116 3rd St SE
Cedar Rapids, Iowa 52401
Gov. Kim Reynolds is placing Iowa first against an onslaught of bad federal policies. Recently, the governor announced Iowa would not continue to provide the $300 federal unemployment benefit. The additional federal unemployment dollars discourage individuals from returning to work at a time when Iowa has an urgent need for workers.
After weathering the economic impact of COVID-19, Iowa has a budget surplus, revenues continue to grow and the reserves funds are full. Reynolds deserves credit for keeping Iowa's economy open through the pandemic.
However, in a recent interview, Creighton University Economist Ernie Goss said the "inability to find quality workers" still is a major problem for Iowa's economy. The state's unemployment rate is 3.7 percent, and Iowa Workforce Development reports that in March, Iowa had 60,900 unemployed and currently over 66,000 job openings across the state.
In her decision to end participation in the federal unemployment program, the governor said the program "initially provided displaced Iowans with crucial assistance when the pandemic began," but the benefit is no longer needed. Further, Reynolds noted Iowa's businesses and schools are open, and the federal "payments are discouraging people from returning to work."
"Economics is all about incentives. To keep the country prosperous, our public policies should reward productive behavior rather than punish it," wrote Stephen Moore and Phil Kerpen of the Committee to Unleash Prosperity.
The $300 federal unemployment benefit is an example of a policy that disincentivizes people from working, and this was proved with the recent lackluster jobs report. Steve Forbes, chairman and editor-in-chief of Forbes, noted that one of the biggest reasons for the poor jobs report is "Uncle Sam's paying bonus unemployment benefits."
In addition to withdrawing from the federal unemployment benefits program, Gov. Reynolds announced Iowa would return $95 million in federal dollars designated for COVID-19 testing in schools because Iowa schools have been open since August. Federal stimulus dollars continue to flow into the state. The American Rescue Plan (ARP) allocated over $4 billion for state and local governments, with Iowa schools receiving $770 million. Policymakers in Iowa are wise not to rush to spend ARP dollars. Federal money often has strings attached.
Federal funding and unemployment benefits are not the only progressive federal policies Reynolds is resisting. The governor has told the Biden Administration Iowa will not house migrant children. "We do not have the facilities. We are not set up to do that. This is not our problem; this is the president's problem. He's the one who opened the borders. He needs to be responsible for this, and he needs to stop it," stated Gov. Reynolds.
The governor noted Iowa has difficulty finding homes for children who are already in the foster care system. A letter to President Joe Biden signed by Reynolds and 19 other state governors said, "At a time when our country is trying to recover from a once-in-a-generation pandemic, the last thing we need is a self-created crisis that exploits families, undermines public safety, and threatens our national security."
Gov. Reynolds has successfully led Iowa's economic recovery. She is placing Iowa first by saying "no" to federal policies that threaten the state's recovery while adding trillions to the national debt.
Chris Hagenow is vice president of Iowans for Tax Relief.