Deficit, green jobs divide an Iowa town
Voters fear tax credit is not sustainable
NEWTON, Iowa — For decades, the talk of the Midtown Cafe — located in what was once the Maytag Hotel — was about the happenings at the Maytag Corp., the appliance manufacturer that provided good jobs at good wages for many residents in this heartland community.
But Maytag closed its final plant in Newton five years ago, shipping its work to a Whirlpool factory in Tennessee and costing this city of 15,000 about 1,800 jobs. Into the void stepped a fledgling wind-energy industry, a continued tax credit for which is dividing President Obama and Republican nominee Mitt Romney as they compete for the votes of Iowans.
Obama favors extending the tax credit past its Dec. 31 expiration, and visited Newton in May to lobby Congress for it. Romney opposes it, saying all energy sources should compete on the merits.
Regulars at Midtown Cafe are split over this new topic of conversation.
“The Maytag thing; we’ve got to get over it. We’ve got to try to create and get on to new things,” said Ron Helms, 70, as he waited for his breakfast group to arrive.
A couple of tables away, 68-year-old L.D. Palmer said he is eager to vote for Romney because the former businessman would be capable of creating jobs beyond just the renewable energy industry.
“I wish his company would have purchased Maytag,” said Palmer, referring to Bain Capital, the private equity firm which Romney founded. “They probably would have still been here today.”
Although some may have thought that Iowa’s influence on the presidential process ended with January’s caucuses, the state has reemerged as a general election battleground. Its six Electoral College votes are key to each candidate’s plan to reach the 270 required to win.
For Obama in particular, winning Iowa and Wisconsin, as well as Colorado, Nevada, and New Hampshire, would allow him to retain the presidency even if he lost all of the big-ticket states like Florida, Ohio, North Carolina, and Virginia.
The most recent NBC News/Wall Street Journal poll had Obama up 8 percentage points on Romney in Iowa, but the Real Clear Politics average of state polls has him ahead by 3.3 points.
The president visited eastern Iowa on Wednesday, sent Bruce Springsteen after the student vote at Iowa State University on Thursday, and followed up Friday with Jill Biden, wife of Vice President Joe Biden. Romney himself has been here seven times during his general election campaign, most recently on Oct. 9. GOP vice presidential nominee Paul Ryan campaigned in the state on Sunday.
Obama has been bolstered by a relatively healthy economy. In September, the unemployment rate in Iowa was 5.2 percent, compared to the national average of 7.8 percent.
One flashpoint between the candidates has been the continuation of the Production Tax Credit, which provides a tax credit of 2.2 cents per kilowatt-hour for electricity from utility-scale wind turbines. It has been extended four times but allowed to expire three times, which advocates say has created a boom-and-bust cycle in the industry.
Critics complain that wind-energy manufacturers need to wean themselves from support that costs the government about $1 billion in annual tax revenue.
Senator Charles Grassley of Iowa, a Republican, favors the credit, as does the state’s Republican governor, Terry Branstad.
“Governor Romney says, ‘I’m opposed, I’d get rid of it,’ ” said Obama. “That’s not an energy strategy for the future. And we need to win that future, and I intend to win it as president of the United States.”
Romney retorted: “I appreciate wind jobs in Iowa and across our country. I appreciate the jobs in coal and oil and gas. I’m going to make sure that taking advantage of our energy resources will bring back manufacturing to America.”
In Newton, Maytag exerted an influence far beyond its famed “Lonely Repairman” for over a century. Its executives were not just corporate but civic leaders, while its foundations supported many charitable works and its assembly lines provided jobs not just for wrench-turners but white-collar workers.
But Maytag fell behind industry trends in an increasingly global marketplace, and Whirlpool scooped up its competitor in 2006. In October 2007, Whirlpool stopped the last manufacturing line in Maytag’s 1.9-million-square-foot plant on the city’s north side.
“I likened it to losing a parent: You’re on your own now,” said Charles “Chaz” Allen, who was mayor of Newton then and remained so until last month.
A month later, though, Arizona-based TPI Composites announced plans to build a wind-blade manufacturing plant in a still-reeling Newton. It committed to adding up to 500 jobs, which it has since exceeded.
In 2008, Trinity Structural Towers of Texas announced it would retrofit 300,000 square feet of the Maytag plant to produce its windmill towers. It opened in 2009 and hired 140 people.
Today, the companies, along with REG Newton, which has built a biodiesel production plant in the city, provide close to 1,000 jobs.
Helms, a retired farmer and agricultural business worker, gets animated as he talks about the industry at Midtown Cafe.
“I wish I were 20 years younger, because I’d be hopping on this wind-energy thing, because I think it’s the future,” he said.
An Obama voter in 2008, Helms was coy about saying he would do so again, but then he proceeded to make clear he favors the president over Romney this time around.
“I think it’s going to take another four years,” he said. “I don’t think Congress — both parties — has met expectations. I think that’s bogged him down. He’s tried lots of things. They’ve held him back.”
Palmer and his daily group agree that any jobs are better than no jobs, but they see the wind-energy tax credit as a crutch and emblematic of Obama’s failure to resurrect the national economy as promised four years ago.
“It’s been a four-year fiasco,” said Palmer, general manager of Newton’s water utility. “I don’t trust the man. I think he says things so he can hear himself talk, and I don’t know if there’s any substance behind what he says.”
Gary Kaput, a retired Maytag executive, said he is happy to see the tower manufacturer bringing life to his former workplace, but he thinks the wind-energy industry is too tenuous to make him confident about the long-term strength of the local economy.
“We’re not replacing the type of wages and benefits that we had,” the 68-year-old Kaput said.
Joni Bylo, sitting in a booth nearby, can attest to that firsthand. The 49-year-old’s husband, Tracy, worked for Maytag for 24 years before losing his job. He now works at TPI, preparing molds for the wind blades, but his pay has fallen from $25 per hour to $14.
Nonetheless, she plans to vote again for Obama because his federal health care law has allowed the family to keep their daughter on their insurance plan as she pursues her master’s degree.
“That is the best thing to come out of this administration,” said her boothmate, Eunie Meyer, who like Bylo and her husband is a former Maytag employee.
Both the conversations in Midtown Cafe and a few minutes’ worth of TV watching in Iowa make clear, though, that the state’s vote will be shaped by far more than the wind-energy debate.
Iowa has the nation’s lowest per-capita credit card debt in the country, and that financial prudence affects many opinions about the burgeoning budget deficit and national debt.
Branstad knocked Governor Chuck Culver out of office in 2010 after just one term after many Iowans felt the Democrat’s “I-Jobs” job-creation plan was too costly.
Today, Democrat Christie Vilsack, the wife of former governor and current US Agriculture Secretary Tom Vilsack, is campaigning for Congress by blaming incumbent Representative Steve King, a Republican, for voting to add to the nation’s debt.
“The national debt was $6 trillion when Congressman King took office. It’s $16 trillion now,” Vilsack said in an Oct. 9 debate.
Bylo and Meyer, the two women chatting in Midtown Cafe, also said women’s issues — and not the wind-energy tax credit — are steering them to vote for Obama rather than Romney.
Meyer, 45, said she was especially turned off Tuesday night when Romney defended his record of hiring women by noting that he received “binders” full of women’s names when he sought to fill his administration after being elected governor of Massachusetts.
“He doesn’t see women as individuals, I don’t believe” she said. “The fact that all women are generalized as ‘binders,’ it just put a bad taste in my mouth.”