Tensions erupt over jobless benefits, setting tone at State Capitol

Political tensions erupted at the State Capitol this week over what DFLers hoped would be a straightforward measure to extend unemployment benefits for laid-off Iron Range miners.

It all seemed to start harmlessly enough.

The bill was a win-win, Rep. Dave Baker, R-Willmar, assured legislators: It would extend jobless benefits for Iron Range workers, but it would also give Republicans a huge win by offering a massive reduction in unemployment insurance taxes for businesses.

"Thank you, Mr. chair," said Rep. Jason Metsa, a DFLer from Virginia.

Then he unleashed.

"You just said [DFL lawmakers] don't give a [expletive] about our local businesses on the Range. … Are you freakin' kidding me? Are you kidding?"

"I don't think I said you don't give a [expletive]," Baker said. "I think what I said is, 'This also supports the small businesses as well as the workers.' "

With that, Baker and his allies in the committee approved the measure and set the stage for the political fight to come when the Legislature meets next week.

The measure would extend jobless benefits for Iron Range workers for 26 weeks while giving $272 million of the surplus in the unemployment insurance fund to businesses, cuts that many DFLers have firmly opposed.

DFL Gov. Mark Dayton unsuccessfully pushed the Republicans who control the House for a special session this winter to bail out hundreds of steel workers laid off from the mines as their unemployment benefits ran out. Now legislators are preparing to vote on extending the compensation as soon as the session begins Tuesday — if they can work out this new wrinkle with Republicans.

The state's top DFLers have already signaled they won't support the measure in its current form, with Dayton saying that linking the two measures is disgraceful and Senate Majority Leader Tom Bakk, DFL-Cook, slamming the proposal as a "poison pill," a term for a provision designed to sink a measure.

Bill McCarthy, president of the Minnesota AFL-CIO, told the committee that the issues should be addressed separately.

"Workers are struggling and need your help immediately," McCarthy said. "Holding hostage extended unemployment benefits for workers on the Iron Range in exchange for huge tax giveaways for businesses and putting the future solvency of the [unemployment benefits] trust fund at risk is unconscionable."

Minnesota Chamber of Commerce lobbyist Cam Winton testified in support of the measure, saying it provided needed reforms to an unemployment insurance system carrying a surplus of $1.6 billion. The jobless rate is low and the cost of unemployment insurance is too high, Winton said. He noted that the improvement in the state's job market already prompted a reduction in unemployment taxes under Dayton.

Repubicans, too, pointed to the earlier unemployment tax cut that DFLers championed. The governor announced in 2013 that his budget would reduce unemployment insurance taxes by $346.5 million over two years, giving employers more to invest in their businesses.

But Metsa questioned Winton on just how much support the measure had in the business community, saying local chambers of commerce from northeastern Minnesota had opposed linking the unemployment insurance changes to the extension of jobless benefits.

"What you're telling my local chambers, my local businesses, is that it's OK to continue having a political football to kick around, so I want you to take that back to the Minnesota chamber and properly state for the record here today … that [Iron Range legislators] don't matter," said Metsa, whose voice shook with emotion during the hearing.

DFLers said they worry about depleting the trust fund in case the state faces an economic slowdown. Proponents noted, however, that state law requires an increase in unemployment taxes on businesses if the balance drops too low.

Asking for the benefit extension "is not an easy thing for us proud Iron Rangers to do," Cliff Tobey, president of United Steelworkers Local 2660, told legislators.

"I am here today to urge you to help … without playing politics."

The steelworker next to him said, "I worked 42 years in that mine."

He shook his head, leaned back and said no more.

But the session faces the added weight of this being an election year in which the DFL and GOP will fight for control of the House and the Senate.

Rep. Erik Simonson, DFL-Duluth, suggested after the hearing that the two items were tied together for political reasons. He voted to pass the measure reluctantly, saying it was more important to extend benefits for families out of work.

"Some days," he said, "you've got to take the bad with the good."

Maya Rao • 612-673-4210