Striking a balance. Easier said than done when it comes to balancing the state budget and reconciling political realities. We're questioning legislative leaders, democrat Kevin McCarthy and republican Kraig Paulsen, on this edition of Iowa Press.
Borg: Iowa's 2010 legislative session is now in its final weeks, but no one is getting senioritis. Much to the contrary. These next few weeks are going to be most difficult as final decisions are made in how to stretch scant revenue to cover big holes in Iowa's state budget for the fiscal year beginning July 1. The task's enormity becomes a bit clearer on March 11. That's when Iowa's Revenue Estimating Conference provides another estimate of the economy on how much tax revenue is going to be available to pay for state services. At the same time, legislators are seeking to save money by consolidating and streamlining state government. For insight on the subject and other legislative progress, we've invited Linn County Representative Kraig Paulsen -- he leads minority republicans in the Iowa House of Representatives -- and Polk County Representative Kevin McCarthy, who leads the majority democrats. Gentlemen, welcome back to Iowa Press.
Borg: And across the Iowa Press table, Associated Press Senior Political Writer Mike Glover and Radio Iowa News Director Kay Henderson.
Glover: Representative McCarthy, let's start with you. It was said at the beginning of this session that the signature issue of this legislature would be a plan to restructure state government, to streamline it and cut back on state spending. We're told you have an agreement. Is that the case and, if so, how much does it set?
McCarthy: There is agreement from the people that have been working on this from the house and the senate and the governor's office, and the senate just finished their work on the bill. We hoped early this coming week to finish our work on the package. The legislative fiscal bureau, the nonpartisan entity that scores our bills as it relates to our budget, I think that you're going to see this bill plus the other cost saving measures, early retirement and some of the other things we're going to do, will be scored in around $270 million, so over a quarter billion dollars in saving, most of that for the general fund. Not all for the general fund, but that's something we're very pleased with because we set out at the beginning of this session with the hope of around $250 million and we're going to exceed that. So a quarter billion dollars in real savings that will help us lessen our cuts to education, health care, and our other priorities.
Glover: And will your average everyday citizen notice what happens from these cuts?
McCarthy: A couple different things on that. They’ll notice it in the sense that we're going to be cutting a lot less in other areas because we've been able to do this very large cost saving package. But we've done it in such a way that we're not cutting back services for health care for the working poor. We’re not cutting back services that relates to special education for our children and so on and so forth. With the priorities that we have in terms of the services that we provide to people, public safety, for example, we're going to maintain those services. And so Iowans -- we’re not balancing the budget, I would say, on the backs of people who need services the most.
Glover: Representative Paulsen, do you believe that there's that much cutting and saving in this measure?
Paulsen: Well, we'll have to look at the numbers from the Legislative Services Agency. And they are what they say they are until we move through and see how it actually produce or doesn't produce. My understanding is it's about $70 million worth of general fund savings. No question, step in the right direction. House republicans support the move and my assumption is we'll support it when it bounces back from the senate. We don't think it goes far enough.
Glover: Representative McCarthy, I’d like to get you to address this specific piece of legislation, the restructuring piece. There have been various numbers tossed around. How much is in this one?
McCarthy: Just the government reorganization bill that's before us?
McCarthy: I think it's around $128 million I think is what it is. And in terms of general fund savings, I think Representative Paulsen is correct, somewhere in the $80 million range just for that bill. Of course, there's just one piece of a much larger pie of cost savings.
Henderson: One thing that happened this past week was Representative Wendt announced his exit from the legislature. Sad news in regards to his health. And of course, our first thoughts are with him and his family. But one of the things it does bring to mind is that he was one of the yes votes on labor related legislation that stalled in the house last year. Has his exit effectively ended debate or consideration of labor related bills in the House of Representatives, Representative McCarthy?
McCarthy: I really don't -- I’m a little uncomfortable talking about the subject, but to say that
Roger Wendt was the chair of our education committee, a very strong career, former school superintendent. And our thoughts and well wishes are with he and his long-time supporter and wife, Anita. And he's dealing with very serious issues right now, and we're offering him and his family any support that we can give them. In terms of our issues, where sometimes things hang in the balance by a vote or two, obviously if you have someone who is a strong supporter of those sort of issues, it becomes more challenging. Having said that, though, that's part of our job is rising to the challenge and compromising and trying to see how you can put votes together. And that's still occurring and that work is still ongoing. Does it make it more challenging? Perhaps. But --
Glover: But you only have next week to deal with that.
McCarthy: Bills that don't pass out of committee this coming week are funneled. Obviously leadership bills and ways and means and appropriation bills are exempt from that funnel. But there's work that is ongoing on these issues.
Henderson: Representative Paulsen, what's your view on this? Do you think labor related issues are percolating still, or do you think that they -- their days may be numbered in the Iowa legislature?
Paulsen: Well, I mean, look, just like leader McCarthy said, those issues -- there's opportunities to work around the funnel if the leadership decides they want to do that. So we will say a --
Henderson: And for people who don't know what the funnel is, it's a self-imposed deadline whereby bills have to advance or they're no longer eligible for consideration, right?
Paulsen: Exactly. Exactly. So I mean we'll stay vigilant. We’ll stay on top of that through the entire session. I also want to say Roger and his wife, Anita, great, great servants of the state of Iowa, and our thoughts and prayers are with him.
Borg: Representative McCarthy, last time you were on the program, you surprised us all by advancing a gambling initiative, and that was to move poker tournaments and other things off the casino floors and into auditoriums and so on in the same casino. He said it would be better venue and might bring in some more money. How is that coming? Is it going to pass?
McCarthy: Progress is being made on that issue. And perhaps it got more play than it deserved because what we're really talking about is a very limited, very limited expansion of gambling, not something that's designed to close a budget gap, for example, just something that would help maybe on the edges with a little bit more money for the state and a little bit more money for those local communities and nonprofits. But this coming week, I think you'll see actual legislation come down from the drafter that the committee can begin to work on within state government that will provide some very limited expansion in noncontiguous areas within a casino of things that are already legal and already aloud under the same rules and regulations, and then some discussion on whether to move the casinos that are stabilized in the community to what's called a reverse referendum, a possibility for giving voters -- say to recall a casino in the future. But there is work -- progress is being made and we'll see if -- it's a bipartisan effort. We’ll see if there's votes there in the next two weeks.
Borg: Representative Paulsen, is it bipartisan?
Paulsen: I mean I think I have members who will support both of those proposals. I think I have members who will oppose both of those proposals. We need to see the language and we'll move forward from there and see how it ends up.
Glover: Representative McCarthy, just this past week there was a big fuss at the statehouse over health care. You brought in some Wellmark officials, and you brought in the state insurance commissioner, with a lot of complaints about soaring health insurance costs. What exactly can this legislature do about health insurance costs or health care costs?
McCarthy: We don't know yet structurally. We're working with the insurance commissioner to say are there additional tools that you need to gather more information as you look to whether you approve these sort of rate increases or not. And you're right, we did bring them in because it was a shock to a lot of people. Sometimes the legislature debates from time to time, for example, mandates on coverage. We -- it was thought last year that some companies, that it was unreasonable not to provide prosthetics coverage, for example. Companies may come in and say, well, don't pass mandates over here because it might increase rates by 2 percent or 3 percent over here. Well, all of a sudden we, in a pretty reasonable way, have been balanced in our approach, uninsurance mandates. And insurance companies come back, Wellmark, for example, this year, and 18 percent on some plans, and we're hearing from some other small-group plans as much as 35-percent increase in one year. Why? What’s the reason? And we want -- at the very minimum, which is what yesterday's -- or I should say this last week's discussion was, at the very minimum we want more transparency. We want more sunlight on this process. And we started that process by asking these tough questions why and then working with the insurance companies -- or the insurance commissioner to say what additional tools do you need to try to limit these rate increases in the future. They’re very troubling.
Glover: Representative Paulsen, is this a side show? I mean isn't this, in fact, just a bunch of people parading before the cameras to try to take advantage of consumers who are unhappy with health insurance costs?
Paulsen: Well, I think -- I think -- I don't know about that, but this is what I do know is that there's two things that come to mind that we could do to start out with. One is we need to quit passing mandates. We can talk through them and, look, maybe there's something we need to do, but mandates make up somewhere in the neighborhood of 20-percent of a premium. And those are optional things that the state does or doesn't have to do. At least that's what some of the economic development folks tell us. The other thing we need to do is work on reimbursement rates for our Medicaid program. We -- those were just cut by the governor. Those health care providers end up having to pass those costs on to either private payer or those folks who are paying through insurance. I mean decisions in Des Moines and decisions by this leadership have done that, and by leadership I’m talking about governor culver --
Glover: To be clear --
Paulsen: -- In particular.
Glover: To be clear, what happens is when you -- the health insurance reimburses private pay customers, they have to make up for Medicare and Medicaid patients because the government doesn't pay all of the cost of their health care.
Paulsen: That's correct.
Glover: And what can be done about that?
Paulsen: Well, we need to work on getting those reimbursement rates up where the people that we're mandating that we take care of and that we're saying we're going to pay for them, we need to simple pay for them rather than passing that on through -- you know, basically it's a back-door tax increase.
Henderson: There's been a lot of coffee shop conversation about texting in your car while you're driving. Representative McCarthy, will the legislature agree on a bill that would ban sending and reading text messages while you're driving?
McCarthy: I hope so. This is an example -- I’ll speak on behalf of two leaders sitting at this table. Sometimes from a leadership perspective, we always get accused of working behind the scenes to kill things. Both Representative Paulsen and I voted no on that legislation last week, maybe for different reasons, I don't know. But it's something that membership on both sides was working on and we allowed discussion on.
Borg: Why did you vote no?
McCarthy: I voted no for a whole variety of reasons. One is my concern is from a civil liberties perspective on some of these issues. Right now in order for a government law enforcement officer to stop you in your vehicle, you have to have probable cause to do so, and that's right now a crime. Whether you're speeding or whether you have an expired tag or a broken tail light, you have to have a crime. This would be really the first time you'd put something in Iowa law where -- the so-called texting issue, where you would probably vastly expand that ability for law enforcement to stop someone without direct evidence of a crime being committed. Were you drinking a bottle of water, for example, were you looking down? Does an officer have it? And there's -- these are really deep issues because, you know, I do believe in civil liberties. And having said that, it's always a balance, civil liberties versus safety. Someone who may have been rear ended because somebody is texting behind them, what liberties do they have? It’s a public safety issue. So you're trying to balance the two. My personal opinion was it wasn't an appropriate balance there.
Henderson: So what -- what is the outcome going to be? Because apparently there's a threat of a loss of federal money if Iowa doesn't do this.
McCarthy: What is the outcome going to be? I don't know so I’ll just have to give my personal opinion because there are 150 legislators in the house and the senate that have to come to consensus on this. I know there's some representatives that are pushing for a compromise maybe to ban cell phone use altogether for young people in graduated license phases and see how that works and not deal with these other --
Glover: Representative Paulsen, I assume your opposition was coming from a different perspective other than civil liberties.
Paulsen: Well, I would have some of those similar concerns. I mean I think -- I’m concerned about our liberties on a whole spectrum of different issues. I also don't understand why -- I would have preferred we talk about distracted driving more from a -- because just a larger sense. There’s a host of things that you see people doing. Especially in driving back and forth to
Henderson: So the viewer who is watching this and seeing the top democrat and the top republican in the Iowa house saying they don't like this bill, what conclusion should they draw about the prospects of its passage?
McCarthy: That we let the process work and we hope consensus can be reached. I still think it's likely that we'll have a bill passed because we have a lot of strong safety advocates in our caucus who are concerned that these texting issues cause dramatically greater problems than these -- eating or something or that nature. And it's a problem and traffic safety associations are asking us to address it. So I still think they'll have a good chance of consensus being reached.
Glover: Representative McCarthy --
Paulsen: And to be clear -- let me just say, first of all, we're not advocating that people text while they drive. That’s a bad idea and it's unsafe. I’m not a particularly big texter myself. Nor do I text while I drive. So it's not -- it's not about that.
Glover: Representative McCarthy, the Supreme Court just struck down a federal law banning corporate campaign contributions, opening up the door allegedly to a flood of corporate money into politics. A series of questions about that. One, there's a proposal that the state react to that by passing legislation that would require at least disclosure by shareholders of what's going on. Is that going to pass?
Paulsen: We hope so. It’s right now moving on the second side and they're going to move first with the legislation and then we'll give it a good healthy look on the house side. We're obviously constrained within the context of the Supreme Court decision on what we can do, but I don't think we're constrained on trying to have very quick, swift disclosure requirements and sunlight on the process, because I think Iowans should be concerned and citizens around the country should be concerned about quick money saturation right before an election time and what effect does that have on our process. I think it's very destructive. I don't like the 5-4 decision of the court, and I think it's bad for our democracy. And hopefully we can have some legislation passed, but it's in its early stages right now.
Glover: Right. Representative Paulsen, how big a deal is that Supreme Court decision and how big of an impact is that going to be on republicans? We assume republicans will benefit more from corporate money.
Paulsen: Well, I don't know why you'd assume that. I mean corporations -- I think if you look at the numbers, some give more money to democrats. I think much more is being made out of the decision than what really exists. The only thing that I can tell that it actually impacts Iowa campaigns in the state of Iowa is I would assume, based on the ruling, that now a corporation could put a yard sign out in front of their yard. But this isn't all of a sudden where some company can come in and write campaign contributions directly to either one of us. That’s just not -- this is not what the ruling says.
Glover: How big of a deal is it?
Paulsen: For 2010, I don't think it's that big of a deal. For 2012, the presidential race, maybe then it will be a bigger deal, but I’m not expecting it to change the outcome of any race in Iowa in 2010.
Glover: Will republicans support some kind of an effort to change state law to react to that decision?
Paulsen: Oh, absolutely if it's reasonable. We don't need out-of-state corporations any more than we need out-of-state unions coming in and controlling the outcome of elections. And we sure don't need out-of-country folks coming in and controlling -- controlling the democratic process.
Henderson: Representative McCarthy, you almost had a few more guests in your office this week after a citizens for community improvement rally at the statehouse, a group that is opposed to a bill pending at the statehouse which deals with the issue of manure. Is that bill dead? The governor has indicated through his staff that he wouldn't sign it. Is that bill dead?
McCarthy: I don't know. And to be frank with you, I hadn't even read the legislation before they approached to visit last week, and actually I was not in my office at the time that they approached. But there is a concern -- and I know it's so-called section 5 in the bill. There was a concern that they had regarding a particular section in the bill, and the floor manager of the bill came out to address it and to let them know that he had already dropped an amendment to remove that section from the bill, to which their response was we don't care, we want the bill taken down even if the part we don't like is taken out. So I’m not quite sure, with some of those folks, if you can please them. Maybe it's fruit of the poisonous tree. But is -- can there be consensus reached? I know that some of the environmental advocates in our caucus had already started to negotiate on that piece of legislation to strike a balance. We’ll see if they can come to a consensus. It’s probably less likely than likely that it will pass.
Glover: Representative McCarthy, I’d like you to step back and, Representative Paulsen, you too in a minute. Step back for a second and don't deal with specific issues. But in a few months, what will this legislative session be remembered for?
McCarthy: My view is I’m fairly confident this legislative session will be remembered for in the face of the biggest national recession since the Great Depression that affected Iowa in a very serious way, that we came together and were able to rise above petty politics and balance the budget without raising taxes and in a way that does not cut services that Iowans need the most by passing the largest cost saving efficiency measures ever passed in the history of the legislature scored by nonpartisan legislative fiscal bureau. And I think that's what we'll be remembered -- that we rose to the challenge, balanced our budget, and did so without taking the easy route of us raising taxes.
Glover: Representative Paulsen, there are those who would suggest that petty politics is what the legislature does best. But when you get out of the statehouse and the spring comes and the snow is all gone, what do you think this legislature is going to be remembered for?
Paulsen: Well, I think the most memorable thing to the average Iowan is going to be when they get their property tax bill this fall and when they get their property tax bill again this spring. The governor raised property taxes when he did his across-the-board cut. And it appears the legislature -- and they may not even have a choice, but it appears the party -- the majority party is going to carry at least some portion of those forward. I think that is where the average Iowan sees their largest impact.
Henderson: When you were on the program recently, Representative McCarthy, you talked in general about the mood of the electorate. I’m wondering about the power of incumbency. Is that sort of teetering on the brink? Is it now becoming a liability in some instances to be an incumbent?
McCarthy: Right now probably. But again, anybody who watches politics over time knows that a month or two or three is just a lifetime in politics. And we are several, several months away from the election. I will tell you that the recent major poll that was testing political moods by Selzer & Company for the Des Moines Register, one of the things that really didn't get any coverage was that while there was a lot of concern with the federal government and federal deficits, the federal debt, and certain elected officials, it did say that they still thought that their local elected officials were doing okay. And I think on the state legislative perspective, I can spend ten minutes telling you why, but there is always cross voting that occurs as you move around the ballot. And it matters more -- Eric palmer from Oskaloosa, it matters more what he's doing in his local eggs and issues at the Smoky Row Coffee House on Saturday than what's going on in Washington,D.C.
Henderson: Representative Paulsen, that same poll that you mentioned showed that Chuck Grassley is at his lowest ebb in a couple of decades, perhaps because he's an incumbent. Is incumbency becoming a liability regardless of party?
Paulsen: Here's what I think. There’s a lot of energy among republicans right now. There’s a lot of energy among conservatives. I would guess that on -- unless something dramatic changes on November 2 of this year, the most dangerous place in America is going to be is if you're between a republican and a polling station. I mean I’m looking forward to this campaign season.
Glover: Representative McCarthy, we've asked this question of a number of people, and I’d like you to step back and look at the bigger picture here. We’re at the midterm election of a newly elected democratic president. History would tell you that's a good year for republicans. But the economy seems to be driving everything, historically that's a good issue for democrats. Tell me about this year, is it a democratic year, a republican year?
McCarthy: My guess is that it will probably be an even year. I think we'll be more on an even keel, for a whole host of reasons. I think we are slowly moving towards recovery, okay, with our economy right now. As we move towards recovery, I think you'll see the March REC for our legislature as a stabilization. I think they're going to be intentionally fiscally conservative, but I think you'll see that we have really stabilized and are moving toward recovery. A whole host of economic indicators are moving in a positive way. So the water cooler conversations this summer and fall I think are going to be a little bit different, not quite as pessimistic as they are right now. In terms of the state legislature -- the Iowa state legislature, we have not seen the dynamic words it's an off-year of the presidency in some sort of effect. That has not occurred in Iowa. So I think what we have done on these -- these elections for the Iowa house, always recruit good, strong candidates who match our district locally and we fully fund the races. And we've seen positive outcomes cycle after cycle after cycle now, regardless of what happens at the top of the ticket.
Glover: Right. Representative Paulsen, the same question to you. Tell me about this year. Historically it ought to be a good republican year. The economy is driving things. That helps democrats. Give me your take on what this year is going to look like.
Paulsen: Well, I mean I think nine months to go is obviously -- we've got a ways to go to get to the actual Election Day, but the trend lines clearly indicate this should be a strong year for republicans. I think the up-ticket races and what's going in Washington,D.C., helps us out at the margin at some point. Ultimately he's right, it comes down to a local candidate, a local election who is doing their job. And I think we've got the candidates that are going to be able to do that, and I’m looking forward to this fall.
Borg: Let me put it this way, Representative McCarthy. Across Iowa, outside Des Moines, there are school buildings being closed, teachers being laid off, municipal governments cutting back on services, and you could go on and on in litany. Are you not thinking that incumbents are -- and the democrats control the statehouse right now, the legislature and the governor's chair? Aren’t they going to pay a price?
McCarthy: I maybe sound partisan here, but part of it is reminding people in this next election season -- you always have to earn the election, you’re not owed an election, you have to earn it. -- is reminding people where we were at. It was a little bit frustrating and troubling that, you know, just a few months ago, we were -- that president Obama was, what, nine months into his presidency at that time and people were blaming him and democrats for bailout packages and the collapse on Wall Street, all of which was done on the republican presidency. We have been dealt a very bad hand by probably what will go down as one of the worst presidents in the history of theUnited States , George W. Bush, and we're doing our best to maintain services and to be responsible in the face of that national crunch, and we're going to prove that we've done it.
Borg: We're out of time.
Borg: Thanks for being with us today.
McCarthy: Thank you.
Borg: Well, that's this weekend's edition of Iowa Press. Next weekend Iowa Public Television begins Festival, so Iowa Press will be seen only on Friday, and the time remains at 7:30 next Friday night. A reminder too, you can contact our Iowa Press staff directly by using the Internet. The address on the lower part of the screen right now is email@example.com. We’d like to have your comments. I’m Dean Borg. Thanks for joining us today.