Iowa lawmakers crafting budget in light of uncertainty over Trump tariffs
DES MOINES, Iowa (Gray Media Iowa Capitol Bureau) - Some Iowa legislators think people who lose their jobs need more support if President Donald Trump’s higher tariffs on foreign products hurt the state’s economy.
Thousands of Iowans have already lost their jobs in recent months in agriculture and manufacturing.
Democratic Senate Minority Leader Janice Weiner says the state’s economy is headed in the wrong direction, and warning bells are going off. She says Trump’s tariffs will damage Iowa’s already soft ag economy, alienate relationships with our trading partners, and won’t back manufacturing jobs anytime soon like Trump claims.
In light of the new tariffs, Weiner and other Statehouse Democrats are once again calling to allow Iowans to stay on unemployment longer. They want to return to 26 weeks being the maximum number of weeks someone can collect assistance. Republicans cut that number down to 16 weeks in 2022.
Iowa House Speaker Pat Grassley isn’t on board with extending benefits.
“I don’t think at this point in time that’s something we need to be looking at. Keep in mind, when we made the last change when it came to the unemployment and number of weeks, there’s been significant efforts made at workforce development to make sure we’re getting people back to work,” he said.
Grassley says he hopes the long term impacts of the tariffs will outweigh any short term pain they may cause.
He says as an agricultural state, we need good trading partners.
If more Iowans lose their jobs and consumers spend less due to President Trump’s higher tariffs, it could leave Iowa lawmakers with less money to fund government services.
At the capitol, the Republican majority is working on next year’s budget.
At Thursday press conference, Iowa House Minority Leader Jennifer Konfrst said Republicans need to be more realistic when crafting it.
“What can we do to prepare for an economy that isn’t doing very well right now instead of just saying, ‘Yep, this is all great. Let’s cut more taxes for corporations’ which is what Republicans seem focused on doing,” she said.
Konfrst says Republicans need to take into account that next year’s economy won’t look as good.
“What can we do to ensure that costs are stopped? So, can we maybe put a cap on the number of school vouchers that are issued, for example, so that we can rightsize our economy and prepare. Can we make sure that Iowans have jobs and if they don’t that they’re able to get the unemployment they need to find a new job,” she said.
House Speaker Pat Grassley says Republican lawmakers aren’t changing their budget projections. He says the state has $6 billion in surplus reserves.
“For unforeseen things like potentially what the short term impacts on this may be, that’s why we’ve budgeted the way we’ve had over the last several years. So, I think we’re in a position to absorb any uncertainty that may come from that,” he said.
Senate President Amy Sinclair says we don’t know what tariffs will do to Iowa’s economy, but she thinks lawmakers need to be mindful of it when making a budget.
“We need to be cautious in our spending based on that. I think we have to be as conservative as possible because those costs are going to be compounding year over year and we have to know that impacts what our revenues will be in the coming years,” she said.
Governor Kim Reynolds says President Trump is using tariffs as leverage to get better trade deals. She says she’s working with the White House to ease the short term impact.
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Conner Hendricks covers state government and politics for Gray Media-owned stations in Iowa. Email him at conner.hendricks@gray.tv; and follow him on Facebook at Conner Hendricks TV on X/Twitter @ConnerReports, and on TikTok @ConnerReports.
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