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D.C. Memo: Minnesota lawmakers at the center of GOP debt-relief bill drama

Plus: Supreme Court hears case of 94-year-old Minnesota homeowner

House Majority Whip Tom Emmer speaking during a Thursday news conference.
House Majority Whip Tom Emmer speaking during a Thursday news conference.
REUTERS/Tom Brenner

WASHINGTON – Minnesota’s GOP lawmakers played key roles this week in the successful effort by U.S. House Republicans to pass a bill to raise the debt ceiling that would cut spending and unravel some of President Biden’s major initiatives.

The bill was approved Wednesday afternoon on a 217-215 vote. Rep. George Santos, R-N.Y., who had said he was undecided on the bill, was the last Republican to cast his ballot, giving House Speaker Kevin McCarthy, R-Calif., a one-vote victory. It was also a win for Rep. Tom Emmer, R-6th District, who as McCarthy’s whip had worked hard to get all House Republicans to support the bill.

Emmer was largely successful, only four House Republicans – and all House Democrats – voted against the bill.

To tamp down a revolt by some Midwestern Republicans, the Limit, Save and Grow Act was changed to reinstate some ethanol and biofuel tax credits that would have been stripped by the bill’s effort to undo green initiatives in the Inflation Reduction Act.

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A $1 per-gallon biodiesel and renewable diesel tax credit, as well as the second-generation biofuels tax credit were reinstated. And language was removed that would have limited a tax credit for carbon sequestration. But the bill removed a credit on biodiesel fuel for aircraft, unless an airline had already entered into a contract for the fuel and it removed another biofuel tax credit that had been included in the Inflation Reduction Act.

Rep. Michelle Fischbach, R-7th District, introduced an amendment in the Rules Committee that would have spared the ethanol and biofuel tax credits, as did Rep. Angie Craig, D-2nd District. Rep. Brad Finstad, R-1st District, had also opposed an end of those tax credits.

Brian Werner, executive director of the Minnesota Biofuels Association said he had reached out to Fischbach and Finstad on the threat to the tax credits.

“We expressed our concerns to them,” he said.

The only other last-minute change to the bill, which Emmer had vowed would not be altered, was to move up the date it would impose new work requirements on Medicaid and food stamp recipients from 2025 to 2024 – an effort to placate the GOP’s right wing.

The bill is viewed as dead-on-arrival in the Senate and is considered a high-stakes effort to force Biden to negotiate spending reductions or risk a catastrophic debt default. Biden insists Congress raise the debt limit without preconditions.

The nation is expected to reach its debt limit – the total amount of money that the United States government is authorized to borrow to meet its existing legal obligations – before the end of July. The nation actually hit the debt limit in January, but the Treasury Department has used so-called extraordinary measures to keep the government from defaulting. Yet those measures can only continue for a limited time.

The GOP debt limit bill would raise the debt limit by $1.5 trillion, enough to put off default until March of next year, in exchange for cutting government spending nearly 14% over a decade.

Minnesota’s Republicans cheered approval of the bill.

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“Republicans are committed to reining in the irresponsible spending in Washington and passing legislation that truly helps Americans,” Fischbach said.

Rep. Pete Stauber, R-8th District, whose legislation to speed up mine permitting was included in the debt ceiling bill, said “the ball is now in President Biden’s court to sit down with Speaker McCarthy and deliver for the American people.”

Meanwhile, Minnesota’s Democrats were solidly behind Biden’s rejection of McCarthy’s bid.

“The U.S. cannot default on our debt – but we cannot accept House Republicans’ reckless plan either,” said Craig. “This bill risks American jobs, our nation’s credit rating, hard-earned retirement savings, health care access and our entire economy.”

Rep. Betty McCollum, D-4th District, said “threatening to default on our existing debt obligations as a bargaining chip is fiscally irresponsible.”

“This bill is a ransom note demanding deep cuts that will hurt Americans across the country and jeopardize our economic recovery – all while protecting billionaires and big corporations from paying their fair share in taxes,” McCollum said in a statement.

A 94-year-old Minnesota woman gets her day in court

The Supreme Court this week seems inclined to agree with a with a 94-year-old woman who said Hennepin County unfairly kept the equity she had in a condominium after the county sold it for back taxes.

The justices heard oral arguments in Tyler v. Hennepin County, a case brought by property rights advocates who say the state’s forfeiture law is unconstitutional.

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During the lengthy oral arguments on Wednesday, both conservative and liberal justices seemed to agree.

“Are there any limits?” Justice Elena Kagan asked. “I mean, $5,000 tax debt, $5 million house. Take the house, don’t give back the rest?”

Geraldine Tyler lived for a decade in a one-bedroom condominium in Hennepin County. But she moved out of her home in 2010, while in her 80s, to live in an apartment in a senior community. While she lived in her condo, she paid her property taxes in a timely fashion. But after she left, she stopped paying those taxes.

By 2015, Tyler’s delinquent property taxes totaled $2,311, and penalties, costs and interest added an additional $12,689, for a total property-tax debt of $15,000. Hennepin County eventually seized Tyler’s condo and sold it for $40,000, keeping all the proceeds from the sale.

Minnesota and nine other states allow the sale of property for back taxes without compensating owners for the surplus “excess equity” that sale might generate. In most states, the surplus proceeds from such sales are returned to the owner.

The Supreme Court must now decide whether these states forfeiture laws violate the “takings” clause of the U.S. Constitution.

Tyler’s case attracted a broad coalition of ideological support of Tyler. Friend of the court briefs were filed by progressive groups, including the Constitutional Accountability Center and Public Citizen, as well as conservative, property rights advocates such as the Cato institute — which file its brief in conjunction with the American Civil Liberties Union – and the U.S. Chamber of Commerce.

Even the Biden administration weighted in on Tyler’s side.