which other states are experiencing the same challenges. These factors are: (1) loss of state revenues; (2) the relative size of budget gaps; (3) increasing joblessness; (4) high foreclosure rates; (5) legal obstacles to balanced budgets-specifically, a supermajority requirement for tax increases or budget bills and (6) poor money-management practices.

Pew scored all 50 states using the best available data as of July 31, 2009. The snapshot captures an important juncture: the first and second quarters of 2009, the pressure point for governors and legislatures in the throes of crafting their budgets for fiscal year 2010 (which began on July 1 in all but four states).

Click here to view a map showing which states are most and least like California. On that page you’ll also find links to download the full report, its methodology, and a 50-state scorecard (pdf file).

Scanning the scorecard, I noticed that only one state has a better score overall than Iowa. The size of Iowa’s budget gap (as a percentage of total spending) ranks 15th. Only three states had a smaller change in the unemployment rate than Iowa. Only seven states had a lower foreclosure rate. We were among eight states that received a B+ grade for money-management practices (only five states received an A or A- in that category).

Republicans can complain about so-called fiscal mismanagement by Governor Chet Culver and the Democratic-controlled legislature, but compared to many other states, Iowa is weathering this challenging economy well.

Commenting on the Pew report yesterday, Mark Zandi of Moodys.com called for additional federal stimulus funding to support state budgets in fiscal year 2011: “In the past six decades, state and local governments have never seen the kind of tax-revenue collapse they are now experiencing, Mr. Zandi said.”

Huge consumer demand quickly exhausted the $1 billion in federal funds allocated to the “Cash for Clunkers” program that provides $3,500 or $4,500 vouchers to some consumers who trade in old vehicles for newer models. An estimated 250,000 Americans have taken advantage of the program already, prompting the U.S. House to vote on Friday for an additional $2 billion to extend it. All five Iowans in the House voted to fund “Cash for Clunkers” in June, but Representative Steve King (IA-05) voted no on the extra $2 billion.

Although the White House would like to extend this program, Reuters reported that the bill may run into trouble in the Senate:

One member can block a bill in the Senate and there are different interests that could pose a challenge. For instance, Energy Committee Chairman Jeff Bingaman said he opposes the House proposal because it calls for spending unused Energy Department loan guarantees on the program.

Environmental champions in the Senate have urged members to strengthen requirements in the bill for fuel efficiency and pollution control.

Energy analysts played down the impact the program would have on reducing gasoline consumption.

Conservative budget hawks could also draw the line on more help for an industry that has already received tens of billions in federal assistance.

In an ideal world, I would have liked to see “Cash for Clunkers” structured somewhat differently, but there is no question that this program has helped many people and given a slight boost to the economy. Even if the Senate does not approve the additional $2 billion, car dealers’ incentives that copy the “Cash for Clunkers” approach may continue to stimulate new car purchases.

Congressman Bruce Braley (IA-01) was one of the key House sponsors of this bill, and its popularity will probably help him if he ever runs for statewide office. People who bought new cars they otherwise could not have afforded are going to remember that for a long time.

I noticed that Congressman Leonard Boswell (IA-03) is holding a public event to discuss “Cash for Clunkers” on August 4 (Stew Hansen Dodge City Jeep on Hickman in Urbandale, 9 am).

Share any thoughts about this program or stories about people who have benefited from it in this thread.

I see a Chet Culver campaign ad in our future after reading this Radio Iowa story. The non-partisan U.S. Government Accountability Office examined how 16 states are using stimulus funds from the American Reinvestment and Recovery Act:

“We found that Iowa has a foundation of safeguards to help ensure the funds are being spent in the way that they were intended and to minimize the fraud, waste and abuse,” [GAO Iowa division head Lisa] Shames said. The G.A.O. report also praises Iowa for setting up an Accountability and Transparency Board.

“We found that there were many good features in place and that bodes well in terms of the Recovery Act dollars and to ensure that they’re going to create the jobs and retain the jobs that the law intended,” Shames said.

Click here for the summary of the G.A.O’s report on Iowa. From that page you can download the full report (a 40-page pdf file). Reports on other states are available here.

Did I mention that unlike many states, Iowa is fully utilizing stimulus funds intended to help unemployed people?

And that compared to many states, Iowa has wisely invested its stimulus funds for transportation?

We’ll be hearing more about this next year in response to Republicans attacks against Governor Culver. No doubt ragbrai08 is right, and some version of this Tom Vilsack re-election message from 2002 will return to Iowa airwaves in 2010:

My opponent suggests in negative ad after ad that a bunch of problems that have struck virtually every state in the nation are somehow unique to Iowa. That’s his whole campaign. The truth is that in Iowa, we’ve met that challenge better than most.

Though unemployment remains a significant problem in Iowa, our unemployment rate is well below the national average during this recession. Our state officials are doing a good job allocating federal funds intended to save and create jobs, and the I-JOBS program will save and create additional jobs.

Don’t expect Iowa Republicans to pay attention to the G.A.O.’s findings. They never got the point of the stimulus anyway.

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.

Nearly every day I see reports on this or that program in Iowa receiving additional funding thank to the federal economic stimulus bill, passed in February over loud Republican objections. This news caught my eye on Monday. Iowa will receive about $7.5 million out of $100 million appropriated to the U.S. Department of Housing and Urban Development’s Lead-Based Paint Hazard Control Program:

Polk County will receive $3 million to eliminate lead in 206 housing units; Marshalltown will get nearly $2.6 million to remove lead from 150 housing units; and Sioux City will be awarded nearly $2 million to create 75 lead-safe housing units.

Two potential Republican candidates for governor next year happen to be from Sioux City: businessman Bob Vander Plaats and State Representative Chris Rants. I know some conservatives are clueless about the dangers posed by lead paint, but I wonder if Rants and Vander Plaats can see the benefit of creating lead-safe housing.

Background: lead poisoning can cause mental retardation and behavioral problems, and not only in children. “Exposure to excessive amounts of inorganic lead during the toddler years may produce lasting adverse effects upon brain function.” Decades later, people poisoned by lead can show signs of cognitive deficits and mental illness. People exposed to high levels of lead in the womb and in early childhood have cells missing in key areas of the brain and have been found to be “more likely to be arrested for crimes, especially violent crimes.”

If Republicans claim they support lead remediation but don’t think it belongs in an economic stimulus bill, remember that lead remediation requires human labor and therefore creates jobs. I also would like Republicans to explain where they would find the money for this important work, since Republican politicians want deep spending cuts at the state level as well as a federal spending freeze.

I’m glad to learn that more funding to get lead out of homes was included in the stimulus bill. Reducing children’s exposure to lead has long been a priority for Barack Obama.

The Iowa Department of Public Health’s Bureau of Lead Poisoning Prevention has more background on lead poisoning in Iowa.

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.

LATE UPDATE: This piece by BruceMcF is a must-read: How to build a national high-speed rail system.

President Barack Obama and Transportation Secretary Ray LaHood released a

blueprint for a new national network of high-speed passenger rail lines Thursday, saying such an investment is necessary to reduce traffic congestion, cut dependence on foreign oil and improve the environment.

The president’s plan identifies 10 potential high-speed intercity corridors for federal funding, including California, the Pacific Northwest, the Midwest, the Southeast, the Gulf Coast, Pennsylvania, Florida, New York and New England.

It also highlights potential improvements in the heavily traveled Northeast Corridor running from Washington to Boston, Massachusetts.

The economic stimulus package included about $8 billion for high-speed rail projects, and Obama is seeking an additional $1 billion each year for high-speed rail in the next five federal budgets.

After the jump I’ve got more details on how this funding could benefit Iowa.

Yesterday I posted here that Representative Tom Latham (IA-04) has been taking credit for earmarks in the 2009 omnibus spending bill that he voted against.

Alert Bleeding Heartland user frogmanjim informed me that Representative Steve King (IA-05) has been playing the same game. King’s office issued an upbeat statement about $570,000 included in the economic stimulus bill that will go toward widening U.S. Highway 20 in a rural area of northwest Iowa. Of course, the statement did not mention that King voted against the stimulus. Nor did the brief news item in the Sioux City Journal.

I had a feeling that King would take credit for stimulus spending. During last year’s campaign he repeatedly misled voters about his role in securing money to widen Highway 20 (see here and here).

Time for the Democratic Congressional Campaign Committee to add Steve King’s name to the Republican Hypocrisy Hall of Fame. More than 30 House Republicans have already been inducted.

As you can see from this graph, job losses in the current recession are worse than in other recent recessions and are continuing to accelerate at a time when the U.S. economy has already started adding jobs during the past two recessions.

Paul Krugman, who has been arguing for a much larger stimulus package, is very worried:

To see how bad the numbers are, consider this: The administration’s budget proposals, released less than two weeks ago, assumed an average unemployment rate of 8.1 percent for the whole of this year. In reality, unemployment hit that level in February – and it’s rising fast.

Employment has already fallen more in this recession than in the 1981-82 slump, considered the worst since the Great Depression. As a result, Mr. Obama’s promise that his plan will create or save 3.5 million jobs by the end of 2010 looks underwhelming, to say the least. It’s a credible promise – his economists used solidly mainstream estimates of the impacts of tax and spending policies. But 3.5 million jobs almost two years from now isn’t enough in the face of an economy that has already lost 4.4 million jobs, and is losing 600,000 more each month. […]

So here’s the picture that scares me: It’s September 2009, the unemployment rate has passed 9 percent, and despite the early round of stimulus spending it’s still headed up. Mr. Obama finally concedes that a bigger stimulus is needed.

But he can’t get his new plan through Congress because approval for his economic policies has plummeted, partly because his policies are seen to have failed, partly because job-creation policies are conflated in the public mind with deeply unpopular bank bailouts. And as a result, the recession rages on, unchecked.

At MyDD Charles Lemos wonders whether current job losses may become permanent because of the manufacturing sector’s continuing decline.

Only the biggest layoffs make headlines, as when John Deere cut 325 jobs in Dubuque and Davenport last week. But almost all of us have friends or relatives who have lost their jobs in the past six months. Thankfully, none of my recently-unemployed friends are likely to lose their homes, but lots of people aren’t so lucky. Tent cities are booming across the country.

If you are looking for work, read this piece by Teddifish on How to get a job when no one is hiring.

Daily Kos diarist plf515 just found a new job and shared some advice in this diary:

How did I get this job?

I told everyone I was looking for work!  

This particular lead came from an announcement I made on SAS-L a mailing list about software that I use.  I am a frequent contributor there, someone who has read my work saw my mention, and then forwarded me a link to a job offer. […]

But I didn’t just mention it there.  I told everyone. I wrote a diary here; and I joined dkos networking; I announced it on mailing lists; I told my friends; I told former employers; I told the guy who does our dry cleaning; I told EVERYONE.  I also left cards advertising my consulting business all over.  

Can you find a job in this economy? Well, there are no guarantees.  But, if people don’t know you’re looking, they’ll never tell you about any openings.  

MyDD user ragekage has specific advice for people pursuing a career in nursing because they think it is a “recession-proof” occupation.

This thread is for any comments about unemployment or helpful advice about finding jobs.

State Auditor David Vaudt’s a pretty good bean-counter, but he did not read the fine print of the stimulus bill Congress recently passed. (In fairness, the document was more than 1,000 pages long.) Vaudt told the Iowa Political Alert blog that

the state should consider the nearly $1.9 billion expected to flow to Iowa through the package in cafeteria style – taking millions here but potentially leaving money on the table elsewhere if he thinks the short-term gain would give birth to unwieldy bureaucracy down the road.

“I would sort through each piece of the stimulus package and try and say ‘where does it fit Iowa the most,’” he said.

(Hat tip to Iowa Independent.)

But Senator Charles Schumer of New York has bad news for Republican governors (or in this case a would-be governor) advocating an a la carte approach to the stimulus:

As you know, Section 1607(a) of the economic recovery legislation provides that the Governor of each state must certify a request for stimulus funds before any money can flow. No language in this provision, however, permits the governor to selectively adopt some components of the bill while rejecting others. To allow such picking and choosing would, in effect, empower the governors with a line-item veto authority that President Obama himself did not possess at the time he signed the legislation. It would also undermine the overall success of the bill, as the components most singled out for criticism by these governors are among the most productive measures in terms of stimulating the economy.

Vaudt may run for governor in 2010, but I don’t give him much chance of winning a Republican primary. A few days ago he dared to suggest that Iowans may have to pay higher gas taxes in order to adequately fund road projects. That will rile up the base in the wrong way.

Speaking to Iowa Political Alert, Vaudt acknowledged that he hasn’t focused much on social issues in the past. He added that on abortion he’s a “pro-life person” who would make exceptions in the case of rape or when the mother’s life is in danger.

Correct me if I’m wrong, but I think Republican Congressional candidate Mariannette Miller-Meeks had exactly the same stance on abortion and was consequently attacked by Iowa Right to Life. Amazingly, the State Central Committee of the Republican Party of Iowa barely had the votes to censure RNC committeewoman Kim Lehman for failing to support Miller-Meeks during her campaign against Congressman Dave Loebsack last fall.

I don’t think Vaudt will satisfy the social conservatives who dominate GOP primaries in Iowa unless several candidates of the Bob Vander Plaats variety split those votes.  

Jill Richardson’s post on extremely low food stamp participation rates in San Diego got me wondering how well Iowa does in getting eligible people enrolled in this program.

Bleeding-heart liberal that I am, I’d like to see 100 percent of people who qualify for food stamps get them, just for the sake of reducing hunger in our communities.

But let’s leave ethical concerns aside for now. Economic researchers, most recently Moody’s Economy.com, have calculated that expanding the food-stamp program produces more economic stimulus than any other kind of government spending, and much more than any form of tax cuts.  Every additional dollar spent on food stamps translates into $1.73 circulating in the economy.

This page on the U.S. Department of Agriculture’s website contains links to many studies comparing the state participation rates for the Supplemental Nutrition Assistance Program (the official name for the food stamp program). All of the recent annual reports are pdf files you can download.

The report for 2004 put Iowa in 22nd place for food stamp participation and estimated that 61 percent of the 286,000 people eligible for food stamps were receiving them.

The report for 2005 ranked Iowa 24th and estimated that 66 percent of the 307,000 people eligible for food stamps were receiving them.

The report for 2006 ranked Iowa 20th and estimated that 71 percent of the 309,000 people eligible for food stamps were receiving them. Data for 2007 and 2008 are not yet available on the USDA site.

As you can see, Iowa is doing a little better at getting food stamps to the people who qualify for them, but we have a long way to go to match the states near the top. In the top three states, more than 90 percent of people eligible for food stamps are getting them. That figure is above 80 percent for the next five states.

Increasing Iowa’s food stamp enrollment rate from 71 percent to 80 percent would translate to nearly 30,000 more people receiving food stamps in our state. If we could get food stamp participation above 90 percent, roughly 60,000 more Iowans would be receiving food stamps. Those people would consequently have more to spend on other goods and services. Many retailers would benefit as the money flowed through the economy.

I don’t know exactly what needs to be done to further improve Iowa’s food stamp participation rate. There’s a lot of research on the USDA site on factors that affect enrollment. I would welcome comments or a diary from someone with expertise in this area about what Iowa’s doing well already and what we need to do better.

Given the multiplier effect of food stamp benefits on economic activity, this program merits attention from policy-makers looking to stimulate the economy. Government spending on infrastructure projects is worthwhile (as long as we fix what we have first), but let’s not ignore other efficient ways of sparking more economic activity.

To my conservative readers who start hyperventilating at the thought of more people receiving government assistance: don’t think of it as extra food for families struggling to get by. Think of it as a fast way to save jobs in the retail sector–with a lot more bang for the buck than tax cuts.  

The Democratic Congressional Campaign Committee announced that 40 Democrats in the U.S. House of Representatives will be in the “Frontline Program,” which seeks to protect incumbents in potentially vulnerable districts. Once again, Leonard Boswell of Iowa’s third district will be a Frontline Democrat. Here’s what the designation means:

The Frontline Program is a partnership between the DCCC and Members which lays the ground work for the 2010 cycle by supporting and expanding their fundraising and outreach operations. Frontline Members must sign a memorandum of understanding, strengthened this cycle to reflect the challenging political environment, that requires Members to meet aggressive fundraising goals, accelerate volunteer and recruitment efforts, and increase their online networking.

The DCCC’s Frontline Program is a proven success. Frontline Members and the DCCC did its work effectively and early in the 2008 cycle.  As a result, the DCCC’s independent expenditure campaign made a significant investment in only 10 of 34 Frontline districts – approximately 15 percent of the IE’s budget.

I’ve put the DCCC’s press release after the jump. Most of the others named to the Frontline list appear to be in more vulnerable districts than Boswell. Republicans targeted Boswell during his first five re-election campaigns but did not make a serious challenge in IA-03 in 2008. Boswell defeated Kim Schmett by 56 percent to 42 percent in November.

Here’s an interesting fact from the DCCC’s statement, which underscores how the Republican Party has become increasingly uncompetitive in large parts of the country:

There are 83 Democrats in districts that President [George] Bush won in 2004, while there are only six (6) Republicans in seats that Senator [John] Kerry won.

Presumably a significant number of those 83 districts swung to Barack Obama in the 2008 election, as Iowa’s third district did. But the final presidential election results by Congressional district have not been calculated everywhere in the country.

I would be very surprised if the DCCC had to spend resources defending Boswell in the next election. Many House Democrats are in a more precarious position. Unfortunately, the irony is that re-electing Boswell in 2010 could make IA-03 a very tough hold for Democrats in 2012.

The DCCC is staying on offense as well, launching robocalls this week in the districts of 12 potentially vulnerable House Republicans. A few weeks ago the DCCC ran radio ads in 28 Republican-held House districts, including Iowa’s fourth district. Tom Latham is not being targeted in the current robocall effort, however. It’s just as well, since IA-04 does not appear to be among the top Democratic pickup opportunities for the next cycle.

Although GOP leaders are boasting that zero House Republicans voted for the stimulus bill, I have a sneaking suspicion that once this so-called “wasteful spending” starts working its way through the economy, Republican members of Congress will find a way to take credit for it.

We saw last fall that Steve “10 worst” King used his first television commercial to take credit for progress toward widening Iowa Highway 20. The TIME-21 plan approved by the state legislature last spring–not King’s work in Congress–made that project possible. Nevertheless, King continued to mislead voters about his role in moving the Highway 20 project forward.

At least two House Republicans are already playing this game with respect to the stimulus. David Waldman/Kagro X predicts,

Standard operating procedure, of course. Oppose the bill viciously, vote against it, then show up at every ribbon cutting in the district paid for by federal funds, and cry “Politicization!” if they’re not invited.

Paul Rosenberg’s take on this story is also worth a read.

Democrats need to be on the lookout for this kind of weaselry over the next couple of years. Help from Iowans living in the fourth and fifth Congressional districts would be most appreciated.

If you see Steve King or Tom Latham taking credit for stimulus spending they voted against, either in an official press release or in a local newspaper, radio or television news story, please post a diary about it at Bleeding Heartland, or e-mail me with the details (desmoinesdem AT yahoo.com).

UPDATE: More Republicans are touting wonderful provisions in the stimulus bill they voted against.

As President Barack Obama signed the stimulus bill in Denver,

The White House today released state-specific details on the local impact of the American Recovery and Reinvestment Act.  The American Recovery and Reinvestment Act is a nationwide effort to create jobs, jumpstart growth and transform our economy to compete in the 21st century. The compromise package of $789 billion will create or save 3.5 million jobs over the next two years. Jobs created will be in a range of industries from clean energy to health care, with over 90% in the private sector.

Below are links to tables and fact sheets outlining the impact of the American Recovery and Reinvestment Act.  The estimates are derived from an analysis of the overall employment impact of the American Recovery and Reinvestment Act conducted by Christina Romer, Chair of the Council of Economic Advisers, and Jared Bernstein, Chief Economist for the Vice President, and detailed estimates of the working age population, employment, and industrial composition of each state.

Note: all of the links below are to pdf files.

Overview on American Recovery and Reinvestment Act

American Recovery and Reinvestment Act on Working Families

Employment Numbers by State

Employment Numbers by Congressional district

Education Fact Sheet

Energy Fact Sheet

Health Care Fact Sheet

Infrastructure Fact Sheet

I have not had time to read these documents yet. Please use this comment thread to write about what you like and don’t like about the stimulus.

Note: while House Republican leaders proudly proclaim that no one in their caucus voted for the stimulus, I heard on the news this morning that 22 of the 24 Republican governors support the bill.

That’s the difference between someone whose main task is to build an electoral comeback on Democratic failure and someone who has to govern in this difficult economy.

President Barack Obama will have a very large bill to sign on Monday. Yesterday the U.S. House of Representatives passed the $787 billion economic stimulus bill by 246 to 183. As expected, no Republicans voted for the bill. Iowa’s three Democrats in the House voted for it. Looking at the roll call, I was surprised to see that only seven House Democrats voted against this bill (one voted “present” and one did not vote). I did not expect that much support from the 50-odd Blue Dog Democrats. Good for them!

In the Senate, supporters of the stimulus managed exactly 60 votes after Senator Sherrod Brown flew back from Ohio, where he was attending his mother’s wake. All Democrats, two independents, and three Republicans (Olympia Snowe, Susan Collins and Arlen Specter) voted for it. According to Specter, at least a few other Senate Republicans supported the bill but were afraid to vote for it (fearing a challenge from the right in the next GOP primary). I’m no fan of Specter, but I give him credit for casting a tough vote today. As brownsox explains, conservative Republicans in Pennsylvania are eager to take Specter out in the 2010 primary, having apparently forgotten how badly right-wing Senator Rick Santorum got beaten in 2006.

Daily Kos diarist thereisnospoon, a self-described “hack” who conducts focus groups for a living, is giddy about the potential to make Republicans pay in 2010 for voting against “the biggest middle-class tax cut in history.”

On the whole, this bill is more good than bad, but I agree 100 percent with Tom Harkin’s comments to the New York Times:

Even before the last touches were put to the bill, some angry Democrats said that Mr. Obama and Congressional leaders had been too quick to give up on Democratic priorities. “I am not happy with it,” said Senator Tom Harkin, Democrat of Iowa. “You are not looking at a happy camper. I mean they took a lot of stuff out of education. They took it out of health, school construction and they put it more into tax issues.”

Mr. Harkin said he was particularly frustrated by the money being spent on fixing the alternative minimum tax. “It’s about 9 percent of the whole bill,” he said, “Why is it in there? It has nothing to do with stimulus. It has nothing to do with recovery.”

The $70 billion spent on fixing the alternative minimum tax will produce little “stimulus bang for the buck” compared to most forms of spending. The upper middle class and upper class earners who will benefit are likely to save rather than spend the money they get back.

As exciting as it is to see increased funding for high-speed rail, I fear that the bulk of the much larger sum appropriated for roads will go toward new highway construction rather than maintaining our existing infrastructure.

But I’ve buried the lede: what will the stimulus bill do for Iowa?

Iowa Politics linked to two White House documents about the impact in terms of spending and jobs created. This pdf file estimates the number of jobs created in each state and in each Congressional district within that state. It estimates 37,000 jobs created in Iowa: 6,600 in the first district, 7,000 in each of the second and third districts, 6,700 in the fourth district and 6,200 in the fifth district.

Prediction: Tom Latham and Steve King will take credit for infrastructure projects in their districts during the next election campaign, even though both voted against the stimulus bill.

This pdf file shows how much money Iowa will receive under different line items in the stimulus bill. Even more helpful, it also shows the figures for the original House and Senate bills, so you can get a sense of which cuts were made. The bill that first passed the House would have directed $2.27 billion to Iowa. The first Senate version reduced that number to $1.8 billion. The final bill that came out of conference directs about $1.9 billion to Iowa.

If you delve into the details of this document you’ll understand why Harkin isn’t thrilled with the bill he voted for. They took out school construction funds and extra money for the Low Income Home Energy Assistance Program (LIHEAP), for crying out loud.

“Bizarro Stimulus” indeed.

Iowa Independent reports that Harkin and Chuck Grassley “agree that the newly conceived formula used to distribute the $87 billion Medicaid portion of the bill shortchanges Iowa.”

After the jump I’ve posted statements from Representatives Dave Loebsack and Bruce Braley on the stimulus bill. Both talk about the jobs that will be created in Iowa. Loebsack emphasizes the tax cuts that 95 percent of American families will receive as a result of this bill. However, he also expresses his concern about what he views as inadequate funding for modernizing schools in the final bill.

Braley’s statement highlights an amendment he wrote providing low-interest loans for biofuels producers.

I would have been happy to post a statement from Leonard Boswell too, but his office has repeatedly refused my requests to be added to its distribution list for press releases. Hillary Clinton may have a prestigious job in Barack Obama’s cabinet and Joe Lieberman may be welcome in the Democratic Senate caucus, but Boswell’s press secretary seems ready to hold a grudge forever against the blogger who supported Ed Fallon.  

In remarkable parallel to the climate crisis, there is no single solution to reviving our economy – it will take a combination of innovative thinking and bold actions to face both challenges. The American Recovery and Investment Act (of which Jesse provides a great summary of energy-related features) illustrates that.

I want to take a moment to talk about one feature in the stimulus bill that occupied one sentence in his summary: high-speed passenger rail.

The American Recovery and Investment Act included a total of $9.3 billion for passenger rail: $8 billion for construction of high speed passenger rail and intercity passenger rail service and $1.3 billion for Amtrak (the National Railroad Passenger Corporation) rail investments. As I was talking about this today, the number of atrocious puns that came up was amazing:

• “High speed passenger rail can get the economy back on track”
• “Everyone’s getting on board with passenger rail”
• “Trains can be a model for environomics*”
• “The little stimulus package that could”

*environomics refers to developing a sustainable global economy

I could continue with the jokes, but you get the picture. However, I think it is worth noting that not only is there substantial support for high speed passenger rail in Congress (the original amount was $3 billion in the House and $2.25 billion in the Senate – apparently somebody in the conference committee likes us), but there is broad support among the public. Out here in the Midwest, we have been working to gain support and funding for a high speed passenger rail network, with its hub in Chicago. This system would provide high speed service to St. Louis, Cleveland, Detroit, Milwaukee, Madison, the Twin Cities and Omaha. For a little context, the trip from Omaha to Detroit is approximately a quarter of the width of the continental 48 states.

What is even more impressive to me is how rail can really be a model for how to actually engage diverse players in building a sustainable economy. Here in Iowa, we are building a coalition of labor, business and youth organizations (in addition to the traditional environmental groups) to work together on getting high speed passenger rail approved this year. And we’re not just talking liberal groups either. For example Jan Michaelson, a local conservative talk show host, had nothing but good things to say about rail when Andrew Snow from Iowa Global Warming joined his show this week. Talk about finally moving past partisanship – rail is one of the clearest vehicles to make this a reality (no apologies for the pun).

There are plenty of issues that can build a diverse base of support, but the thing is, high speed rail visibly makes lots of people’s lives easier. Upgrading building efficiency largely goes unnoticed except for electricity bills; people don’t see the wind energy powering their homes. But talk about saving yourself the hassle of driving several hours, not having to drive through traffic, and oh, did I mention that rail is about 3 times as efficient as driving and 6 times as efficient as flying. Oh, and hundreds to thousands of jobs will be created through construction and operation.

Rail has broad support, has a significant improvement in the ease of travel and will save countless vehicle miles traveled (well, you probably could count them, but it would keep you very busy). We can use rail as a way to build successful and diverse coalitions which we can then continue to work with to advance the less visible, less sexy aspects of sustainability. These relationships will be crucial to mobilizing society-wide action.

All aboard!

Originally posted on It’s Getting Hot In Here

Recovery Act Invests $9.3 Billion to Expand High-Speed Rail

Representative Steve King bragged about his 11th-grade research project in the Thursday edition of the Des Moines Register:

As a junior at Denison High School, I wrote a term paper on President Franklin D. Roosevelt and the New Deal. I began working on the paper with the intention of confirming what I had been taught in school – that FDR’s government recovery programs brought America out of the Great Depression.

I started my research believing in the success of Roosevelt’s economic-recovery programs. To support this claim, I spent hours at the Carnegie Library in Denison reading past editions of the local, biweekly newspaper.

My reading began with the 1929 stock-market crash, and I examined every issue through the attack on Pearl Harbor in December 1941. Those stacks of old papers turned upside down everything I had been taught in history and government class about the New Deal. As I searched for information proving the New Deal stabilized the American economy, I instead found the exact opposite: high unemployment, a struggling stock market and continued hard times.

Later statistical findings confirm my 11th-grade research. Throughout the 1930s, the unemployment rate never dipped below 14 percent. FDR’s tinkering with the free market frustrated investors, and the 1929 high point for the Dow Jones industrial average was not reached again until 1954.

Roosevelt possessed tremendous leadership skills and inspired many Americans, including my hard-hit family. Charisma aside, historians often inflate the true economic record of the New Deal. Roosevelt tried one big government program after another, with poor results. Many of Roosevelt’s programs and initiatives led the government to compete directly with the private sector for capital and workers, with Washington making the rules.

Massive government spending did not lift the United States out of recession. Instead, FDR’s big-government programs prolonged the Great Depression. The best we can say about the New Deal is that it may have blunted the depths of the Depression, but the trade-off was it delayed economic recovery until World War II and our post-war industrial advantage brought America out of the Depression.

Ah yes, the “poor results” of big-government programs introduced by FDR. Programs like Social Security, which dramatically reduced poverty among the elderly, and the Fair Labor Standards Act, which “set maximum hours and minimum wages for most categories of workers.”

But never mind the safety net for seniors and regulations that improved the quality of life for workers. What about King’s central claim, that the New Deal prolonged the Great Depression? This is now a key right-wing talking point against government spending in Barack Obama’s stimulus package.

It is wrong to say that no economic recovery occurred during the New Deal. On the contrary,

The economy had hit rock bottom in March 1933 and then started to expand. As historian Broadus Mitchell notes, “Most indexes worsened until the summer of 1932, which may be called the low point of the depression economically and psychologically.”[18] Economic indicators show the economy reached nadir in the first days of March, then began a steady, sharp upward recovery. Thus the Federal Reserve Index of Industrial Production hit its lowest point of 52.8 in July 1930 (with 1935-39 = 100) and was practically unchanged at 54.3 in March 1933; however by July 1933, it reached 85.5, a dramatic rebound of 57% in four months. Recovery was steady and strong until 1937. Except for unemployment, the economy by 1937 surpassed the levels of the late 1920s. The Recession of 1937 was a temporary downturn. Private sector employment, especially in manufacturing, recovered to the level of the 1920s but failed to advance further until the war.

Unemployment continued to be high by today’s standards throughout the 1930s, but King ignores the sharp reduction in unemployment following the introduction of New Deal policies.

The bottom line is this: the unemployment rate dropped by 9 percent during the pre-World War II FDR era, and the absolute number of unemployed people dropped by 36.7 percent (from 12.8 million unemployed in 1932 to 8.1 million unemployed in 1940).

World War II significantly reduced the number of unemployed Americans, but again, it is false to claim that the New Deal programs accomplished little on the employment front.

By way of comparison, under King’s hero Ronald Reagan, the unemployment rate only dropped by 2.1 percent, and the absolute number of unemployed people dropped by 19.0 percent (from 8.2 million in 1981 to 6.7 million in 1988).

The U.S. population was a lot bigger during Reagan’s presidency than it was in FDR’s day. If Reagan’s policies were so much better for putting people to work, why did we not see a larger decrease in the total number of unemployed Americans during the 1980s? Why did we see such marginal improvement in the unemployment rate during Reagan’s presidency?

If we look at employment figures under every president since FDR, King’s nemesis Bill Clinton comes out ahead. During his presidency, the unemployment rate declined by 2.9 percent, and the total number of unemployed dropped by 36.3 percent (from 8.9 million in 1993 to 5.6 million in 2000).

Note: Chase Martyn had a go at King at Iowa Independent, but he was too kind in my opinion. The facts do not support King’s assertion that the New Deal delayed economic recovery and failed to address high unemployment.

Someone please talk King into running for governor in 2010 so we can get a less odious Republican representing Iowa’s fifth district.

Senator Judd Gregg of New Hampshire withdrew his name from consideration for Commerce Secretary in Barack Obama’s cabinet today. Politico posted the statement from Gregg’s office. Excerpt:

I want to thank the President for nominating me to serve in his Cabinet as Secretary of Commerce. This was a great honor, and I had felt that I could bring some views and ideas that would assist him in governing during this difficult time. I especially admire his willingness to reach across the aisle.

However, it has become apparent during this process that this will not work for me as I have found that on issues such as the stimulus package and the Census there are irresolvable conflicts for me. Prior to accepting this post, we had discussed these and other potential differences, but unfortunately we did not adequately focus on these concerns. We are functioning from a different set of views on many critical items of policy.

Obviously the President requires a team that is fully supportive of all his initiatives. […]

As a further matter of clarification, nothing about the vetting process played any role in this decision. I will continue to represent the people of New Hampshire in the United States Senate.

One wonders why Gregg only noticed today that his views on economic stimulus and the census would impede his effectiveness as a cabinet member. (The U.S. Census Bureau is part of the Commerce Department.)

Despite the last paragraph of Gregg’s statement, you have to wonder whether something popped up in the vetting process here.

Whatever his reasons, I welcome the news and hope that the third time will be the charm for President Obama as he tries to fill this position.

This thread is for any comments or speculation about why Gregg dropped out and who should replace him at Commerce. I don’t want the job to go to another conservative or another Republican.