Fiscal cliff divides Minnesota lawmakers

Negotiations continue to move slowly between the Obama administration and Congressional Republicans as they try to avert a series of automatic tax hikes and budget cuts that take place at the beginning of next year.

None of Minnesota's delegation sits at the negotiating table over the "fiscal cliff." But they will have to vote on whatever agreement is made, if a deal happens.

Numerous issues unite and divide the 10 members of Minnesota's delegation. But when it comes to the big issues, such as whether middle class taxes should go up or whether $109 billion worth of budget cuts should kick in next year, both parties agree neither should happen.

Minneapolis Democrat Keith Ellison is particularly worried about the effect of spending cuts on jobs.

"I want to make sure that we do not inflict austerity on this economy because I think that will lead to layoffs. I think that will worsen the economy," Ellison said.

Both parties agree that tax rates should stay where they are for those making less than $250,000 a year but are divided on what should happen to those making more. President Barack Obama and most Democrats want to raise taxes on the wealthiest taxpayers back to the rates that existed during the presidency of Bill Clinton in the 1990s.

But raising those top tax brackets could lead to a financial calamity, warns Republican Rep. John Kline, who represents the southern Twin Cities suburbs.

"It does make a difference because there's a lot of empirical evidence that raising rates will have an immediate impact on the growth of the economy," Kline said.

Many economists do not agree with that conclusion. First District Democrat Tim Walz said the rates have been low since Republicans cut them under President George W. Bush in the early 2000s and there is little to suggest that tax rates have such a direct impact on the economy.

"If lowering those tax rates on the top 2 percent had created a boom in economic and job growth then we would be supportive of it, but there's absolutely no evidence that that happened," Walz said.

While many Republicans now say they are open to raising tax revenues — but not rates — Rep. Chip Cravaack is not among them. He said just because he was defeated on Election Day does not mean he is backing down on his small government principles before his term ends on Jan. 3.

"The President keeps on pushing us to revenues, where are the spending cuts? And until we have any spending cuts, I'm not willing to talk about revenue," Cravaack said.

To get the support of most of the 240 Republicans who currently serve in the House, any agreement will likely have to cut spending, especially on entitlement programs, including Social Security and Medicare.

Republicans say they are not satisfied with an offer put forward by the White House to make up to $400 billion in cuts to those programs over the next decade, although they have offered no specific proposals of their own.

Ellison on Thursday said that any agreement that touches Social Security or the other entitlements won't get the support of liberal Democrats.

Even one of the most fiscally-conservative Democrats in the House, Seventh District Rep. Collin Peterson, agrees with Ellison that Social Security is should be off the negotiating table.

"Social Security is not the problem, it's not causing the deficit," he said.

He was one of 60 members who signed a letter asking President Obama and House Speaker John Boehner to "go big and widen the scope of the deficit talks."

Peterson is also the longest-serving member of Minnesota's delegation, having been in office since 1991. Last year he accurately predicted that the so-called congressional super committee would fail to come up with a deficit reduction plan and is worried negotiations could once again end deadlocked.

Perhaps the biggest optimist in the delegation is Sen. Amy Klobuchar. The Democrat was re-elected earlier this month and said despite the partisan bickering, there actually is progress.

"There are going to be days where it feels like people are on complete opposite ends," Klobuchar said. "If you really look at the movement, think about the change from six months ago, no Republicans were talking about revenue then and now they are."

The clock is ticking down and both sides are still waiting to see who will blink first.

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