Archive for July 3, 2010
Iowans and the Recovery Act
by Paul Deaton
On Thursday, June 24th, Iowa’s senior senator, Charles Grassley, voted against extending unemployment benefits to those who have been looking for work for more than six months. The repercussions of his vote may result in over 60,000 Iowans being denied or cut off of emergency unemployment compensation benefits by the end of the year.
“Senator Grassley voted to give Wall Street $700 billion of tax payer’s money, but when it comes to dealing with everyday Iowans, who are struggling to make it in a poor economy, he's not willing to help them out,” said Midge Slater of the Iowa Alliance for Retired Americans.
If extension of unemployment benefits for working Americans on the brink of financial ruin is off the table, then what help should we expect from the federal government? Washington is spending hundreds of millions of dollars on the American Recovery and Reinvestment Act of 2009. The administration assured us of the transparency of the expenditure of funds under the law, so let’s take a look at how the dollars are being spent in Iowa.
The author is a member of his county’s board of health, so let’s start close to home. As previously reported on Blog for Iowa, roughly $3 million in stimulus money was used to fill the revenue gap in the Iowa Department of Public Health. Governor Chet Culver determined that Public Health services were critical and he shored up the budget gap with federal stimulus dollars. It remains to be seen how the state will replace this money in the next budget year and combined with an additional $2 million budget reduction, there is justified concern that public health expenditures will be cut significantly. There is a trickle down of this stimulus to our local public health department, and it enabled us to continue to operate pretty much business as usual for one more year. No jobs were created with this $3 million, but jobs were saved. This situation of jobs saved is part of the Recovery Act’s success and more typical than not.
On recovery.gov, there is a listing of awards to Iowa from the Recovery Act. According to the web site, 284 contracts valued at $178,700,340 were awarded in Iowa creating 285 jobs. 2,175 grants valued at $1,625,412,514 were awarded to Iowans. These grants created 8,530 jobs. Finally, the Recovery Act gave 20 loans at a value of $33,057,984, creating an additional 13 jobs. This totals $1.8 billion in investment and 8,828 jobs.
It seems like a lot of money but is not so much. $1.8 billion translates to $610.79 for each of Iowa’s 3,007,856 residents. The stimulus is mostly shoring up public health, school districts, municipalities and other existing infrastructure, along with some going to business development. With an Iowa workforce of 1,687,000, job creation is helping about one half of one percent of workforce. In view of the scale of the problem, after the Recovery Act we fell far short of where we need to be.
A look at Iowa’s unemployment shows the April rate was 7.0% according to the US Bureau of Labor Statistics, the second highest it has been in the ten years charted. According to the Iowa Workforce Development, 115,400 people were unemployed in Iowa in May. We appreciate the stimulus money, but a year in it is not getting the job done for working Iowans.
If everyone else would participate, our family would scrape together the $1,222 and contribute it to stimulating the Iowa economy. Not a realistic solution and we don’t believe in throwing good money after bad. What the Recovery Act has done is to help preserve the status quo in a way that is not sustainable.
In the end, this recession and the financial hardships it brought us will be resolved by working people getting together to dig us out. Jobs are important, but jobs are not the complete answer. Government can be helpful, but we should learn the lesson of the Recovery Act. What is important is that we stick together, help our neighbors, family and friends and develop solutions to modern living that will help us get by. It is what we have always done and what we need now, more than ever. The only thing that seems clear today is that before the recovery is here, there will be plenty of rocky times where working Iowans live.
Deaton is a native Iowan living in rural Johnson County and weekend
editor of Blog for Iowa. E-mail Paul