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Iowa House and Senate Republicans approve unemployment cuts

state representatives speak in the Iowa House of Representatives
Madeleine King
Rep. Michael Bousselot, R-Ankeny, managed a bill's passage in the Iowa House that would cut the maximum duration of unemployment benefits.

Republicans in the Iowa House and Senate passed bills Wednesday that would cut the maximum time Iowans can receive unemployment benefits from 26 weeks to 16 weeks and require claimants to accept a lower-paying job more quickly.

But the Senate version would add a one-week waiting period for claimants to start receiving benefits, while the House version does not include a waiting period.

Rep. Michael Bousselot, R-Ankeny, led the bill’s passage in the House. He said it’ll shift the state’s unemployment system to focus on re-employment.

“It’s about filling key jobs that are open. It’s about ensuring that a vital benefit for unemployed Iowans stays available for unemployed Iowans,” Bousselot said. “As amended, this would give a modern mission to Iowa Workforce Development and our unemployment system, focusing on re-employment, on new skills and new abilities so our workers can fill the modern jobs of today and tomorrow.”

Rep. Chris Hall, D-Sioux City, criticized his comments.

“In my opinion, that is the most polite and soft way that you can tell the public they’re about to get screwed,” Hall said. “Is the solvency of the unemployment trust fund at risk? No. And nobody’s buying the governor’s rationale that garbage policy like this will have a positive economic impact. It’s not going to address the workforce shortage.”

Unemployment cuts are one of Gov. Kim Reynolds’ top priorities for the legislative session. But the proposal can’t reach her desk until Republicans agree on a final bill.

At a news conference last week, Reynolds said it’s important to get something done regarding unemployment as a way to address the workforce shortage.

“When we have more jobs available than we have people on unemployment, we need to take a look at a system that was put in place during a much, much different time in our history,” Reynolds said, adding that the current six months maximum duration for benefits is “too long.”

The proposal would require Iowans receiving unemployment benefits to take a job that pays 60 percent of their previous wages if the job offer comes after the eighth week of unemployment. Current law requires people to take a job paying at least 65 percent of their previous wages after the eighteenth week of receiving unemployment benefits.

It would cut the maximum duration of unemployment benefits from 39 weeks to 26 weeks for Iowans whose employer went out of business. And it would change the definition of misconduct that can prevent people from receiving unemployment benefits.

During more than 4 hours of debate in the House Wednesday, Democrats offered amendments to instead raise Iowa’s minimum wage to $15, restore collective bargaining rights, prohibit asking about criminal history on a job application, and invest in affordable housing. Republicans rejected those amendments.

The bills passed Wednesday also did not include parts of Reynolds’ original billthat would have limited noneconomic damages awarded in medical malpractice and trucking accident lawsuits. A separate bill dealing with the trucking accident lawsuits and COVID-19 vaccine mandates failed in a House procedural vote last week.

The unemployment bill passed the House 58 to 37, with two Republicans joining all Democrats present in voting against the bill.

In the Senate the bill passed 30 to 20, with two Republicans joining all Democrats present in voting against the bill.

Sen. Jason Schultz, R-Schleswig, said about 10 percent of pandemic unemployment paymentswere fraudulent.

“I would ask, at what point is there enough fraud and at what point can we not step in and seek to limit that fraud to the smallest amount possible? The one-week waiting period would do that,” Schultz said.

Sen. Nate Boulton, D-Des Moines, said some states that have a one-week waiting period have higher fraud rates.

“There’s a lot of distance between the two dots you’re trying to connect here,” Boulton said. “But there is a direct impact on working families here. That missing week of benefits is immediately hurtful and impactful.”

Katarina Sostaric is IPR's State Government Reporter