Minnesota begins to see impact of federal agency shutdown

Washington – Minnesota budget chief Myron Frans warned Friday that the state could begin to feel dire consequences if the partial federal government shutdown extends deep into the New Year.

"We're in a whole different world if this thing doesn't get resolved at the beginning of that first week of Congress," said Frans, commissioner of Minnesota Management and Budget. "You go beyond a two-week shutdown into I don't know how long, then all of a sudden … a shutdown could have a more serious economic disruption."

The state is monitoring crucial federal programs such as reimbursements to local governments hit with disasters, payments for federally backed transportation projects and money to inspect commercial vehicles for safety.

Frans noted a range of services that are cut off as budget negotiations remain deadlocked over President Donald Trump's insistence that Congress allocate an initial $5.7 billion for a border wall between the U.S. and Mexico. Home buyers in flood-prone areas and those relying on Federal Housing Assistance can't close on their loans. Residents can't consult with the Internal Revenue Service on end-of-the-year tax questions. Small businesses can't get federal loans, and the U.S. Department of Agriculture won't be open to help farmers.

Meanwhile, immigration courts and federal parks around the state remain closed.

Federal money is a significant source of revenue for all states, so there is the potential for financial aftershocks from any disruption in payments. Minnesota received nearly $9 billion in federal money in 2013, the most recent numbers available. The money goes for human services, transportation, education, housing and public safety.

Some government agencies and services were already funded, so state budget officials across the country are scrambling to measure and predict the impact of the shutdown.

"We really are in a holding pattern," Frans said. "It's frustrating."

U.S. Rep. Collin Peterson, a Democrat representing Minnesota's Seventh District, said the shutdown is already threatening farmers, particularly if federal loans are delayed or farmers can't get subsidies they've been promised to blunt the impacts of Trump's trade war with China.

"Farmers and ranchers count on USDA to deliver a range of services, many of which are now suspended during the shutdown," Peterson said. Farmers waiting for loans for new buildings or to manage cash flow "will be put in limbo."

U.S. Rep. Betty McCollum, a Minnesota Democrat who sits on the House committee that oversees funding of the government, said members of her party will immediately pass legislation to reopen the government after they take control of the House next week. Such legislation would need buy-in from the GOP-led Senate to pass Congress, though Trump remains adamant that he wants funding for the wall.

"This shutdown has proved that it is almost impossible to negotiate with this administration," said McCollum, of the Fourth District. "The end game is not wasting $5 billion on a border wall, but it may mean working to secure 65 Republican votes to join Democrats in funding the government with a bipartisan veto-proof majority and restoring a little bit of sanity to Washington."

House Republicans passed a measure earlier in December that would have kept the government open until Feb. 8 and approved $5.7 billion for the border wall.

"It's time for Democrats to compromise and bridge the political divide," said U.S. Rep.-elect Jim Hagedorn, a Republican from Minnesota's First District, on Twitter last week. "Five billion for physical border security is reasonable and important for America's security."

While flying to Washington, incoming U.S. Rep. Dean Phillips chatted with a Transportation Security Administration agent who was working without pay during the busiest time of the year. Moving into his Capitol Hill apartment, he heard from an employee of the building who was trying to pick up extra shifts because he was also a federal employee affected by the shutdown.

"It certainly casts a pall over this transition time, and it's not how any of us anticipated starting our tenure as members of Congress," said Phillips, a Democrat from Minnesota's Third District.

Lawmakers have introduced various measures to withhold pay for members of Congress during a shutdown. Democrats are also signaling they are willing to consider measures to enhance border security, but in ways that don't include building a massive wall.

"We should look for ways to enhance border security with smart technology," said incoming U.S. Rep. Angie Craig, who represents Minnesota's Second District. "There's no debate that our immigration system is broken. … If we can get to the point where we can stop making it about politics and make it about good policy, then I think we can get there."

Maya Rao • 202-662-7433