Culver: Second federal stimulus not needed in Iowa

While state governments across the country gear up for another year of devastating budget shortfalls and federal officials weigh whether the state of the economy calls for a second round of stimulus spending, Iowa Gov. Chet Culver said he believes the Hawkeye State can weather the storm without additional federal cash.

Gov. Chet Culver

“Some economists are arguing that we do need another round [of stimulus] because the challenge is so great,” Culver said in an interview with the Iowa Independent. “Ultimately, whether the country needs another stimulus or not will be a decision the president and Congress have to make. Iowa is well-positioned to emerge from this economic downturn in good shape, but other states are not so lucky.”

Culver pointed to his $830 million I-JOBS infrastructure plan as his response to a difficult economic situation, saying if the General Assembly had failed to pass his signature piece of legislation then the need for another round of federal aide would much larger.

“That’s why I-JOBS was so important,” he said. “We knew we couldn’t rely indefinitely on the federal government to get our economy going again. If we hadn’t passed that, we might have needed another stimulus.”

In an op-ed in the Washington Post on Sunday, President Barack Obama defended his $787 billion stimulus plan and asked Americans for patience.

“[The American Recovery and Reinvestment Act] was, from the start, a two-year program, and it will steadily save and create jobs as it ramps up over this summer and fall,” Obama wrote. “We must let it work the way it’s supposed to, with the understanding that in any recession, unemployment tends to recover more slowly than other measures of economic activity.”

Culver called the original round of stimulus money a “life saver” during a difficult budget year.

“We really appreciate [President Obama’s] leadership,” he said. “The stimulus made all the difference in the world in terms of health care for kids, funding for education and making sure we didn’t have deeper lay offs. And we have $150 million left for next year.”

Iowa has the eighth-fastest growing economy in the U.S., Culver said, and that is due in large part to the hundreds of millions of dollars being spent on infrastructure, thanks to the stimulus funds and I-JOBS. The U.S. Government Accountability Office recently gave Iowa high marks for the way it is handling its share of federal stimulus dollars.

“It’s creating economic opportunity when our state needs it,” Culver said. “We have an opportunity to modernize our state’s infrastructure.”

Whether or not a second round of federal money will be needed is something that will be decided in Washington, D.C., and influenced by states in much worse shape than Iowa, Culver said.

“I think other states are pushing harder for another stimulus, states like California, New York and Michigan who are in a really tough place,” he said. “The president is going to have to weigh all of that. I feel really bad for other states that are in the middle of a crisis. I feel bad for my colleagues around the country who are in a really tough position right now.”

While there are tough budget decisions left to make in the coming legislative session, Culver said Iowa is well positioned to avoid major cuts.