Iowa Public Television

Borg: IN THE SHADOW OF BUDGET DEFICITS, IOWA'S 2003 LEGISLATIVE SESSION IS UNDERWAY. WE'LL DISCUSS EXECUTIVE BRANCH PRIORITIES AND ASPIRATIONS WITH GOVERNOR TOM VILSACK ON THIS EDITION OF "IOWA PRESS."

FUNDING FOR THIS PROGRAM WAS PROVIDED BY BY "FRIENDS," THE IOWA PUBLIC TELEVISION FOUNDATION... GENERATIONS OF FAMILIES AND FRIENDS WHO FEEL PASSIONATE ABOUT THE PROGRAMS THEY WATCH ON IOWA PUBLIC TELEVISION. AND BY THE IOWA BANKERS ASSOCIATION... FOR PERSONAL, BUSINESS, AND COMMERCIAL NEEDS, IOWA BANKS HELP IOWANS REACH THEIR FINANCIAL GOALS. AND BY THE ASSOCIATED GENERAL CONTRACTORS OF IOWA, THE PUBLIC'S PARTNER IN BUILDING IOWA'S HIGHWAY, BRIDGE, AND MUNICIPAL UTILITY INFRASTRUCTURE.

ON STATEWIDE IOWA PUBLIC TELEVISION, THIS IS THE FRIDAY, JANUARY 24 EDITION OF "IOWA PRESS." HERE IS DEAN BORG.

Borg: ON MONDAY THE GENERAL ASSEMBLY BEGINS THE THIRD WEEK OF THE CURRENT SESSION. THE OPENING DAYS WERE CEREMONIAL, BUT ALSO SIGNIFICANT BECAUSE OF TWO MAJOR ADDRESSES IN WHICH GOVERNOR TOM VILSACK OUTLINED HIS VISION FOR IOWA, BOTH SHORT AND LONG TERM. BUT SHADOWING THAT VISION ARE DEFICIT CLOUDS AND, PERHAPS EVEN MORE CONCERNING, A STATE ECONOMY THAT LACKS VITALITY EVEN WHEN THE REST OF THE NATION PROSPERS. AS THE GOVERNOR PHRASED IT, "WE DO NOT HAVE AN ECONOMY THAT SUPPORTS OUR VALUES," ADDING "WE HAVE TO CHANGE THAT." GOVERNOR TOM VILSACK JOINS US TODAY. WELCOME BACK TO "IOWA PRESS."

Vilsack: IT'S GREAT TO BE HERE, DEAN.

Borg: AND ACROSS THE IOWA PRESS TABLE, "DES MOINES REGISTER" POLITICAL COLUMNIST DAVID YEPSEN AND "ASSOCIATED PRESS" SENIOR LEGISLATIVE REPORTER MIKE GLOVER.

Glover: GOVERNOR, YOU SOUNDED THE BROAD THEME FOR YOUR SECOND ADMINISTRATION BOTH IN THE YOUR CONDITION OF THE STATE AND IN YOUR INAUGURAL ADDRESS. BUT IN THE COMING WEEK, YOU'RE GOING TO HAVE TO PUT SOME MEAT ON THOSE BONES WITH A BUDGET, A BUDGET THAT LOOKS PRETTY TOUGH AND PRETTY TIGHT WITH A LOT OF DEFICITS. WHAT CAN IOWANS EXPECT FROM THIS BUDGET?

Vilsack: WELL, FIRST OF ALL, THIS BUDGET IS EXHIBIT "A" IN THE CASE AGAINST OUR ECONOMY, IN THE SENSE THAT IT'S A BUDGET THAT, AS I'VE SAID BEFORE, DOES NOT ADEQUATELY SUPPORT THE VALUES OF IOWANS. WE'RE GOING TO HAVE MORE RESOURCES FOR EDUCATION, BUT OUR CHILDREN STILL NEED MORE EFFORT. WE'RE GOING TO DO MORE FOR THE ENVIRONMENT, BUT THE ENVIRONMENT STILL NEEDS MORE. AND WE'RE GOING TO LAY OUT AN AGGRESSIVE EFFORT TO TRY TO TRANSFORM THIS ECONOMY. AT THE END OF THE DAY, THIS BUDGET IS A ONE-YEAR PLAN. WHAT WE REALLY NEED IS A LONG-TERM PLAN TO CHANGE THE ECONOMY OF THE STATE. WE HAVE PROPOSED AND HAVE HAD MEETINGS WITH LEGISLATORS ALREADY TO ESTABLISH AN IOWA VALUES FUND THAT WOULD PROVIDE THE RESOURCES AND THE CATALYST FOR CHANGE. IT IS ABSOLUTELY ESSENTIAL THAT WE INVITE THE LIFE SCIENCE INDUSTRY INTO THIS STATE. TO DO THAT WE HAVE TO BUILD THE INFRASTRUCTURE FOR THAT INDUSTRY. IT IS VERY IMPORTANT THAT WE FOCUS EFFORTS ON TRYING TO ENCOURAGE MORE INSURANCE AND MORE ADVANCED MANUFACTURING, AND WE NEED RESOURCES TO DO THAT. WE PROPOSE TAKING THE LESSONS THAT WE'VE LEARNED FROM VISION IOWA AND APPLYING IT TO ECONOMIC DEVELOPMENT. WE ALSO KNOW THAT THERE IS A PENT-UP NEED AND A PENT-UP DEMAND AND AN EFFORT IN REGIONAL AREAS ALL ACROSS THIS STATE TO TAKE RESOURCES FROM THE STATE, TO COMBINE THEM WITH THE RESOURCES FROM LOCAL COMMUNITIES TO CREATE REGIONAL ECONOMIC OPPORTUNITIES AS WELL SO THAT THERE IS A MOMENTUM FOR CHANGE. WE ALSO HAVE TO REMOVE BARRIERS FOR PROGRESS, WHICH ARE NOT NECESSARILY DRIVEN BY THE BUDGET. WE NEED TO TRANSFORM AND REFORM OUR PROPERTY TAX SYSTEM. WE NEED TO SIMPLIFY OUR INCOME TAX SYSTEM. WE NEED TO TAKE A LOOK AT OUR REGULATORY STRUCTURE TO FIND OUT WHERE THE BARRIERS EXIST TO PROGRESS AND TRY TO REMOVE THEM. SO NOT ALL OF THIS IS NECESSARILY DRIVEN BY THE BUDGET, BUT THE BUDGET SIMPLY REFLECTS THE FACT THAT WE'VE GOT TO CHANGE THE ECONOMY IF WE WANT TO HAVE THE SCHOOLS THAT IOWANS EXPECT, IF WE WANT TO HAVE THE HEALTH CARE SYSTEM IOWANS WANT, IF WE WANT TO HAVE THE ENVIRONMENT THAT IOWANS EXPECT.

Yepsen: GOVERNOR, BECAUSE YOU ARE GOING TO BE PROPOSING YOUR BUDGET AT THE END OF THE WEEK, WE'VE GOT A LOT OF QUESTIONS ABOUT THE BUDGET. WHAT'S THE SINGLE MOST IMPORTANT THING THAT YOU'RE RECOMMENDING IN THAT BUDGET? WHAT'S THE ONE THING YOU REALLY WANT THE LEGISLATURE TO DO?

Vilsack: WELL, WE'VE GOT TO ESTABLISH THE IOWA VALUES FUND. WE HAVE TO ESTABLISH A CATALYST FOR CHANGE. WE HAVE TO ENCOURAGE THE LIFE SCIENCE INDUSTRY INTO THIS STATE. BY MAKING MEANINGFUL INVESTMENTS NOW IN A WINDOW OF OPPORTUNITY, WE CAN DISTINGUISH OURSELVES FROM OTHER STATES AND WE CAN REALLY PROMOTE ECONOMIC OPPORTUNITY.

Yepsen: THIS IS THE $500-MILLION FUND YOU SUGGESTED IN YOUR CONDITION OF THE STATE ADDRESS.

Vilsack: THAT'S CORRECT.

Yepsen: OKAY, THE QUESTION IS WHERE DO YOU GET THE MONEY TO PUT IN THIS FUND.

Vilsack: WELL, THERE'S SEVERAL WAYS WE'VE STARTED TALKING TO LEGISLATORS ABOUT. WE WANT TO REACH CONSENSUS ON THIS. AGAIN, VISION IOWA IS ONE MODEL WHERE WE ESSENTIALLY GO OUT, WE BOND RESOURCES, AND WE DEDICATE RESOURCES IN THE FUTURE TO REPAY THESE BONDS. THE INVESTMENTS THAT WE'RE MAKING ARE GOING TO BE IN INFRASTRUCTURE. THEY'RE GOING TO BE IN OPPORTUNITY THAT WILL LAST NOT JUST A SINGLE YEAR OR FIVE YEARS, BUT TEN, FIFTEEN, TWENTY YEARS. THERE'S ALSO A PAY-AS-YOU-GO KIND OF PROCESS THAT WE COULD GO THROUGH. BUT THE BOTTOM LINE IS IT'S NOT SO MUCH WHERE THE MONEY IS GOING TO COME FROM, IT'S THE COMMITMENT TO GET IT DONE. WE'LL FIND THE RESOURCES IF IT'S A PRIORITY. THE BUDGET ITSELF IS NOT A VERY EXCITING DOCUMENT. AND THE REALITY IS THAT IN THIS DAY AND AGE, IF STATES CAN MAINTAIN STATUS QUO IN A LOT OF AREAS, THAT'S A VICTORY. WE'LL HAVE ADDITIONAL RESOURCES FOR EDUCATION, NOT AS MUCH AS WHAT IS NEEDED, BUT WE'LL HAVE ADDITIONAL RESOURCES FOR EDUCATION. WE'LL MAINTAIN THE STATUS QUO IN OTHER CRITICAL AREAS. IT WON'T BE EASY. IT WILL REQUIRE US WORKING TOGETHER. BUT AT THE END OF THE DAY, WHAT THIS BUDGET REALLY SHOWS IS THE NEED, THE ABSOLUTE NECESSITY OF TRANSFORMING THIS ECONOMY.

Glover: YOU'VE TALKED ABOUT ADDITIONAL RESOURCES FOR EDUCATION, AND YOU'VE TALKED ABOUT HOLDING THINGS HARMLESS IN SOME OTHER AREAS. THIS BUDGET HAS A DEFICIT. WHAT LOSES? WHAT LOSES RESOURCES?

Vilsack: WELL, WE'RE GOING TO LOOK AT CREATIVE WAYS TO REDUCE SPENDING. THE FACT IS THAT THERE ARE OPPORTUNITIES, WE THINK, TO APPROACH THOSE THAT WE HAVE PARTNERED WITH TO SEE IF THERE'S A POSSIBILITY OF REDUCING COMPLEXITY IN THEIR LIFE IN EXCHANGE FOR RESOURCES -- FEWER RESOURCES. THERE ARE OPPORTUNITIES FOR --

Glover: HELP ME WITH THAT. I'M NOT SURE I'M GETTING WHAT YOU'RE SAYING THERE.

Vilsack: WELL, WE -- WE HAVE RELATIONSHIPS WITH PROVIDERS, FOR EXAMPLE, WHO PROVIDE BASIC SERVICES FOR STATE GOVERNMENT. THERE'S A GREAT DEAL OF PAPERWORK THAT'S INVOLVED IN CREATING A LINKAGE BETWEEN STATE GOVERNMENT AND PROVIDERS. MAYBE THERE'S A PROCESS BY WHICH WE COULD REDUCE THE PAPERWORK, IN WHICH CASE THEY MAY NOT NEED THE LEVEL OF SUPPORT. THERE ARE INNOVATIVE WAYS. WE'VE GOT A TEAM OF FOLKS WORKING ON A SERIES OF CREATIVE INITIATIVES, WHICH WE'RE GOING TO BE OUTLINING TO LEGISLATORS AND TO THE PUBLIC OVER THE COURSE OF THE NEXT SEVERAL WEEKS. THAT'S PART OF IT. THE OTHER PART -- THE OTHER PART IS THIS ECONOMY IS ACTUALLY GROWING A BIT. MOST STATES ARE SEEING DEFICITS. WE'RE ACTUALLY RECOGNIZING SMALL SURPLUSES. SO TO A CERTAIN EXTENT, THERE WILL BE NEW MONEY, UNLIKE MOST STATES WHERE THEY'RE BASICALLY SEEING A REDUCTION IN REVENUES. AND THEN FINALLY, THERE ARE TAXES THAT WE NEED TO COLLECT THAT WE'RE NOT COLLECTING. THE FACT IS INTERNET SALES, REMOTE SALES, THERE'S AN OPPORTUNITY FOR THIS STATE TO COLLECT SOMEWHERE BETWEEN $80 AND $100 MILLION A YEAR IN TAXES THAT ARE CURRENTLY OWED BUT JUST SIMPLY ARE NOT BEING COLLECTED. SO WE NEED TO BE A LITTLE BIT MORE AGGRESSIVE IN THOSE EFFORTS, AND WE NEED TO TRY TO TRANSFORM OUR SALES TAX SYSTEM SO THAT WE CAPTURE THE TAXES THAT ARE ACTUALLY OWED BY FOLKS.

Glover: AREN'T YOU GOING TO RUN INTO A BUZZ SAW UPSTAIRS WITH THAT WITH PEOPLE WHO ACCUSE YOU OF DOING A BACKDOOR TAX INCREASE?

Vilsack: IT'S NOT A TAX INCREASE, MIKE. IT'S COLLECTING TAXES THAT ARE OWED. RIGHT NOW WHEN YOU PURCHASE SOMETHING ON THE INTERNET, YOU ARE REQUIRED TO PAY SALES TAX. THE SALES TAX IS NOT COLLECTED BY THE REMOTE VENDOR, BECAUSE THE LAW DOESN'T REQUIRE THEM TO DO THIS. IOWA IS ONE OF 39 STATES WORKING ON A SYSTEM THAT WOULD ALLOW FOR A VOLUNTARY COLLECTION BY THE REMOTE SELLER OF THOSE TAXES AND REMITTING THOSE TAXES TO THE STATE.

Yepsen: GOVERNOR, EDUCATION, K-12, WHAT'S YOUR ALLOWABLE GROWTH FIGURE IN YOUR BUDGET?

Vilsack: IT'S A 2-PERCENT NUMBER, WHICH IS WHAT WE PROMISED. WE'LL MAINTAIN THE LEVEL OF RESOURCES FOR CLASS SIZE REDUCTION, AND WE ALSO RECOGNIZE THE NEED TO MAINTAIN OUR EFFORTS IN TEACHER QUALITY AND STUDENT ACHIEVEMENT.

Yepsen: BOARD OF REGENTS INSTITUTIONS, WHAT ARE YOU GOING TO DO TO THE STATE UNIVERSITIES? AND SPECIFICALLY, DO YOU ANTICIPATE YOUR BUDGET WILL FORCE ANOTHER TUITION INCREASE?

Vilsack: FIRST OF ALL, I'M NOT WILLING TO CONCEDE THAT BUDGET ISSUES ARE ALWAYS THE RESULT OR DIRECTLY CONNECTED TO TUITION INCREASES. I THINK OFTENTIMES THE BOARD OF REGENTS MAKES A DECISION TO INCREASE TUITION IN ORDER TO MAINTAIN OR EXPAND QUALITY. HAVING SAID THAT, WHAT WE'RE GOING TO TRY TO DO IS MAINTAIN FUNDING FOR THE REGENTS UNIVERSITIES, PROVIDE THE RESOURCES TO ADEQUATELY FUND SALARIES, WHICH IS THEIR TOP PRIORITY, AND THEN THEY'LL HAVE TO MAKE A DECISION AS TO WHETHER OR NOT ADDITIONAL RESOURCES ARE NEEDED IN ORDER TO MAINTAIN QUALITY. BUT I DON'T THINK THEY'LL BE ABLE TO POINT TO REDUCTIONS IN STATE FUNDING AS AN EXPLANATION OR REASON FOR.

Yepsen: THAT SOUNDS LIKE A FREEZE, A STATUS QUO, HELD HARMLESS.

Vilsack: VERY MUCH, YOU'LL SEE A LOT OF THAT IN THIS BUDGET, A LOT OF LINE ITEMS IN THIS BUDGET. OUR MAJOR EFFORT WAS TO TRY TO MAINTAIN THE STATUS QUO, AND HERE'S WHY THAT'S IMPORTANT. IF WE'RE GOING TO TRANSFORM THE ECONOMY, IF WE'RE GOING TO MOVE THIS STATE FORWARD, WE CAN'T REALLY AFFORD TO TAKE A STEP BACK RIGHT NOW. WE HAVE TO MAINTAIN THE STATUS QUO AND THEN BUILD ON THAT. THE REASON THIS IS IMPORTANT IS THAT THE STATE OF IOWA IS IN A LITTLE BETTER SHAPE THAN A LOT OF OTHER STATES. THE STATES SURROUNDING US ARE HAVING VERY, VERY SERIOUS DIFFICULTIES WITH THEIR BUDGETS. AS A RESULT, WE ARE IN A POSITION, POTENTIALLY, IF WE AGGRESSIVELY PROCEED FORWARD WITH THE IOWA VALUES FUND IN REMOVING BARRIERS, TO MARKET THE STATE AS A PLACE WHERE SOMETHING IS HAPPENING AT A TIME WHEN NOT MUCH IS HAPPENING IN THE NATION.

Borg: IS ONE OF THOSE PLACES WHERE STATUS QUO OR FREEZE COULD BE APPLIED TO STATE WORKER PAY?

Vilsack: YOU KNOW, DEAN, THAT'S AN INTERESTING ISSUE. YOU HAVE TO RECOGNIZE SOMETHING ABOUT STATE WORKERS. FIRST OF ALL, THERE ARE A LOT FEWER STATE WORKERS THAN THERE WERE A YEAR AGO OR TWO YEARS AGO. IN FACT, THE WORK FORCE HAS BEEN REDUCED BY ALMOST 10 PERCENT. SO THAT MEANS THAT THOSE WHO ARE LEFT ARE WORKING A LITTLE BIT HARDER. THIS IS A COLLECTIVE BARGAINING PROCESS, AND WE ARE STILL IN THE PROCESS OF NEGOTIATING, SO IT PROBABLY WOULDN'T BE PARTICULARLY APPROPRIATE FOR ME TO MAKE COMMENTS ABOUT THIS. BUT I DO WANT TO RECOGNIZE THAT WE HAVE A LOT OF HARD WORKING FOLKS. AND AT THE END OF THE DAY, WHATEVER IS AGREED UPON HAS TO BE AGREED UPON BY BOTH SIDES BECAUSE OF THE NATURE OF OUR COLLECTIVE BARGAINING PROCESS.

Yepsen: WILL YOUR BUDGET PROMPT ADDITIONAL LAYOFFS OF STATE GOVERNMENT OR FURLOUGHS?

Vilsack: WE'RE NOT PROPOSING THAT. WE THINK THAT WE'LL -- THE DIFFICULTY OF THE FIRST-YEAR BUDGET IN THE FIRST YEAR OF THE GENERAL ASSEMBLY IS THE COLLECTIVE BARGAINING PROCESS WILL NOT HAVE BEEN COMPLETED BEFORE WE HAVE TO SUBMIT OUR BUDGET SO THAT WE BELIEVE THAT THERE WILL BE AMPLE ROOM IN WHAT IS NOT BEING SPENT IN THE BOTTOM LINE, THE ENDING BALANCE, TO COVER COLLECTIVE BARGAINING.

Glover: ONE OF THE THINGS THAT THE LEGISLATURE HAS ALREADY BEGUN DEALING WITH IS A SUPPLEMENTAL APPROPRIATION FOR THIS BUDGET YEAR, WHICH INCLUDES SOME EXTRA MONEY FOR THE STATE'S PRISON SYSTEM. WHAT DO YOU HAVE IN YOUR BUDGET BEYOND THAT SUPPLEMENTAL TO FLUSH OUT THE PRISON SPENDING BUDGET THIS YEAR FOR NEXT YEAR? HOW DIRE IS THE STATE OF OUR PRISON SYSTEM?

Vilsack: WELL, FIRST OF ALL, LET ME EXPRESS APPRECIATION TO THE SENATE FOR THEIR QUICK ACTION IN THE SUPPLEMENTAL APPROPRIATIONS BILL AND THE FACT THAT THE HOUSE HAS ALSO EXPRESSED DESIRE TO MOVE THIS FORWARD. I THINK THAT'S A POSITIVE SIGN. IT'S A RECOGNITION THAT WE HAD A POTENTIALLY UNSAFE SITUATION. I CAN'T GUARANTEE THAT THERE'S GOING TO BE A GREAT DEAL OF MORE RESOURCE AVAILABLE FOR CORRECTIONS. I THINK THAT WE NEED TO TAKE A LOOK AT PROCESSES AND STEPS WHERE WE MIGHT BE ABLE TO, OVER THE LONG TERM, RELIEVE SOME OF THE PRESSURE. I THINK THERE HAVE BEEN SEVERAL POSITIVE SUGGESTIONS IN SENTENCING REFORM THAT REPRESENTATIVE MADDOX HAS PROPOSED IN THE PAST, AND I THINK THAT'S A GOOD STARTING POINT FOR DISCUSSION.

Glover: IS IT REALISTIC TO ASK THIS LEGISLATURE TO REFORM THE STATE SENTENCING SYSTEM, TO SEND FEWER PEOPLE TO PRISON? THAT'S BEEN A NONSTARTER UP IN THE LEGISLATURE IN THE PAST FEW YEARS.

Vilsack: WELL, I THINK THAT THERE'S A RECOGNITION OF THE FACT THAT WE ARE IN A POSITION TODAY WHERE WE HAVE OVERCAPACITY. WE CURRENTLY HAVE ABOUT 1,300 MORE PRISONERS THAN WE HAVE CAPACITY FOR. WE'VE GOT TO ADDRESS THIS PROBLEM. AND THE REALITY IS THIS IS NOT NECESSARILY ABOUT NOT SENDING PEOPLE TO PRISON. IT'S ABOUT TRYING TO FIND THE RIGHT BALANCE IN TERMS OF PUNISHMENT AND MAINTAINING A SYSTEM THAT MAKES SURE THAT WE HOLD PEOPLE THAT ARE DANGEROUS AND VERY DANGEROUS IN SOCIETY IN PRISON LONG ENOUGH TO PROTECT SOCIETY.

Yepsen: IT ISN'T JUST A MATTER OF REDUCING SENTENCES, THOUGH. YOU'VE GOT TO COME UP WITH ADDITIONAL RESOURCES FOR COMMUNITY BASED CORRECTIONS, FOR DRUG TREATMENT, FOR PRISONER EDUCATION. WILL YOUR BUDGET HAVE MONEY FOR THOSE THINGS?

Vilsack: DAVID, THERE JUST SIMPLY IS NOT THE RESOURCES TO DO EVERYTHING THAT EVERYONE WANTS TO DO. THIS IS PRECISELY THE REASON WHY I SAY IT IS NECESSARY IF WE WANT THESE THINGS IN THE LONG TERM -- IF WE WANT THESE THINGS IN THE LONG TERM, WE'RE GOING TO HAVE TO TRANSFORM THE ECONOMY. THE TRADITIONAL RESPONSE TO A SITUATION WHEN YOU'RE FACED WITH NOT ENOUGH RESOURCES IS FOR GOVERNMENT TO PROPOSE TAX INCREASES. WE'RE NOT PROPOSING SALES TAX INCREASES. WE'RE NOT PROPOSING INCOME TAX INCREASES. WE'RE NOT PROPOSING A GENERAL TAX INCREASE OF ANY KIND, SO THAT MEANS WE HAVE TO LIVE WITHIN OUR MEANS JUST LIKE IOWA FAMILIES DO. THE FACTS ARE THESE: OUR ECONOMY DOES NOT PRODUCE ENOUGH REVENUE EITHER FOR FAMILIES, FOR COMMUNITIES, OR FOR THE STATE. IF WE WANT TO SOLVE THESE PROBLEMS IN THE LONG TERM, WHICH IS WHAT THIS DISCUSSION OUGHT TO BE ABOUT, THEN WE OUGHT TO TRANSFORM THE ECONOMY.

Yepsen: WILL YOU PROPOSE AN INCREASE IN THE CIGARETTE TAX?

Vilsack: THAT IS NOT IN OUR BUDGET.

Yepsen: GOVERNOR, I WANT TO ASK YOU ABOUT THE STATE'S HEALTH CARE PROGRAM FOR THE POOR, MEDICAID.

Vilsack: YES.

Yepsen: YOU'VE GOT TWO PROBLEMS WITH IT. ONE IS THE CURRENT FISCAL YEAR THAT YOU'RE IN, WHICH ENDS ON JUNE 30 OF THIS YEAR, OF '03, YOU HAVE TO PUT MORE MONEY IN THAT PROGRAM. AND THEN YOU'VE ALSO, FOR THE '04 BUDGET, FOR THE YEAR FOLLOWING, YOU'RE PROJECTING THAT YOU'RE GOING TO NEED MORE MONEY. MY QUESTION IS HOW MUCH. AND SECONDLY, WHAT HAVE YOU GOT IN MIND TO TAMP THIS DOWN TO TRY TO GET THESE SPENDING INCREASES UNDER CONTROL?

Vilsack: WELL, FIRST OF ALL, WE WILL, IN FACT, HAVE TO PUT MORE RESOURCE INTO THE BUDGET THIS YEAR IN ORDER TO MAINTAIN OUR RESPONSIBILITIES IN THE MANDATE THAT THE FEDERAL GOVERNMENT HAS IMPOSED ON US. NEXT YEAR IS GOING TO BE A REAL CHALLENGE, AND IT WILL REQUIRE US TO CHANGE THE SYSTEM. SENATOR KRAMER AND A GROUP OF LEGISLATORS ARE WORKING ON A SERIES OF PROPOSALS TO REFORM THE SYSTEM AND TO CHANGE THE SYSTEM. I THINK WHAT YOU'LL SEE IS, AT THE END OF THE DAY, A DIFFERENT PROCESS FOR PRESCRIPTION DRUGS UNDER MEDICAID. WE'RE TAKING A LOOK AT SOME STATES THAT HAVE BEEN INNOVATIVE AND CREATIVE WITH PRESCRIPTION DRUGS, TRYING TO DEVELOP A PREFERRED DRUG LIST THAT MAKES SENSE AND THAT'S BASED ON RESEARCH, WHERE WE FIND THE DRUG THAT WORKS BUT ALSO THE LEAST EXPENSIVE ALTERNATIVE. YOU MAY VERY WELL SEE A DIFFERENT STRUCTURE IN TERMS OF EMPOWERING FAMILIES WHO ARE INVOLVED IN THE MEDICAID PROGRAM TO MAKE DECISIONS FOR THEMSELVES IN EXCHANGE FOR SOME FLEXIBILITY ON THE RESOURCES. THE OTHER ISSUE THAT HAS TO BE ADDRESSED AND IS ALMOST NEVER ADDRESSED IN THESE CONVERSATIONS IS THE FACT THAT WE HAVE ANOTHER PARTNER IN THIS PROGRAM. IT'S CALLED THE FEDERAL GOVERNMENT, AND THEY HAVE NOT LIVED UP TO THEIR RESPONSIBILITIES EITHER ON MEDICAID OR MEDICARE. AND THAT IS WHAT IS CHALLENGING OUR HEALTH CARE SYSTEM. IN ORDER FOR US TO ACTUALLY RESPOND TO THE CONCERNS, THE FEDERAL GOVERNMENT HAS TO RECOGNIZE THAT IT HAS REQUIRED THE STATES TO TAKE ON A RESPONSIBILITY, THE DUAL ELIGIBLES, PEOPLE WHO ARE ELIGIBLE BOTH FOR MEDICARE AND MEDICAID. THIRTY PERCENT OF STATE BUDGETS IN MEDICAID ARE FOR THOSE FOLKS WHO ARE REALLY THE FEDERAL GOVERNMENT'S RESPONSIBILITY. SO AS WE LOOK AT SOLUTIONS FOR THIS, IT'S NOT JUST CHANGING THE WAY WE DO BUSINESS, IT'S ALSO MAKING SURE THAT OUR FEDERAL PARTNER LIVES UP TO ITS OBLIGATION.

Yepsen: GOVERNOR, THERE'S BEEN A LOT OF GIVE AND TAKE UP THERE, BOTH SIDES TRYING TO COMPROMISE. IS ONE OF THE ELEMENTS OF THIS MEDICAID COMPROMISE THAT YOU WOULD BE WILLING TO ACCEPT HIGHER COPAYMENTS? YOU HAVEN'T BEEN WILLING TO DO THAT IN THE PAST.

Vilsack: I THINK -- I THINK WE HAVE TO BE WILLING TO TAKE A LOOK AT A LOT OF DIFFERENT OPTIONS. THE CONCERN I HAD ABOUT THE COPAY ON PRESCRIPTION DRUGS WAS THAT IT WOULD AFFECT THE SENIOR CITIZENS AT A TIME WHEN WE WERE TRYING TO REDUCE THE COST OF PRESCRIPTION DRUGS. I THINK WE MAY HAVE A DIFFERENT APPROACH ON PRESCRIPTION DRUGS. HAVING SAID THAT, THIS GETS BACK TO THE ISSUE OF THE FEDERAL PARTNERSHIP AGAIN. A LOT OF THINGS THAT WE COULD DO, THAT WE'D LIKE TO DO, THAT WOULD MAKE SENSE TO DO, DAVID, WE CAN'T DO BECAUSE THE FEDERAL GOVERNMENT'S RULES DON'T ALLOW US. SO IT MAY BE THAT WE CREATE A SYSTEM AND THEN WE MAY HAVE TO PETITION WASHINGTON FOR THE FLEXIBILITY TO DO SOMETHING NEW AND CREATIVE. UP TO THIS POINT, WASHINGTON HAS BEEN PRETTY SLOW TO RESPOND TO SOME REQUESTS FOR WAIVERS IN THE MEDICAID PROGRAM. I THINK YOU ALSO SEE, AS THERE'S TALK OF STIMULUS OF THE NATIONAL ECONOMY, I THINK YOU'LL SEE A NUMBER OF SENATORS AND REPRESENTATIVES PROPOSE ADDITIONAL AID TO STATES FOR MEDICAID, RECOGNIZING THAT WE'RE ALL FACED WITH A DIFFICULT ISSUE.

Glover: THERE HAVE BEEN SOME SUGGESTIONS IN THE PAST THAT ONE OF THE WAYS TO SOLVE THE STATE'S BUDGET CRUNCH HAS BEEN TO DIP INTO THE STATE'S ROAD USE TAX FUND AND USE SOME OF THAT MONEY FOR NONHIGHWAY PURPOSES. IS THAT IN YOUR NEW BUDGET?

Vilsack: NO.

Glover: YOU'VE DECIDED NOT TO GO THAT ROUTE AGAIN. HOW ABOUT A GASOLINE TAX INCREASE? YOU'VE RULED OUT CIGARETTE TAXES, SALES TAXES, INCOME TAXES.

Vilsack: THERE'S NO GASOLINE TAX INCREASE PROPOSED IN THIS BUDGET. THE POINT OF THIS -- AND THIS IS A REALLY IMPORTANT POINT FOR PEOPLE TO UNDERSTAND -- IS THAT THIS BUDGET IS A ONE-YEAR PLAN. IF ALL WE DO IS FOCUS ON ONE YEAR AT A TIME, WE WILL NEVER MOVE THIS STATE FORWARD. WE HAVE GOT TO HAVE A STRATEGY -- A LONG-TERM VISION AND STRATEGY FOR THIS STATE TO TRANSFORM AND GROW THE ECONOMY. THIS BUDGET WILL NEVER SUPPORT THE LEVEL OF EDUCATION RESOURCES THAT ARE NEEDED. IT WILL NEVER SUPPORT THE HUMAN SERVICES NEEDS. IT WILL NEVER ALLOW US TO REDUCE THE NUMBER OF IMPAIRED WATERWAYS. WE CAN'T ASK FAMILIES TO DO MORE, BECAUSE THEY ARE JUST AS STRAPPED AS WE ARE. OUR BUDGET PROBLEMS ARE JUST A REFLECTION OF WHAT HAPPENS IN OUR STATE. SEVENTY PERCENT OF OUR WORK FORCE -- SEVENTY PERCENT OF OUR WORK FORCE HAS A HIGH SCHOOL DEGREE OR LESS. THE AVERAGE WAGE LEVEL FOR A HIGH SCHOOL GRADUATE IN THIS STATE IS $12.50 AN HOUR. IT IS VERY HARD TO SUPPORT A FAMILY ON $12.50 AN HOUR. WE HAVE GOT TO CHANGE THE KIND OF JOB THAT WE CREATED IN THIS STATE. IT CAN'T BE DONE OVERNIGHT. IT NEEDS TO BE DONE. WE NEED TO START THE PROCESS NOW.

Borg: AS YOU START THAT PROCESS WITH THAT IOWA VALUE FUND, YOU SAID WE'LL FIND THE RESOURCES, THAT $500 MILLION THAT YOU NEED, IF IT'S A PRIORITY, YOU SAID EARLIER IN THIS PROGRAM. YOU SAID YOU WANT TO TALK WITH THE LEGISLATORS ABOUT THAT. WHAT KIND OF A CLIMATE -- HOW FAR ARE YOU ALONG WITH TALKING WITH LEGISLATORS, AND ARE THERE ANY IDEAS? AND THE SECOND PART OF THAT QUESTION IS CAN PART OF IT COME FROM PRIVATE SOURCES, NOT ALL GOVERNMENT. LET'S SAY THE IOWA FARM BUREAU HAS A VESTED INTEREST IN DEVELOPING RURAL IOWA, ECONOMIC DEVELOPMENT.

Vilsack: WE WANT IT TO BE A PUBLIC/PRIVATE PARTNERSHIP. WE'RE PROPOSING A MANAGEMENT STRUCTURE FOR THIS FUND THAT INVOLVES THE PRIVATE SECTOR AS WELL AS THE PUBLIC SECTOR, WHICH IS A NEW DYNAMIC FOR ECONOMIC DEVELOPMENT. WE WANT PARTNERSHIPS BETWEEN LOCAL COMMUNITIES AND THE STATE GOVERNMENT, ANOTHER NEW DIMENSION TO ECONOMIC DEVELOPMENT IN THIS STATE. THE CLIMATE HAS BEEN POSITIVE. WE'VE HAD MEETINGS WITH LEGISLATIVE LEADERS, INDIVIDUAL MEETINGS WITH THE HOUSE AND REPUBLICAN CAUCUS LEADERS. WE'VE HAD A GROUP MEETING ARRANGED WITH THE HELP OF THE REPUBLICAN AND DEMOCRATIC LEADERSHIP IN THE LEGISLATURE YESTERDAY WHERE WE LAID OUT SOME OF THE DETAILS OF WHAT WE WANT TO DO. WE HAVE A VERY SPECIFIC PROPOSAL AS IT RELATES TO THE LIFE SCIENCES, ADDITIONAL RESOURCES FOR OUR UNIVERSITIES, ADDITIONAL RESOURCES FOR LABS, ADDITIONAL RESOURCES FOR A PROTEIN EXTRACTION FACILITY, ADDITIONAL RESOURCES FOR FERMENTATION AND TRANSGENIC PLANTS AND TRANSGENIC ANIMALS, ALL OF WHICH IS KIND OF COMPLICATED TALK. THE BOTTOM LINE IS WE HAVE THE CHANCE TO THE INVITE A BRAND-NEW INDUSTRY TO THIS STATE THAT WILL REQUIRE COLLEGE EDUCATED AND POST-GRADUATE EDUCATED WORKERS. MUCH HIGHER WAGE LEVELS, PAY MORE IN TAX. IF WE CAN ADD 100,000 NEW COMMUNITY COLLEGE EDUCATED WORKERS TO THIS WORK FORCE IN FOUR YEARS, SOMETHING I THINK WE CAN DO, IT WILL ADD $175 MILLION TO THE STATE BUDGET JUST FROM THE TAXES THOSE INDIVIDUALS WOULD PAY, WITH NO MULTIPLIER. WE CREATED 50,000 JOBS LAST YEAR IN A VERY SLUMPING ECONOMY. WE CAN DO THIS IF WE MOVE AGGRESSIVELY.

Yepsen: GOVERNOR, AS ALWAYS WHEN WE HAVE YOU ON THIS PROGRAM --

Vilsack: IT'S POLITICS.

Yepsen: -- WE'VE GOT TOO MANY QUESTIONS AND NOT ENOUGH TIME. VERY QUICKLY, VISION IOWA. WILL YOU PUT MORE MONEY INTO THE VISION IOWA PROGRAM?

Vilsack: WE'RE GOING TO -- AT THIS POINT AND TIME WE'VE GOT $12.5 MILLION OF COMMUNITY ATTRACTIONS AND TOURISM MONEY IN THE BUDGET. WE'LL TAKE A LOOK AT THAT. WE'LL SPEND THAT AND WE'LL TAKE A LOOK AT WHETHER OR NOT THE PROGRAMS THAT ARE CURRENTLY BEING FUNDED THROUGH VISION IOWA COMPLETE THEIR PROCESS, AND THEN WE'LL TAKE A STEP BACK AND SEE WHETHER THE LEGISLATURE WANTS TO CONTINUE THIS PROGRAM AND, IF SO, WHAT -- HOW THEY WANT TO DO IT. THE KEY HERE, THOUGH, IS TO LEARN FROM THE LESSON OF VISION IOWA: $200 MILLION OF STATE INVESTMENT LEVERAGED $2 BILLION OF INVESTMENT. WHAT IF WE HAD A $500 MILLION FUND FOCUSED ON CREATING THE KINDS OF JOBS THAT WOULD DEVELOP NEW REVENUES FOR THE STATE AND NEW REVENUES FOR IOWA FAMILIES? THAT'S WHAT WE CAN DO. THE POSSIBILITIES FOR THIS STATE ARE LITERALLY UNLIMITED IF WE MOVE NOW. OTHER STATES HAVING DIFFICULTY, OTHER STATES NOT THINKING ABOUT THE FUTURE, NOT THINKING ABOUT NEW ECONOMIC DEVELOPMENT OPPORTUNITIES, THEY'RE JUST TRYING TO HANG ON.

Yepsen: SO YOUR VALUE FUND IS JUST A VARIATION OF THE VISION IOWA CONCEPT. BUT MY QUESTION WAS NET NEW DOLLARS FOR VISION IOWA. I GATHER NO.

Vilsack: NOT AT THIS POINT IN TIME BECAUSE, AGAIN, THIS IS A STATUS QUO BUDGET.

Glover: ANOTHER QUESTION YOU FACE IS THE STATE'S TAXING STRUCTURE FOR ITS GAMBLING INDUSTRY. THAT WAS TOSSED AT A QUESTION WHEN THE STATE SUPREME COURT'S STRUCK DOWN THE TAXING SYSTEM. NOW THE U.S. SUPREME COURT IS GOING TO HEAR IT. A LOT OF LEGISLATORS ARE SAYING NOW THAT'S OFF OUR PLATE, WE DON'T NEED TO WORRY ABOUT IT. DOES THE LEGISLATURE NEED TO WADE INTO THAT?

Vilsack: WELL, I CERTAINLY UNDERSTAND AND RESPECT WHY LEGISLATORS MADE THE COMMENTS THAT THEY MADE, BECAUSE GAMING DISCUSSIONS CAN BE VERY DIVISIVE AND VERY DIFFICULT. AT THE END OF THE DAY, WE HAVE TO FIGURE OUT WHERE WE'RE GOING TO GET THE RESOURCES TO PROVIDE OPPORTUNITIES WITHIN THE REBUILD INFRASTRUCTURE FUND. MY HOPE WOULD BE THAT EVERYONE WOULD SEE THE CURRENT SITUATION AND UNDERSTAND THAT THERE'S RISK FOR EVERYBODY NOW. THERE'S RISK FOR THE GAMING INDUSTRY IN THAT YOU MAY GO BACK TO THE TAX SYSTEM THE WAY IT WAS, IN WHICH CASE YOU WOULD SEE HIGHER TAXES BEING PAID BY THAT INDUSTRY. THERE'S RISK FOR THE STATE, BECAUSE IT'S POSSIBLE THAT THE UNITED STATES SUPREME COURT MAY DECIDE THAT, IN FACT, OUR SUPREME COURT WAS CORRECT, IN WHICH CASE WE THEN GET A LARGE BILL FROM THE GAMING INDUSTRY. WHEN THERE ARE RISKS ON BOTH SIDES, IT MAKES SENSE FOR BOTH SIDES TO COME TOGETHER AND TRY TO RESOLVE THIS. WHEN THEY RESOLVE IT, WHAT WE HAVE TO FOCUS ON IS MAKING SURE THAT THERE ARE ADEQUATE REVENUES TO SUPPORT EDUCATION, HEALTH CARE, ENVIRONMENT, ALL THE THINGS THAT GET SUPPORT FROM THE GAMING REVENUES.

Glover: SO WHEN YOU HAVE A GUN AT YOUR HEAD, IT'S A GOOD TIME TO CUT A DEAL.

Vilsack: REASONABLE PEOPLE WOULD CONCLUDE THAT, YES.

Yepsen: WELL, ARE YOU TRYING TO BRING PEOPLE TOGETHER AND KNOCK SOME HEADS AND SAY HERE'S A PROPOSAL TO REACH A MIDDLE GROUND? ARE YOU ACTIVELY TRYING TO DO THAT?

Vilsack: WE PUT A TASK FORCE TOGETHER TO MAKE A SET OF RECOMMENDATIONS AS A PART -- AS THE BEGINNING OF THAT PROCESS. WE'RE GOING TO CONTINUE OUR EFFORTS TO ENCOURAGE PEOPLE TO COME TOGETHER.

Yepsen: GOVERNOR, I WANT TO CHANGE SUBJECTS. A NONBUDGET QUESTION: HOMELAND SECURITY. CLOUDS OF WAR ARE ON THE HORIZON. IS IOWA PREPARED FOR THE COMING WAR WITH IRAQ?

Vilsack: WE HAVE PROBABLY MORE THAN MOST OTHER STATES BEEN VERY FOCUSED ON HOMELAND SECURITY IN TERMS OF IDENTIFYING WHERE THERE ARE POTENTIAL THREATS AND HAZARDS AND TRYING TO BEEF UP SECURITY BOTH IN THE PUBLIC SECTOR AND THE PRIVATE SECTOR. WE WOULD BE BETTER PREPARED IF OUR FEDERAL PARTNER LIVED UP TO ITS OBLIGATIONS AND RESPONSIBILITIES WITH REFERENCE TO HOMELAND SECURITY. WE'VE BEEN A LITTLE FRUSTRATED WITH THE FEDERAL GOVERNMENT'S INABILITY TO GET THE RESOURCES TO US SO WE IN TURN COULD GET IT TO THE LOCAL GOVERNMENT TO BEEF UP. THE STRATEGY BEHIND HOMELAND SECURITY WAS THAT WE WOULD HAVE A NATIONAL STRATEGY. RESOURCES FROM THE FEDERAL GOVERNMENT FUNNELED THROUGH THE STATE GOVERNMENT PURSUANT TO PLANS CREATED BY THE LOCAL FOLKS. AND UP TO THIS POINT, THERE HAS BEEN VERY LITTLE OF THAT RESOURCE PROVIDED TO THE STATE.

Yepsen: HOW CONCERNED ARE YOU ABOUT ALL THIS ACTIVATION THAT'S GOING ON OF NATIONAL GUARD AND RESERVE TROOPS, MANY OF WHOSE MEMBERS ARE POLICE OFFICERS, STATE TROOPERS? WILL THIS WAR -- THIS COMING WAR DRAIN THIS STATE OF THE VERY PEOPLE WHO ARE ON THE FRONT LINE OF HOMELAND SECURITY?

Vilsack: WELL, FIRST OF ALL, THE CONCERN THAT ANYBODY IN MY POSITION HAS WHEN WE TALK ABOUT MOBILIZING TROOPS IS ABOUT THE TROOPS THEMSELVES AND THEIR FAMILIES. I HAPPEN TO HAVE BEEN MAYOR OF MOUNT PLEASANT THE LAST TIME WE WENT THROUGH THIS, AND I REMEMBER MY EMOTIONAL FEELING AS I WATCHED MEN GET ON THE BUSES, TRAVEL TO FARAWAY LANDS, WATCH THEIR LOVED ONES LEFT BEHIND, AND NEVER KNOWING WHEN OR IF THEY WOULD COME BACK. SO OUR FIRST CONCERN, OBVIOUSLY, IS FOR THE MEN AND WOMEN WHO ARE BEING MOBILIZED, THAT THEY SAFELY RETURN AND QUICKLY RETURN. IOWA HAS ALWAYS BEEN ABLE TO RESPOND TO THE CALL. AND AS DIFFICULT AS THE CHALLENGE MAY BE, WE WILL RESPOND BECAUSE WE WANT TO BE PART OF A NATIONAL EFFORT TO MAKE SURE THAT WE HAVE A SAFE AND SECURE WORLD. I AM EXTRAORDINARILY PROUD OF THE MEN AND WOMEN OF OUR NATIONAL GUARD. I DON'T THINK IOWANS FULLY APPRECIATE AND UNDERSTAND WHAT THESE 9,700 PEOPLE DO ON A DAILY BASIS, A YEARLY BASIS FOR OUR STATE. THEY ARE TRUE HEROES. THEY REALLY ARE. AND OUR HOPE AND PRAYER IS THAT THEY RETURN SAFELY.

Glover: GOVERNOR, YOU JUST CAME BACK OFF THE CAMPAIGN TRAIL WHERE YOU SPENT A LOT OF TIME FACE TO FACE TALKING TO IOWANS, HEARING WHAT'S ON THEIR MINDS, CASTING THEIR MOOD. ARE IOWANS READY FOR THIS WAR? DO THEY SUPPORT THIS WAR? ARE WE READY TO GO TO WAR WITH IRAQ, OR DO PEOPLE HAVE QUESTIONS? I GUESS MY QUESTION IS HAS PRESIDENT BUSH MADE HIS CASE.

Vilsack: I THINK THE PRESIDENT NEEDS TO DO MORE NOT ONLY FOR IOWA BUT FOR THE NATION. I DON'T THINK THAT TO THE EXTENT THAT THERE IS A DECISION FOR THE UNITED STATES TO PROCEED ALONE OR WITH VERY FEW -- VERY FEW FRIENDS IN THE INTERNATIONAL COMMUNITY, I THINK AMERICANS ARE VERY LEERY OF THAT. IOWANS ARE LEERY OF THAT. I THINK THE PRESIDENT HAS TO MAKE THE CASE. IF HE HAS INFORMATION THAT WE DON'T HAVE, AT SOME POINT IN TIME HE'LL SHARE IT WITH US. AS I TRAVEL AROUND THE STATE, THE CONCERNS THAT I HEAR FROM IOWANS ARE MUCH LESS FOCUSED ON THE INTERNATIONAL SITUATION AND MUCH MORE FOCUSED ON THE DOMESTIC ECONOMY. PEOPLE ARE SAYING TO ME: WE WANT MEANINGFUL OPPORTUNITY FOR OUR CHILDREN; WE WANT A HEALTH CARE SYSTEM THAT'S AFFORDABLE AND ACCESSIBLE; WE WANT AN EDUCATION SYSTEM THAT IS AS GOOD AS IT CAN BE; AND THERE IS DEEP CONCERN, AS THERE NEEDS TO BE AND SHOULD BE, ABOUT OUR NATURAL RESOURCES. SO AS IOWANS FOCUS -- THEIR FOCUSED PRETTY MUCH INTERNALLY RATHER THAN EXTERNALLY. THEY'RE AWARE OF WHAT'S GOING ON. THEY'RE CONCERNED ABOUT IT. THEY WANT TO STAND BEHIND THE PRESIDENT, BUT THE PRESIDENT HAS GOT TO MAKE THE CASE.

Yepsen: GOVERNOR, WE'VE ONLY GOT ABOUT A MINUTE LEFT. IN YOUR INAUGURAL, YOU SURPRISED EVERYBODY BY SUGGESTING WE PASS CIVIL RIGHTS FOR GAYS LEGISLATION IN RETURN FOR SOME FAITH BASED -- YOU SAID THAT THERE COULD BE A DEAL THERE.

Vilsack: THAT'S NOT WHAT I SAID. THAT'S NOT WHAT I SAID. WHAT I WAS SUGGESTING WAS THAT THERE ARE ISSUES ON BOTH THE RIGHT AND THE LEFT WHERE THERE ARE VISCERAL RESPONSES AND THAT PEOPLE HAVE TO REMOVE THE BARRIERS THAT EXIST IN THEIR HEART AND LISTEN TO FOLKS. THESE AREN'T NECESSARILY TIED TOGETHER, BUT THEY'RE EXAMPLES OF THINGS ON THE RIGHT AND ON THE LEFT.

Yepsen: BUT MY QUESTION -- EXCUSE ME, SIR. IT WASN'T IN THE PREPARED TEXT THAT YOUR AIDES GAVE US ALL. IT WAS SOMETHING YOU CLEARLY INSERTED AT THE VERY END. WHY DID THIS COME UP AT THE VERY END?

Vilsack: IT DIDN'T REALLY COME AT THE VERY END. IT WAS SOMETHING THAT I WANTED TO SAY. I WANTED TO FIND THE RIGHT MOMENT TO SAY IT. I THINK IT IS IMPORTANT. I THINK IOWANS BASICALLY DON'T LIKE DISCRIMINATION OF ANY KIND, AND I THINK THAT THIS IS AN ISSUE THAT AT SOME POINT IN TIME --

Yepsen: GO AHEAD.

Vilsack: -- AT SOME POINT IN TIME WE HAVE TO DEAL WITH. AT THE SAME TIME, I THINK THAT THERE ARE ISSUES THAT FOLKS WHO ARE PROGRESSIVES OFTENTIMES HAVE A VISCERAL RESPONSE TO. MAYBE WE OUGHT TO STOP AND LISTEN MORE CLOSELY TO EACH OTHER. THIS IS A TIME WHEN WE REALLY CAN'T AFFORD TO BE PROGRESSIVE OR CONSERVATIVE, RIGHT OR LEFT, REPUBLICAN OR DEMOCRAT. THIS IS A TIME WHERE WE HAVE TO COME TOGETHER. WE ARE THREATENED FROM OUTSIDE AND WE ARE ALSO THREATENED BY AN ECONOMY THAT DOESN'T SUPPORT OUR VALUES. IT'S GOING TO REQUIRE EVERYBODY GROWING IN THE SAME DIRECTION.

Borg: GOVERNOR, YOU CAN TELL WE HAVE MORE QUESTIONS THAN TIME, BUT WE ARE OUT OF TIME. THANK YOU VERY MUCH.

Vilsack: YOU'RE WELCOME.

Borg: ON OUR NEXT EDITION OF "IOWA PRESS," WE FOCUS ON HIGHER EDUCATION IN IOWA. JOINING US, DR. DAVID SKORTON, WHO IN ANOTHER MONTH WILL BE THE NEW PRESIDENT OF THE UNIVERSITY OF IOWA. HE'S REPLACING MARY SUE COLEMAN AND INTERIM PRESIDENT WILLARD BOYD. DR. SKORTON JOINS US TO DISCUSS HIS NEW CHALLENGES AND TO PROFILE HIS VISION FOR HIGHER EDUCATION IN IOWA... NEXT WEEKEND, FRIDAY 6:30, SUNDAY AT NOON. AND THAT'S IT FOR THIS WEEK'S EDITION OF "IOWA PRESS." I'M DEAN BORG. THANKS FOR JOINING US TODAY.