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Iowa Press #4338
Governor Terry Branstad (R-Des Moines)
Original Broadcast Date: June 10, 2016
Copyright 2016 – Iowa Public Television
Mid-year, mid-term. Iowa Governor Terry Branstad almost halfway through his sixth term.
We're asking what the Governor sees ahead on this edition of Iowa Press.
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For decades Iowa Press has brought you politicians and newsmakers from across Iowa and
beyond. Now celebrating more than 40 years of broadcast excellence on statewide Iowa
Public Television, this is the Friday, June 10 edition of Iowa Press. Here is Dean Borg.
Borg: Governor Terry Branstad knows his way around the Iowa Statehouse, literally and
politically. Beginning in 1973, representing Winnebago County in the House of
Representatives, 10 years later he was Governor, after serving as Lieutenant Governor in the
Robert Ray administration. But experience isn't suppressing political challenges. The Branstad
administration now navigating troubled waters over converting Iowa's Medicaid program to
private management. In many unpopular decisions like that, Governor Branstad contends he is
keeping the state financially healthy. Governor Branstad, welcome back to Iowa Press.
Branstad: Thank you very much, Dean. Great to be with you.
Borg: This is going to be a busy summer. You've got the convention up ahead of you. Anything
else planned?
Branstad: Well, we're hosting the National Governor's Annual Meeting here in Des Moines July
14th through the 17th. We'll have the Governor's Council, which advises the Pentagon and
National Guard and Homeland Security, we're going to have a meeting at Camp Dodge and
we're proud to be able to do that, showcase all the great things going on in Des Moines and
Iowa. And of course we do have the National Convention. Next week I'll be in San Francisco to
speak at the World Bio Conference to talk about the fact that Iowa is the first state to have a
biochemical tax credit, which is where we think that's the next generation of products that can
be made in conjunction with ethanol in this state. We've added 43 ethanol plants and we
hope to get many other complexes like Eddyville throughout the state where other products
will be made as well.
Borg: Governor, we're going to get the program underway and I want to introduce to our
viewers people that you know well. Across the table, Des Moines Register Political Columnist
Kathie Obradovich and Radio Iowa's News Director Kay Henderson.
Henderson: Governor, you will be a delegate at the Republican National Convention in
Cleveland. Many of the other delegates support Ted Cruz and are not enthused yet about
Donald Trump. Do you consider yourself a party peacemaker?
Branstad: Well, I have always tried to be a party peacemaker and one that works to unite the
party, to support the nominee, to win elections.
Henderson: So what do you say to those Cruz people who say, we just can't quite get on board
the Trump train?
Branstad: Well, I think look at the alternative. And I think they strongly feel that Hillary Clinton
would be a disaster for America. They're concerned, as I am, about the size of the national
debt. They're concerned about the lack of leadership in the world in the fact that America has
lost support among our allies and our adversaries are embolden. They see the overreach of
government. I think we're all concerned about that. This administration has done many things
beyond what should be done in issue after issue. So I think when they examine the choice -and the next President is going to choose at least one and maybe three or four members of
the Supreme Court, Donald Trump has pointed out 11 prospective people that he would
consider and one of them is Steven, it happens to be -Borg: Steve Colloton.
Branstad: Steve Colloton, who is the son of John Colloton, an 8th Circuit Court of Appeals
Judge from Iowa, which would be a great choice.
Henderson: Speaking of Iowans, early in May you said you wanted to have a one-on-one with
Donald Trump to tell him to pick Joni Ernst. Have you had that conversation?
Branstad: No, but recently in North Dakota he said he wanted to consult with me about
ethanol and what happens beyond the year 2022 in terms of the Renewable Fuel Standard.
And so I intend to -- and once the California primary is over I think we'll have that opportunity
to visit. First of all, Joni is doing a great job. I'm really proud of the work she's doing as United
States Senator. With Chuck Grassley and Joni Ernst we have two real leaders that are making a
difference for our state. And obviously a lot of people were surprised that she beat
Congressman Braley by more than 8 points. So I think she is a strong leader. She's got military
background. And she served in -Obradovich: Do you think she would entertain a bid to be Vice President? She said that's not
what she's looking at right now.
Branstad: Well, I don't know of anybody that looks at being Vice President. It's one of those
things if the candidate for President asks you, it's a pretty hard thing to say no.
Obradovich: In your role as party unifier, what would be your advice to the Chairman of your
Republican Governor's Association? Donald Trump criticized her in her home state of New
Mexico and now he's asking for her endorsement. Should she endorse him?
Branstad: Well, she didn't go to the rally and I guess I don't know why she chose not to go to
the rally. But my feeling is since the nomination is pretty well decided I think we all need to
get together and support the ticket. And I think she has done a great job. I was recently out
there for a republican governor's meeting in New Mexico. I have a lot of respect for Susana
Martinez and the job she has done. In a very difficult state for republicans I think she has done
a great job. But obviously I think it's important that we all come together and support the
party, support the nominee for president, the vice presidential candidate, as well as our
gubernatorial candidates. We're very excited about republicans have 31 governors and we
may end up with 34 or 35 after this next election. We have some great chances to pick up
more governorships and that is of course what our focus was in our meeting in New Mexico.
Obradovich: Would you consider advising Donald Trump about your longtime association with
the media? Do you agree with him that the political media are sleazy?
Borg: Be careful now.
Branstad: Well, I take a different approach. But I think a lot of people are really upset at the
establishment, the media establishment, the political establishment, they think the country is
on the wrong track, they blame the media as well as the political establishment in D.C. They're
looking for new leadership to restore American greatness and they see with Donald Trump
somebody that has been successful in business, that has got all kinds of courage and guts to
do the right thing and they think America needs to be a leader again instead of a follower,
which we've been for the last eight years. It has driven the country into debt and it has driven
us into a situation of weakness. We can't afford to continue in this direction.
Borg: Governor, the question really is the use of the word sleaze for media.
Branstad: I'm not going to choose -- first of all, I'm my own person and I'm not going to try to
analyze other people's speech or whatever. And, like a lot of other people, I've been surprised
that Donald Trump has been so successful. But I think he has hit a chord with a lot of
Americans who are really unhappy with the media, unhappy with the political establishment in
D.C. and want to see significant change. And he's not the only one. I see some of the same
things on the democratic side with Bernie Sanders and his supporters feel the same way,
alienated to feel America is not the land of opportunity we want for my grandchildren.
Obradovich: But you released your tax returns. So you seem to think that there's some
measure of accountability or some measure of voters' right to know that Donald Trump
doesn't seem to think applies to him. He seems to think that we ought to take his word for the
fact that he gave donations to veterans' organizations.
Branstad: Well, he'll come out and he has released all of that information, all the contributions
made to veterans, and that is a big contrast to Hillary Clinton, who has done nothing to speak
of for veterans and who won't release the information about the speeches she has given to
Wall Street nor the fundraising tactics of the Clinton Foundation or her emails and it goes on
and on and on.
Henderson: But why do you release your tax returns?
Branstad: I've been doing it ever since I ran for the first time.
Henderson: So why do you think Donald Trump isn't?
Branstad: Well, I don't know. I'm not going to judge individual candidates. I'm just saying that's
something that I felt was the right thing to do, something that I've always done, not everybody
does it. But I am proud of -- first of all, I'm a lot different. I'm not a billionaire, I'm not a
successful businessman, I'm just a farm kid from Iowa who has worked most of my life in
public service and I'm proud and honored to serve the people of this state and my life is an
open book. I think people know about anything they want to know about me because I've
been in public office for a long time.
Henderson: Well, let's talk about some things you did in office in May. You issued a set of item
vetoes of policy but you did not use your authority to subtract any of the budget items that
legislators put together. In other words, you approved in whole the budget plan that
legislators sent you. Are you that confident about the state's economy?
Branstad: Well, the good news is unlike last year and other years where the legislature spent
one-time money for ongoing expenses, that happened only a very limited instance and frankly
it was in the human services appropriation bill, something I couldn't get at with item veto
anyway. But this legislature did respect the spending limitations, we can only spend 99% of
projected revenue. I put my budget together on the December revenue estimate. The March
revenue estimate was $46 million less. So they had to cut the budget another $46 million and
they did it and I was proud of them for doing that. It wasn't easy. It was difficult. And they had
to say no to a lot of things they'd have liked to have said yes to. But they did it. So in approving
their budget I was reaffirming that I appreciate the fact that it fits within our five-year
projections and it does not violate the 99% spending limitation and it doesn't use a significant
amount of one-time money for ongoing expenses. Thank God last year I did item veto that
one-time spending or we'd be in trouble right now.
Henderson: In making that decision, we you trying to butter them up, legislators, so that
they'll be more amenable to your proposals in 2017?
Branstad: I've been around long enough to know that kind of stuff doesn't work. I just try to
make a decision on each and every individual item and I did item veto some things, some
policy issues, but generally I was pleased. We worked closely with the legislature and they
made tough decisions and I know they weren't easy, but they did it. And so I think it was a
pretty successful session. Compare us with Illinois, they haven't passed a budget for the last
two years and they have the worst unfunded pension system, the most state and local debt
per capita and people want to leave there in droves. In Iowa, things are good and getting
better. In Illinois, they're bad and getting worse. Now this is despite the fact that we went
through the bird flu epidemic and farm income has been below the cost of production in
recent years.
Obradovich: Well, speaking of 2017, are you planning to lure more Illinoisans over the border
with perhaps a big income tax cut? Are you going to propose an income tax cut for Iowa?
Branstad: Well, it's too early to talk about what we're going to do in the 2017 session. We've
got an election between now and then and we've got to look at what is happening in terms of
revenue. I'm encouraged by this, corn and soybean prices have improved a little bit in the last
couple of months, and I'm hopeful we'll get from a loss situation to an income situation for
agriculture. That would be good for the Iowa economy. Also the tax bill that passed this year
provides some incentives in manufacturing and also the credit for biochemicals. And I'm going
to be talking to the worldwide conference, in fact, no I guess -- we Iowans don't like to brag -but I would say I'm going to be out there to tout the fact that Iowa is the first state in the
nation to have this tax credit. And we already have a number of companies that are looking at
Iowa. One of them recently located in Boone.
Obradovich: The Taxpayers Association though says Iowa could make some common sense
reforms and deal with some of the exemptions, etcetera, and lower rates without it being a
revenue, making it revenue neutral. Is that something you would consider?
Borg: Is that yes that you're shaking your head in agreement?
Branstad: Okay, first of all, I want to commend the Iowa Taxpayers Association for doing this
study. I think it's a very thoughtful, comprehensive study. I haven't had a chance to go through
all of it yet. I intend to review it very carefully and visit with legislators about it. I think there's
some good ideas in there that could be used in 2017. But frankly, I haven't even read the
whole report yet so we have to -Obradovich: Eliminating federal deductibility is one of the rubs for a lot of those plans to make
it revenue neutral. Are you ready to go there again?
Branstad: Well, I tried that once. But that was back when Iowans for Tax Relief really led the
charge to keep that. The circumstances may have changed somewhat. I'm open to considering
a lot of those ideas but I haven't formalized any plans yet and I want to visit with legislators to
see what is the art of the possible. That's another thing I've learned from experience.
Obradovich: So you're not really possibly looking at federal deductibility, which is the ability to
deduct your federal tax bill from your Iowa tax return.
Branstad: Yeah, and Iowa is one of the few states where you can do that. But the problem is
when a lot of these groups look at it, they look at what is the high marginal rate and they don’t
take into consideration the federal deductibility. So our effective rate is much lower than that
marginal rate and that hurts a perception of Iowa. Now, a lot of Iowans understand that
because they are familiar with the Iowa tax, but a lot of companies from the outside just
looking at it don't realize that. So that is one of the impediments and one of the problems that
I think we have faced for a long time.
Henderson: You've used the word problem twice in answering that question. If it's a problem
does it need to be fixed?
Branstad: Well, it's also a question of what is the art of the possible. And I'm not one to tilt
windmills. I want to do things that I think can be accomplished. And sometimes it takes more
than one year to accomplish significant things like the -Henderson: Well let's talk about your water quality -Branstad: That's a great one, that's a great segway.
Henderson: Nice segway. You proposed in January a significant proposal to shift taxes being
collected for school infrastructure, part of those to water quality. Didn't get adopted in the
2016 legislation. Do you plan to make adjustments and propose a new plan for legislators?
Branstad: Yes. Well, first of all, we work with the legislature throughout the whole session and
the House of Representatives passed a water quality bill that we supported through the
Agriculture Committee, through the Ways and Means Committee and through the
Appropriations Committee. It got 65 votes and it had our full support and it goes all the way to
the year 2029. Our plan went from 2029 to 2049, which would give us an even longer-term
reliable source of funding for it. So I think between what the House passed and the ideas that
we have presented, which were endorsed also by Secretary Vilsack, Secretary of Agriculture, I
think we have the chance to get something significant done next year. I was disappointed that
after the House worked on that all year and passed it through three committees and passed
with strong bipartisan support with 65 votes, that the Senate leadership didn't even take it up,
nor did they offer any alternative. I believe water quality needs to be addressed and I'm
visiting farms all over the state of Iowa to personally see the different practices that are being
put in place so that we can be as knowledgeable as possible and have an aggressive plan to
address water quality next year. So, it'll be at the top of our priority list.
Borg: Governor, Senator Gronstal, Senate Majority Leader, a democrat from Council Bluffs, on
this program just a few weeks ago, suggested a water quality summit. Would you take
leadership in calling such a summit?
Branstad: I think in the midst of a political season it's probably not the time to do that. But I
want to visit with as many people as I can and that's why I'm traveling throughout the state.
Here's the problem, Gronstal is up for re-election, he’s got the fight of his life on his hands,
once that is over then we'll be glad to sit down and talk with him or anybody else. But in the
meantime, I'm going to do all I can to build grassroots support for a collaborative approach
towards dealing with this that will help our cities as well as help our farmers to put in place
practices that can reduce the loss of nutrients and provide long-term funding for it.
Obradovich: Governor, last time you were here you didn't seem to think that there was a big
need for the legislature to insert a bunch more oversight over the Medicaid managed care
program that you have in place. But you signed that bill. Why?
Branstad: Well, first of all, it scaled back to something that was reasonable and we worked
with them through the legislative process. We're going to have the most transparent and I
think effective oversight program of any state. Now, 70% of Medicaid patients are already
under managed care, but we're going to have, in my mind, the best one that has the most
oversight as well as the most transparency. And we had already agreed to a lot of the
oversight matters in the agreement we worked out with CMS. So I appreciated the fact that
the legislature worked with us on that, that they recognized the need. And there's $100
million in savings in the fiscal year from managed care in addition to improving the health
outcomes for Medicaid patients.
Obradovich: Are you confident you're going to reach that savings?
Branstad: Yes.
Henderson: What role will you have in finding a replacement for Bill Ruud, the University of
Northern Iowa President, who is leaving?
Branstad: I will not have a role in that. That is the responsibility of the Board of Regents.
Henderson: You met with Mr. Herrald, the current President of the University of Iowa, before
he was hired.
Branstad: No.
Henderson: You talked to him on the phone.
Branstad: I talked to him on the phone, that's correct, because he requested to have a visit
with me. And I guess if any of the candidates want to visit with me I'll certainly return their
phone call. But I didn't meet with him nor did I play a role in that. I believe that is the
responsibility of the Board of Regents. I respect their independent responsibility to do that.
Henderson: So there's questions about the timing of your meeting with a new member of the
Board of Regents, the board you just mentioned, that governs Iowa, Iowa State and UNI and
Mary Andringa's resignation. Did you ask for her resignation?
Branstad: No, no. Actually she informed me before it was announced publicly that she was
intending to resign. I have the greatest respect for Mary Andringa. She did a great job. She just
felt it was bigger undertaking than she wanted and I feel that the year that she served she
served the people of Iowa well. When she told me that she was intending to resign at the end
of the month, so I had a few weeks’ notice before the actual public announcement was made,
I started thinking about who would be a really good replacement. And that's why I contacted
my good friend, Dr. Mike Richards, who is a doctor, is Marcus' godfather, his kids went to
grade school with my kids, he was my doctor for a while. He also was with the Iowa Health
Systems and now he's in private business and they have a manufacturing company up in
Orange City.
Borg: So you knew him.
Branstad: I knew him very well. He's a graduate of the University of Iowa. He's a doctor. He
grew up in Osage.
Henderson: Is he your best friend?
Branstad: No, he's not my best friend. Mel Straub was my best friend and he passed away. But
he's a good friend, he's a good friend of our family.
Obradovich: Did you consider other candidates though?
Branstad: Well, I think there were some other people that applied but I felt that, I like the idea
that he had the medical experience and background because the University of Iowa Hospitals
and also because he has also been somebody that, he has a really good way about him and
works well with people. And I felt that -- he also I just thought would be a good addition to the
Board of Regents.
Borg: I'm going to get into tuition just briefly here. What is your long-term strategy? There's a
tuition increase the Regents are going to be considering right now because the state
appropriation didn't come up to their expectations and desires. What is your long-term
strategy? Where would you like to see the balance between what parents and students have
to kick in as to what the state appropriates?
Branstad: Well, that's a great question. First of all, I'm very sensitive to the cost of higher
education. I went to the University of Iowa right out of high school. My parents didn't have the
money to send me there. I worked construction work in the summer, I worked in the cafeteria
during the school year and I had to borrow money. And I didn't get my last student loan paid
back until after I was elected Governor the first time. So I'm very sensitive to the tuition costs
for parents and students. And I want to keep -- and I'm proud to say that we've had two years
where we had a total freeze and now I would like to see the tuition increase to be pretty
modest. And so I'm concerned about too big an increase, especially with the financial
hardships that families are facing. I understand the Regents have to balance the needs of the
universities with the impact that it's going to have on the students and their families, but I for
one would like to see those tuition increases kept modest so we can keep our university
tuition affordable for Iowa students.
Borg: Just a quick follow-up to that, more modest than is being considered right now, taking
on an extra $300 onto what has already been approved for the fall?
Branstad: I think that's -Borg: Too much?
Branstad: I think it's too much. I hope the Regents will take a close look at that. That is a board
recommendation. It has not been approved by the Regents. But I think they need to look at
the impact it's going to have on Iowa students and their families, especially this late, because
the fall school year is not that far away. So I think we have to be careful about it.
Obradovich: The end of this program is not very far away either so I want to get in another
question. You mentioned Senator Gronstal a few minutes ago. What are you doing to try to
make sure that you have a republican Senate in the next term? And how confident are you
that that's going to happen?
Branstad: Oh, I am very excited about that. We have a young man that used to be on my staff
that, Matt Leopold, we got together a long time ago with the House leadership, the Senate
leadership and the Republican Party leadership, and said we need to get somebody really
good to go out and recruit the best candidates. And Matt agreed to leave the staff and to do
that and he has done a phenomenal job. We have a great group of candidates. They're
working hard. If you've seen the financial disclosure reports, you see many of our challengers
are raising more money than their incumbent opponents. They are going door-to-door.
They're working extraordinarily hard. We have a primary out in Council Bluffs to take on
Gronstal and we have six districts where we have more republican registrations than
democrats and the candidates are, they're going to a lot of doors. I went to a fundraiser for
one of those candidates in State Center the other day, Jeff Edler, 170 people and he started in
March and he has already raised more money than the incumbent he's running against and
he's knocked on thousands of doors. So I think we have a great chance. We've got six or seven
districts that are in play. I think we're going to win four or five districts. So I'm pretty
encouraged about this.
Henderson: Are you prepared to withhold nominating anyone in your final year in office to
follow the way of the United States Senate and not confirm folks for important positions?
Branstad: We have a different system than we have -- first of all, my choice of people to serve
on the courts is not subject to confirmation. Just wait a minute, let me explain the system -Henderson: We don't have time -- we don't have time -Branstad: No, there's time. The system is we have a nominating commission that gives me
three and I have to select among those three. I can't choose anybody I want to like the
President can and we don't have a confirmation process. I think our system is better than the
federal system and I'm proud of the quality of people I've appointed to the court. I hope I'll get
more opportunities to do that in the future.
Borg: Governor, I know you're Governor, but you can't dictate time. Thank you.
Branstad: Thank you.
Borg: We'll be back next week, 7:30 Friday night and noon on Sunday. I'm Dean Borg. Thanks
for joining us today.
(music)
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