Governor Terry Branstad emphasized fiscal responsibility in his budget address Thursday to a joint session of the Iowa legislature, proposing a budget for the next two fiscal years that makes $360 million in total budget cuts, reduces the corporate income tax and commercial property taxes, and increases the tax on state casinos.

"The rebounding agricultural economy gives us a unique opportunity to bind up Iowa's budget wounds quickly," Branstad said. "We must not squander that opportunity. It will not be easy. It will require difficult and painful choices. But the pain we endure by fixing our budget today will lead to great opportunities for Iowa in the future."

Branstad's proposed budget would spend nearly $6.2 billion in Fiscal Year 2012 and nearly $6.3 billion in Fiscal Year 2013. It includes $194 million in reductions throughout the state budget in the general fund, would save $89 million by not providing extra money to pay for state-worker salary increases, and would save $75 million by not continuing some programs currently funded with one-time sources.

The emergence of a number of socially divisive issues has quickly set up a battle between Democrats and Republicans, and between the Iowa House and Senate, just two weeks into the 2011 legislative session.

"Our fear is ... we're going to be moving from one socially divisive issue to another," House Minority Leader Kevin McCarthy (D-Des Moines) said Thursday.

Fresh off the debate to end a state-funded preschool program created by Democrats, House Republicans this week either introduced or began moving forward on legislation that would ban late-term abortions; call for constitutional amendments to ban gay marriage, civil unions, and domestic partnerships; and define a right to life from the beginning of biological development.

McCarthy said Democrats have been told to prepare for committee work next week and House floor debate the following week on some of these issues. He said a return to the ban on stem-cell research will also be revisited.

"I understand that the new majority needs to do some things for their base, but the concern globally is if we spend the next several weeks, we are ... already 10 percent done with the session," McCarthy said. "We'll have spent the bulk of the session doing socially divisive issues that just tear our society apart, and I think away from what most voters want us to focus on, and that's basic bread-and-butter issues: education and health care and environmental issues."

Republican Terry Branstad was sworn into office as Iowa's 41st governor Friday and used his inaugural address to issue calls for service, less government, more integrity and transparency, a reduced and simplified tax system, and a renewed commitment to education.

"It is time for a new covenant between Iowans and their government," Branstad said. "It is a covenant that is founded upon principles of limited government, service above self, transparency and integrity, world-class schools, and celebrating the success of Iowans. These are the principles that will guide my days as your governor."

Governor-elect Terry Branstad and incoming Department of Management Director Dave Roederer said Thursday that state expenditures are expected to exceed revenues by $605 million in Fiscal Year 2012 - more than twice as large as the gap projected by the nonpartisan Legislative Services Agency.

"We've got a big challenge," Branstad said. "A lot of one-time money has been used for ongoing expenses. We want to stop what we consider to be bad budgeting practices and really get us back into an affordable, sustainable way to deliver the best quality services in the most efficient and economical way that we can."

In a budget presentation Thursday at the Capitol to reporters and editors, Roederer said the projected budget "deficit" would be $1 billion for Fiscal Year 2013, nearly $1.2 billion for Fiscal Year 2014, and $1.3 billion for Fiscal Year 2015.

It's confirmed: New U.S. Census Bureau numbers show that Iowa will go from having five congressional seats to four.

Iowa is one of 10 states that will see a loss of congressional seats. Illinois, Louisiana, Massachusetts, Michigan, Missouri, New Jersey, and Pennsylvania will also lose one seat apiece. Two states - New York and Ohio - will each lose two seats.

The big winner was Texas, which will gain four seats. Florida will gain two seats, while Arizona, Georgia, Nevada, Utah, Washington, and South Carolina will all gain one.

Iowa Republicans hope that a nationally broadcast GOP presidential debate they've scheduled for August 11, 2011, in Ames will up the stakes for the Iowa Straw Poll two days later.

"We wanted to make sure it's bigger and better and more prominent than it's ever been before," Republican Party of Iowa chair Matt Strawn said Thursday in a conference call with reporters, less than an hour after announcing the two events.

The Iowa Straw Poll has historically been considered the critical first test of grassroots support for Republican presidential candidates in the first-in-the-nation caucus state.

However, the future of the Ames Republican straw poll was cast into doubt in June 2007 after former New York City Mayor Rudy Giuliani and Arizona Senator John McCain decided to skip the key event leading up to the caucus.

That's something the Iowa GOP hopes to avoid this time around.

Governor-elect Terry Branstad says budget cuts in the upcoming year will include reductions in the Iowa governor's office staff and security detail, and he will ask other state agencies to make similar cuts.

Branstad did not specify the number of positions that will be eliminated in his office, but said that he would have only one legislative liaison instead of two. He also said he would likely not fill some deputy-chief-of-staff positions. He said reducing his security detail will allow the state to put more state troopers on the road. He also said he'll lead by example with a goal of cutting the cost of state government by 15 percent over five years to align state spending with ongoing revenues.

Governor-elect Terry Branstad has picked Siouxland Chamber of Commerce President Debi Durham to be the new director of the Iowa Department of Economic Development.

As Branstad introduced her, the two of them began outlining how they plan to change the department into a public/private partnership and create the 200,000 new jobs in Iowa that Branstad promised on the campaign trail.

"That takes legislation," Branstad said of the transformation to a public/private partnership. "We're going to work from the present framework that exists, but we are going to envision where we want to go and we're going to lay that out. We did some of that during the campaign, and we're now going to move forward very aggressively on this even during the transition before we take office. But we will then need to work through the legislative process to get the changes made that we want to get made."

Former Republican National Committee (RNC) political director and Iowa native Gentry Collins says he is weighing a bid for chair of the organization.

The announcement came one week after Collins announced his departure from the RNC with a scathing letter directed at current RNC Chair Michael Steele.

"I have been encouraged by many friends, both on the committee and from outside the committee, to take this step as the RNC prepares to elect a chairman in January," Collins said in a statement.

Republican National Committee member and former Michigan GOP state chair Saul Anuzis is the only candidate to publicly announce he's running for RNC chair.

Iowa House and Senate Democrats voted this week to stick with their leaders, despite losses in the 2010 election.

Representative Kevin McCarthy (D-Des Moines) was re-elected the leader of House Democrats but will now serve as the minority leader instead of the majority leader. He said the caucus saw its losses in the 2010 election as part of a nationwide setback for Democrats, and did not blame individual decisions made by legislative leaders here.

"There was not a lot we could do in this campaign environment to stop that trend," McCarthy said. "Some serious setbacks were dealt to Democrats nationally, really pretty epic in scope in what occurred around the country. We are very united as a caucus and hopeful and optimistic about the future because when you have setbacks politically like occurred recently in the election, the opportunity for moving the ball down the field for future success is much, much greater."

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