The state government of Minnesota has been shut down for over a week now, and it appears that negotiations remain utterly inert. The state faces a $5 billion deficit and lawmakers are faced with the challenge of plugging the hole in the financial ship of state.
The question is, will the state be pulled out of the red through spending cuts, revenue increases, or a combination of the two?
If Minnesota Republicans have their way, the solution will be constituted of drastic spending cuts, with absolutely no room for revenue increases. This, of course, is to be expected; the GOP prides itself on its hard-line stance against raising any form of tax for any reason whatsoever.
On the other hand, Democratic governor Mark Dayton proposed something a little more balanced. While plenty on the left would prefer to decrease deficits mostly through revenue increases, Dayton has made a bid for compromise in the hopes of reaching a middle ground with the GOP.
His proposal still relies on spending cuts for the majority of the reduction, but he also calls for a revenue increase of $1.4 billion. According to the Associated Press, this would come from “either a temporary income tax increase on top earners or higher cigarette taxes.”
A nongovernmental, bipartisan commission has also weighed in on the budget battle, according to The Minneapolis Star Tribune, calling for a $3.6 billion spending cut and a revenue increase of $1.4 billion. While Dayton disagrees with the commission’s recommendation of a four percent income tax hike on all citizens, his intent is clear: Democrats are willing to have spending cuts make up the bulk of the deficit reduction package.
This is clearly a move towards compromise with the Republicans. Since the GOP controls the state legislature and a Democrat holds the governor’s seat, compromise seems like the only way to break the stalemate.
As disappointing as ever, Minnesota Republicans are holding firm in their insistence that the deficit be completely reduced by spending cuts. Meanwhile, as GOP lawmakers are throwing a tantrum, demanding that they get exactly what they want, the state suffers.
Again, The Minneapolis Star Tribune reported, “the state was forced to lay off 22,000 workers, close state parks and halt hundreds of road projects.”
On top of that, the state’s credit was recently downgraded to an AA-plus explicitly because of the budget gridlock.
Minnesota Republicans may think of themselves as principled warriors fighting for, well, whomever they think benefits from their antics. In reality, the state suffers for their bullheadedness.
GOP legislators in national government are showing the same fiscal recklessness, demonstrating the party’s flawlessly streamlined message. Caught in deficit reduction talks, House Republicans demand a package that solely consists of spending cuts.
As The Economist points out, this is ludicrous. Democrats have offered spending cuts of at least $2 trillion, and are merely asking for some of the package to consist of a revenue increase, coming in the form of loophole elimination.
The Republican Party likes to play the party of fiscal responsibility on television, but they show an utter unwillingness to compromise in order to achieve real progress on budgetary matters. What’s worse, its tomfoolery keeps Minnesota mired in a government shutdown and the nation trembling under the specter of a debt default.
It’s time for the GOP to start getting serious about fiscal issues. When The Economist (of all magazines) calls your stance “economically illiterate and disgracefully cynical,” it might be time to reconsider.
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