MN GOP response to Gov Dayton’s statement on the shutdown

“What are you Republicans thinking?” Read below. This explains it.

After the June 30 deadline, Gov. Mark Dayton provided a statement on the shutdown of MN’s state government. It is reprinted below, paragraph by paragraph (boldface type). Following each section of the governor’s remarks is the Republican Party of Minnesota response.

I deeply regret that the last week of intense negotiations between the Republican legislative leaders and Senator Bakk, Representative Thissen, and myself have failed to bridge the divide between us.

Unfortunately, Gov. Dayton’s regret did not extend to calling a special session to pass a temporary funding bill thus avoiding a government shutdown, which for political reasons Gov. Dayton insists be as painful as possible. Although he has said he views “virtually all government services as essential,” Gov. Dayton proposed a narrower definition of “essential services” than DFL Attorney General Lori Swanson. DFL legislators like Bakk and Thissen remained silent, neither supporting their governor nor supporting their constituents and AG Swanson. Gov. Dayton is the only one who can call a special session to pass a temporary funding bill and fund any government services.

Our major difference remains the same. It is the difference between my balanced approach of significant spending cuts combined with income tax increases only on the very wealthiest Minnesotans, versus the Republicans’ “all-cuts” budget.

First, Gov. Dayton’s “balanced approach” is simply expanding government less than he would like and calling it “compromise.” The fundamental fact is, raising taxes and increasing spending (but less than he’d like) is not balance. It is the same old compromise to the left, expand government/increase spending approach that has created the unsustainable government growth that is the problem. Second, at $34 billion, $4 billion dollars more than the 2008-2010 budget, the Republican balanced budget simply cannot be “all-cuts.” To call it so is disingenuous rhetoric. If Gov. Dayton disagrees with its priorities, that is his right, but he does not have a right to portray the Republican budget as something it is not.

In recent days, I proposed to reduce state spending by an additional $1.6 billion. It brought my total amount of spending cuts to over $1.9 billion. Those cuts reduced my proposed budget to $35.7 billion, slightly lower than the $35.8 billion I offered as a half-way compromise six weeks ago.

Gov. Dayton’s compromise for the sake of compromise approach, his assumption that meeting in the middle is necessarily good for Minnesota, presents him with some interesting ethical problems. If he really considers virtually all government services “essential,” then every time he “compromises,” he is throwing some group of his constituents under the bus. Thus far, he has not defined his spending “cuts,” so there is no way to tell just who Gov. Dayton is cutting off “essential” services. Nonetheless he must cut someone; he must break a promise to someone; he must desert someone. If he truly believes what he says about essential services, how does he ethically justify his “compromises” – or is it possible his real objective is simply growing government where he can, irrespective of the negative impacts on people he claims to care about? (By the way – where are the DFL legislators when Gov. Dayton throws their people under the bus?)

Republicans have offered only to forego their $200 million tax cut and add that amount of spending. While welcomed, $200 million is only a small step toward resolving a $5 billion deficit.

Republicans have already compromised $4 billion in state spending when their budget proposal is compared to state spending in 2008-2010 (less federal stimulus and school shift dollars). They have also offered to compromise and have made proposals that shift funds to Gov. Dayton’s highest priorities – when he has defined them.

Unfortunately, despite many hours of intense negotiations, the Republican legislative caucuses remain adamantly opposed to any additional tax revenue. Therefore, a $1.4 billion gap remains between our last respective offers.

The Republican loyalty to principle truly befuddles Gov. Dayton and the DFL who are used to wheeling and dealing political negotiations where decisions are made and deals are cut for political gain. They do not understand the new batch of Republican freshman that actually believe in the principles they espouse and are not willing (unlike the governor) to compromise on a deal they believe is bad for Minnesota.

For the past six months, I have proposed that remaining gap be resolved by raising taxes on only the wealthiest 2% of all Minnesotans. Republicans have adamantly opposed it. Today, Representative Thissen, Senator Bakk, and I made two proposals which contained revenues to be raised by increasing taxes only on people who make more than $1 million per year. The Department of Revenue reports that there are only 7,700 of them, less than 0.3% of all Minnesota tax filers.

Where in the state or federal constitutions is it written that one can discriminate against a class of people if there are only a few of them? That is essentially what Gov. Dayton and the DFL are proposing. Aside from the morality of the issue, it is extremely risky to tie so much of the state budget to such a small proportion of the states population. As we learned in the recent recession, the income of the wealthy (in other words the tax base) takes severe hits as their invest income declines. That’s bad risk management at best.

The Republicans rejected those two proposals, as they have every proposal that involves raising tax revenues from any source whatsoever. Instead, they would prefer to protect the richest handful of Minnesotans at the expense of everyone else, even at the expense of a state government shutdown. As one Republican legislator told a member of my staff, “We’re friends with some of those guys.”

Fortunately, Republicans understand compassion better than Gov. Dayton understands economics. The state budget is not just an accounting problem where over spending is balanced with overtaxing the wealthy or anyone else. It is the economic problem of how to best use scarce resources that have other uses. Government cannot provide any service to anyone until it first takes resources from the private sector – from someone who could produce additional wealth with those resources. As government removes resources from the private sector, the less potential exists for economic growth and job creation. The less potential for wealth production, which makes compassion possible.

Instead of taxing their friends, they would prefer very damaging cuts to health care, K-12 and higher education, state and local public safety, mass transit, and other essential services.

What Gov. Dayton consistently ignores is that the balanced budget Republicans sent to the governor, which he vetoed, contained significant reforms that provided low-income individuals with the opportunity to take advantage of the same marketplace opportunities as other Minnesotans. Republicans were (are) willing to discuss priorities with the governor, funding essential services, but Gov. Dayton will not set priorities and when e3verything is a priority, then nothing is a priority and creating a budget is difficult if not impossible.

The “billion dollar revenue increase” they now claim to have offered consisted principally of two big loans. The first was from our schools; borrowing $700 million by delaying school aid payments. The second was borrowing from future tobacco settlement payments. This does not add revenue, it adds debt. And it’s what got us into this budget mess in the first place.

Gov. Dayton can criticize these proposals if he wishes, but only with the understanding that they are consequences of his refusal to set priorities. Gov. Dayton has stated that he considers “virtually every government services ‘essential.’ As Speaker Zeller has said, “When everything is a priority, nothing is a priority.” Failing to set priorities, failure to specify spending cuts, leaves the state with two options: Take responsibility for its spending by borrowing or tax resources out of the private sector that produces the wealth that funds government in the first place. As the Pioneer Press editorial board noted, it would be much easier to get behind Gov. Dayton’s “soak the rich” agenda if it worked, but it doesn’t. “What’s the plan?” asked the Pioneer Press. “Tax the rich, then tax the rich again, then tax the rich again?” Gov. Dayton’s refusal to set priorities is the problem, not good faith attempts by Republicans to work in the dark.

It is significant that this shutdown will begin on the 4th of July weekend. On that date, we celebrate our independence. It also reminds us that there are causes and principles worth struggling for – worth even suffering temporary hardships to achieve.

Our American Revolution was very much about fair and just taxes, where the middle-class was over-taxed while the very rich went tax-free. In the absence of fair taxes, the basic services people relied upon for their health and well-being were denied them.

Aside from the self-serving interpretation of colonial America as a welfare state, the salvageable point Gov. Dayton makes is that there are causes and principles worth struggling for – worth even suffering temporary hardships to achieve. The fundamental principles upon which American was founded are the primacy of individual sovereignty, the sanctity of private property and the preservation of the rule of law. The cause and principles Gov. Dayton struggles for substitutes the collective good for individual sovereignty, the needs of government for private property and the arbitrary creation of laws for the preservation of the rule of law. To achieve his goal, he is willing to impose suffering on others, ironically specifically the people he claims to care about most; he is not willing to endure the consequences of his shutdown – he’d rather have a mediator step in and do the hard job of negotiating. Gov. Dayton’s idea of leadership is sitting on the hilltop while the battle rages and when the smoke clears ride out of the hills and shoot the wounded.

I cannot accept a Minnesota where people with disabilities lose part of the time they are cared for by personal care attendants, so that millionaires do not have to pay one dollar more in taxes.

I cannot accept a Minnesota where young people cannot afford the rising tuitions at the University of Minnesota or a MnSCU campus, so that millionaires do not have to pay one dollar more in taxes.

I cannot accept a Minnesota where elderly widows are denied the at-home services that permit them to remain healthy and able to live in their own homes, or a Minnesota where local governments have to further slash their firefighters and police forces, or a Minnesota where special education is being cut, so that millionaires do not have to pay one dollar more in taxes.

Gov. Dayton’s secular beatitudes set up a false dichotomy. He might equally have said, “I cannot accept a Minnesota where people who can afford over $100 to take a family of four to the Twins game travel on subsidized light rail.” Or he might have said, “I cannot accept a Minnesota where people with hundreds of dollars of gear ski and play golf at a subsidized state facility, Giant’s Ridge. He might have said, “I cannot accept a Minnesota where the government denies students from low-income families the opportunity to escape failing public schools.” He could have said any of those things with more validity. Be he chose not to; instead he set up a binary that does not exist.

Gov. Dayton’s litany of horribles reflects his principles as noted above: It puts the collective good (as Gov. Dayton defines it) above the sovereignty of the individuals who produced wealth; it puts the need of government for revenue above the sanctity of the private property of the people who created the wealth; and it would use the law to destroy the rule of law, which is intended to protect individual rights and private property.

That is not Minnesota. That is not why the people of Minnesota elected me their Governor: so that millionaires could continue to avoid paying their fair share of taxes for the benefit of everyone else in our state. Some of them are my friends, too. However, unlike the Republican Legislature, I believe in putting the people of Minnesota first.

What Minnesota is Gov. Dayton referring to? Outside of Minneapolis and St. Paul, Tom Emmer led Gov. Dayton by 6 percent of the vote. Look at a county-by-county voter map of the 2010 election and with the exception of the Twin Cities and the Arrowhead region of the state, it is virtually all red. It is the Democrat-controlled cities, where Gov. Dayton won by huge margins, that elected him governor of Minnesota. Write that off as poor-campaigning if you will, but it is no coincidence that those most dependent on government would vote overwhelmingly for the candidate who promised the more at the expense of others.

The real irony of Gov. Dayton’s statement, however, is the notion that “unlike the Republican Legislature, [he believes] in putting the people of Minnesota first.” Aside from implying that the wealthy are not “people of Minnesota” (a telling implication), Gov. Dayton’s policies actually hurt most the people he claims most to care about. Taxing resources out of the private economy, irrespective of who is taxed, are resources unavailable to the private sector to produce the wealth that creates jobs enabling people to be self-sufficient and which makes compassion possible. What Gov. Dayton really means, consistent with his principles, is he believes in setting some people above others, enabling some people to live off others, creating not one, but two Minnesotas, the next paragraph notwithstanding.

We are One Minnesota. Our state’s greatness has been forged by generations of people who also worked hard for their money, yet willingly paid their fair share of taxes so that our entire state could prosper. It was once called “the Minnesota Miracle.”

It wasn’t a “miracle,” however. They earned it. They spent to achieve it by building excellent schools, colleges, and universities; good roads, highways, and public transit; and an exceptional quality of life helped by collaborations between the private and public sectors throughout Minnesota.

Whether Gov. Dayton’s sense of history or knowledge of economics is more deficient is a difficult call. In the governor’s view of history our ancestors crossed oceans, traversed mountains and forded rivers until they reached the prairies of Minnesota and exclaimed, “Someday we’ll build a light rail line here.” Gov. Dayton has it backwards. It is private sector wealth that produces demand for things like schools and universities and better transportation. Without demand, there is no “need.”

The problem today is that the scope of government, the collectivist vision of the role of government, has become unsustainable and inefficient in the age of globalization. Where a little government proved beneficial, a lot of government has created problems. The philosophy of the “Minnesota Miracle” makes as much sense for Minnesota today as a dial-up Internet connection for your new computer – it still works, but not very well.

What has not changed is that wealth production drives demand. As population grows, government will grow – in size, but it should not expand its scope. Ultimately that is the problem that makes the state budget unsustainable. There is more than enough money collected by modest taxation to provide what government ought to do; the will never be enough to provide what Gov. Dayton feels government can provide.

Now, all of that is at risk. All of it is being underfunded while, at the same time, middle-income Minnesotans are being over-taxed. Will the Republicans insist that inequality continue, so that millionaires do not have to pay one dollar more in taxes?

So far they have. It will take the people of Minnesota to persuade them otherwise.

Indeed, Minnesota is at risk, but it is not because of underfunding of government. Gov. Dayton states that middle-income Minnesotans are being over-taxed; how does raise taxes on someone else and increasing spending at the same time lower taxes on those over-taxed middle-income Minnesotans? How does raising taxes on high wage-earners necessarily lead to growth and prosperity? How does raising taxes but failing to specify fundamental reforms improve dysfunctional government programs failing low-income Minnesotans they are intended to serve?

It is not Republicans promoting inequality. The balanced budget Republicans sent to Gov. Dayton, which he vetoed, contained funding that provide low-income Minnesotan the opportunity to escape failing public schools just like more well-to-do families can. The health care bill sent to the Governor, which he vetoed, enabled low-income Minnesotans the means and opportunity to take advantage of the same private health insurance market used by other Minnesotans. Equality is always illusive in a free society, but it is only a society free of government manipulation that equality is conceivable.

I will continue—tonight, tomorrow, and however long it takes—to find a fair and balanced compromise. I welcome Republicans to join with me – my door is always open. I believe the people of Minnesota are with me. I ask them to join me in standing up for our State’s future.

In his conclusion, Gov. Dayton is consistent in his focus on systems rather than actual people. His goal is a “fair and balanced” compromise; however, compromise for the sake of compromise is not always the best solution to a problem. Cutting the baby in half is a “fair and balanced compromise,” but not a good deal for the baby. Dividing Minnesota along class lines might be a “fair and balanced compromise,” but not a good deal for Minnesota. Republicans are after the best deal for Minnesotans, for it is only by focusing on people, not systems, that we can ensure the future of Minnesota.


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