At first blush, you’d think that Iowa might be one of the Trump administration’s favorite states. After voting for Obama in both 2008 and 2012, Iowa gave its 6 electoral votes to Trump in 2016. Both its senators, three of its four congressmen (including the nativist Steve King), and its governor are Republicans. The state legislature is controlled by Republicans. But it certainly seems like the Trump administration is fundamentally—and intentionally—messing with the well-being of Iowa’s economy.
Let’s count the ways—first up, health care. In Iowa, as in most other states, health care accounts for about 8.8 percent of employment. The more people with insurance, the better the health of the system. And yet, as the Washington Post reported last week, when Republican Iowa officials asked for a waiver from the federal government so the state could make the individual market insurance function more effectively, Trump personally denied their request. The result is likely to be rising rates and, in the words of state Insurance Commissioner Doug Ommen, “over 20,000 middle-class farmers, early retirees, and self-employed Iowans will likely either go uninsured or leave Iowa.”
Next up, agriculture. Agriculture is a huge industry in Iowa, and the state is the largest producer of corn. The corn is not just for eating: According to the Iowa Corn Promotion Board, “Iowa leads the nation in ethanol production, with 39 percent (953 million bushels) of the corn grown in Iowa going to create nearly 30 percent of all American ethanol.” The Environmental Protection Agency has a lot of control over these figures. Each year it stipulates the volumes of different types of biofuels refiners must use, with cellulosic biofuel (ethanol) always accounting for the lion’s share of the quotas. In 2016, the Obama administration sharply increased the 2017 volume of ethanol to 311 million gallons from 230 million gallons in 2016, a good move in the eyes of Iowa’s corn farmers.
Typically, because of Iowa’s status as a swing state that has the first presidential caucuses, candidates of both parties pledge to protect the vital ethanol mandate. Trump was no different. But oil producers and refiners typically loathe the mandate. It forces them either to add ethanol to their product or to buy expensive credits to meet the mandate. And in this administration, their voice carries a lot of sway. As HuffPost reported last week, when the Trump administration had its first opportunity to set the standard this summer, the EPA reduced the 2018 proposed volume for ethanol to 238 million gallons, a 23.5 percent reduction from 2017. The Iowa ethanol industry has cried foul.
Third, Trump’s policies are screwing up the state’s workforce. Agriculture and the meatpacking and processing industries generally rely on lower-cost labor. Because fields and packing facilities are located in places in Iowa where not many people live and the unemployment rate is low, these industries need immigrants—both legal and illegal—to function. Heightened enforcement activity, the rescinding of DACA, and a general hostility to foreigners are affecting companies that rely on immigrants in all parts of the U.S. And they are instilling a particular fear in companies and communities in Iowa.
Finally, Iowa is one of America’s capitals of wind power. According to the Iowa Wind Energy Association, the state’s 3,957 turbines produce 36 percent of the state’s electricity—that’s the highest proportion among the states. Wind works in the U.S. in general—and Iowa in particular—for a few reasons. First, many states have mandated that utilities source a particular percentage of their electricity from renewable sources, and wind is the most effective way to scale up renewable production. Second, the Clean Power Plan is one of the factors pushing utilities to invest in wind and natural gas and retire coal. Third, the long-standing Wind Production Tax Credit, which is expected to expire in 2020, helps reduce the cost of wind projects and makes them economically viable. Mid-American Energy is in the midst of a $3.6 billion plan to add 2 gigawatts of wind capacity in Wind XI project: a network of wind farms that is one of the biggest investments ever made in the state. Upon completion of this project, Iowa’s wind industry could provide a large majority of the state’s electricity and even export electricity to other states.
But the Trump administration may be undermining the prospects for Iowa’s wind industry, too. EPA Administrator Scott Pruitt announced on Monday that the Trump administration is going to override the Clean Power Plan and generally scale back efforts to reduce emissions from power plants. That’s likely to reduce demand for renewables like Iowa wind. Pruitt also said that he’d like to see the federal tax production credit for wind and solar ended immediately.
Iowans are now coming to realize that perhaps the slick-talking salesman from the east wasn’t on their side in quite the way they thought. As Sen. Chuck Grassley said of the move on the ethanol standards, “this seems like a bait and switch.” Grassley and his fellow Iowans may have occasion to ask Trump about the ways in which policy is affecting their state: The Iowa caucus is less than 28 months away.