Iowa angles on BBB, Trump rally in DSM, Windschitl in, Bird out
July 7 edition of "KHOI's Capitol Week"
Welcome to new subscribers! I usually post twice a week here: once to share this radio show, “KHOI’s Capitol Week,” and once to share some in-depth reporting originally published at Bleeding Heartland. My goal is to bring you stories you won’t find anywhere else, which is why I wrote about Senator Chuck Grassley’s speech at the big rally in Des Moines.
No such thing as a slow news week in 2025, even after a national holiday! Spencer Dirks and I had our hands full on Monday night. The audio file for the July 7 edition of “KHOI’s Capitol Week” is at the top of this post. You can also find the show through podcast platforms or smart speakers. The full show archive (going back to February 2021) is available on KHOI’s website.
Here’s the written summary of the latest show, for those who would rather read than listen. If your email provider truncates this post, you can read it without interruption here.
Lots of angles on that BBB
We spent a lot of time on the budget reconciliation bill, which all the Iowans in the U.S. House and Senate voted for last week. It’s probably the most consequential law Congress will approve this decade, even more than the American Rescue Plan of 2021 and Inflation Reduction Act of 2022.
Republicans call it the one, big beautiful bill. Some Democrats call it the big bad bill or big ugly bill. Each Democrat running for U.S. Senate in Iowa had a different name: Zach Wahls called it the Big Budget Betrayal, J.D. Scholten called it the Billionaire Bailout Bill, Nathan Sage called it the Big Bullshit Bill (which we couldn’t say on the radio). I’m sticking with budget reconciliation bill.
We began with an overview of the tax cuts and the budgetary impact. Many tax cuts that Republicans in Congress first approved in 2017 through the budget reconciliation process will now be permanent. The tax savings go up with income, so the highest earners will save hundreds of thousands of dollars a year.
The bill includes a couple of President Donald Trump’s campaign promises, namely no income tax on tips or overtime. But those are not permanent: they will expire after the 2028 tax year (unless Congress extends them, which seems likely).
There are a few other provisions that benefit wealthy people. For instance, the estate and gift tax exemption is now permanently set at $15 million for an individual or $30 million for a married couple. Way less than 1 percent of households have that much to pass on to their loved ones.
The State and Local Tax (SALT) deduction increases from the current $10,000 to $40,000, which will mainly going to benefit people living in states with higher taxes and higher property taxes.
The reconciliation bill will add trillions to the federal deficit over the coming decade and raises the debt ceiling by $5 trillion. As we’ve seen for decades, many Republicans in Congress refuse to raise the debt ceiling when a Democrat is president, but they are happy to do it when a Republican is in the White House.
Some conservative groups have denounced the bill because of its fiscal impacts. The CATO Institute called it the Big Beautiful Blunder, which could increase the national debt by $6 trillion.
Looking ahead to the 2026 elections, Republicans will campaign heavily on how they voted to cut taxes (sometimes framing it as preventing the largest tax increase in history). Democrats will point out how the tax cuts are skewed to the wealthy, with billionaires benefiting the most. As Ed Tibbetts reported in May, a Democratic-aligned group has already paid for mailings in Mariannette Miller-Meeks’ district that highlight the SALT changes: ““Rich coastal elites don’t need another handout.”
Several Democrats, including Christina Bohannan (one of Miller-Meeks’ challengers), have pointed out that everyone will pay more in mortgage rates because of the increase in the deficit and debt.
There will be many competing messages, but independent analysis suggests that although working-class people will get a small tax cut, lower-income Americans will be worse off because whatever they gain in tax cuts will be more than offset by cuts to Medicaid and other programs. You can read more about that in the Wharton Budget Model.
How Medicaid cuts will affect Iowa
The House-approved version of this bill would have cut Medicaid by more than $700 billion over ten years. But as the bill moved through the Senate, the Medicaid cuts grew to more than $900 billion. A lot of the Medicaid cuts will happen after the 2026 midterm elections.
Hundreds of thousands of Iowans are enrolled in Medicaid, which covers roughly 40 percent of Iowa children, nearly 40 percent of Iowa births, and about half of nursing home residents.
I’ve seen different estimates on how many Iowans could lose Medicaid coverage, in part because of the new work requirements. It’s likely to be at least 50,000 people and could be more than 110,000 people.
The impact on hospitals is hard to quantify now. The American Hospital Association strongly opposed the bill, in part because the final version will reduce something called “provider taxes,” which hospitals use to increase federal Medicaid funding. That won’t go into effect immediately but would greatly reduce revenue to hospitals over time.
Another big issue for hospitals is that they will need to provide more uncompensated care as people lose their Medicaid coverage or the health insurance they’ve been buying through the Affordable Care Act exchanges. That could mean longer wait times for everyone in emergency rooms, and more expensive care as people neglect chronic conditions. Some rural hospitals may close.
Medicaid cuts will be a big campaign issue in 2026. The GOP line is that Democrats are lying. Iowa GOP state chair Jeff Kaufmann yelled at the Trump rally in Des Moines on July 3: “If you work, and if you’re legal, you’re not gonna get kicked off Medicaid. That’s a lie. It’s a lie from desperate people.” Senator Joni Ernst, Representative Ashley Hinson, and others have implied the only people who might lose coverage are undocumented immigrants and people lying on the couch playing video games.
That line could be successful with voters, since the most harmful Medicaid cuts will take effect after 2026.
But Democrats are working hard to explain to voters how Medicaid cuts will affect them. I saw many Iowa Democrats denounce last week’s votes in press releases, podcast appearances, or television interviews. Those include Senate candidates Sage, Scholten, and Wahls, Congressional candidates Bohannan, Travis Terrell (another candidate in IA-01), and IA-03 challengers Jennifer Konfrst and Sarah Trone Garriott. Many of them referenced Ernst’s infamous town hall comment, “Well, we all are going to die.”
Rural hospitals in the spotlight
On Saturday, I tagged along as Rob Sand, the Democratic front-runner in the governor’s race, toured the Manning Regional Healthcare Center for about an hour. This is a critical access hospital in Carroll County, which serves a high proportion of Medicaid patients. In part that’s because nearly two-thirds of the patients in their substance abuse recovery unit are on Medicaid.
During the tour, Sand asked the Manning hospital CEO what government could do to help them, and the first thing she said was don’t pass things like these Medicaid cuts. She doesn’t expect the hospital to close–overall, they are on a strong footing–but the reconciliation bill has already prompted them to shelve a planned expansion for their substance abuse treatment program, one of the leading inpatient options in the state.
I was surprised to be the only reporter on the tour! Afterwards, I asked Sand for his top takeaways.
Keep an eye on this rural health care angle. I think it could become a problem for Republicans, especially Miller-Meeks and Nunn. They were among the House Republicans who signed a letter to the Senate in late June, criticizing the Medicaid language in the Senate bill. Here’s an excerpt:
The Senate proposal also undermines the balanced approach taken to craft the Medicaid provisions in H.R. 1—particularly regarding provider taxes and state directed payments. The Senate version treats expansion and non-expansion states unfairly, fails to preserve existing state programs, and imposes stricter limits that do not give hospitals sufficient time to adjust to new budgetary constraints or to identify alternative funding sources.
We are also concerned about rushed implementation timelines, penalties for expansion states, changes to the community engagement requirements for adults with dependents, and cuts to emergency Medicaid funding. These changes would place additional burdens on hospitals already stretched thin by legal and moral obligations to provide care.
Protecting Medicaid is essential for the vulnerable constituents we were elected to represent. Therefore, we cannot support a final bill that threatens access to coverage or jeopardizes the stability of our hospitals and providers.
Of course, the Senate didn’t change their Medicaid language, and Miller-Meeks and Nunn voted for the bill anyway.
On social media, Miller-Meeks has touted a $50 billion fund designed to help stabilize rural hospitals, which was part of the reconciliation bill. That won’t be nearly enough to address the problems.
I forgot to mention during the show that Bohannan has been warning in interviews that the hospital in Newton (part of IA-01) is at risk of closing due to the Medicaid cuts.
Bill defunds Planned Parenthood nationwide
We mentioned last week that the U.S. Supreme Court recently gave a green light to South Carolina’s law excluding Planned Parenthood as a Medicaid provider. Under the reconciliation bill, Planned Parenthood won’t be eligible to serve Medicaid patients anywhere in the country. This could have enormous implications.
Medicaid hasn’t paid for abortions at Planned Parenthood since Congress approved the Hyde Amendment in the mid-1970s. But across the country, many patients on Medicaid can get a range of other services at Planned Parenthood: contraception, breast exams, Pap smears, STD testing, HPV vaccines, and more. In many communities, the Planned Parenthood clinic is the only accessible provider.
After Iowa Republicans created a new state-run family planning program in 2017 in order to exclude Planned Parenthood, access to those services crashed by at least 90 percent, compared to the Medicaid family planning waiver the state used for many years before 2017. I covered that story a couple of years ago:
We noted in May that Planned Parenthood is going to close four of its six Iowa clinics. I wonder how long the last two (in Des Moines and Iowa City) will be able to keep operating if courts uphold this part of the reconciliation bill. A federal judge in Massachusetts has temporarily blocked the defunding language from taking effect.
SNAP cuts could be costly for Iowa
The reconciliation bill would cut the federal food assistance program known as SNAP by an estimated $230 billion over ten years. It will be the largest cut in the history of the program. The Iowa Hunger Coalition condemned passage of the bill and explained some of the impact for vulnerable populations. While some of the cuts and new work reporting requirements have been pushed off to 2027, others take effect sooner, like the defunding of the “SNAP-Ed” program, which funds nutrition education and obesity prevention programs.
Tens of thousands of Iowans are expected to lose all or part of their SNAP benefits over the coming years.
Currently, the federal government pays the full cost of SNAP benefits, and states pay half the administrative costs. The reconciliation bill pushes more administrative costs onto states, beginning in fiscal year 2027, and also requires states to pay for part of the benefits, depending on a complicated formula.
The Iowa Hunger Coalition has estimated that this bill could cost the state of Iowa up to $40 million a year. Since that would be difficult to cover in the state budget, Iowa may end up slashing benefits to eligible people.
Clean energy tax credits phasing out
The reconciliation bill rolls back most renewable energy tax credits, including some that Democrats extended as part of the Inflation Reduction Act in 2022. I’m looking for solid estimates of how this will affect Iowa. Some Democratic candidates are already talking about rising utility bills; one renewable energy group estimated that energy bills would increase by an average of $45 a month for Iowans.
In May, Hinson, Miller-Meeks, and Nunn signed a letter calling for renewable energy production credits to be preserved in the reconciliation bill. But they voted for the “big, beautiful bill” anyway.
If any renewable energy projects in Iowa are cancelled because of this bill, we will be hearing about it during the 2026 campaigns.
Massive spending on immigration enforcement
The budget reconciliation package massively increases spending on immigration enforcement by around $171 billion, including $45 billion for detention facilities, $47 billion for a wall along the southern border, and $14 billion for local law enforcement to partner with Immigrations and Customs Enforcement. In fact, ICE will become the largest federal law enforcement agency. You can read more about that in Iowa Capital Dispatch, Bolts, and a fact sheet from the American Immigration Council.
This will be a centerpiece of Republicans’ defense of the law. Senator Chuck Grassley bragged about the immigration provisions in the bill during his speech at the big Trump rally on Thursday.
Although ICE has been active in Iowa, we haven’t seen any large-scale raids here yet.
Reconciliation odds and ends
I’m still learning more every day about what Republicans tucked into this bill. One angle that hasn’t gotten enough attention is a new $50,000 annual cap on student loans for professional schools (not indexed to inflation). That won’t even cover tuition at many law schools and medical schools, let alone cost of living. That could price out working-class people from professional school. As Iowa lawmakers have been working to address the doctor shortage, Republicans in Washington have just made it more difficult to go to med school.
Ryan Cooper and David Dayen wrote a great piece for The American Prospect on “Ten Bizarre Things Hidden in Trump’s Big Beautiful Bill.” I flagged a couple of them on the show: $40 million for statues in a new “Garden of Heroes,” which Trump is very excited about, and a reduction in how much gamblers can deduct from their losses.
America 250 turns into partisan Trump rally
Trump came back to Des Moines for the first time since the 2024 Iowa caucuses to headline an event at the Iowa State Fairgrounds on Thursday. He brought Iowa’s four U.S. House members on Air Force One with him. I thought it was funny that White House staff misspelled Miller-Meeks’ name.
Technically this was an America 250 celebration event, but it was really a partisan rally. The crowd was full of MAGA gear, only Republicans were invited to speak, and they talked more about Trump’s greatness than about U.S. history.
Trump spoke for more than an hour and ended with the same riff he used at his campaign rallies (make America strong again, safe again, great again), and then they played “YMCA.” So the vibe was very much like a Trump campaign rally.
I didn’t go bake in the sun at the state fairgrounds, but I did catch the president’s whole speech at home. His comments about immigration stood out to me, especially the idea of putting the farmers “in charge” and not deporting undocumented immigrations if farmers “vouch for” them. Doug Burns (who did attend the rally) wrote about that angle.
We’ll see if Trump follows through on this idea. When the U.S. Department of Homeland Security issued guidance last month not to conduct raids on farms and ag facilities, the administration quickly reversed that policy.
As usual, Trump said a lot of things that were not true, such as claiming Los Angeles would have burned down if they hadn’t sent in the National Guard. He is also still claiming the 2020 election was rigged against him.
The president used an antisemitic slur while bragging about how the reconciliation bill would supposedly help farmers. He said later he didn’t realize “Shylocks” had that connotation, but it is really hard to believe a New Yorker wasn’t aware that Shylock reinforces negative stereotypes about Jews. It’s not the first time he has used an antisemitic trope.
Other notable speeches from Trump rally
A few other Iowa politicians spoke at the event. Ernst wore a Trump hat and praised the president for “making Iowa great again.” She focused her attention on immigration and boasted that she’s been leading the Senate DOGE caucus and working on draining the swamp.
You could almost forget that Ernst didn’t endorse Trump until after Super Tuesday (when Nikki Haley dropped out of the race). In any event, I highly doubt there’s any danger of Trump endorsing a Senate primary challenger to Ernst next year.
I wrote over the weekend about Senator Chuck Grassley’s speech, and how he said that as chair of the Judiciary Committee, he’s “going to make sure that everybody is exposed” for “the eight years that the opposition was trying to put President Trump in prison.” He praised FBI Director Kash Patel and is still crusading about the alleged persecution of Trump, but has nothing to say about the current president ordering the Justice Department to investigate his enemies. Even by Grassley standards, the hypocrisy level was high.
Grassley is a famous aficionado of the History Channel, and he did talk about some history at the America 250 event. He emphasized that the Declaration of Independence says “We are endowed by our Creator” with inalienable rights, which to him means, “We get our rights and freedoms from God, we don’t get ‘em from the government.”
Matt Windschitl running for Congress in IA-04
The worst-kept secret in Iowa politics came out on Monday afternoon: House Majority Leader Matt Windschitl will seek the GOP nomination in the fourth Congressional district, where the incumbent Randy Feenstra is all but certain to run for governor. I would guess he waited until now so that he could announce near the beginning of a quarterly fundraising period.
Windschitl is one of the longest-serving current Republican lawmakers. First elected in 2006, when he was just 22, he came in to the Iowa House the same year as Pat Grassley, who was also very young at the time. He and Grassley are considered sort of an odd couple. But despite having very different personalities, they’ve worked together as speaker and majority leader for six legislative sessions.
Before becoming majority leader, Windschitl was best-known for floor managing several pro-gun bills, including the omnibus bill in 2017 that included “Stand Your Ground,” reduced background checks, and allowed concealed carry at the state capitol. He endorsed Florida Governor Ron DeSantis for president in 2023 but didn’t actively campaign for him like Kim Reynolds did.
While acknowledging Iowa Republican leaders in the crowd last Thursday, Trump referred to State Representative Bobby Kaufmann (currently the House Ways and Means chair) as “majority-leader elect.” So he’s on track to replace Windschitl as the second-ranking House Republican.
Last week we reported that Chris McGowan, the longtime leader of the Siouxland Chamber of Commerce, is also seeking the GOP nomination in IA-04. He is going to raise a lot of money but to me he seems like the kind of person who would have won a Republican primary 20 years ago.
Windschitl isn’t the most MAGA person, but as far as I know, he hasn’t angered any major part of the GOP base. He told the Des Moines Register,
"I’ve got a 19-year track record of being pro-life, pro-2A, pro-business, pro-ag, cutting taxes, getting government out of the way, getting bureaucracy out of the way and helping constituents through different political problems," he said. "But also when we’ve had the derecho, when we’ve had floods, being there boots on the ground. You can look at everything I’ve done. My record stands for itself."
I think Windschitl is the one to beat in the primary.
State Senator Lynn Evans has said he’s seriously considering running in IA-04 but I don’t see him raising the kind of money it would take to compete.
Brenna Bird not running for governor
Last Wednesday, Attorney General Brenna Bird confirmed she won’t run for governor next year. She’ll seek a second term as attorney general instead.
I wasn’t surprised. In April I thought she’d definitely run for governor, but the more time passed, the more I thought she probably wasn’t going to run.
As for the timing, I suspect Bird was told Trump wasn’t going to endorse her for governor. She would not win a GOP primary without his endorsement and probably didn’t want to see a bunch of stories about how Trump didn’t endorse her while he was in Des Moines.
There don’t seem to be any hard feelings, though. Bird spoke at the rally and thanked Trump for choosing Iowa to start the America 250 celebrations. Trump also thanked Bird again for endorsing him early during the Iowa caucus campaign.
We reported in May that Nate Willems is running for attorney general, and I expect him to be unopposed for the Democratic nomination. He has already lined up lots of endorsements and has raised hundreds of thousands of dollars.
Republicans are favored in all of Iowa’s statewide elections now because of their voter registration advantage and their tendency to have higher turnout in midterm elections. But Willems has an interesting strategy, which we haven’t seen before in an AG race in Iowa. He’s promised to “restore the office’s focus on consumer protections, take on big corporations who steal wages and benefits from Iowans, and prioritize improving public safety by working with prosecutors to secure convictions for violent crimes.”
Bousselot “laying the groundwork” for IA-Gov bid
Getting back to the Republican field for governor: State Representative Eddie Andrews and former State Representative Brad Sherman are in, and Feenstra is clearly running (even though he is technically still “exploring”).
State Senator Mike Bousselot was out with a statement soon after news broke about Bird. He praised her work as attorney general and added, “Iowans need a leader at the top of the 2026 ticket and in the Governor's office who will fight aggressively for an Iowa First Agenda that complements President Trump's America First Agenda.” Bousselot claimed he has fought for that agenda in the state legislature and confirmed, “I have been sharing my perspective with voters around the state, listening to feedback from Iowans, and am laying the groundwork for a potential campaign for Governor next year.”
I would guess Bousselot will run and can raise a lot of money, with help from former Governor Terry Branstad. He has angered a lot of Republicans with his approach to the eminent domain/pipeline bill, though. He also floor-managed the unpopular pesticide immunity bill this year.
This GOP primary is shaping up to be weird: Sherman and Andrews are more in line with the MAGA base on the issues, but I doubt they can raise the funds to run an effective statewide primary campaign. Feenstra and Bousselot could raise lots of money but they have problems with segments of the base.
I haven’t heard anything lately about Matt Whitaker, but I wouldn’t rule out the possibility that he may run for governor. The current U.S. ambassador to NATO came to the Trump rally in Des Moines, and Trump acknowledged him from the stage.
A quick word about the Democratic candidates for governor: Sand held fourteen town halls across northwest Iowa last week, and toured the Manning hospital over the weekend.
Julie Stauch was in the West Des Moines parade on July 3 and in Clear Lake on the Fourth of July–that’s one of the largest parades in the state. I saw she had scheduled one of her public events (she calls them “interview sessions”) for July 7 in Lamoni (Decatur County).
Latest maneuvering on Trump/Selzer lawsuit
We had just a minute for me to bring listeners up to date on Trump’s meritless lawsuit against the Des Moines Register and its longtime pollster, Ann Selzer. In May, a federal judge denied his request to move the case back to state court. So on June 30, Trump moved to dismiss his federal lawsuit and refiled the case in state court, with Miller-Meeks and former State Senator Brad Zaun as co-plaintiffs.
The date is important because Iowa’s anti-SLAPP law, which makes it easier for defendants to get frivolous lawsuits thrown out, went into effect on July 1.
Thanks for reading or listening! Spencer and I will be back next week with more news about the 2026 campaigns and state government.
Laura, this piece is quite a comprehensive analysis of the current political landscape. It’s remarkable what political animals Republicans are. The contrast in Grassley’s vote to impeach Clinton in 1999 and not Trump in either 2019 and 2021 is egregious. Such strange oblique remarks he made claim to support, weaponizing the Senate Judiciary Committee. Quite strange. It is beyond me to understand why the H.R. 1 continuing resolution bill passed when it will seriously impact the lives of the limited income wage earners with the Medicaid cuts and SNAP benefits. The lies being spread at these MAGA infused 250 rallies is beyond the pale.
Starting dates create some of the most cynical aspects of the BBB: After the mid-terms or in 2029. Those elected for those terms will get the blame, paving the way for…you guessed it, if Democrats are the ones winning 2026, 2028, or both.