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Legislative Issues with House Majority Leader Kevin McCarthy (D)

posted on February 27, 2009

Borg: Muscle spasm. Majority democrats falling short of pushing major labor legislation through Iowa's House of Representatives. We're discussing that and other legislative matters with house democratic majority leader Kevin McCarthy on this edition of Iowa Press.

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On statewide Iowa Public Television this is the Friday, February 27th edition of Iowa Press. Here is Dean Borg.

Borg: For the past several weeks the Iowa legislature's democratic majority leaders have been making the case for major changes in the state's labor laws ... changes that are long time goals of organized labor. Well, late last week the house of representatives took one of those goals, legislation called prevailing wage, essentially requiring union scale wages on any state building projects, and even though the majority democrats kept the voting open from last Friday through the weekend and into Monday afternoon the bill failed. What democrats are planning now in resurrecting the prevailing wage bill and other union backed legislation is what we're including in our conversation with Representative Kevin McCarthy of Des Moines who leads the house majority democrats. Welcome back to Iowa Press.

McCarthy: Thank you.

Borg: And across the table Radio Iowa News Director Kay Henderson and Associated Press Senior Political Writer Mike Glover.

Glover: Representative McCarthy, let's start with that prevailing wage bill. It came up a vote short, a big hectic weekend. What happens with that? What's the future of it? Do we see it again?

McCarthy: We may see it again. Those that are claiming victory over defeating this bill may be doing so prematurely. If this was a football game we're about at halftime right now. There's a lot of session left. At this point last year we were struggling to find consensus on the smoke-free places bill, we brought up the model core curriculum bill which failed and we had to put a motion to reconsider on it and it took three more weeks to find the 51st vote. This is part of the process. Because this bill is more high profile it seems to be something that is unique historically but it really is not. There's a lot of time left in the session, there's a lot of negotiation and deliberation that can remain and is still a possibility that the 51st vote will be there for this legislation.

Glover: But because this bill is so high profile isn't it very difficult to find somebody to switch? A person is going to be in the goyer if they switch on this.

McCarthy: Maybe but the bill is pretty complicated. There's a lot of provisions in it and there's been a lot of compromise and a lot of work that has gone into this bill. Make no mistake we had 51 firm votes for this bill when it was brought up for debate and a legislator changed their mind on that bill and there's still provisions in the bill and negotiations that can occur that can bring that legislator and potentially others on board to the legislation.

Glover: And this particular bill was part of a package of labor bills that the legislature is considering. What message does that send about those other labor bills? Republicans are saying prevailing wage was the easy one, if they can't do that they can't do any of them.

McCarthy: I just don't look at these bills as part o the package. I never talked about them as part of the package. I know that there is an association of labor groups that like to talk about them as part of the package and I don't. Labor is not a monolith. You have building trades, you have public sector workers, you have UAW, you have teachers and so each one of these issues there is a different policy that's brought to the table. I don't view that as any sort of package. Each one will be completely separate and bring a different dynamic to the table.

Henderson: If you're looking for that 51st vote wasn't it a tactical move to keep the voting machine open and to keep the conversation about this bill going over a period of days? Didn't you in effect freeze the no votes by keeping the voting machine open?

McCarthy: I don't think so. The speaker of the house is in control of the gathering in and gathering out and the control of the machine and it was his prerogative to keep the machine open I think because he wanted to see if the 51 commitments that were made for this piece of legislation would be there. That was his prerogative and he chose to do that.

Henderson: Did you advise him to do so?

McCarthy: No, I did not. The decision was made by him on the spot but I supported the decision because I had 51 commitments made to me as well and he was giving people an opportunity to reconsider their position on the bill.

Glover: But didn't it backfire in this regard? You talk about making changes to the bill, coming up with another compromise but by using that tactic of just leaving that bill up on the voting board open you precluded any possibility of saying, okay, I'll do this if you'll do that? Any negotiations? Any movement?

McCarthy: Not at all. There is a mechanism to do that right now. We have a motion to reconsider on this bill. It can be brought up for future reconsideration of previously passed amendments and new versions can be worked out. So, the opportunity is still there. Keep in mind that one of the reasons the machine was also left open is this is something a lot of people passionately believe in. I know this is a philosophical difference but we as a state are getting ready to spend a tremendous amount of money on flood recovery, infrastructure type work, we saw what happened in Louisiana and it wasn't pretty. We have really, really good private sector contractors in this state right now that do good work but the laws that we have are similar to what they have in Louisiana and it does allow people to be the lowest bidder sometimes and come in and have that subcontractor that then hires independent contractors and shoddy work is done, shoddy work is done and we're trying to avoid that. We want to make sure that if we're seeing double the projects, double the money and more people to be paid a living wage and do good quality work and that's something that a lot of us really strongly believe in.

Borg: I want you to analyze the governor's support of that bill that failed. He came in with support late in process. How do you analyze that, number one? And then the importance of whatever the governor does on the other labor bills.

McCarthy: The governor has been supportive of this bill for as long as I have known the governor. He did a lot of work behind the scenes, phone calling and working with legislators, meeting with individual legislators, helping to negotiate this package. We thought we had 51 votes. There's no need to go out and celebrate prematurely. When that changed, when that situation changed he issued a statement and came out stronger publicly for the bill and we encouraged him to do so. But he's been in support of this for as long as I have known him.

Glover: If we can move on just this past week democratic legislative leaders announced a package of spending cuts. You said you're going to cut $133 million or so more than the governor has included in his budget. Tell me how Iowans will feel those cuts that you're proposing.

McCarthy: In a variety of ways. This is obviously a process that is going to change moving forward. One of the things that is going to affect our budget this year and next year is this federal stimulus package that's going to come in. We don't have the answers yet on what's called maintenance of effort or the purse strings that are going to be required. I'm hopeful that the federal government moves very fast and in an efficient fashion and we get all this money soon and we can figure out how we can make our budget work for Iowans better. My fear is that it's going to take longer to get that done because of the bureaucracy of the federal government and that may make our budget challenge here in Iowa that much greater because we have to wait to figure out exactly what requirements are going to be placed on all this money. But one thing we want to try to do is as we eliminate programs or services we do so for things that maybe are wish list items as opposed to core services, healthcare for the poor, all the various Medicaid programs, we'll make sure we protect those, public safety is very important, corrections officers are very important and if we start cutting things we start looking at some of these tax credits and other things before we get into core services.

Glover: Well, so you're an optimist the federal government is going to move very quickly. Some of us are a little bit more pessimistic about how quickly they'll move. What about the potential that you might have to come back in special session and react to this down the road?

McCarthy: That's a possibility. I think a couple of things are possible. One would be that rank and file legislators go home and leadership and appropriations members stay and work through this maze of federal rules that are going to be coming down to deal with all this money and then when there's a deal bring them back, that's one option. The other option is to pass a fairly lean budget and then come back in special and backfill certain areas once we figure out the maze of all these federal rules. So, that's another option.

Henderson: In terms of how the budget decisions you make impact people will in effect the level of funding you send the Regents institutions in Iowa City, Ames and Cedar Falls mean that tuition will go up for students?

McCarthy: It could mean that but that's something we're going to be pretty mindful on. There are some discussions as to -- I don't want to create a firestorm but they have some pretty healthy reserves at this stage and there may be some discussion on whether they are forced to use those reserves prior to looking at any sort of tuition increases.

Borg: The universities have reserves?

McCarthy: That's correct. The universities under the supervision of Regents have a pretty healthy reserve account, some of that is obligated for various things, but we may be looking at having them draw down those quite a bit prior to looking into any sort of tuition increases.

Henderson: So, philosophically the Board of Regents met last year and set the tuition rate for the fall. Do you think it's wrong for them to change the rules of the game, to change the tuition late for parents and students who have already begun planning and may have already lined up their college loan? Is that what I hear you saying?

McCarthy: Yes.

Glover: And I'd like you to walk through the mechanics of this a little bit more. It sounds to me like you're almost banking on some kind of a special session this year because of the timing of all of this.

McCarthy: I wouldn't say that. It's a possibility, it's a possibility. The other scenario is likely too that it may take a while to figure this out and then we bring everybody back before we so-called sign and die or end the session.

Glover: So, you send the legislature home, rank and file legislators. At what point do you do that?

McCarthy: I don't know. Again, I'm hopeful that we get this money within the next two to three weeks -- we got some of it already -- but the maintenance of effort, the rules so to speak aren't figured out. I'm just don't know if that's going to be possible so we're going to do our best with the information that we have right now with really lean budget targets and be prepared to backfill certain areas with the stimulus money and then not spend it all right away either. If we have a certain amount of Medicaid money that helps offset our budget crunch then we want to make sure we can use it over a two or three year period so that we're not spending it all now and then have a big hole again next year, get through this tough time.

Glover: You came up with some pretty lean budget targets that make some pretty deep cuts. There's starting to be a little bit of a buzz around the statehouse called revenue. Is there increased attention being given to places where you could go for additional revenue?

McCarthy: There is and I don't know if this is the one piece of news that will come out of this show today but one of the things that I find intriguing of the republican proposals for revenue that they put out this week was the possibility of leasing or selling the ICN. I think that may have some merit and I say that because it clearly just if you look at state assets has a lot more merit than the lottery let's say. The lottery is more of a function that has ongoing revenue, $57 million a year we get. Well, here we have with the ICN arguably the best infrastructure in the entire country and it largely remains dormant. We have a robust private enterprise in telecommunications and have no access to it and yes it's been good for schools and yes it's been good for certain seminars but largely this infrastructure is an asset that we are not utilizing ...

Glover: You had the chance to vote on that and you voted it down.

McCarthy: That was not the appropriate vehicle within the middle of the appropriations bill or maybe it was the allowable growth the amendment was offered, it's an intriguing idea and I think it's worth exploring.

Glover: So, you think that new revenue is one option in this budget crisis?

McCarthy: Spread out over a period of time. Leasing the ICN potentially figuring out a way to do a public and private partnership might be a way to generate quite a bit of resources for the state moving forward and we don't lose anything as a result. We're not really utilizing it now.

Borg: Do you have some evidence that that can be quickly converted to cash? Are there willing and waiting buyers?

McCarthy: No evidence on that. We haven't really explored this year. This would be in its infancy in terms of exploring so it would require a bipartisan group and we require some experts to look at this. I know it's been discussed in the past but we haven't had this sort of economic challenge moving forward and that may be something that Iowans might look to and say this might make some sense. I think the lottery idea which kind of spun out of control didn't make a whole lot of sense. This idea may make some sense.

Henderson: Speaking of revenue your senate counterparts recently said it was time to overhaul the state's tax system, the income tax system and get rid of federal deductibility, the ability of Iowans to deduct their federal tax payments from their income before they calculate their state income tax liability. House democrats -- are you ready to tackle that?

McCarthy: Before you get an answer to that the two sides of this are should you pay a tax on a tax and that's the position of the folks that want to keep the deductibility. The flip side is it hurts us as to how we're viewed around the country by business groups because it makes our tax code look artificially uncompetitive because it jacks up the rates. I don't believe that there will be consensus among house democrats to move in that direction this year. There's still more education that needs to occur, it is in the party platform, I just don't see that there would be ability to have consensus to tackle that challenge this year.

Glover: One idea that has popped up this year that there is not consensus on is a suggestion made by one of your senate democratic counterparts, Matt McCoy, that we start moving the state to merge school districts. He later modified that to require school districts to share superintendents, to only have one superintendent per county. Are you willing to tackle these kinds of structural changes in the state's school system.

McCarthy: We have started that process actually two years ago in a piece of legislation that literally got no attention. It was called the whole district sharing proposal that over time gives districts slightly more money than they otherwise would have if they voluntarily merge and that is starting to occur throughout the state. His proposal would vastly accelerate and mandate that. I think given the politics of how the place works it's better used a carrot and stick approach to get it done and we need to maybe go in and tweak that more to offer some incentives to allow folks to do this voluntarily. There has not been the role of rural legislators, and rural legislators dominate the legislature, it has not been the role to go in and say to your whatever it is your 27 communities that have trophies on their mantle from the football championship from 1965 that you're now going to be joining that school and it's been extremely difficult to get consensus on that. So, the carrot and stick approach I think is best and that's something I think we need to examine.

Glover: There's no good way to segway to this but one of the things you're going to do next week is the house ethics committee is going to have a meeting early in the week to listen to a complaint that was filed against one of your members, Dolores Mertz, suggesting that as chair of the house agriculture committee she has a conflict because she's a farmer. What is your view of that?

McCarthy: I think we need to let the process work so there is openness and transparency as they go about this complaint. Any complaint should be treated very seriously. I will say without regard to commenting on the specific issue we are a citizen’s legislature and because of that it's a pretty good, pretty clean system when you look around at what other folks do in other states. I'm an attorney, I don't think that I'm going to recuse myself any time an issue comes up regarding the courts. We have teachers, I don't think that they should recuse themselves when we talk about education. That's why we're there. We have electoral contractors. I don't think we should stay away from things regarding contracting issues. We bring our expertise to the legislature, we're a citizen’s legislature and I think that's a good thing.

Henderson: Required by law you this past week set the general level of state aid for public schools for the academic year that begins in the fall of 2010. When will legislators make a decision on the promise that was made for the academic year that begins this fall in regards to whether you will forward the promised 4% to schools?

McCarthy: One of the things is we already made the decision that we're going to keep that 4%. The question is whether we pick up the entire tab as a state or whether we allow locals to use their reserves and/or rely on property taxes. That is a decision that we're going to be making in conjunction with figuring out these maintenance of effort requirements with the federal money. But it is possible that we might be able to use this federal money to pick up the tab and therefore avoiding local districts from using their reserves. Maybe we'll do a combination, forcing them to use their reserves to a certain percentage along with some federal stimulus money. Our goal is to try to figure out a way to pick up the tab but it will be probably three to four weeks before we know.

Glover: And it wouldn't be an official Iowa Press program if we didn't spend just a little bit of time talking about politics, Representative McCarthy. Next year will be the mid-term election in the first term of a democratic president. History would teach us that's a bad year for you. How do you swim upstream against those tides?

McCarthy: I would argue that history has not shown that given the way we recruit and the way we run our campaigns. We've really segregated our operation with house campaigns and we run independent campaigns largely focused on local issues with the strengths of our local candidates. 2004 was a presidential year and John Kerry got beat in Iowa and our seats around the state that we picked up we outperformed the president quite a bit. 2006 was an off year election and we took the majority. Now, you say the party in power, how does that affect down the ballot races -- I just don't see it because we operate in such an independent fashion. We run on local races, we target swing voters, we make sure we do our own absentee ballot programs and we have picked up seats now really if you count two special elections five cycles in a row and so we will just continue the same formula we have in the past, recruit really high quality candidates that match their district locally and try to fully fund the races and more often than not we end up picking up seats.

Glover: And you have 56 seats in the house, 32 in the senate. Can you expand on that?

McCarthy: It's possible, it is possible to expand on that. Obviously our low lying fruit so to speak you have to go in and really fight some of these competitive races and we're going to have to defend a lot more seats next time. So, the dynamic for us might be more incumbent protection next time with two or three targeted seats as opposed to what we've been doing protecting two or three people and going after eight or nine republican seats. The dynamics might change but there's still the potential to hold or expand the majority I believe.

Henderson: In 2008 Senator Tom Harkin was able to easily win re-election against a relatively unknown republican opponent. Conversely Senator Grassley, a republican, is on the ballot in 2010. Should democrats try to recruit someone to challenge Grassley seriously or should they give Grassley a pass?

McCarthy: I think if there's a good quality candidate then they should run a strong campaign and anything can happen. Anybody can be beaten. Senator Grassley has done a lot of good work for Iowa and he's helped a lot with our federal stimulus package so I'll give him kudos on that. But we saw a poll that had Tom Vilsack interested in running and he would have been within the margin of error right from the get go. So, the illusion of being invincible I think might not quite be there. But there has to be a quality candidate that comes out and is able to put together the financial operations but we haven't seen that yet. I hope that happens.

Henderson: What is the prospect for Tom Vilsack coming back? The previous U.S. Ag Secretary had been governor of Nebraska, he left the job of U.S. Ag Secretary and now he's a U.S. Senator.

McCarthy: I don't know the prospect of that and I wouldn't presume to speak for what Tom Vilsack is thinking about. I think he'd be an outstanding candidate for any office he would seek.

Glover: Do you have any other news other than Tom Vilsack that you can think of that might be even thinking about -- because selection is coming up fairly quickly. A lot of people who are up next year are already putting their campaigns together. Grassley I know is. Isn't it time for you folks to come up with somebody? Do you have anybody?

McCarthy: I know that the new state party chair -- I have had a conversation with him about this -- is going to spend the next two months focusing on that as one of his primary missions and so I hope somebody emerges.

Glover: In the next election that's going to be something we pay attention is the governor is up next year. You have had occasionally rocky relations with the governor, you seem to have put those behind you a little bit now. What are the prospects of the governor getting re-elected and who do you hear as a serious challenger for him?

McCarthy: Oh my gosh, there's a new name coming out of the woodwork it seems like every day. The republican base as I see it from an outside observer has moved so far to the right that the person who maybe appeals to the evangelical base may have a leg up on the competition. From my perspective as being someone who is more towards the center the further they go to the right the better for us. And so I encourage their primary base to have a good fight and we'll see what happens.

Glover: There have been suggestions and I've heard people make this prediction -- they say the republican party in this state has drifted far enough to the right that it may cause a problem with Iowa's role in the national spotlight, puts the lead off precinct caucuses, that Iowa republicans have moved so far to the right that any candidate, presidential candidate, maybe even slightly moderate would have an excuse to skip Iowa. Do you think that's the case?

McCarthy: I don't know. I don't get a good feel for that. It is concerning when you have a large field of republican candidates and they go down the line and all but a couple deny evolution as being something that has at least got some scientific credibility behind it, that's somewhat concerning. But it's the process we have. I think Iowa should be first and has done a pretty good job overall of filtering these candidates out.

Borg: I just want to insert here a possibility -- there are eastern Iowa communities that are hurting badly -- what do you think as you look ahead to the election if they are still hurting badly, the legislature adjourns, the special session doesn't occur could there be a backlash into the coming election toward democrats and even Governor Culver?

McCarthy: You're referring to flood recovery?

Borg: Yes, I am.

McCarthy: There is tremendous money hitting the streets right now. We have over a billion dollars flowing through these communities.

Borg: But there are still people hurting and are looking to help from you.

McCarthy: That's correct and the situation I think is better now than it was three months ago when the election happened and we didn't see any sort of backlash but we've been very focused on this effort, the state has been focused, the federal government has been focused and I've talked to representatives there and people are working hard to make sure that we recover as a state.

Henderson: You are a full-time legislator and a full-time attorney. What is your political future?

McCarthy: I don't know. I think about that sometimes of whether I should not have a political future and maybe go and try to make some money for my family for a change. It's a lot different than what people think. If you have got a private career and you serve as a citizen legislator it's a financial sacrifice in most cases both in time and in resources and that's why I admire a lot of my colleagues who are up here volunteering their time. But I don't have any plans other than right now getting through this session.

Glover: Let's be a little more specific if we could. The congressman who represents Des Moines and the central part of the state is getting up there, he's got some gray hairs on this head, Leonard Boswell. Have you ever given any thought to that seat?

McCarthy: No.

Glover: Congress is not an option for you?

McCarthy: No.

Glover: Why?

McCarthy: I just wouldn't be interested. I'm a little scared of plane travel, I'm not a big fan of flying and going back and forth all the time would probably be more than I could handle.

Henderson: Let's talk about the state as a whole. You tried to get your colleagues to pass prevailing wage bill which is law in five of the six surrounding states. What is it about the Iowa culture that prevented you from doing that?

McCarthy: Again, there's still the possibility that we could pass the bill or other pieces of legislation but I think it's pretty slow to change. We have the vast majority of this country, for example, is moving into smoke free places and we passed our bill in Iowa and the response here I think has been a lot more controversial than what I would have guessed. I think we're slow to change. Unions in Iowa are not a huge presence in terms of the workforce -- about 11% of the workforce is unionized and I think we're kind of slow to change and we are also I think a bonified purple state as we have increased our party registrations in Iowa but we're a battleground purple state and if you start moving too far one direction or the other I think Iowa there's a natural tension there you've got to work through. That's why you've got to convince people prevailing wage is a pretty easy bill from my perspective to convince people. I talked to my local school board member and she's for the bill because she says it will help rule out shoddy contractors. Our school superintendent said that she was fine with the bill. Our city of Des Moines was not registered against the bill. And so I think the bill we have is a pretty well crafted, reasonable bill but it takes a while to get people there and that's the discussion we're going to continue to have over the next few weeks.

Borg: Is it safe to say that if that bill comes up again and doesn't pass that labor legislation of all kinds is dead this session?

McCarthy: No, each bill is different and brings a different dynamic.

Borg: Thanks for being with us.

McCarthy: Thank you very much.

Borg: In concluding this edition of Iowa Press I'm encouraging you to schedule plenty of time for Iowa Public Television's Festival during the next couple of weeks. You'll be seeing outstanding special programming along with opportunities to join other viewers in supporting programs such as Iowa Press. And because of the special Festival programming Iowa Press airs only once next week and it's an hour earlier than usual at 6:30 next Friday night. I'm Dean Borg and thanks for joining us today.

Funding for Iowa Press was provided by Friends, the Iowa Public Television Foundation. The Iowa Bankers Association ... for personal, business and commercial needs Iowa banks help Iowans reach their financial goals. By Iowa's Private Colleges and Universities ... employing over 10,000 Iowans and enrolling 25% of the total Iowa higher education enrollment. More information is available at www.thinkindependently.com. The Iowa Hospital Association ... supporting the missions and visions of Iowa's 117 community hospitals. The Iowa Hospital Association ... we care about Iowa's health.


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