Capitol View for January 29

Good morning. Non-stop news in Washington can be hard to keep tabs on.

The overnight news – it always comes when we’re sleeping – that a funding freeze was in play created confusion, consternation and contention. Groups and people whose work or well-being depends on federally financed programs, loans or grants wondered if theirs was on the chopping block. Minnesota officials were among those to initiate immediate lawsuits. A federal judge paused the funding pause until next week. Minnesota leaders say they will take stock of how much of the $20 billion or so received annually could be at risk. Even if the cuts never come to pass, state lawmakers will probably have to keep the possibility in mind as they craft a budget. If Trump is blocked in the courts, it would be difficult to see a closely divided Congress going to the extent he proposed. Many Republican lawmakers would be nervous about feeling voter heat in 2026 while Trump won’t be on a ballot again. Any congressionally approved spending cuts are likely to be more surgical in nature. Dana Ferguson and Clay Masters recap the Minnesota reaction here.

Tim and Tom are feuding again. When Gov. Tim Walz was on the Democratic ticket, Republican Rep. Tom Emmer was one of his fiercest critics. He even played Walz during vice presidential debate preparation with JD Vance. Emmer, who as House majority whip is one of the top-ranking Republicans in Congress, has aligned himself closely with President Donald Trump. When the Trump funding freeze plan went public, Emmer defended it in a Politico interview as a sign Trump is following through on his promise to “shake up the status quo.” Walz criticized Emmer as having misplaced priorities for not being “more concerned about helping Minnesotans than flying on Air Force One next to the president.” Emmer lashed back at Walz, saying he “lies like he breathes. It sounds like he’s just bitter he’s not the one in the White House.”

Democrats will be back in the Senate majority. Doron Clark easily won a Senate special election in District 60 last night, a deep-blue Minneapolis area and a seat that came open after the death of Sen. Kari Dziedzic. Clark beat Republican Abigail Wolters with 90 percent of the vote. Now the question is when he’ll be sworn in. When that happens, it will restore a one-vote edge for Democrats in the Senate and likely spell the end of a power-sharing deal between the caucuses when the chamber was divided 33 to 33 for the opening weeks of session. The results are due to be canvassed in Hennepin County on Wednesday, which could be quick enough to allow the swearing-in soon. By law, there must be seven days between the final canvass and issuance of the election certificate. The Senate is next in session on Thursday. Clark is the 1,411th person to carry the title of Minnesota senator since statehood in 1858.

You are about to enter another dimension, a dimension not only of sight and sound, but of mind: it’s called the Minnesota House of Representatives. Over the last few weeks it’s been in action – even if most of the work lawmakers did hasn’t felt completely real. There's even a disclaimer on the House site that you didn’t actually see what you saw. The video is gone, too. Duluth correspondent Dan Kraker made a visit to St. Paul this week and has this outsider’s take on how folks at the Capitol are experiencing this Twilight Zone sort of moment.

Talks about a power-sharing deal that could kickstart the Minnesota House are ongoing but the jury’s out on when they’ll yield an agreement. DFL Leader Melissa Hortman said they’d made progress toward a power-sharing deal during negotiations yesterday. But not quickly enough to bring Democrats back to the House floor for the latest attempt to bring the chamber to order. It was another gavel in, gavel out with just Republicans there to put up votes to organize. GOP leaders said they needed to see Democrats return to the Capitol to move forward.“This is the third week of Democrats not showing up, and so they need to show up first. From there, if they return to a tie, we are happy to have those conversations,” said GOP Leader Lisa Demuth. She disputed Hortman’s comments about negotiations getting closer to a deal. “So there's been no movements. There's been a lot of conversation, but you don't keep offering the same thing and expect that to look like a new deal,” Demuth said. Hortman said the private talks would continue. “Failure is not an option, so we’ll keep meeting,” Hortman said.

Republicans and DFLers overseeing education policy and school finance are quietly setting priorities for when the Capitol power stalemate breaks. Expect Republicans to try and wind back some stuff passed when the DFL had complete control, including the state's paid leave law and another making hourly school workers eligible for summer jobless benefits . With Walz as governor, though, changes are unlikely. Budgets will be tight this session so there likely won't be much to work with for school funding beyond an inflationary increase. Looking for unity? GOP and DFL members both back the 2023 Read Act, which seeks to overhaul reading instruction. Schools are starting to implement the law now and some legislative fine-tuning might be needed. The wild card this session? The feds. Roughly 11 percent of Minnesota education funding comes from D.C. Any cuts would create huge headaches for school leaders and lawmakers, regardless of party.

The sales tax plan from Gov. Tim Walz got its first committee workover yesterday, with a focus on the amount it pulls in versus what it cuts. Walz wants to slightly reduce the state sales tax rate – from 6.5 percent now to 6.425 percent – but apply it to more services, such as accounting, brokerage and legal work. Revenue Commissioner Paul Marquart told the Senate Taxes Committee that most people would see savings. “Many, many residents will see a tax cut under the sales tax rate cut. The average family will see a sales tax rate cut -- nothing else -- of about $37.” Republican Sen. Drazkowski says the expansion part makes that pitch misleading. “We're going to take two dollars out of your front pocket and we're going to put one dollar in your back pocket and you're going to be better off for it,” he said. Marquart acknowledged the proposal brings in more tax dollars than would be cut – by about $100 million. The governor's budget plan is in the early stages of legislative review.