Eight Republican presidential candidates will debate for the second time in less than a week tonight at 7 pm central time. I expect former Massachusetts Governor Mitt Romney and Representative Ron Paul to have a go at Texas Governor Rick Perry, like they did during last week’s debate. Representative Michele Bachmann has been trying to distinguish herself from Perry too lately. I see the other four candidates mainly fighting not to be ignored by the moderators.

I’ll update this post later, but meanwhile here’s a thread to talk about the debate or the presidential race in general.

UPDATE: First thoughts on the debate and excerpts from the transcript are after the jump.

Salaries for chief executive officers of major U.S. corporations rose sharply in 2010 despite the weak national economy, and various tax-dodging strategies allowed highly profitable companies to pay little or no corporate income taxes. That’s a small taste of the distubring news from the Institute for Policy Studies’ report on Executive Excess: CEO Rewards for Tax Dodging.

Democratic Congressional candidate Christie Vilsack rolled out her first specific proposal to create new jobs last week. The plan to expand apprenticeship programs was light on specifics but heavy on conservative catch phrases.  

The National Republican Congressional Committee went up on cable television this week against Representative Dave Loebsack in Iowa’s new second district. I’ve posted the video and transcript after the jump. Be warned: you may wonder whether you’re watching a real Republican commercial or a Stephen Colbert parody.  

President Barack Obama came to Iowa on the first two days of his bus tour through the Midwest, where he hopes to highlight economic issues. He bashed Congress for not being willing to compromise for “shared sacrifice” but didn’t reveal much about his forthcoming plan for improving the economy.

Defending his veto of a tax measure designed to help lower and middle-income working Iowans, Governor Terry Branstad hinted yesterday that he won’t allow any expansion of that tax credit unless legislators approve corporate income and property tax reform costing more than twenty times as much.

Governor Terry Branstad has nixed Iowa Democrats’ top tax policy priority for the second time this year. The governor signed the broad budget “standings” bill yesterday, but used his item veto power to eliminate several provisions, including an expansion in the earned income tax credit for working people. The governor’s veto message said,

“This change is estimated to reduce revenue to the state general fund by $28.5 million for fiscal years 2012-2013,” Branstad said. “It is my desire to approach tax policy in a comprehensive and holistic manner. As such, I urge members of the House and Senate to continue to work with my office on an overall tax reduction package that both fits within or sound budgeting principles while reducing those taxes that are impeding our state’s ability to compete for new business and jobs.”

Branstad vetoed the same tax credit expansion in a compromise bill the legislature approved in April. At that time, he also cited his “desire to approach tax policy in a comprehensive and holistic manner.”

Spending $28.5 million over two years would have helped at least 225,000 Iowa households, more by some calculations. The earned income tax credit goes entirely to lower-income and middle-income families earning less than $48,000 per year.

In a press call this morning, AFSCME Council 61 president Danny Homan described Branstad’s action as “mean-spirited,” and I would agree. In this economy, why would you block a little extra help to working households? Iowa Senate Ways and Means Committee Chair Joe Bolkcom noted in a statement, “Studies show that the Earned Income Tax Credit is the most effective antipoverty program for working families. Plus the money is spent at our small and Main Street businesses, helping to further spur our local economy.”

Branstad’s veto doesn’t look like smart politics either. During the 2012 legislative session, he wants to pass a major education reform package, comprehensive property tax reform and corporate income tax cuts. Yet he’s tanked the top Democratic tax priority twice. He is forging ahead with closing Iowa Workforce Development offices, even though saving those offices was high on the Democrats’ list throughout the 2011 session. Democrats have only a narrow Iowa Senate majority, but that majority held together for the last six months. I don’t understand why Branstad thinks he’ll be able to get any of his priorities through the upper chamber next year.

The Iowa Fiscal Partnership published a short piece on why expanding the earned income tax credit is good policy. I’ve posted that piece after the jump, along with the full text of Bolkcom’s statement on the Branstad veto and a comment from U.S. Representative Bruce Braley (IA-01).

Iowans for Tax Relief, an advocacy group that claims to be “the taxpayers’ watchdog,” was missing in action today. The organization endorsed Branstad in the 2010 gubernatorial primary as well as the general election. Iowans for Tax Relief criticized Branstad’s veto of the earned income tax credit expansion in April. Since then, the organization has had substantial turnover on its staff and board of directors. Still, you’d think they would notice the governor blocking a tax break for hundreds of thousands of Iowans.

Also from the standings bill, Branstad item vetoed a ban on bonus pay for state employees. His communications director says the bonuses are needed to attract and retain “exceptional employees,” but it looks bad for Branstad to insist on bonuses for his favorites while vetoing help for woking families. O.Kay Henderson noted at Radio Iowa that Republican lawmakers criticized Democratic Governors Tom Vilsack and Chet Culver for awarding bonuses to some state employees. Speaking on behalf of AFSCME, Homan slammed Branstad for “running around the state telling the citizens how the state’s going broke because they’re giving the union employees a two percent raise and a one percent raise and now he’s going to allow for bonuses for his department heads.”

If Republican legislative leaders comment on Branstad’s vetoes, I will add their statements to this post. So far, it’s been radio silence from the Iowa House and Senate GOP leadership.

Yesterday’s heartbreaking attacks in Norway are the big global news story this weekend. This man, Anders Behring Breivik, is suspected of setting off a bomb in downtown Oslo on July 22. The explosion killed seven people and destroyed the prime minister’s office building. The suspect then reportedly dressed in a policeman’s uniform and shot to death at least 85 people at a youth camp run by Norway’s governing Labor Party. Breivik has “confessed to the factual circumstances,” according to his attorney, who said his client planned the crimes long in advance. Police are trying to determine the motive for the attacks. The suspect reportedly had right-wing and anti-Muslim views, but why would anyone attack teenagers at a summer camp?

The big U.S. news story is that House Speaker John Boehner was too stupid to take the deficit reduction deal President Barack Obama offered:

Obama said he had demanded $1.2 trillion in additional revenues over 10 years, in exchange for spending cuts, including cuts to Medicare and Social Security. He said the revenues had been structured in a way that marginal tax rates would not be increased, and no Republicans would be forced to cast a vote that would violate the Taxpayer Protection Pledge, which most Republicans in Congress have signed.

You read that right. While agreeing to cuts in programs that tens of millions of Americans rely on, Obama was ready to guarantee no increases in any tax rates, even at the highest income levels, for the next decade. Not only that, he bent over backwards to give Republicans political cover, so they could accept his offer without facing blowback from Grover Norquist. The same Grover Norquist who now wants Congress to stop playing chicken with the debt ceiling. And Obama was angry Boehner walked out on negotiations, saying he felt “left at the altar”! I don’t see how this so-called Democrat could be handling the budget negotiations any worse. For the first time, I am seriously thinking about writing in a candidate for president in November 2012.

The Iowa Policy Project analyzed the latest state jobs numbers here. Iowa has more than a billion dollars in various state reserves, but Governor Terry Branstad and Iowa House Republicans insisted on an extremely tight budget for fiscal year 2012. The predictable result was a “sharp drop in government jobs” in June, which “fully accounted for the first net drop in Iowa nonfarm jobs in the last six months.” Shrinking government does not help the private economy create more jobs. On the contrary, government job losses contribute to our unemployment problem. Iowa’s unemployment rate is 6 percent, still well below the national average, but that’s no excuse for unwarranted austerity policies.

Here’s one good thing that happened this week: Obama, Defense Secretary Leon Panetta and Admiral Mike Mullen of the Joint Chiefs of Staff all certified “that the U.S. military is prepared to accept openly gay and lesbian service members, and that doing so will not harm military readiness.” As a result, the military’s Don’t Ask, Don’t Tell policy will officially end 60 days from July 22.

This is an open thread. What’s on your mind this weekend, Bleeding Heartland readers?

UPDATE: Iowa native Chuck Manatt passed away this week at age 75. He chaired the Democratic National Committee from 1981 to 1985 and co-chair Bill Clinton’s presidential campaign in 1992. The Los Angeles Times published a good obituary of Manatt. He will be buried this week in Audubon, near the farm where he grew up.

We already knew Christie Vilsack was running for Congress in the new fourth district, but today she made her candidacy official at events in Ames, Sioux City and Mason City. During her announcement speech and in a video released by her campaign, Vilsack didn’t mention four-term Republican incumbent Steve King by name. However, she drew clear contrasts with his political style, promising to bring the “Iowa values of civility, responsibility and respect” to Washington.

Bleeding Heartland discussed Vilsack’s strong early fundraising here. Follow me after the jump for her announcement video (with transcript) and highlights from her campaign rollout.  

The battle of the incumbents in Iowa’s third Congressional district will be one of the most closely-watched House races in the country in 2012. Yesterday Karl Rove’s 501(c)4 group Crossroads Grassroots Policy Strategies launched a television commercial targeting eight-term Democrat Leonard Boswell. Similar spots went up against nine other Democratic incumbents, part of a $20 million summer advertising campaign by Crossroads.

Meanwhile, local media have devoted heavy coverage to the reported break-in attempt at Boswell’s southern Iowa farm on Saturday night. The latest comments from Boswell, his wife Dody Boswell, and law enforcement officers are after the jump, along with the Crossroads ad and annotated transcript.

UPDATE: Law enforcement officers have arrested two suspects in the break-in. Details are at the end of this post, along with statements from Leonard and Dody Boswell.

If Barack Obama doesn’t want to be a one-term president, he has a funny way of showing it. I can’t imagine how the president could come out of the debt ceiling negotiations in a worse political position.  

What’s on your mind this weekend, Bleeding Heartland readers?

Yesterday’s employment report was so awful (1 on a scale of 1 to 10) that a double-dip recession seems more likely than ever. At the Naked Capitalism blog, Edward Harrison reposted a piece from November 2009 on why Treasury Secretary Timothy Geithner and economic adviser Larry Summers would be President Barack Obama’s Dick Cheney and Donald Rumsfeld. It’s worth a read. At the Bonddad blog, New Deal Democrat went over lots of weekly indicators and found more evidence of an economic “stall” than a contraction (so far).

I’m still surprised by some of the bills that didn’t get through the Iowa legislature during this year’s extra-long session. I learned this week that Iowa wasn’t the only state where pro-nuclear legislation faltered. The nuclear industry failed to persuade lawmakers in five other state legislatures to advance favored bills. After the jump I’ve posted a press release from Nuclear Bailout, a project of Physicians for Social Responsibility. The Iowa chapter of Physicians for Social Responsibility lobbied hard against the bill written exclusively for the benefit of MidAmerican Energy.

In case you missed it, Iowa Senate Majority Leader Mike Gronstal and Minority Leader Paul McKinley reflected on the 2011 session during the July 1 edition of Iowa Public Television’s “Iowa Press” program. Click the link to read the transcript or watch the video. Both of them expect some progress on property tax reform next year, though they may get a crack at that sooner if Governor Terry Branstad calls a special legislative session later this year.

I’ll post Bleeding Heartland’s final news roundup on what passed and didn’t pass during the 2011 session after Branstad signs or vetoes the bills that reached his desk during the last week of June.

This is an open thread.

UPDATE: Best slip of the tongue I’ve heard this year: while phone-banking for Republican presidential candidate Michele Bachmann, State Senator Brad Zaun says he’s calling on behalf of “Congressman Boswell.” Democrat Leonard Boswell beat Zaun during the 2010 Congressional race in Iowa’s third district.

Conventional wisdom says President Barack Obama would love to run against an “extreme” Republican candidate, such as Representative Michele Bachmann. With unemployment up again and likely to rise further as Obama tries to outdo Republicans on government spending cuts, I’m not convinced that a big campaign war chest will be enough to get the president re-elected.

Watching Bachmann’s solid introductory television commercial and highlights from her recent Iowa tour, I challenge those who write her off as “unelectable,” especially in this economy. Ad video, transcipt, analysis and more Bachmann campaign news are after the jump.

The Iowa House and Senate finally passed a budget and got out of town yesterday with only about eight hours remaining before the end of the fiscal year.

Every legislative session has its own dynamic, and I’ve been thinking about what surprised me most about this year’s maneuvering in the capitol.  

Iowa’s current fiscal year ends on June 30, which gives Governor Terry Branstad, Republican leaders in the Iowa House and Democratic leaders in the Iowa Senate just ten days to approve a 2012 budget without disrupting state government operations. Although the parties have settled on a total spending target for the next fiscal year, they are still at odds over funding for key programs. They appear to have made no progress toward a compromise on commercial property tax reform, which Branstad demands as part of any final budget deal.

Lots of links on spending priorities, rival tax proposals and government shutdown scenarios are after the jump.

UPDATE: Scroll to the end for further details Senate Democrats released on June 20 regarding a budget compromise.

A Republican-led filibuster blocked Senate consideration today of a bill that would end “tax breaks for the five largest oil companies: Exxon Mobil, Shell, BP, ConocoPhillips and Chevron.” Click here for more detail on tax breaks that would be eliminated. The 52 to 48 vote in favor of proceeding with the “Close Big Oil Tax Loopholes Act” failed because 60 votes are needed to overcome a filibuster. The roll call shows that Iowa’s Chuck Grassley voted against the motion to proceed, as did all but two Senate Republicans. Tom Harkin voted for considering the bill, as did all but three Democrats.

I’m all for ending oil company subsidies, but this bill was about optics rather than good energy policy. Andrew Restuccia wrote in The Hill,

Democrats’ pledge to continue pushing the bill signals that they view the effort as a winning political issue amid $4-a-gallon gas, soaring oil company profits and growing concern about the deficit. […]

Democrats say the bill would save $21 billion over the course of 10 years, savings that can be used to reduce the deficit at a time of increased belt-tightening.

Those talking points would be more convincing if party leaders had genuinely tried to end oil subsidies when Democrats controlled the U.S. House and had close to 60 votes in the Senate. It also makes no sense to focus this bill on the biggest oil companies, rather than the sector as a whole. Democrats apparently wrote the bill that way because of those companies’ large profits in the first quarter of this year.

Senate Majority Leader Harry Reid told journalists today that he will press for ending oil companies’ tax breaks as part of legislation on raising the debt ceiling. The U.S. hit its current debt ceiling yesterday and won’t be able to pay all its bills if Congress does not act to raise the ceiling by August 2. I believe President Barack Obama and Congressional Democrats are playing a losing game by making budget negotiations part of a deal on raising the debt ceiling. When it was time to raise the government’s borrowing limit in 1995, President Bill Clinton wisely refused to let Republicans use the occasion to “backdoor their budget proposals.”

Share any relevant thoughts in this thread.

UPDATE: After the jump I’ve added a statement Grassley released on May 17, calling on Secretary of State Hillary Clinton to approve the proposed Keystone XL Canadian pipeline project. Grassley depicts that project as a way for the Obama administration to help reduce the cost of gasoline. But an analysis commissioned by the U.S. Department of Energy earlier this year suggested that building this pipeline might cause oil and therefore gasoline prices to rise in the Midwest. Environmental groups have raised many objections to the Keystone XL project as well.

SECOND UPDATE: I’ve also added below excerpts from a report by the Congressional Research Service on “the extent to which proposed tax changes on the oil industry are likely to affect domestic gasoline prices.” The report briefly explains the five tax breaks that would be repealed under the bill senators filibustered.

Despite a well-funded campaign to extend the 1 percent local option sales tax for another 20 years, voters in the Cedar Rapids metro area (Cedar Rapids, Marion, Hiawatha, Robins and Fairfax, vote breakdown here) rejected the May 3 ballot measure by less than a 1 percent margin.

The defeat will be a blow to Mayor Ron Corbett, the City Council and a long list of the city’s largest and best-known employers. Those employers contributed to a fund-raising effort that raised nearly $500,000 to get the message out to the community that the city needed to help fund its own flood-protection system.

Corbett was hoping to head to Des Moines on Wednesday to tell lawmakers face-to-face that Cedar Rapidians had agreed to its part in flood-protection funding.

The “yes” campaign on the local option sales tax raised more than 100 times as much money as its opponents. The “no” campaign was a grassroots effort, lacking the funds for radio or television commercials.

Half of the funds raised over 20 years via the 1 percent sales tax were to be used for a flood prevention system protecting both sides of the river in Cedar Rapids. Corbett had argued that extending the sales tax would improve prospects for the city to receive state and federal funds for the project, estimated to cost approximately $375 million.

Legislation pending in the Iowa House and Senate would allow Cedar Rapids to use $200 million in state sales tax revenues for flood prevention over the next 20 years. The bill cleared the Senate Appropriations Committee last week, and a House Appropriations subcommittee advanced a companion bill on May 3. I doubt the Iowa House and Senate will pass this legislation now that Cedar Rapids area voters have rejected the local option sales tax–unless Cedar Rapids officials have a “plan B” up their sleeves.

Peter Fisher of the Iowa Policy Project and Iowa Fiscal Partnership has argued that creating a “state sales-tax-increment financing district” to fund flood prevention is a “gimmick.” In Fisher’s view, this method conceals real state spending (see also here). On the other hand, Cedar Rapids Gazette columnist Todd Dorman notes that hundreds of small businesses in neighborhoods near downtown will be hurt if the flood prevention plan fails to materialize.

On a related note, the future of the $75 million Cedar Rapids Convention Complex project is uncertain. City officials and Governor Terry Branstad’s administration have not resolved differences over a project labor agreement signed a month before Branstad issued an executive order banning such labor agreements on state-funded projects. On May 3, the Central Iowa Building and Construction Trades Council and the Cedar Rapids/Iowa City Building Trades Council filed a federal lawsuit seeking to force Branstad to honor project labor agreements for construction projects in Coralville and Marshalltown.

The trades councils’ lawsuit said that the governor and the state have breached their contract with the labor councils by eliminating project labor agreements is place before the governor took office. The lawsuit also states that the governor’s action violates the Iowa Constitution regarding separation of powers, Iowa’s Home Rule law and federal law.

The outcome of that lawsuit could determine whether the Branstad administration is able to withhold $15 million in state I-JOBS funds for the Cedar Rapids Convention Complex project. The Iowa Finance Authority threatened to do so in February, and the governor rejected compromises Corbett proposed to honor the project labor agreement as well as the spirit of Branstad’s executive order.

UPDATE: More reaction to yesterday’s vote is after the jump.

The Iowa legislature was supposed to adjourn for the year on April 29, but the session could go on for quite some time. The most important unresolved issues relate to the state budget and tax policy: whether legislators will pass spending plans for one fiscal year or two, how much and what kind of tax cuts will be approved, and whether the state will take the unprecedented step of passing no allowable growth for K-12 education budgets. I doubt all of this will be resolved in a week or two. Governor Terry Branstad and Republican leaders in the Iowa House worked out a deal on property tax reform, which cleared the House Ways and Means Committee on Wednesday, but it sounds like that is a non-starter in the Democratic-controlled Iowa Senate. Earlier this month, the Senate passed a $200 million commercial property tax break on a bipartisan 46 to 4 vote. Some Democrats have also warned that the Republican property tax plan usurps local government powers.

This Tuesday, May 3, Linn County residents will be able to vote on whether to extend the one percent local option sales and services tax beyond July 1, 2014. Cedar Rapids would use the local option sales tax revenue “for flood protection, street repairs, and property tax relief.” Click here for more details on the ballot initiative and flood prevention plans.

Cedar Rapids officials have asked state legislators to let the city use $200 million in state sales tax revenues for flood prevention over the next two decades. The idea has some support at the capitol but hasn’t won final approval yet. Peter Fisher of the Iowa Policy Project and Iowa Fiscal Partnership has made a convincing case against this approach to funding flood prevention (see also here).

Iowans for Tax Relief has experienced a mass exodus of high-level staff this month, and the influential conservative group’s most prominent board member resigned as well. I’m sure there’s an interesting back-story, but the latest public communication from Iowans for Tax Relief Chairman Dave Stanley wasn’t enlightening. Maybe the group will turn up on some Republican presidential campaign staff soon.

Good news and bad news came out of the April 27 meeting of the State Board of Regents. The bad news is that students at Iowa State will pay 3 percent more next year for room and board. Those charges will go up 4.3 percent at the University of Northern Iowa and 5 percent at the University of Iowa. The good news is that the University of Iowa will expand its small certificate program for students with intellectual disabilities. Former Iowa Lieutenant Governor Sally Pederson was instrumental in getting that program going; click here for more background.

Speaking of college life, the country’s conservative noise machine was up in arms this week about a dust-up in Iowa City. Anthropology and Women’s Studies Professor Ellen Lewin used an obscene epithet responding to an e-mail from the College Republicans about a conservative “coming out” event on campus. University President Sally Mason has already spoken out against the “bad behavior” by a faculty member. Natalie Ginty, leader of the College Republicans, isn’t satisfied and filed a formal complaint against Lewin, seeking further investigation of the incident. I don’t know what she expects investigators to turn up regarding a hasty “F** You” e-mail. I think we can all agree that faculty shouldn’t communicate with students in that way. The Daily Iowan editorial board got it right in my opinion:

There is no evidence that this was anything more than a momentary lapse in professionalism. Professors, like students, are justified in having their own political perspectives – as long as they do not get in the way of their duties. If Lewin were engaged in a pattern of harassing conservative students, strict punitive measures would be justified; an inappropriately vulgar expression of outrage is another matter. […]

The disproportionate response to this case is indicative of a Manichean partisan culture in which both sides thrive on misplaced martyrdom.

Harsh punitive measures would only serve to legitimize the exaggerated indignation, and our rhetorical culture deserves better.

A simple reprimand would remind Lewin of her duties as a professor: to hold herself as an example of intellectual, professional competence and a model of reasoned argumentation.

This is an open thread. What’s on your mind this weekend, Bleeding Heartland readers?

UPDATE: State Senator Bill Dotzler delivered clever floor remarks on May 2, giving five reasons Iowans for Tax Relief should hire Senate Ways and Means Committee Chair Joe Bolkcom as its next executive director. I’ve posted the case he made after the jump.

Before this year’s legislative session began, I thought the Democrats in the Iowa Senate would more easily find common ground with Governor Terry Branstad than with the Republican-controlled Iowa House. Branstad dealt with a Democratic or divided legislature for 14 of his 16 previous years as governor, while most of the House Republicans weren’t serving in the legislature at that time.

This week Branstad proved me wrong, rejecting key provisions of a compromise bill that passed both chambers unanimously and a Democratic offer to meet him halfway on biennial budgeting. Follow me after the jump for more on those stories.

In the first major breakthrough on tax policy this legislative session, a bill containing tax cuts and supplemental appropriations cleared an Iowa House and Senate conference committee Monday, then passed both chambers unanimously.

Details are after the jump, along with recent news on efforts to reach a compromise on the state budget for fiscal year 2012.

Federal income tax returns are due this Friday, April 15 make that next Monday, April 18. This week the IRS released a list of 12 common tax scams.

If House Republicans get their way, taxes on the wealthiest Americans will fall further in the coming years, while government programs benefiting lower-income groups will be slashed. House Budget Committee Chairman Paul Ryan’s blueprint is like a caricature of Republican Reverse Robin-Hood-ism. And it wouldn’t reduce the deficit by nearly as much as Ryan claims.

The Pew Charitable Trusts recently published a report on Who’s Winning the Clean Energy Race? (pdf). Not the United States, unfortunately. We have slipped to third place globally, behind China and Germany. But the American Wind Energy Association’s annual report shows that within the U.S., Iowa ranks first for percentage of a state’s electricity generated from wind power (about 15 percent). (Texas still has nearly three times as much installed wind capacity as Iowa.) Think how much more clean energy we could be producing if we’d adopted an ambitious renewable energy standard at the state or federal level during the past decade, or if Iowa’s utility companies had embraced renewable energy production a decade or two ago. MidAmerican is adding turbines to several of its existing Iowa wind farms, but for years the company resisted wind power and lobbied against legislation aimed at ramping up wind energy production.

This is an open thread. What’s on your mind this weekend, Bleeding Heartland readers?

UPDATE: Sidney Lumet died on Saturday. I didn’t know he never won an Oscar for best director, despite making so many good movies: “12 Angry Men,” “Serpico,” “Network,” “Dog Day Afternoon,” and “The Verdict.”

SECOND UPDATE: Nice tribute to Sidney Lumet by Dennis Hartley, with a few extra comments from Digby.

Frantic efforts to control the situation at Japan’s Fukushima nuclear power plant have not had much success during the past week. The areas of greatest concern appear to be the reactor in unit 3 and the spent fuel pool on the roof of unit 4.

President Barack Obama indicated yesterday that the U.S. and its allies may embark on a new military campaign in Libya, if Colonel Muammar el-Qaddafi does not comply with demands for a cease-fire with rebels. On Thursday the United Nations Security Council authorized military action against Qaddafi. Like other commentators, I don’t feel reassured by Obama’s promise that the U.S. won’t deploy ground troops in Libya. The president’s reasoning for intervening there (but not elsewhere to avert atrocities) is not convincing.

The Des Moines Register has published front-page stories three days in a row on an Ankeny couple who exploited a loophole in mortgage law to get a nice house for free. Lee Rood’s reporting suggests the couple misrepresented their assets to obtain the mortgage and were in a position to know about the loophole before they closed on their house (without the wife signing the documents). I don’t condone obtaining a house by fraudulent means, if that’s what has occurred in this case. That said, foreclosure fraud by lenders appears to be far more prevalent than the scheme this Ankeny couple may have implemented. Most of the time the mainstream media ignores stories about innocent homeowners jerked around by banks. I hope the Register will follow up with a number of front-page stories about that side of the foreclosure story.

Iowa State University economist Neil Harl argued that Republican tax cut proposals won’t spark economic growth. Speaking on Iowa Public Television’s “Iowa Press” program,

“The question is what is in the best interest of this state in terms of long-term economic growth,” Harl said. “What attracts companies to come to Iowa? I don’t think it’s potholes in the streets. I don’t think it’s a third-rate school system. I don’t think it’s a situation of starved universities.” […]

Harl said he opposes the Republican plans because they would inevitably cut into state revenue needed to support the services he believes are the real attraction for businesses. One of Iowa’s main assets is a high quality of life, he said.

“I think it’s a state that’s viewed as forward looking and offers a great environment for a company to move into,” he. “This is being sold on the grounds that it will attract more companies here, but I really doubt that.”

As part of a Chapter 11 bankruptcy reorganization, Borders will close its West Des Moines bookstore by the end of May. For now, Borders plans to keep its stores in Ames, Dubuque and Davenport open. Even though I support locally-owned businesses like Beaverdale Books, Borders is one chain I will be sorry to see go.

I’ll close this gloomy post on an upbeat note: less than one week remains before Planned Parenthood’s giant semi-annual book sale at the State Fairgrounds.

This is an open thread. What’s on your mind this weekend, Bleeding Heartland readers?

UPDATE: And on March 19, the U.S. launched air strikes in Libya. Happy Iraq War anniversary! This is not going to end well.  

The U.S. Air Force announced on Thursday that Boeing will receive a $35 billion contract to build aerial refueling tankers. The contract is expected to create roughly 800 jobs in Iowa, including 200 at Cedar Rapids-based Rockwell Collins. Iowa politicians from both parties hailed the decision, including Republican Governor Terry Branstad and Cedar Rapids Mayor Ron Corbett and Democratic Representatives Bruce Braley and Dave Loebsack. Branstad, Braley and Loebsack all noted in their official statements that they had urged the U.S. Department of Defense to award Boeing the contract.  Former Governor Chet Culver went to Washington to lobby for Boeing’s bid last year. Boeing’s rival for the contract was the European Aeronautic Defense and Space Company, which makes Airbus planes. Airbus also uses subcontractors based in Iowa, but Boeing’s subcontractors employ more Iowans. The European company may protest the Air Force’s decision and has support from some members of Congress.

Des Moines business owner Mike Draper published a guest editorial in Saturday’s Des Moines Register undermining Republican claims about corporate tax cuts creating jobs:

I recently heard “cutting state taxes will add jobs” delivered with a perfect, deadpan tone, but I was the only one laughing. Wasn’t it meant to be a joke?

After all, since starting a small downtown clothing store, Raygun, in 2005, I have added about 25 jobs and never once considered the state tax rate when doing so. […]

Most job growth nationally and in Iowa will come from small businesses like mine, and many small businesses are set up as S-corporations, which don’t pay corporate tax; rather, any profits for the company are paid on the personal tax statements of the owners. So corporate tax cuts will only really affect the largest companies in Iowa, which add the least number of jobs over time.

But for argument sake, let’s say the governor wanted to cut state income-tax rates as well to help small businesses add jobs. Say he even reduced my state taxes by 20 percent and I was expected to hire new staff with that savings. On a salary of $40,000 per year, that 20 percent reduction moves my taxes by 1 percent, or 400 annual dollars.

So, indeed, I could hire a new employee with my savings; it would just take 100 years (and by 2111, would $40,000 per year even be enough for them to afford the newest hover-board that all the other guys at the store will have?).

However, if that tax savings were coupled with public pre-K being eliminated for my son, a $400 annual savings may be slightly offset by the additional $8,000 annually I’d have to spend on day care.

With the governor’s math, I’d be laying off someone every 5 years and hiring every 100.

State tax collection data doesn’t support the claim that corporate tax cuts would help Iowa’s small businesses expand:

About 885 businesses, with sales over $25 million in Iowa, paid 65 percent of the state’s corporate taxes in 2008. That’s $142 million of nearly $219 million paid, Iowa Department of Revenue data show.

In addition, the data show the biggest corporate taxpayers are large retailers with sales outside the state. Iowa taxes companies only for income earned within the state.

Branstad has said small businesses would benefit the most because most of their sales – and income – are within the state.

But data from a state report show the 22,000 companies that have sales exclusively in Iowa contributed just 19 percent of the revenue collected via the state’s corporate taxes. That was about $41.6 million in 2008.

The governor has promoted his plan to cut the state’s corporate tax rates – with the highest rate at 12 percent – to a flat 6 percent for all companies. Branstad has said the tax cut – along with reducing commercial property taxes and government spending and eliminating regulations that stifle job growth – will help create 200,000 jobs and boost income 25 percent for Iowa families over five years. […]

But Iowa State University economist Dave Swenson said “it’s very unclear to me how this tax cut would create significantly more jobs in Iowa.”

Swenson said the proposed tax would be “very beneficial to a lot of large retailers and service firms that serve Iowa demand.”

“But cutting the corporate tax rate isn’t going to create more of those firms,” he said. “And for those large firms we want to attract – the Googles, IBMs, the Microsofts, companies that produce for a worldwide market – it’s a meaningless tax cut because they already do not pay very much Iowa corporate tax,” given that their sales and services are mostly sold outside Iowa and avoid state tax.

Economist Peter Fisher fleshed out that argument in his recent report on Corporate Taxes and State Economic Growth (pdf file):

Business tax breaks are an expensive and inefficient way to attempt to stimulate a state economy. Because of the small effect of tax breaks on business costs, and the much larger importance of other production costs and location considerations, tax breaks will have little if any positive effect on private- sector employment. In fact, the revenue losses may well produce immediate public-sector job losses. Furthermore, the private-sector employment effects of such tax cuts could be reduced or even eliminated by a long-term deterioration in the quality of public services, which themselves have been shown to be important to businesses making location decisions, and which provide an important part of the foundation for the state economy.

The business owners I know hire new employees when they anticipate greater demand for their goods or services. Tax rates are not a factor in that decision.

This is an open thread. What’s on your mind this weekend, Bleeding Heartland readers?

Anyone go to the labor rally on Saturday at the capitol? Snow couldn’t keep 70,000 to 100,000 people from attending the labor rally in Madison, Wisconsin.

The first all-nighter of the 2011 legislative session ended this morning around 6:05 am, as the Iowa House Labor Committee approved a bill restricting public employees’ collective bargaining rights on a party-line vote.

Details on the bill, the debate, and the fight to come are after the jump.

The Des Moines Register’s first statewide poll since Governor Terry Branstad returned to office shows that 45 percent of respondents approve of the job Branstad is doing, 35 percent disapprove and 20 percent are not sure. Selzer and Co surveyed 800 Iowa adults between February 13 and 16, and the poll has a margin of error of plus or minus 3.5 percent. Ann Selzer commented in the Des Moines Register over the weekend, “Iowans are giving Gov Branstad no honeymoon.”

Elected officials never like to see their approval ratings below 50 percent, but the Register poll numbers are better for Branstad than Public Policy Polling’s latest Iowa survey. Just 40 percent of Iowa voters polled by PPP in January had a favorable opinion of Branstad, while 44 percent had an unfavorable opinion. Those low numbers probably don’t reflect a big drop in support for Branstad since November, but they underscore how strongly the 2010 voter pool skewed Republican in Iowa.

The Register’s new poll indicates that most Iowans don’t expect Branstad to fulfill key campaign promises. Asked about various goals Branstad mentioned while running for governor, respondents who were “mostly skeptical” the governor could accomplish the goal outnumbered those who were “mostly confident” he would succeed on every question.

Cut state spending by 15 percent over 5 years: 47 percent mostly confident, 49 percent mostly skeptical

Cut regulations that hamper business growth: 44 percent mostly confident, 49 percent mostly skeptical

Cut corporate income tax rates: 39 percent mostly confident, 52 percent mostly skeptical

Cut commercial property tax rates: 36 percent mostly confident, 57 percent mostly skeptical

Add 200,000 jobs within five years: 21 percent mostly confident, 76 percent mostly skeptical

Raise family incomes 25 percent over five years: 13 percent mostly confident, 84 percent mostly skeptical

The Register’s Tom Beaumont noted in his write-up of the poll,

Some Iowa economists said during the campaign that Branstad’s goals were unrealistic. The number of jobs in Iowa has grown by 233,000 since 1981, according to the Iowa Department of Workforce Development.

Family incomes in Iowa grew by 21.7 percent from 1999 to 2009, according to the U.S. Census Bureau.

Although Iowa has experienced months of economic and job growth, respondents for the Register’s new poll still see signs of economic distress. About 47 percent of respondents said Iowa is on the wrong track, compared to just 40 percent who see the state headed in the right direction. Some 47 percent of respondents said they are “personally still feeling the effects of a recession” and 41 percent said they are not personally feeling a recession but are “seeing it affect others” around them. Those numbers were almost identical to findings from the Register’s Iowa poll from January 2009, when the economy was by various measures in worse shape.

House File 45 heads to Governor Terry Branstad’s desk today after the Iowa House approved the “deappropriations” bill by a 95 to zero vote. The bill was the top legislative priority for House Republican leaders, but the Democratic-controlled Iowa Senate eliminated many of its controversial provisions last week. The full text of House File 45 is here, and the complete bill history is here. The Senate Journal for February 17 contains roll calls for votes on House File 45 and various amendments (pdf file). The final Senate version of House File 45 passed with 48 yes votes. First-term Republican Senator Mark Chelgren voted against the bill, and Republican Senator Sandy Greiner was absent.

Thanks to the Senate amendment, state funding for preschool, family planning, passenger rail, smoking cessation programs, and the core curriculum live to fight another day in the Iowa legislature. So do the Power Fund, the Office of Energy Independence, and the Grow Iowa Values Fund, all economic development programs long targeted by statehouse Republicans.

In addition, the Senate removed language from House File 45 that would have reduced funding for state universities, area education agencies, land acquisitions by the Department of Natural Resources and the Resource Enhancement and Protection fund.

The Senate’s version of House File 45 also did not include language creating a “tax relief fund” that would have collected surplus revenues after state reserve funds were filled.

After the jump I’ve posted an overview compiled by the Iowa House Democratic research staff on “major items eliminated” by the Senate amendment to House File 45. I’ve also listed some other significant points of divergence between the Senate and House versions of this bill, as well as key points on which the Senate left House File 45’s language intact.

Finally, I’ve posted the House Democratic research staff’s explanation of language that would create searchable databases on the state budget and tax rates.  

Republican elected officials are sending a mixed message about Iowa’s finances. Before the 2011 legislative session began, Republicans were outraged about a so-called “unaffordable” union contract that would give state workers modest raises, at a cost of about $100 million a year for two years.  Barely a week into the session, a party-line Iowa House vote approved a broad “deappropriations” bill, in which about a third of the savings came from cutting Iowa’s preschool grant for four-year-olds. The universal voluntary preschool program was expected to cost $70 million to $75 million per year (according to Legislative Services Agency estimates), or up to $90 million by some other estimates.

Since then, House Republicans have passed House File 185, which allows zero growth in K-12 education budgets for the next two fiscal years. That was an unprecedented move. In nearly 40 years, the Iowa legislature has never approved less than 1 percent allowable growth for school district budgets: not during the farm crisis, not during the recessions and budget crunches of the early 1980s, early 1990s, 2001-02 or 2009-10. Now, we are told, our dire fiscal condition doesn’t leave any room to spend $65 million to allow school districts to increase their budgets by 2 percent.

Yet on February 16, the Iowa House approved House File 194 on a mostly party-line vote. The bill would cut Iowa’s individual income tax rates by 20 percent, which the Legislative Services Agency estimates would cost $330 million during fiscal year 2012 and more than $700 million in each of the next three fiscal years.  How Iowa can afford that loss of revenue and what services would be cut to keep the budget balanced, House Republicans don’t say.

Meanwhile, Governor Terry Branstad plans to lay off hundreds of state workers to cut labor costs and sent state legislators a draft budget with no allowable growth for K-12 schools for two years. This week Branstad offered a preschool plan that would support fewer children at a lower cost ($43 million per year). He and his Department of Education director, Jason Glass, have repeatedly said Iowa cannot afford to continue the preschool program as currently structured. Yet Branstad’s plan to cut corporate taxes in half would deprive the state of at least $100 million in revenues. He has proposed about $450 million in commercial property tax cuts, with the idea that state government would reimburse local governments for much of that lost revenue. If our budget constraints are so severe, how can we afford those policies?

More context on the state budget is after the jump, along with details on the Iowa Senate’s resistance to Republican tax and education funding proposals.

The Iowa Fiscal Partnership released a must-read report yesterday by economist Peter Fisher. Facts don’t support political rhetoric about a supposedly unfriendly tax environment for Iowa business, Fisher demonstrates:

Whether one focuses only on the corporate income tax, or the whole range of taxes falling on business, Iowa’s state and local taxes are well below average, and have been for some time.

Iowa’s corporate income tax in recent years has been considerably lower than the national average level of taxation and lower than all but 11 states. How can this be when the top tax rate – 12 percent – is the highest in the nation? The answer is simple: That 12 percent tax rate is applied to only a small portion of a company’s profits in Iowa. Iowa is one of only four states that allows a portion of federal corporate income taxes to be deducted from income. On top of this, Iowa determines how much of a multi-state firm’s profits are taxable in Iowa solely on the basis of sales in Iowa. The majority of states take into account a firm’s payroll and property in the state as well as sales. As a result, many large corporations selling nationally and worldwide earn substantial profits on Iowa operations but pay taxes on only a small fraction of those profits. Finally, Iowa offers a range of generous tax credits that further reduce corporate tax liability.

I recommend reading the full report, Corporate Taxes and State Economic Growth (pdf file) or at least the two-page backgrounder. While you’re on the Iowa Fiscal Partnership’s site, check out the many other valuable reports they have published in recent years. For instance, last month’s report showed why “additional cuts to essential public services are not needed to balance the 2011-12 [Iowa] budget.” The Iowa Policy Project, which is part of the Iowa Fiscal Partnership, is on Twitter here.

After the jump I’ve posted a few excerpts highlighting key conclusions from Fisher’s latest research. Keep these facts in mind next time you hear Iowa Republicans claim that we “can’t afford” a modest raise for state employees, continued investment in preschool or any growth in K-12 education budgets.

UPDATE: Agree 100 percent with what Fisher told Iowa Independent:

“Revenues are improving, in spite of the drain already in place by business breaks. A responsible budget does not include new breaks, especially when we know that the services provided by state and local government are important to a thriving business climate,” Fisher said. “We should be looking for ways to avoid cuts in services that will actually hurt Iowa jobs and the Iowa economy.”

Sunday, February 6 would have been Ronald Reagan’s 100th birthday, and the occasion will be marked by a graveside ceremony in California and a tribute video to be aired during the Superbowl. I try not to speak ill of the dead, but I honestly struggle to think of anything Reagan did that benefited the country, besides signing the arms control treaty with the USSR. Not only was he nowhere near one of the great presidents, his main legacy was massive income inequality. He cut programs aimed at helping the poor and demonized welfare recipients successfully, paving the way for the welfare reforms of the 1990s. I disliked Reagan’s politics so much that Barack Obama’s rhetorical similarity to the Gipper was a big reason I never could warm up to Obama’s “inspiring” speeches.

The Reagan-worship in today’s Republican Party is comical. If Reagan were a candidate today, he’d be assailed as a “RINO” for his tax-raising, big-spending policies. Yes, Reagan raised many taxes as governor and as president, not that many Republicans would admit that today. At Think Progress, Alex Seitz-Wald published “10 Things Conservatives Don’t Want You To Know About Ronald Reagan,” and one of them was news to me, even though I remember the 1980s well: “Reagan signed into law a bill that made any immigrant who had entered the country before 1982 eligible for amnesty. […] The bill helped 3 million people and millions more family members gain American residency.”

This is an open thread. What’s on your mind this weekend, Bleeding Heartland readers?

UPDATE: I like Robert Borosage’s post on “The Reagan Ruins.”

SECOND UPDATE: Daily Kos user Clarknt67 on Reagan’s years-long non-response to the AIDS epidemic.

Governor Terry Branstad presents his draft budget to members of the Iowa House and Senate this morning. His staff have indicated he will outline about $700 million in budget cuts, including layoffs of hundreds of workers. Branstad and Republican legislators say Iowa needs to reduce spending by $700 million to make up for the projected budget gap for fiscal year 2012, which begins on July 1.

The facts tell a different story: Iowa has a projected gap of around $263 million for the coming fiscal year. That figure was the Legislative Services Agency’s best guess as of December 2010, but it probably overstates the gap. Congress extended the Bush tax cuts for all income levels, which means higher-income Iowans will not be forced to pay more federal taxes and therefore will not have more to deduct from their state tax returns. With the Bush tax cuts in place, Iowa can expect to collect about $140 million more in state tax receipts for the 2012 fiscal year. That would be enough to cover the estimated cost of the new AFSCME contract Branstad has declared unaffordable.

The $700 million figure Branstad uses assumes Iowa will use more than $300 million from the current-year budget surplus to pay for corporate and other tax cuts. He also wants to reduce commercial property taxes, which will cost the state more money to reimburse local governments. Those are Branstad’s preferences, not policies state government is obliged to implement. It’s not that Iowa can’t afford to continue the preschool program that costs about $70 million per year, or can’t afford any allowable growth in K-12 education budgets. Republicans simply want to do other things with the public’s money.

I am curious to hear what Branstad says about transportation funding today, since he came out this week against passenger rail subsidies but for a future gas tax hike to build more roads. I also wonder whether he will propose any specific reform to tax-increment financing in Iowa. TIF was originally intended to spur redevelopment in “slum and blighted” urban areas but has become increasingly costly for state government and has created inequities in commercial property taxes.

I’ll update this post with details from Branstad’s speech and political reaction after the jump. Meanwhile, share any thoughts about the state budget in this thread.

UPDATE: IowaPolitics.com posted the prepared text of Branstad’s speech. Big surprise: he’s not planning to eliminate appropriations for preschool, just to reduce them to $43 million per year. Further thoughts are below.

FRIDAY UPDATE: At the end of this post I’ve added Senator Rob Hogg’s assessment of Branstad’s draft budget. He notes that zero percent allowable growth for K-12 schools for two years is “unprecedented in the history of Iowa’s school financing formula which was created in 1973.”

Lack of funding for various flood mitigation and watershed management programs also concerns Hogg, a Democrat representing Cedar Rapids and a leading advocate of improved flood prevention efforts in Iowa.

Former Governor Chet Culver and former Republican gubernatorial candidate Chris Rants were vindicated today, as Governor Terry Branstad “encouraged transportation stakeholders to build support for a gas tax increase next year,” James Q. Lynch reported.

Last summer, Branstad said the timing wasn’t right for a gas tax increase, and today he told “representatives of highway associations and coalitions, local elected officials, engineers, economic developers and other stakeholders” that this year fiscal issues will take priority. Still, he made clear that he supports raising the gas tax to pay for more road construction in the future:

Having the resources to maintain and improve the transportation system is “absolutely critical to our goal of creating 200,000 jobs and raising incomes by 25 percent and making Iowa a growing and competitive state,” Branstad said.

That was welcome news to the transportation stakeholders who have lobbied in recent years for a gas tax increase to provide those resources. […]

“I want to team with you and help in this effort because I see it as part of what is critically important to our economic development success and achieving our ambitious job creation goals and income growth goals,” Branstad said.

According to Lynch, Branstad “repeatedly referred to motor fuel taxes as user fees that benefit motorists who pay it.” Earlier this month, a report by Iowa Public Interest Research Group demonstrated that “gas taxes cover barely half the costs of building and maintaining roads,” and “[t]he amount of money a particular driver pays in gasoline taxes bears little relationship to his or her use of roads funded by gas taxes.” The governor isn’t worried about taxpayers subsidizing roads for other people, to the tune of hundreds of millions of dollars a year, but he’s deeply troubled by a small subsidy for passenger rail.

I wouldn’t be surprised if Branstad backs a sales tax increase a year or two down the road. Last April, he told the Sioux City Journal editorial board that his “long-range plan” on taxes was “to have more of a thing on consumption.” Shifting to draw more state revenues from consumption taxes (like the sales and gas tax) and less from income and property taxes would make Iowa’s already regressive tax structure even worse.

The House of Representatives approved a bill last night to extend all the Bush tax cuts for two years, reduce the estate tax, and extend benefits for some unemployed people by 13 months. The bill passed by an unusual bipartisan vote of 277 to 148. The Democratic caucus split 139 in favor of the bill and 112 against, while Republicans overwhelmingly supported the bill by a 138 to 36 margin. The roll call shows that Iowa Democrats Leonard Boswell (IA-03) and Dave Loebsack (IA-02) voted for the bill, as did Republican Tom Latham (IA-04). Democrat Bruce Braley (IA-01) and Republican Steve King (IA-05) both voted no.

It’s a disgrace that House Democrats went along with a so-called “compromise” that makes the lowest-income workers pay more, does nothing for people who have exhausted 99 weeks of unemployment benefits, and will lay the groundwork for big cuts to domestic spending and Social Security in the future. President Barack Obama deserves the most blame for not negotiating a better deal with Republican leaders. He could have changed the dynamic months ago by making a clear threat to veto any extension of the tax cuts for the highest incomes. But he lacked the courage or the integrity to stand up for tax policies he claims to believe in.

Democrats should nevertheless have voted against this bill, in my opinion. They campaigned against the Bush tax cuts for a decade and are now extending them at all income levels, setting the stage for a permanent extension two years from now. Sorry, Sue Dvorsky: that’s not standing up for the middle class.

It’s a moral failure for the Democratic Party to ask people earning less than $20,000 and families earning less than $40,000 to pay a bit more while the wealthiest people don’t sacrifice a penny. Democrats may have worried the Republican-controlled House would pass an even less favorable bill in the new year, which Obama would sign.

After the jump I’ve posted statements from Braley, Loebsack and Boswell. You can tell Loebsack isn’t proud of this vote, and Boswell makes some excuses too. But it’s consistent with his style: “As I have always said, my legislative philosophy is if you can’t take home the whole loaf of bread, grab as many slices as you can to benefit your constituents […].”

Braley’s press release touting his no vote uses a Republican frame (“Americans spoke clearly on November second. Congress must get serious about reducing the deficit and become better stewards of their tax dollars […]”). His remarks during the House floor debate also focused on fiscal conservatism, although Braley also threw in some populist lines criticizing the tax breaks for the rich. He also cited the threat to “the long-term viability of Social Security.”

UPDATE: In the comments, John Deeth mentioned the House vote on an amendment to raise the estate tax rate and lower the exemption to that tax received just 194 yes votes, all from Democrats. Braley and Loebsack voted with the majority of their caucus, but Boswell was among the 60 Democrats who voted with Republicans. Changing the bill would have sent the measure back to the Senate rather than directly to the president’s desk.

The U.S. Senate voted 81 to 19 today to approve a bill to extend unemployment benefits and some tax credits for one year, in exchange for keeping current income tax rates on all income levels in place for two years. Iowa’s Chuck Grassley was among 37 Republicans who voted yes, while Tom Harkin was among 14 Democrats who voted no. (Harkin and three others voted against the bill today despite voting for Monday’s cloture motion to advance the bill.) Before today’s final vote, the Senate considered a motion to suspend the rules so that Senator Bernie Sanders’ amendment improving various tax provisions could be considered. Only 43 Democrats, including Harkin, supported that effort.

Bleeding Heartland has already covered some of the problems with this bill.  Some may wonder why a self-styled deficit hawk like Grassley would support adding $858 billion to the deficit over two years (and trillions more in the years to come, as Bush tax cuts appear almost certain to be made permanent). Grassley’s answer is that Americans are still “overtaxed,” and “We have a deficit problem because Washington spends too much.” Naturally, Republicans ignore the fact that Warren Buffett pays a lower effective tax rate than his secretary, or that corporate tax payments are at historically low levels. Statements from Grassley and Harkin on today’s vote are after the jump. Harkin’s Senate floor statement of December 14 made a more extensive case against the package.

But desmoinesdem, you might object, Republicans said a few weeks ago that they would block everything during the lame-duck session until the future of the Bush tax cuts was resolved. Well, the tax cuts have been extended, and now Republicans are threatening to shut down the federal government and block ratification of the START U.S.-Russia nuclear arms treaty. Who’d have guessed that giving in to Republican demands would lead to more hostage taking?

The House of Representatives is debating repeal of Don’t Ask, Don’t Tell today. I wouldn’t bet on Republicans letting that through the Senate, even though at least 60 senators claim to be for allowing gays and lesbians to serve openly in the military.

Iowa’s U.S. Senators Tom Harkin and Chuck Grassley were among a large bipartisan majority that voted to advance a bill to extend unemployment benefits, the Bush tax cuts and various special tax breaks and credits. The Senate passed the cloture motion by a vote of 83 to 15. Just 10 members of the Democratic caucus and five Republicans voted against cloture for various reasons. A handful of senators who voted for cloture may vote against the bill itself, but the bill will pass easily.

The Los Angeles Times summarized key points in the Senate’s version of the deal President Barack Obama negotiated with Republican leaders in Congress:

The package extends the Bush tax cuts for two years on families at all income levels, including the wealthiest 2% who have incomes above $250,000 a year. Obama once campaigned against tax cuts for those earners.

The package also continues unemployment insurance through 2011 for up to 7 million Americans who otherwise would see their extended jobless aid expire.

One key change for most taxpayers will be a 2-percentage-point reduction in payroll tax worth up to $2,000. It replaces the so-called Making Work Pay tax cut for 95% of Americans, a break that expires Dec. 31.

The package also reinstates the estate tax that lapsed this year under a quirk of law. It establishes a 35% rate on inheritances above $5 million for singles and $10 million for families. […]

[T]he Senate added $10 billion in energy assistance, including nearly $5 billion in ethanol and coal credits that environmentalists oppose. But it also included an extension of grants for renewable energy developers, which supporters credit with having doubled solar plant production in 2010.

The package also includes a long, $55-billion list of specialty tax breaks that tend to be extended each year – help for Puerto Rican rum makers, racetrack developers and Los Angeles film producers.

I don’t have time to list all the shameful aspects of this deal tonight, but I discuss seven big problems after the jump. UPDATE: I recommend Rortybomb’s post on “who got what” in this package.

The House of Representatives approved the DREAM Act on December 8 by a vote of 216 to 198. The bill would give some undocumented immigrants brought to the U.S. as children a path to citizenship. Eligible people could obtain “conditional” status for six years provided they have no criminal record, have lived in the country for at least five years, and have graduated from high school or received a GED. To maintain legal status, people would have to pass a criminal background check and demonstrate that they have either attended college or served in the military for at least two years. Although 38 House Democrats opposed the DREAM Act yesterday, all three Iowa Democrats (Bruce Braley, Dave Loebsack and Leonard Boswell) voted for it. Only eight House Republicans crossed party lines to support this bill, and those did not include Tom Latham or Steve King. In recent weeks, King has slammed the DREAM Act as a “multi-billion dollar amnesty nightmare.”

The White House supports the DREAM Act, and the administration has mostly exempted students even as deportations of undocumented immigrants increased since President Barack Obama took office. However, Obama didn’t insist on passage of the DREAM Act as part of his tax cut deal with Congressional Republican leaders. The Senate is expected to vote on the House version of this bill next week. Although some Republicans support the DREAM Act, including Senator Richard Lugar of Indiana, I would be surprised if it passes during the lame duck session.

Incidentally, former Arkansas Governor Mike Huckabee has supported legislation like the DREAM Act in the last, but last week he said he opposed current bill before Congress. He must be aware that if he runs for president again, he’ll need to win over GOP primary voters and caucus-goers who overwhelmingly oppose what conservatives call “amnesty.”

Also on December 8, the House voted on the Seniors Protection Act. According to a statement from Braley’s office, that bill “would have provided a one-time $250 payment to seniors on Social Security, Supplemental Security Income (SSI), railroad retirement, and veterans disability compensation or pension benefits due to the lack of a cost-of-living adjustment for 2011 (COLA).” The bill received 254 votes in favor and 153 votes against but still failed, because it was brought to the House floor under a suspension of the rules, which requires a two-thirds vote to pass. The Iowa delegation again split on party lines.

Meanwhile, the offices of Representatives Braley, Loebsack and Boswell still have not responded to my requests for comment on Obama’s tax deal with Republicans. On December 9 the House Democratic caucus reportedly voted against bringing the deal to the floor, but that was a non-binding resolution. The bill could still pass with a minority of Democratic votes and a majority of Republicans. On the Senate side, Republican Chuck Grassley says the deal is better than doing nothing. Democrat Tom Harkin says he is working behind the scenes to improve the deal and is inclined to vote no without some changes. However, even as he criticized Obama’s negotiating strategy, Harkin didn’t rule out supporting the deal until he sees the final package.

UPDATE: Braley released this noncommittal statement on December 9:

“As the tax cut package takes shape, I want to reiterate my support for a tax cut extension for every American family on incomes up to $250,000.  I continue to fight for an extension of unemployment benefits, especially during the holiday season.  I remain extremely concerned that extending Bush’s tax cuts to the wealthiest 2% of Americans will explode the deficit.”

“I continue to fight to cut taxes for Iowa’s families and I am working to ensure our future generations are not saddled with extreme debt.  I look forward to reading the legislative language produced on the bill before making a final decision on these important issues.”

SECOND UPDATE: Steve King talked to the Sioux City Journal’s Bret Hayworth:

King said he dislikes that the tax cuts are only extended for two years. He said he wouldn’t go to the mat to extend the tax cuts permanently, but that they should be at a minimum extended five years so people sitting on capital to invest will know their tax liabilities for a longer period.

Further, King doesn’t like the unemployment benefits extension, since he said that only encourages people to not work and continue to receive those dollars.

THIRD UPDATE: Loebsack’s office says he “has consistently supported extending the middle-class tax cuts. He is also pleased to see that an extension of emergency unemployment benefits and additional tax cuts for hard-working families are included, along with potential extensions of renewable energy tax credits.  He is actively working to improve the proposal as it develops in order to ensure that the best interests of Iowans are being served.”  

Governor-elect Terry Branstad announced three appointments on December 7. He will retain Brigadier General Tim Orr as Adjutant General of the Iowa National Guard, a post Orr has held since March 2009. Story County Treasurer Dave Jamison, who unsuccessfully ran for state treasurer, will head the Iowa Finance Authority in the Branstad administration. Retired Iowa Army National Guard Brigadier General Jodi Tymeson will lead the state Department of Veterans Affairs. Tymeson retired from the Iowa House this year, having represented district 73 for five terms.

Press releases containing background information on all three appointees are after the jump. None of them should have trouble being confirmed by the Iowa Senate. I noticed the Branstad administration’s bio of Tymeson didn’t mention her most recent role as co-chair of Bob Vander Plaats’ gubernatorial campaign.

Branstad has asked all state department heads to send him their resignations by December 15. He will replace most, if not all, of Governor Chet Culver’s appointees.

Branstad named three new staffers today. His liaison to the Iowa House and Senate will be Todd Schulz, who has handled government relations for Newton-based Iowa Telecom. The governor’s executive scheduler will be Alicia Freed, a former staffer for Senator Chuck Grassley who most recently worked as project manager for RuffaloCODY LLC in Cedar Rapids. Jimmy Centers, who was northeast Iowa field coordinator for Branstad’s gubernatorial campaign, will be deputy communications director. I wouldn’t be surprised if Centers got a promotion before too long, because Branstad’s communications director Tim Albrecht may go work for one of the Republican presidential campaigns in 2011.

Meanwhile, Branstad spoke about his property tax plans while addressing the Iowa Taxpayers Association’s annual meeting in West Des Moines today.

In proposing to cut commercial property tax rates by 35 percent to 40 percent for new businesses and phase down rates for existing businesses in a like manner over four or five years, Branstad said part of the lost revenues for local entities could be offset by increased business activity that would generate new property tax receipts. He also suggested that cities and counties should be less aggressive in offering tax increment financing and abatements that create disparities among new and existing businesses.

The price tag for lowering the commercial property tax burden would depend on the growth the proposed relief could generate, he said. Branstad said his plan would be to provide state funding to hold local governments “harmless” but not give them a windfall in the process – similar to when the state phased out the property tax on machinery and equipment in the 1990s when he previously served as governor.

“We want to make this adjustment in a fair way,” Branstad said, conceding that the cost could be as much as $500 million over four years.

The Iowa Taxpayers Association supports Branstad’s property tax plans, but Republican legislative leaders have warned getting the proposal through the legislature will be difficult. Yesterday Democratic Senate Majority Leader Mike Gronstal described the phase-out of the property tax on machinery and equipment as “pretty close to the biggest unfunded mandate in the history of the state.” The executive directors of the National League of Cities and the Iowa League of Cities both expressed concern about Branstad’s proposal:

No other state in the nation is considering similar cuts to commercial property taxes, said Donald Borut, executive director of the National League of Cities, a national advocate for municipalities. Resulting cuts to key city services such as police protection and road improvements ultimately could push businesses away, he said.

“The objective” to lower commercial property tax “is a laudable one, but the cost to municipalities could be draconian,” Borut said. “If there is some way to guarantee in blood that the municipalities would be held harmless, it’s one thing, but I don’t know how one can do that. Even with the best intentions, the pressures would be enormous.”

UPDATE: James Q. Lynch has more on local government officials worrying about Branstad’s property tax proposals. In that piece, Cedar Rapids Mayor Ron Corbett raises some good points:

Cedar Rapids is more dependent on property taxes than many communities, Corbett said. It has no gaming revenue and it local option sales tax is dedicated to flood recovery.

On a personal level, he’d like to see property tax relief targeted to benefit local businesses.

“Is there some different classification within commercial property tax base so you’re not giving Wal-mart a tax break at the same level as small business” he said.

President Barack Obama announced the “framework” for his unilateral surrender betrayal of core principles deal with Republicans on extending the Bush tax cuts today. It’s worse than I expected, which is saying something. Republicans get tax cuts for all income levels extended for two full years (we’re supposed to believe Obama will stand up for letting them expire during a presidential election year). They agreed to extend some unemployment benefits, but only for 13 months. Although long-term unemployment is at historically high levels, the “99-ers” (people who have exhausted 99 weeks of unemployment benefits) will get nothing out of this framework. To sweeten the deal for Republicans, the estate tax will be reduced to 35 percent, and it will apply only to estates exceeding $5 million in assets. That’s very costly and not at all stimulative. To provide more disposable income for working people, the payroll tax on employees will be cut by two percentage points for a year. That’s good as long as it doesn’t become an excuse later to cut Social Security benefits. UPDATE: David Dayen reports that a senior administration official told him the payroll tax cut “would be paid for out of general revenue through a credit, and so would not impact Social Security and Medicare finances in any way.”

It astounds me that Obama could think he will gain politically from this bargain. How many videos like this one are floating around? October 30, 2008: “Why would we keep driving down this dead-end street? […] At a moment like this, the last thing we can afford is four more years of the tired old economic theory that says we should give more and more to billionaires and corporations and hope that prosperity trickles down on everybody else.”

After the jump I’ve posted some Iowa politicians’ reactions to the deal. I’ll update as more statements become available.

UPDATE: Late on Tuesday afternoon, the offices of Representatives Bruce Braley (D, IA-01), Dave Loebsack (D, IA-02) and Leonard Boswell (D, IA-03) have not responded to my requests for comment on the tax deal. How hard is it to express an opinion about the major decision of the lame-duck session? U.S. Senate conservadem Mary Landrieu of all people came out guns blazing today against the “moral corruptness” of the deal.

Iowa’s three-member Revenue Estimating Conference again raised projections for state revenues during the current fiscal year and fiscal year 2012, following another month of growing state tax collections in November. The news hasn’t deterred Republican leaders from planning mid-year budget cuts, and legislators from both parties acknowledged the end of federal stimulus funds will make the next budget year difficult. Details and proposals are after the jump.

Republican filibusters on Saturday blocked two U.S. Senate attempts to vote on extending Bush tax cuts for all but the highest income levels. The first cloture attempt related to an amendment to permanently extend all tax cuts affecting the first $200,000 of income for individuals or $250,000 for families. It also would have extended unemployment benefits. It needed 60 votes to pass but received 53 yes votes and 36 no votes (roll call). Iowa’s Chuck Grassley joined all Republicans present and a handful of conservative Democrats to block this measure. All 11 senators who didn’t vote were Republicans. Perhaps they didn’t want to go on record voting against tax cuts.

The second cloture motion related to Senator Chuck Schumer’s amendment, which would have extended Bush tax cuts for all incomes below $1,000,000. The idea was to force Republicans to show that they would defend millionaires’ interests even if doing so torpedoed tax cuts for everyone else. But many Democrats objected to Schumer’s plan, because it would cost $400 billion over ten years and would tacitly redefine earners up to $1,000,000 per year as middle-class. The vote was 53-37, with 60 yes votes needed to invoke cloture. Iowa’s Tom Harkin was among the small group of Democrats who voted no, as did Grassley and the rest of the Republicans.

A deal that would have allowed votes today on two Republican-proposed amendments, extending all the Bush tax cuts permanently or for a limited time, “fell apart when a Republican objected to it at the last minute, leaving a surprised and embarrassed Mitch McConnell at the table empty-handed.” Click through for David Waldman’s explanation of the procedural issues and why a Republican would want to prevent those votes from happening during the lame-duck session.

Joan McCarter posted a revealing exchange between Schumer and Grassley during today’s Senate debate:

   Mr. Schumer: I thank my colleague. And through the chair, I’d simply like to ask my colleague this. I understand we have a different point of view here. We both care about deficit reduction. Could he please explain to me why it is okay to take $300 billion of tax cuts for those at the highest income levels, above a million, and not pay for it and yet we have to pay for unemployment insurance ex extension?

   Mr. Grassley: I thought I made that point very clear, because the taxpayers are smarter than we in Congress are. They know that they give another dollar to us to spend and it’s a license to spend $1.15. So it just increases the national debt. And when it comes to paying for unemployment compensation, we can pay for unemployment compensation because the stimulus bill was supposed to stimulate the economy and it’s not being spent. And if you put money from stimulus into unemployment, you don’t increase the deficit and you’ll also have the money spent right away.  

   Mr. Schumer: I would just say that the answer doesn’t deal with deficit reduction. If you care about deficit reduction, the two should be treated equally. A dollar of tax break for millionaire and a dollar of increased unemployment benefits increases the deficit the same amount. However, every economist — I saw we had a chart up about economists before — will tell you that a dollar into unemployment benefits stimulates the economy about four times as much as a dollar into tax decreases for millionaires. That’s pretty universal. Mark Zandy, John McCain’s economic advisor during his campaign, said that a dollar of tax breaks for millionaires stimulates the economy about 30 cents worth. A dollar of tax — a dollar of unemployment benefits increases the economy by about $1.62.

Grassley and the rest of the Republicans should stop pretending to care about the deficit.

If I were Senate Majority Leader Harry Reid, I would ignore whatever deal President Obama is working out with Republicans and refuse to schedule a vote on extending all the Bush tax cuts. Republicans had their chance to keep lower tax rates for everyone on their first $250,000 of income, but they said no.

The House of Representatives voted today to extend the Bush tax cuts affecting individuals earning less than $200,000 annually and families earning less than $250,000. The vote was 234 to 188, mostly along party lines. Iowa Democrats Bruce Braley, Dave Loebsack and Leonard Boswell all voted for the bill, while Republicans Tom Latham and Steve King voted against it. If you click on the roll call, you might notice the vote was on a “Motion to Concur in the Senate Amendment with an Amendment” to the Airport and Airway Extension Act of 2010, Part III. Adding the tax cut language to this vehicle, instead of introducing a new bill, was done to deny Republicans the chance to make a motion to recommit and attach the rest of the Bush tax cuts. David Waldman walks you through the House procedural weeds.

Only three House Republicans voted for this bill, which would permanently extend the Bush tax cuts for 98 percent of filers. Every recent poll shows a minority want to extend the tax cuts for the top income levels. It’s disgusting that Republicans can’t accept even this bill, which gives more money back to wealthier people anyway.

The White House response to today’s vote was even more disgraceful:

“The President continues to believe that extending middle class tax cuts is the most important thing we can do for our economy right now and he applauds the House for passing a permanent extension.  But, because Republicans have made it clear that they won’t pass a middle class extension without also extending tax cuts for the wealthy, the President has asked Director Lew and Secretary Geithner to work with Congress to find a way forward.  Those discussions started just yesterday and are continuing this afternoon.  The talks are ongoing and productive, but any reports that we are near a deal in the tax cuts negotiations are inaccurate and premature.”

Who still believes that Barack Obama wants to win this battle? He isn’t even trying. I wonder if he’s been planning to cave on this issue all along.

Meanwhile, the House passed the Healthy, Hunger-Free Kids Act of 2010 today by a vote of 264 to 157. All Iowa Democrats voted yes, as did Latham (one of just 17 Republicans to cross the aisle on this issue). King voted no, along with most of the Republican caucus. The Senate passed this bill by unanimous consent in August. It would improve the school lunch program and fund other child nutrition programs, but unfortunately food stamp funding was used to cover part of the cost. Senator Tom Harkin’s office summarized the bill’s provisions, and I’ve posted that statement after the jump. Referring to the food stamp funding, Harkin states, “President Obama, however, has committed to work with Congress to replace this offset before these SNAP [food stamp] cuts take place in November 2013.” I wouldn’t count on the president keeping that promise in light of today’s White House statement on tax cuts.

UPDATE: Senator Tom Harkin said on December 2 that if Obama caves on the Bush tax cuts, “He would then just be hoping and praying that Sarah Palin gets the nomination.”