Lessons from the Minnesota Shutdown for the Federal Budget Impasse

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July 15, 2011; Source: Christian Post | The Minnesota state government shutdown is (maybe, possibly) over after  an agreement was reached late last week between Democrats in the state Legislature and Democratic Governor Mark Dayton on one side and Republicans in the Legislature on the other. They all hope to convene early this week to make the deal formal, but the Legislature had to finish work on 10 component bills by the close of business Friday, and it didn’t happen. Nonetheless, despite grumbling on both sides about how much they gave away, most observers seem to expect the deal to go through.  

Is Minnesota a harbinger of what might happen at the federal level as the August deadline for raising the debt limit approaches?  Was the Minnesota shutdown something akin to a play-within-a-play so that the nation could see how voters, legislators, and governors navigated their way through the impasse?  A few themes might be discernable:

  • Kicking the can down the road:  By most accounts, Minnesota’s policy makers sidestepped the big budget issues, so that the conflicts behind this year’s shutdown may well reappear with more vehemence in future budgets. That sounds vaguely like the federal budget solutions of recent years.
  • Budget gimmicks and one-time fixes: Representing the Democratic side of the ledger, state senator Roger Reinert from Duluth is aggrieved that the deal is predicated on gimmicks such as a “tobacco bond” (borrowing against future payments from the state’s tobacco lawsuit settlement) and increasing the amount of money the state is withholding from K-12 education (currently about one-third, slated in the deal to reach 40 percent).
  • Republican opposition to any revenue increases: It was like Eric Cantor was teleported to Minnesota as Republicans in the Legislature opposed anything that smacked of raising revenues as a detestable tax, even raising alcohol or cigarette taxes. That’s way beyond protecting millionaires and billionaires from what Republicans think might be job-killing taxes.
  • Social policies embedded in budget negotiations: Contrary to their purported focus on spending and taxes, Minnesota Republicans had a number of social policies on the table as part of this stand-off: restricting abortions, ending funding for stem cell research, requiring voters to show IDs for voting, etc.  Although those demands were dropped in the final deal, they show that the Tea Partiers (who were dominant on the Republican side in Minnesota’s budget impasse) are strongly tied to ultra-conservative social, as well as fiscal, policies.

As something of a state-level pre-season exhibition game for the federal government budget-and-debt-ceiling Super Bowl, the Minnesota shutdown might give cause for alarm.—Rick Cohen