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Iowa Statehouse Reporters Discuss Legislative
Politics, the Budget and the Campaign of 2004


(#3141)
June 4 , 2004

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IOWA PRESS #3141>>

Yepsen: IOWA'S 80TH GENERAL ASSEMBLY IS NOW HISTORY, AND ALREADY THE PRIORITIES AND AGENDA FOR THE 81ST ARE TAKING SHAPE. WE DISCUSS LEGISLATIVE POLITICS, THE NEW BUDGET, AND THE CAMPAIGN OF 2004 WITH OUR TEAM OF IOWA STATEHOUSE REPORTERS ON THIS EDITION OF "IOWA PRESS."

 

FUNDING FOR THIS PROGRAM WAS PROVIDED 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.

ON STATEWIDE IOWA PUBLIC TELEVISION, THIS IS THE FRIDAY, JUNE 4 EDITION OF "IOWA PRESS." HERE IS DAVID YEPSEN.

Yepsen: IN JUST LESS THAN ONE MONTH'S TIME, THE NEW IOWA BUDGET, THE BUDGET FOR FISCAL 2005, GOES INTO EFFECT. THE $5.2-BILLION DOCUMENT WAS, OF COURSE, THE PRIMARY FOCUS OF THE LEGISLATIVE SESSION OF 2004, WHICH CLOSED UP SHOP ON APRIL 20 AND BROUGHT DOWN THE CURTAIN ON THE CONTENTIOUS TWO-YEAR 80TH IOWA GENERAL ASSEMBLY. THE NEW BUDGET IS PRIMARILY A POLITICAL DOCUMENT, AND IT SPOTLIGHTS THE FACT THAT THE REPUBLICAN CONTROLLED GENERAL ASSEMBLY AND IOWA'S DEMOCRATIC GOVERNOR HAVE NOT BEEN SEEING EYE TO EYE ON A HOST OF ISSUES. AND NOT COINCIDENTALLY, THE AFTERMATH AND THE REVERBERATIONS CONTINUE IN AN ELECTION YEAR. WELL, WE CONTINUE TO SORT THROUGH THE PARTICULARS OF THE NEW BUDGET AND THE POLITICAL IMPLICATIONS WITH OUR TEAM OF STATEHOUSE REPORTERS. JOINING US ARE TODD DORMAN, CAPITAL BUREAU CHIEF WITH "THE LEE NEWSPAPERS" AND KAY HENDERSON, NEWS DIRECTOR WITH "RADIO IOWA." ALSO WITH US AT THE "IOWA PRESS" TABLE ARE DAVE PITT, LEGISLATIVE REPORTER WITH THE "ASSOCIATED PRESS" AND JENEANE BECK, IOWA STATEHOUSE REPORTER WITH "KUNI PUBLIC RADIO." JENEANE, LAST WEEK THE GOVERNOR SAID HE'S GOING TO HAVE TO REDUCE THE STATE PAYROLL BY ANOTHER 400 JOBS. WHAT'S THAT ALL GOING TO MEAN?

Beck: WELL, THAT MEANS SOME WORKERS WILL LOSE THEIR JOBS, HOWEVER, NOT THAT MANY OF THAT 400. A LARGE PART OF THAT WILL BE EARLY OUTS, EARLY RETIREMENTS. THE STATE OFFERED AN INCENTIVE PACKAGE FOR SENIOR WORKERS TO GET OUT. AND THEN THERE WILL ALSO BE SOME ATTRITION WHERE JOBS THAT HAVE JUST BEEN VACANT WILL BE WRITTEN OFF AND NOT FILLED; HOWEVER, A SMALL PERCENTAGE OF THAT WILL BE LAID OFF.

Yepsen: NOW, THAT FIGURE DOES NOT INCLUDE THE REGENTS INSTITUTIONS, SO THERE IS REALLY MORE STATE WORKERS THAN THAT THAT ARE GONE FROM THE WORK FORCE. THE GOVERNOR SAID THAT SINCE HE'S BEEN GOVERNOR, HE'S REDUCED THE STATE WORK FORCE BY 10 PERCENT. HAS ANYBODY NOTICED?

Beck: WELL, IN FACT, HE SAID HE DOESN'T THINK PEOPLE HAVE NOTICED. OF COURSE, THOSE WORKERS WITHOUT JOBS HAVE NOTICED, BUT HE DOESN'T THINK THE PUBLIC HAS NOTICED. THEY'VE BEEN ABLE TO MAINTAIN SERVICES. AND HE'S PROUD OF THAT, SO IT'S AN ODD POSITION FOR HIM TO HAVE TO BE IN TO LAYOFF WORKERS, EVEN THOUGH IT'S THE UNION THAT OFTEN HELPS ELECT HIM. BUT HE WANTS TO SAY THE STATE IS DOING A GOOD JOB EVEN DESPITE LOSING ALL THESE WORKERS AND, IN ONE SENSE, IT WAS GOOD FOR THE STATE TO FIND EFFICIENCIES AND CUT SOME FAT.

Yepsen: TODD, WHAT DO YOU THINK? DO YOU THINK ANYONE IS GOING TO NOTICE THIS STARTING NEXT YEAR ON JULY 1 THAT WE'VE GOT ANOTHER 400 FEWER STATE WORKERS?

Dorman: WELL, THE GOVERNOR'S TAKE ON THIS IS THAT STATE WORKERS ARE SO GOOD THAT THEY HAVE BANDED TOGETHER AND COVERED THE GAPS. THE UNION WAS GIVEN -- AFSCME WAS GIVEN AN OPPORTUNITY, AT THE REQUEST OF STATEHOUSE LEADERS, TO MAYBE TAKE A PAY FREEZE OR DO SOME OTHER CONCESSIONS TO AVOID LAYOFFS. THEY DECLINED TO DO THAT. THEY SAID THAT THEY DID THAT IN THE PAST AND DIDN'T REALLY GET ANY CREDIT FOR IT FROM REPUBLICAN LEGISLATIVE LEADERS AND THEY'RE NOT WILLING TO DO THAT AGAIN. WHETHER IOWANS WILL SEE MUCH OF A DIFFERENCE IN SERVICES, I GUESS, WILL DEPEND ON WHAT KIND OF SERVICES THEY NEED.

Pitt: AND, DAVID, IF I MIGHT SAY TOO, IT'S INTERESTING THAT THE UNION, THERE'S BECOMING A REAL KIND OF ATMOSPHERE OF DISLIKE I THINK BETWEEN THE UNION AND LAWMAKERS, LEGISLATIVE REPUBLICAN LEADERS LAST YEAR PARTICULARLY. YOU KNOW, WE'RE PRETTY TOUGH ON STATE WORKERS IN SOME OCCASIONS, AND I THINK THE UNION WORKERS ARE BECOMING -- KIND OF BANDING TOGETHER AND SAYING WE ARE NOT GOING TO TAKE THE BRUNT OF THIS AGAIN. THEY DID IT A FEW YEARS AGO AND THEY FELT LIKE THEY WEREN'T RESPECTED FOR IT AND DIDN'T GET RECOGNITION FOR IT. SO IT WILL BE INTERESTING TO SEE HOW IT ALL PLAYS OUT IN THE COMING SESSION, TO SEE IF THAT RIVALRY EVEN DEVELOPS FURTHER.

Dorman: WELL, THE UNION HAD A LOT OF CRITICISM FOR REPUBLICAN LEGISLATIVE LEADERS SAYING -- BLAMING THIS ON THEM. BUT IN REALITY, THE GOVERNOR ALSO DID NOT INCLUDE $70 MILLION IN HIS BUDGET TO PAY FOR SALARY INCREASES THAT HE NEGOTIATED. SO ESSENTIALLY THEY FEEL POLITICALLY, YOU KNOW, MOTIVATED TO STICK WITH THE GOVERNOR, BUT HE SHORTCHANGED THEM AS WELL.

Yepsen: KAY, THE AFSCME UNION IS A DEMOCRATIC UNION. IT ENDORSED TOM VILSACK. IT HELPED MAKE HIM GOVERNOR.

Henderson: EXACTLY.

Yepsen: SO ISN'T IT NATURAL THAT THEY'RE GOING TO BE A LITTLE SORE AT THE REPUBLICAN LEGISLATURE FOR NOT RAISING TAXES?

Henderson: IT'S NATURAL. WHAT IS INTERESTING IS THAT TOM VILSACK, BEHIND THE SCENES, IS STILL PRESSING UNION MEMBERS, IN SOME SPECIFIC BARGAINING UNITS WITHIN STATE GOVERNMENT, TO ACCEPT FURLOUGHS PERHAPS. AND SO NEGOTIATING -- NEGOTIATIONS, RATHER, BEHIND THE SCENES ARE STILL HAPPENING, BECAUSE IN SOME AREAS, LIKE THE DEPARTMENT OF CORRECTIONS, YOU DON'T WANT PRISON GUARDS TO BE CUT. AND SO PERHAPS THERE'S SOME MEANS WITHIN SPECIFIC AREAS OF STATE GOVERNMENT WHERE THE UNIONS WILL AGREE TO SOME FURLOUGHS.

Yepsen: WHY DIDN'T THEY JUST REQUIRE FURLOUGHS, KAY? I REMEMBER -- WAS IT A YEAR OR TWO AGO THAT THE DEPARTMENT OF AGRICULTURE SHUT DOWN OVER A HOLIDAY WEEKEND? THE WORLD KEPT ON GOING AND THE DEPARTMENT TOOK A DAY OFF. WE ALL BOUGHT OUR GRAZIANO'S SAUSAGE A DAY OR TWO EARLY, AND EVERYTHING WAS FINE. WHAT'S WRONG WITH JUST REQUIRING SOME FURLOUGHS?

Henderson: UNION LEADERS NEGOTIATED IN THE MOST RECENT CONTRACT THE FACT THAT THERE WOULD BE NOT ANY FURLOUGHS. THEY DON'T LIKE FURLOUGHS. THEY WOULD PREFER THAT THERE BE LAYOFFS IF INDEED THERE BE SOME MEANS -- I MEAN NEED TO CUT THE SALARIES. AND PART OF THEIR ARGUMENT IS THAT ONE REASON YOU BELONG TO A UNION AND BECOME A STATE EMPLOYEE IS TO BUILD TENURE. AND SO WHEN YOU GET THAT TENURE BUILT UP, YOU SHOULD BE REWARDED FOR IT THROUGH PAY INCREASES, THROUGH MERIT PAY INCREASES, AND THROUGH THE FACT THAT WHEN BUDGET TIMES ARE TIGHT, YOU GET TO STAY AND THE NEWEST PEOPLE GET TO GO. THAT'S JUST PART OF THE UNION CULTURE.

Yepsen: DAVE, THE GOVERNOR, A FEW YEARS AGO, TOLD ME THAT THE STATE HAS ONE SUPERVISOR FOR EVERY SEVEN EMPLOYEES, AND HE WANTED TO TAKE THAT RATIO TO ONE SUPERVISOR FOR EVERY TWELVE EMPLOYEES. HE TOLD US THE OTHER DAY AT THE PRESS CONFERENCE THAT THE STATE IS NOW AT A RATIO OF ONE SUPERVISOR TO EVERY ELEVEN EMPLOYEES. SO IT SEEMS TO ME, ISN'T HE CLOSE TO GETTING HIS SUPERVISOR-TO-STAFF RATIO TO ABOUT WHERE HE WANTS IT.

Pitt: RIGHT. AND I THINK THAT'S THE POINT HE WAS MAKING. AND HE'S IN AN AWKWARD POSITION HERE IN WHICH HE IS TRYING TO MAKE THE POINT THAT, YOU KNOW, GOVERNMENT IS MORE EFFICIENT SINCE HE TOOK OFFICE. BUT AT THE SAME TIME, IT'S A DIFFICULT POINT TO MAKE. YOU KNOW, YOU'RE LOSING EMPLOYEES, YOU'RE LOSING STAFF MEMBERS ON THE STATE LEVEL, AND IT'S GOT TO BE DIFFICULT TO BE BASICALLY THE CEO OF THE STATE AND TO SEE THAT KIND OF LOSS OF NUMBERS. BUT IT'S -- ON THE OTHER HAND, THE QUESTION IS DO PEOPLE REALLY SEE A DIFFERENCE WHEN THEY GO TO A STATE AGENCY AND THEY NEED SOMETHING FROM THAT STATE AGENCY: ARE THEY SEEING THAT THEY'RE NOT GETTING WAITED ON EFFICIENTLY AND IF THEY'RE WAITING LONGER. THE GOVERNOR ALSO MADE THE POINT THAT, YOU KNOW, THEY HAVE CUT THE AMOUNT OF TIME IT TAKES TO GET AIR QUALITY PERMITS FROM THE STATE. SO THERE ARE A LOT OF DIFFERENT ISSUES THAT COME INTO PLAY IN THIS WHOLE SCENARIO.

Yepsen: TODD, ISN'T THIS REALLY SORT OF GOOD NEWS? I MEAN STATE WORKERS, LIKE PRIVATE WORKERS, ARE DOING BETTER WITH LESS; PEOPLE ARE MORE PRODUCTIVE; I MEAN EVERY BUSINESS -- MOST OF OUR NEWS ORGANIZATIONS ARE TRYING TO BE MORE EFFICIENT. ISN'T THIS REALLY GOOD NEWS THAT THE STATE CAN GET RID OF 10 PERCENT OF ITS WORK FORCE AND STILL DELIVER SERVICES TO PEOPLE?

Dorman: WELL, SURE. THE SILVER LINING IN HARD TIMES IS ALWAYS THAT IT FORCES YOU TO FIND EFFICIENCIES, FORCES YOU TO STREAMLINE. AND THE BUDGET REALLY -- IT'S NOT ALL BAD NEWS. I MEAN THE LEGISLATURE DID INCLUDE MONEY FOR THE STATE PATROL, FOR INSTANCE. AND FOR THE FIRST TIME IN THREE YEARS, THE STATE PATROL IS HANGING OUT THE HELP WANTED SIGN TO HIRE 25 NEW TROOPERS AND AGENTS FOR THE DEPARTMENT OF CRIMINAL INVESTIGATIONS, THE FIRE MARSHAL'S OFFICE. SO IT'S A BUDGET THAT IS FORCING EFFICIENCIES IN AREAS WHERE THERE SHOULD BE EFFICIENCIES. AND IT'S PROVIDING SOME DOLLARS IN AREAS WHERE GOVERNMENT -- WHERE FOLKS THINK GOVERNMENT SHOULD BE BEEFED UP IN PUBLIC SAFETY.

Yepsen: DAVE, THE STATE REVENUES PICKED UP DRAMATICALLY IN THE MONTH OF MAY. ARE HAPPY DAYS HERE AGAIN IN IOWA? ARE WE DONE WRITING THESE BUDGET-CUT STORIES THAT WE'VE ALL BEEN WRITING FOR THE LAST THREE YEARS?

Pitt: WELL, I THINK EVERYONE WHO KIND OF WATCHES THE ECONOMY WOULD BE STILL HESITANT TO SAY THAT HAPPY DAYS ARE HERE AGAIN. I THINK THAT THERE ARE GOOD INDICATIONS THAT THE ECONOMY IS PICKING UP IN IOWA, BUT AS THE GOVERNOR SAID THE OTHER DAY, ONE MONTH IS NOT A TREND. EVEN A COUPLE OF MONTHS DOES NOT MAKE A TREND. AND THEN EVERYONE I TALK TO SEEMS TO THROW IN THE WHOLE SITUATION WITH GAS PRICES AS WELL AND WHAT KIND OF A DAMPENING EFFECT THAT MIGHT HAVE ON THE ECONOMY. NO ONE REALLY KNOWS THAT. AND SO THERE ARE SOME THINGS OUT THERE THAT ARE OUT OF THE CONTROL OF REALLY ANYONE, AND WE JUST, KIND OF, HAVE TO WATCH TO SEE IF THERE IS POWER UNDERLYING THIS KIND OF UPTICK IN THE ECONOMY AND WHETHER IT WILL HAVE SOME STAYING POWER.

Yepsen: KAY, I NOTICED THAT ANNOUNCEMENT OF THE NEW REVENUE IS OUT, AND IMMEDIATELY PEOPLE STARTED TALKING ABOUT WHAT WAS GOING TO BE DONE WITH THIS NEW MONEY. WHAT DO YOU THINK? ARE WE GOING TO SPEND IT ON THINGS? ARE WE GOING TO PUT SOME OF IT IN A CASH RESERVE? WHAT'S GOING TO HAPPEN WITH NEW REVENUES IF, IN FACT, AT THE END OF JUNE 30, THE STATE WINDS UP WITH MORE MONEY THAN IT EXPECTED?

Henderson: WELL, IN CHATTING WITH DENNIS PROUTY, WHO IS THE HEAD OF THE LEGISLATIVE SERVICES AGENCY, HE INDICATES THAT IF TRENDS CONTINUE, THERE WILL BE ABOUT A POT OF 100 MILLION EXTRA DOLLARS. AND BY LAW, THAT WOULD SHIFT INTO THE CASH RESERVE, OR THE STATE SAVINGS ACCOUNT, IF NOTHING IS DONE. ONE THING THAT THE GOVERNOR HAS BEEN TALKING ABOUT IS AMENDING HIS EXECUTIVE ORDER, WHICH MADE AN ACROSS-THE-BOARD CUT IN ALL STATE AGENCIES, AMENDING THAT SO THAT PERHAPS AT THE END OF JUNE, PERHAPS SOMETIME IN SEPTEMBER WHEN ACTUALLY THE STATE BOOKS ARE BALANCED IN SEPTEMBER -- THAT'S WHEN THE STATE BOOKS ARE CLOSED ON THE FISCAL YEAR THAT ACTUALLY ENDS JUNE 30 -- AT THAT POINT HE COULD MAKE AN AMENDMENT TO THAT ACROSS-THE-BOARD ORDER AND SORT OF SHIFT SOME OF THAT $100 MILLION BACK THROUGH STATE GOVERNMENT, MAKE A PAYMENT TO PERHAPS THE STATE SCHOOL DISTRICTS. SO THAT'S STILL SOMETHING THAT HE'S SORT OF CONTEMPLATING. IT'S A VERY COMPLICATED MOVE AND IT'S SOMETHING THAT'S NEVER BEEN DONE BEFORE. SO THERE'S A LOT OF LEGAL MINDS THAT ARE LOOKING AT THAT ONE.

Yepsen: TODD, WHY IS IOWA'S ECONOMY GETTING BETTER?

Dorman: WELL, IT SEEMS THAT PEOPLE ARE MAKING MORE MONEY. WAGES ARE INCREASING. THEY'RE GOING OUT AND BUYING CONSUMER GOODS. IT'S JUST THE TYPICAL LOOSENING UP OF THE ECONOMY AFTER A PERIOD WHERE PEOPLE WERE KIND OF SAVING AND WERE CAUTIOUS. THAT'S WHY THERE'S A WORRY THAT GAS PRICES COULD PUT AN END TO THAT OPTIMISM, THAT PEOPLE COULD START SPENDING MONEY -- MORE MONEY ON GASOLINE, LESS MONEY ON CONSUMER GOODS. IT'S -- SPEAKING OF, I GUESS, AWKWARD MOMENTS FOR THE GOVERNOR, HE'S IN A SITUATION RIGHT NOW WHERE TAX REVENUES ARE JUMPING. THEY JUMPED, IN MAY, 14 PERCENT, WHICH WAS ALMOST A RECORD. THIS IS THE SAME GOVERNOR WHO IN JANUARY ARGUED THAT WE NEED A TAX INCREASE ON CIGARETTE TAXES AND A MODIFICATION OF THE SALES TAX, WHICH WOULD INCLUDE A SHORT-TERM INCREASE FOR A LONG-TERM REDUCTION TO PAY FOR SPENDING. REPUBLICANS ARGUED THAT THE ECONOMY WAS IMPROVING, THAT THEY DIDN'T NEED TO RAISE TAXES TO INCREASE SPENDING. AND RIGHT NOW IT LOOKS LIKE THEY MIGHT HAVE BEEN RIGHT.

Yepsen: WELL, KAY -- GO AHEAD.

Beck: WELL, WHAT WILL SET UP, THEN, AN INTERESTING BATTLE AS WE HEAD TO THE POLLS NEXT FALL, PEOPLE ARE GOING TO START TALKING ABOUT, IF THE ECONOMY IS TURNED AROUND AND WE HAVE MORE MONEY FOR THE NEXT LEGISLATIVE SESSION, ON HOW TO SPEND THAT MONEY. AND I THOUGHT ONE OF THE INTERESTING THINGS THE GOVERNOR SAID TO US THIS WEEK WAS THAT, WELL, YES, THERE MAY BE MORE MONEY, BUT WE SPENT A LOT OF ONE-TIME ACCOUNTS. WE DREW MONEY OUT OF POTS EVERYWHERE IN STATE GOVERNMENT, AND WE MAY HAVE TO PAY THAT BACK. SO WHILE THERE ARE GOING TO BE SPECIAL INTEREST GROUPS CALLING FOR, OKAY, WE'VE BEEN ON THE LEAN SIDE, WE WANT MONEY, LEGISLATORS ARE GOING TO HAVE TO DECIDE IF THEY'VE GOT TO PAY SOME BACK TO THESE GROUPS -- OR TO THESE POTS OF SAVINGS ACCOUNTS THAT THEY GRABBED FROM.

Yepsen: THE LAW SAYS THEY HAVE TO PAY IT BACK, BUT THE LEGISLATURE ALWAYS COMES IN AND THEY SAY NOT WITHSTANDING THIS LAW, WE'RE GOING TO SPEND IT ON WHATEVER. DAVE, ISN'T IT TRUE THAT SOME OF THIS REVENUE GROWTH IS A RESULT OF THE FEDERAL TAX CUT? IF -- WE HAVE FEDERAL DEDUCTABILITY IN IOWA, WHICH MEANS YOU DEDUCT THE FEDERAL TAXES YOU PAY BEFORE YOU HAVE TO CALCULATE YOUR STATE INCOME TAXES. SO IF THERE'S A FEDERAL TAX CUT, THE AMOUNT OF INCOME TAX -- THAT'S MORE TAXABLE INCOME FOR THE STATE. SO ISN'T PART OF THIS THE RESULT OF THE TAX CUTS?

Pitt: WELL, I THINK THAT'S PROBABLY TRUE BUT I THINK THAT, AGAIN, YOU KNOW, THERE MAY BE MORE MONEY IN THE HANDS OF A CONSUMER. BUT WHETHER OR NOT THE CONSUMER IS GOING TO GO OUT AND SPEND THAT MONEY -- I THINK IN TIMES WHEN THERE IS A WAR, GAS PRICES ARE STILL HIGH, I DON'T KNOW THAT PEOPLE REALLY FEEL CONFIDENT ENOUGH TO GO OUT AND BUY LARGE-TICKET ITEMS, GO OUT AND BUY A NEW WASHER AND DRYER OR A NEW CAR AND THOSE KINDS OF THINGS. AND UNTIL THEY FEEL A LITTLE BIT MORE SECURE AND UNTIL THAT KIND OF SPENDING STARTS OCCURRING AND CONTINUES TO OCCUR OVER A PERIOD OF TIME, THEN, YOU KNOW, THEN MAYBE WE CAN SIT BACK AND SAY, YEAH, WE HAVE AN ECONOMY THAT'S REALLY ON THE MOVE.

Henderson: ONE OTHER POINT ABOUT THIS ECONOMY IS THE FARM SECTOR. COMMODITY PRICES ARE INCREDIBLY GOOD RIGHT NOW FOR A VARIETY OF REASONS, INCLUDING WORLDWIDE MARKETS AND THINGS THAT ARE HAPPENING IN SOUTH AMERICA AND PLACES THAT AREN'T ON OUR CONTINENT. SO THAT IS HAVING AN EFFECT IN RURAL IOWA. SOME OF THE PESSIMISM THAT YOU MIGHT EXPECT AMONG THE STATE'S FARM COMMUNITIES IS SORT OF EVAPORATING IN THE WAKE OF THESE INCREDIBLY GOOD COMMODITIES PRICES.

Yepsen: KAY, YOU'RE FROM RURAL IOWA. HAVE YOU EVER HEARD A FARMER SAY, HEY, IT'S HOPEFUL? [ LAUGHTER ] I MEAN I THOUGHT THEY WERE ALL COMPLAINING ABOUT THE RAIN RIGHT NOW.

Henderson: OH, YOU'RE PUTTING ME ON THE SPOT, DAVE.

Beck: THIS IS JUST YET ANOTHER AWKWARD SPOT FOR GOVERNOR VILSACK, WHO WANTS TO BE OUT THERE LOBBYING AND CAMPAIGNING ON BEHALF OF JOHN KERRY. SO HE TELLS US: YES, STATE REVENUES ARE INCREASING; THAT'S A GOOD SIGN FOR THE ECONOMY; BUT, BOY, THERE ARE POCKETS OF IOWA STILL SUFFERING, BECAUSE HE DOESN'T WANT IT TO LOOK LIKE THE ECONOMY IS TURNING AROUND TOO QUICKLY BECAUSE HE NEEDS TO USE THAT AS AN ISSUE AGAINST PRESIDENT BUSH.

Yepsen: TODD, WHAT DO YOU THINK? ARE WE -- IS THE PSYCHOLOGY IN IOWA GETTING BETTER? IS TOM VILSACK DOING A GREAT JOB? IS PRESIDENT BUSH DOING A GREAT JOB, OR ARE THINGS BAD AND BAD ENOUGH THAT WE STILL NEED TO THROW OUT THE REPUBLICANS IN THE LEGISLATURE AND THROW OUT PRESIDENT BUSH? WHAT ABOUT THAT DILEMMA THAT JENEANE MENTIONED?

Dorman: WELL, IT'S INTERESTING. I MEAN FOR SOME FOLKS THE ECONOMY IS IMPROVING, BUT THERE'S STILL A LOT OF PEOPLE OUT THERE THAT HAD MANUFACTURING JOBS, FOR INSTANCE, THE FARM ECONOMY FOR ANOTHER EXAMPLE, THAT THE RECOVERY HAS BEEN LAGGING BEHIND FOR THEM. AND, YOU KNOW, THE OTHER WILD CARD THAT YOU DIDN'T REALLY MENTION YET IS THAT YOU'VE GOT THE FEDERAL GOVERNMENT LAYING OUT SOME PRETTY DIRE WARNINGS ABOUT A POSSIBLE TERRORIST ATTACK BEFORE THE -- BEFORE THE ELECTION THIS FALL. AND WE ALL KNOW WHAT THE SEPTEMBER 11 ATTACKS MEANT FOR THE ECONOMY, AND I THINK THAT'S ANOTHER REASON PEOPLE ARE BEING A LOT MORE CAUTIOUS THAN THEY MIGHT BE IN A SIMILAR RECOVERY CIRCUMSTANCE.

Yepsen: TODD, AFTER THE END OF THE SESSION, THE GOVERNOR VETOED MANY BILLS, ALMOST A RECORD NUMBER OF BILLS FOR A GOVERNOR TO BE VETOING, CERTAINLY RIGHT AT THE TOP. WHY DID THAT HAPPEN?

Dorman: WELL, THE REPUBLICAN LEGISLATIVE LEADERS AND THE GOVERNOR AREN'T GETTING ALONG. THEY'RE NOT PLAYING WELL WITH EACH OTHER, I GUESS. IF THEY WERE ELEMENTARY SCHOOL STUDENTS, THEY WOULD GET UNSATISFACTORY IN THAT CATEGORY. AND THEY'RE -- YOU KNOW, BOTH SIDES HAVE CLAIMS AS TO WHY THAT HAPPENED. YOU TALK TO REPUBLICAN LEGISLATIVE LEADERS AND THEY SAY: WELL, THE GOVERNOR WAS TOO ENGAGED IN THIS NATIONAL PRESIDENTIAL CAMPAIGN, TOO ENGAGED IN AUDITIONING FOR THE VICE PRESIDENCY; HE DIDN'T WANT TO MEET WITH US AS MUCH AS HE DID IN THE PAST; HE WAS MORE PARTISAN THAN HE WAS IN THE PAST. THE GOVERNOR SAYS: NO, NO, THE REPUBLICANS WERE FAR MORE PARTISAN; THEY WOULDN'T INCLUDE DEMOCRATS IN ANY OF THEIR DELIBERATIONS ON MAJOR ISSUES; THEY DIDN'T WANT TO TALK TO HIM; THEY DIDN'T WANT TO COMPROMISE ON THE BUDGET OR COME HIS WAY ON A LOT OF ISSUES. SO THERE'S A LOT OF FINGER POINTING GOING ON.

Yepsen: KAY, IS THIS JUST POLITICS? I MEAN THE REPUBLICANS PASS A BILL TO LIMIT LAWSUITS; THAT HELPS THEM WITH THEIR BASE. THE GOVERNOR VETOES IT; THAT HELPS HIM WITH HIS BASE. ISN'T THAT POLITICS?

Henderson: IT IS PRETTY STARTLING THAT POLITICIANS WOULD ACT IN A PARTISAN WAY AFTER GOING -- IN AN ELECTION YEAR, IT IS STARTLING.

Yepsen: DAVE, GAMBLING... THE STATE GAMBLING REGULATORS ARE SCHEDULED TO DEBATE THE MORATORIUM HERE IN THE NEXT FEW DAYS. WHAT DO YOU THINK WILL HAPPEN WITH THAT?

Pitt: WELL, I THINK THAT THERE IS AN INDICATION THAT THE BOARD IS SPLIT, THE COMMISSION IS SPLIT. I KNOW THAT THE CHAIRMAN HAS, IN THE PAST, IF NOT DIRECTLY, INDIRECTLY VOICED AN OPPOSITION TO EXPANSION OF GAMBLING. BUT THERE WILL BE AN AWFUL LOT OF PEOPLE SHOW UP AT THAT MEETING ADVOCATING FOR THEIR OWN RIVERBOAT. AND THERE ARE, I THINK, A COUPLE MEMBERS ON THE COMMISSION THAT ARE WILLING TO AT LEAST TAKE A LOOK AT IT. THEY INDICATED THAT AT LEAST BEFORE THEY TOSSED THE ISSUE TO THE LEGISLATURE. SO I THINK IT WILL BE A ROWDY MEETING. THERE WILL BE A LOT OF PEOPLE THERE. THEY'LL WANT TO MAKE THEIR POINT, AND EACH OF THEM WILL BE ADVOCATING FOR THEIR OWN LOCAL AREA AND, YOU KNOW, THE ECONOMIC BENEFITS THE RIVERBOAT WOULD HAVE FOR THEM. SO I THINK THE COMMISSION IS GOING TO BE PUT UNDER A LOT OF PRESSURE TO MAKE THAT DECISION.

Yepsen: ISN'T THE COMMISSION, KAY, ALSO UNDER PRESSURE TO LIFT THE MORATORIUM FOR MONETARY REASONS? I MEAN THE STATE NEEDS MORE MONEY.

Henderson: RIGHT. I MEAN BIG MONEY COMING IN IF THEY LIFT THE MORATORIUM AND GRANT NEW LICENSES. BIG MONEY IF THEY ALLOW PRAIRIE MEADOWS TO ADD TABLE GAMES. RIGHT NOW PRAIRIE MEADOWS JUST HAS THAT HORSE TRACK AND THEN A SLOT MACHINE CASINO. IF THEY ADD GAMES LIKE ROULETTE, OTHER GAMES OF CHANCE CALLED TABLE GAMES, THEY WOULD PAY THE STATE A MULTIMILLION-DOLLAR FEE. SO THERE'S A LOT OF MONEY AT STAKE IN THIS.

Yepsen: HOW SOON, JENEANE, BEFORE -- IF THEY DO LIFT THE MORATORIUM, HOW SOON DO YOU THINK IT WOULD BE BEFORE IOWANS ACTUALLY SEE NEW GAMBLING FACILITIES BEING CONSTRUCTED? WHAT'S THE TIME LINE HERE FOR ALL THIS?

Beck: WELL, I DON'T THINK THEY'LL ISSUE ANY LICENSES BEFORE -- POSSIBLY BY THE END OF THE YEAR BUT NOT BEFORE AND POSSIBLY NOT TILL NEXT YEAR BECAUSE THEY WANT TO -- THERE ARE NEW RULES THAT WERE APPLIED FROM THE LEGISLATURE THAT SAYS IF YOU LIFT THIS MORATORIUM, THESE ARE THE NEW RULES WE PLAY BY. THEY'VE GOT TO PUT THOSE IN PLACE. NOW, ON THE ONE POSITIVE SIDE FOR THE COMMUNITIES IS THESE COMMUNITIES HAVE BEEN DOING THIS FOR A WHILE AND MANY OF THEM ARE ALSO COMMUNITIES THAT IN THE PAST HAVE APPLIED FOR VISION IOWA MONEY OR OTHER KINDS OF GRANTS. SO THEY KNOW WHAT THEY'RE DOING. IT'S NOT LIKE THEY'RE GOING TO BE SUDDENLY SHOCKED THAT THEY'VE GOT TO TURN IN A PROPOSAL TO RACING AND GAMING COMMISSION. THEY'VE GOT THAT BABY WRITTEN AND JUST HAVE TO FILL IN THE BLANKS OF WHATEVER SPECIFICATIONS THEY HAVE TO ADD. SO THEY ARE READY TO COME AS SOON AS THE COMMISSION LIFTS THAT MORATORIUM WITH THEIR PROPOSALS. SO I THINK BY NEXT SUMMER, WE COULD SEE, IF THEY'VE LIFTED IT, CONSTRUCTION BEGINNING AND -- YOU KNOW, I DON'T KNOW HOW SOON THEY CAN GET A BOAT ON THESE LITTLE PONDS OF WATER IN THESE AREAS, BUT BY NEXT SUMMER WE'RE GOING TO SEE SOME MOVEMENT.

Yepsen: LET'S SWITCH GEARS AND TALK A LITTLE POLITICS OUT HERE. KAY, VICE PRESIDENT VILSACK, A LOT OF TALK ABOUT JOHN KERRY PUTTING HIM ON THE TICKET. HE'S APPARENTLY ON THE SHORT LIST. WHAT'S THAT ALL ABOUT? WHERE DOES THAT STAND?

Henderson: WELL, CHRISTIE VILSACK ENDORSED JOHN KERRY IN THE DAYS LEADING UP TO THE IOWA CAUCUSES. AND THE VILSACKS THEMSELVES, TOM AND CHRISTIE VILSACK, HAVE HAD OPPORTUNITIES BEHIND THE SCENES TO INTERACT WITH JOHN KERRY AND HIS WIFE. SO THERE IS SOME SORT OF PERSONAL RELATIONSHIP THAT'S DEVELOPED BETWEEN THE TWO COUPLES, (A). SO THEY GET ALONG. (B) TOM VILSACK IS SAID TO HAVE A COMPELLING PERSONAL STORY. HE WAS ORPHANED AT BIRTH, ADOPTED, HAD DIFFICULTIES AS A CHILD WITH AN ABUSIVE MOTHER, CHOSE TO LIVE IN SMALL-TOWN AMERICA, PRACTICED LAW WITH HIS FATHER-IN-LAW, RAISED TWO KIDS IN SORT OF AN IDYLLIC ALMOST "LEAVE IT TO BEAVER" MANNER IN MT. PLEASANT. AND SO IT'S THAT PERSONAL STORY THAT'S PROMPTING HIM TO --

Yepsen: MUCH OF WHICH -- MUCH OF WHICH STARTED IN PENNSYLVANIA, COINCIDENTALLY.

Henderson: EXACTLY. HE GREW UP IN PENNSYLVANIA. AND THIRD, YOU KNOW, WHAT HE WOULD BRING TO THE TICKET. HE HAS A GOOD RELATIONSHIP, AS WE'VE ALL MENTIONED JUST PREVIOUSLY, WITH AFSCME. KERRY, IN THE PAST, HAS HAD A LITTLE BIT OF A TOUCHY RELATIONSHIP WITH LABOR, SO VILSACK MIGHT BE ABLE TO SORT OF BRIDGE THAT GAP.

Yepsen: WHAT'S THE UPSIDE OF A VILSACK NOMINATION? TODD, WHAT DO YOU THINK ARE SOME OF THE THINGS THAT WORK AGAINST KERRY PUTTING VILSACK ON THE TICKET?

Dorman: WELL, GOVERNOR VILSACK IS FROM A -- I GUESS IOWA IS A BATTLEGROUND STATE, BUT IT'S A SMALL STATE. AND THERE'S A QUESTION AS TO -- FROM A GEOGRAPHICAL ASPECT, YOU KNOW, WHETHER THAT WOULD BE A SMART PICK. GOVERNOR VILSACK ISN'T VERY WELL KNOWN NATIONALLY. THERE ARE SOME THAT WOULD ARGUE THAT HE'S NOT THE MOST CHARISMATIC FIREBRAND. IT'S JUST A -- I GUESS IT'S A SITUATION WHERE HERE IN WITH IOWA WHEN WE STARTED HEARING RUMBLINGS ABOUT THIS THAT WE KIND OF SHOOK OUR HEADS PERHAPS AND SAID, YOU KNOW, OUR GUY COULDN'T POSSIBLY BE VICE PRESIDENT. BUT AS THIS HAS GONE ON, IT'S LOOKING LIKE HE'S MORE OF A SERIOUS CANDIDATE THAN MAYBE WE ORIGINALLY THOUGHT.

Yepsen: DAVE, DO YOU AGREE WITH THAT? IS THIS MORE THAN JUST STROKING ANOTHER POLITICIAN BY THE KERRY PEOPLE, THAT THIS IS MORE REAL, HE'S ON A SHORT LIST?

Pitt: IT SEEMS TO BE. AND THERE HAVE BEEN, AS A LOT OF US HAVE REPORTED, YOU KNOW, INQUIRIES INTO HIS BACKGROUND. HE'S HANDED IN ALL THE PAPERWORK, AND SO THERE SEEMS TO HAVE BEEN GENUINE INTEREST SHOWN. BUT THERE HAVE BEEN A NUMBER OF NAMES BATTERED AROUND ALSO, SO THE GOVERNOR IS NOT THE ONLY PERSON BEING CONSIDERED. WE KNOW THAT AS WELL. WE THINK WE KNOW THAT AS WELL. OBVIOUSLY THE KERRY CAMPAIGN IS NOT SAYING ANYTHING ABOUT IT AND NOT EVEN GIVING US A TIME FRAME REALISTICALLY ABOUT WHEN THAT DECISION WILL BE MADE. PERHAPS CLOSE TO THE CONVENTION, PERHAPS BEFORE. BUT I THINK IT'S -- I THINK IT'S A REALITY. THE GOVERNOR DOESN'T LIKE TO TALK ABOUT IT, AS WE ALL KNOW. IN ANY PRESS CONFERENCE THAT WE'VE ASKED ABOUT IT, HE'S HESITATED TO DISCUSS IT MUCH AND WE TRY TO FOCUS --

Yepsen: ALL RIGHT. WHO IS JOHN KERRY GOING TO PICK?

Henderson: IT'S HARD TO SAY. I MEAN WHO WOULD HAVE THOUGHT THAT GEORGE BUSH, 41, WOULD HAVE PICKED DAN QUAYLE. IT'S A REALLY INTERESTING PERSONAL DECISION THAT HAS MADE SORT OF IN AN ATMOSPHERE ABSENT OF ALL THE CAMPAIGN PRESSURE FOR MANY PEOPLE. SO I THINK IT'S JUST REALLY DIFFICULT TO SAY. I MEAN EVAN BAYH IS AN INDIANA SENATOR. THE TWO SPEND TIME IN THE SENATE. THAT'S BEEN BANDIED ABOUT. JOHN EDWARDS, WHO WE ALL LEARNED TO KNOW -- CAME TO KNOW WHEN HE WAS CAMPAIGNING HERE FOR THE PRESIDENCY. I MEAN THERE ARE JUST A NUMBER OF NAMES THAT ARE OUT THERE. IT'S JUST REALLY HARD TO PINPOINT WHO HE WOULD PICK.

Beck: AND SOMETHING THAT YOU MENTIONED, THE PERSONAL RELATIONSHIP. I'M ONE OF THOSE WHO, LIKE TODD MENTIONS, OUR GOVERNOR? REALLY? I MEAN WE'RE A SMALL STATE. HE'S NOT GOING TO BRING THAT MANY ELECTORAL VOTES. WHY HIM? BUT YOU WERE TALKING ABOUT THE PERSONAL RELATIONSHIP, AND I THINK WE WATCHED FROM BILL CLINTON'S CHOICE AND THEN GEORGE W. BUSH'S CHOICE IN CHENEY THAT THESE PRESIDENTS HAVE DECIDED THERE NEEDS TO BE A COMFORT LEVEL WITH THAT PERSON, THAT IT'S NOT JUST THE SECOND PERSON ON THE TICKET BUT IT'S A CONFIDANTE AND IT'S A PERSON IN WHICH CAN BRING SOMETHING TO HELP THEM. AND MAYBE HE FEELS THAT WITH VILSACK NOW. MAYBE HE FEELS IT WITH SOMEONE ELSE AS WELL, BUT I THINK THAT CHOICES ARE MADE DIFFERENTLY NOW THAN MAYBE THEY WERE IN THE PAST.

Yepsen: TODD, IOWA HAS ONLY GOT SEVEN ELECTORAL VOTES. IT'S VOTED DEMOCRAT IN EVERY ELECTION SINCE 1984, TWENTY YEARS. DOES JOHN KERRY REALLY NEED VILSACK TO GET IOWA? HASN'T HE ALREADY GOT IT? WOULDN'T HE BE BETTER OFF PICKING A DICK GEPHARDT OR SOME OTHER BIG STATE CANDIDATE?

Dorman: THERE ARE SO MANY CALCULATIONS AND COUNTERCALCULATIONS: DO YOU PICK AN OUTSIDER, WHICH VILSACK WOULD SEEM TO FIT THE BILL OF AN OUTSIDER; DO YOU PICK SOMEONE YOUNG AND CHARISMATIC LIKE A JOHN EDWARDS; DO YOU ACCENTUATE WHAT YOU ARE TRYING TO ARGUE AS YOUR STRENGTH, KIND OF LIKE BILL CLINTON PICKED AL GORE, THEY WERE BOTH KIND OF YOUNG, SOUTHERN; I MEAN DOES HE PICK WESLEY CLARK TO ACCENTUATE THE FACT THAT, YOU KNOW, WE'RE HEAVYWEIGHTS ON FOREIGN POLICY AND MILITARY AFFAIRS? PICKING TOM VILSACK COULDN'T HURT JOHN KERRY WIN IOWA. IT'S CLEAR IOWA IS GOING TO BE CLOSE AND COMPETITIVE AS IT HAS BEEN EVEN IN THE YEARS WHEN THE REPUBLICANS HAVEN'T BEEN ABLE TO CAPTURE IT. I MEAN LAST TIME IT WAS ONLY ABOUT 4,000 VOTES.

Yepsen: DAVE, WE MENTIONED THAT IOWA IS GOING TO BE A BATTLEGROUND STATE AND IT'S GOING TO BE CLOSE. WHAT ABOUT THE U.S. SENATE RACE?

Pitt: WELL, WE HAVE SENATOR GRASSLEY, OF COURSE. HE'S AS POPULAR AS EVER AND DOES A REAL GOOD JOB OF COMING BACK TO THE STATE, VISITING WITH CONSTITUENTS. HE'S A REAL DOWN-HOME, YOU KNOW, KIND OF A DEMEANOR. HE HAS AN OPPONENT IN NOVEMBER --

Yepsen: ART SMALL OF IOWA CITY.

Pitt: -- ART SMALL, WHO IS A FORMER LEGISLATOR AND AN ATTORNEY AND HAD RETIRED REALLY FROM POLITICS I THINK BACK IN THE MID '80S AND IS NOW LAUNCHING HIMSELF INTO A CAMPAIGN AGAIN. BUT I THINK MOST OBSERVERS WOULD SAY, SENATOR GRASSLEY HAS SOMETHING LIKE $6 MILLION IN A WAR CHEST. ART SMALL HAS LESS THAN $10,000 PROBABLY.

Yepsen: ALL RIGHT. WE'RE BETTING HEAVILY ON GRASSLEY HERE. KAY, WHAT ABOUT, QUICKLY, THE CONGRESSIONAL RACES? ANY CHANGES THERE?

Henderson: THE RACE THAT SEEMS TO BE TARGETED NATIONALLY IS THE LEONARD BOSWELL REELECTION CAMPAIGN. HE'S THE DEMOCRAT. STAN THOMPSON IS THE REPUBLICAN WHO RAN AGAINST HIM LAST TIME AROUND. IT'S A REMATCH. REPUBLICANS HAVE BEEN IN HERE RAISING MONEY, PEOPLE LIKE THE SPEAKER OF THE HOUSE. SO THAT SEEMS TO BE THE LONE COMPETITIVE RACE THAT BOTH PARTIES ARE LOOKING AT.

Yepsen: TODD, REAL QUICKLY IN ABOUT FIFTEEN SECONDS, IS IT CLEAR WHO'S GOING TO CONTROL THE LEGISLATURE AFTER THE NOVEMBER ELECTION?

Dorman: IT LOOKS LIKE REPUBLICANS HAVE SOME ADVANTAGE. OBVIOUSLY THE PARTY THAT'S IN CONTROL HAS AN ADVANTAGE. I THINK IN THE SENATE, PARTICULARLY, WHERE THE REPUBLICANS ARE FORCED TO DEFEND A LOT OF SEATS, THERE'S A CHANCE THAT DEMOCRATS COULD MAKE SOME INROADS.

Yepsen: THANK YOU ALL VERY MUCH. WE'RE OUT OF TIME. APPRECIATE IT. NOW, IN CLOSING WE HONOR THE PASSING OF IOWA'S MORE COLORFUL CITIZENS... THE GUY WHO OWNED THE STORE: BILL REICHARDT. THERE ARE MANY WORDS IN WEBSTER'S DICTIONARY TO DESCRIBE THE PERSONA OF BILL REICHARDT. "DYNAMIC" IS ONE WORD. "COMPASSIONATE" IS APPROPRIATE. "ASSURED" IS YET ANOTHER. NO DOUBT BILL REICHARDT WAS SURE OF HIMSELF AND SURE OF HIS MANY OPINIONS. BILL WAS IN THE IOWA SPOTLIGHT, INDEED THE LIMELIGHT FOR MORE THAN FIFTY OF HIS SEVENTY-THREE YEARS, FIRST AS AN ALL-AMERICAN HAWKEYE FOOTBALL STAR, A RENOWNED CLOTHING DEALER, A STATE LEGISLATOR, A CANDIDATE FOR GOVERNOR, BUT ABOVE ALL, A CHAMPION OF YOUNG PEOPLE AND THE UNDERDOG. BILL WAS ALSO PRETTY GOOD AT SELF-DEPRECATING HUMOR. WHEN THE MAJOR MOTION PICTURE "COLD TURKEY" WAS FILMED IN IOWA, HE HAD A BIT PART. HE WAS ASKED WHY HE DIDN'T GET A HIGHER PROFILE ROLE. HIS RESPONSE: "BECAUSE," HE SAID, "THERE'S NO MOVIE MARQUEE THEATER BIG ENOUGH TO HOLD BILL REICHARDT'S NAME." AND THEN HE'D ROAR IN LAUGHTER. AND IT'S A LAUGH WE'LL SADLY MISS. AND THAT'S IT FOR THIS WEEKEND'S EDITION OF "IOWA PRESS." I'M DAVID YEPSEN OF "THE DES MOINES REGISTER." THANKS FOR JOINING US.

 

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