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News Analysis: October 8, 2007

posted on October 8, 2007

In the headlines this week: There are worries about the market for Iowa's burgeoning ethanol industry, despite oil being at $80 a barrel; and the president has vetoed expanded funding for the health care of poor children. Dave Pitt of the "Associated Press" is here to brief us about these matters.

Mundt: Welcome, David.

Pitt: Thank you, Todd.

Mundt: What's the potential of an override of the Presidential veto?

Pitt: I think there's a lot of discussion about that right now. I know that the Democrats have sent out emails nationwide, asking people to write their Congressional representatives to try to get them to - if they're Republicans that voted against the bill - to get them to change their mind and vote in favor of an override. I think they said they have 90,000 letters so far this week and they're putting out a subsequent e-mail to try to get 125,000 people to write. So the push is on. I think that there is going to probably be a vote at some point. It looks like the Senate may vote to override, but there probably are not enough votes in the House right now, and that's what people are saying.

Mundt: There were 151 Republicans who voted against it, right, in the House, against this expansion?

Pitt: And there would have to be a significant number to change their vote. The House would vote first. If the House does not override the veto, then the bill is dead. The next result would be that Congress would have to go back and work with the White House and try to come up with some sort of a compromise that was acceptable.

Mundt: Is that vote likely to come anytime soon?

Pitt: I think they're talking around a January time frame but, you know, we'll just have to watch and see where that goes and how quickly they want to bring it up, but I think that's what they're talking about.

Mundt: Governor Culver has had, as one of the important items on his agenda, increasing the coverage for poor children in Iowa. What impact might this have on his plans?

Pitt: Well, it has a significant impact. The Governor was working very hard before the President's veto to try to put pressure, to bear - to try to get support for this program to keep it alive, and obviously that didn't happen. The Governor is saying that there are 21,000 children in Iowa on the program now. The Congressional appropriation that would fund the program to $35 billion would increase the program rolls up about 11,000 more children. So there would be significantly more children that could join the program if that federal money came through. So obviously the Governor had a vested interest. It is one of his priorities, and so it's brought up kind of a battle between the Governor and Congressman Steve King, who was the only member of Iowa's Congressional delegation to vote against it.

Mundt: What do you make of that? It was an exchange of words.

Pitt: Yeah. The Governor kind of called out Representative King in a speech that he gave and in subsequent news releases and press releases that he put out. Steve King responded back saying the Governor is making this a political issue and health care for children should not be a political issue. And Representative King, I think, made it clear that, you know, he opposed the program as it was drafted by Congress for many of the same reasons President Bush opposed it, and that is they believe it pulls way too many people - more people into the program than was originally intended. And obviously there's the issue of federal spending and how to keep that under control.

Mundt: Ethanol -- just briefly, the ethanol prices have been falling through the summer. They're now about a third down, but corn prices are staying relatively high and there's a squeeze that's developing. How do you see that playing out?

Pitt: Well, I think that there is some talk that a few plants might be on the drawing boards or maybe in construction now may not go forward. There was one in Indiana, I think this week, that announced that it would not go forward at this point in time. So, you know, the people who are really supportive of the ethanol industry say it may be just a little period of time where there is a little settling, because the industry grew so rapidly within the last couple of years. So there may be just some time here to let things calm down, cool down, see how corn prices come out. So I think it's just a blurb and it will probably fix itself.

Tags: biofuels industry Iowa news oil renewable fuels