At a speech at the Humphrey Institute at the University of Minnesota on Thursday, Gov. Mark Dayton announced that he is prepared to concede to most of the demands offered by Republican legislative leadership on June 30 in order to end the 14-day government shutdown. The Republican demands included a shift of $700 million in payments to public schools and borrowing another $700 million from the state’s tobacco settlement fund. Dayton will also drop his proposal to tax the wealthiest 2 percent of Minnesotans. He excoriated Republicans for not offering any compromises during the shutdown.

The governor and Republicans are $1.4 billion apart in their budgets, and Republicans had steadfastly refused Dayton’s proposal to tax the wealthiest 2 percent of Minnesotans — Dayton’s signature campaign theme — and a subsequent proposal offered by Dayton to make up the $1.4 billion with a tax the state’s 7,700 millionaires.

Dayton offered some conditions on his concession. Dayton said he will rely on the Republicans’ public statements that they have dropped the push to include a ban on abortion and certain kinds of stem cell research, as well as the inclusion of private school vouchers. Those were included in negotiations two days before the government shutdown began and were still being pushed by interest groups as recently as Tuesday.

Dayton also said that a $500 million bonding bill would be necessary in any agreement, as well as increases of $50 per pupil in school payments to offset the education payment delays. In addition, Dayton wants $10 million to offset tuition hikes to higher education and to restore funding for the Department of Human Rights and the Trade Office.

“I want to get this done. I’m willing to take the initiative and the leadership necessary to get a resolution that is not ideal from my standpoint,” he said at the Humphrey Institute. He said his opposition to delaying payments to schools and borrowing to fix the gap are “as strong today as they were two weeks ago.”

In the letter he sent to Republican leadership, Dayton did not mince words about the fact that they hadn’t offered any compromises during the two weeks of the shutdown.

“Astonishingly, I have not received a single new proposal from you during [the two week shutdown],” he wrote.

The GOP had not responded to Dayton’s concession immediately following his speech.

Here’s Dayton’s letter:

GMD-7.14.11-Letter-to-Speaker-and-Majority-Leader

Archbishop John Nienstedt and the Minnesota Catholic Conference, the public policy wing of Minnesota’s Catholic bishops, said Tuesday that they want a resolution to the state shutdown that protects poor Minnesotans. But their request also contains a slew of controversial social issues, including vouchers for private school students and a ban on certain forms of stem-cell research. The bishops didn’t back either Gov. Mark Dayton or legislative Republicans, but did criticize cuts to the social safety net.

The bishops attacked anti-government sentiment prominent in Republican talking points.

“Ensuring the welfare of all Minnesotans is a core function of government,” said Jason Adkins, MCC’s executive director, said in a statement. “Although controlling spending and putting the state on sound fiscal footing are important goals, those with limited means should not be shouldering that responsibility, especially as politicians continue to load budgets with tax loopholes, subsidies, and spending projects that serve narrow special interests.”

Rev. John M. LeVoir, Bishop of New Ulm, added that private charities such as Catholic Charities depend on partnerships with government in order to help those in need of assistance.

“The Church, of course, has a fundamental imperative from her Lord to feed the hungry, clothe the naked and shelter the homeless,” he said. “But the state should, when necessary, support the work of upholding the dignity of her citizens, thereby assuring the common good. In Minnesota, churches and non-profits have a long and fruitful history of collaborating with government to provide support to Minnesotans in need.”

The bishops said they oppose cuts to Minnesota’s General Assistance program and the Minnesota Family Investment Program, which provide subsidized health care and food for low income Minnesotans.

But while the bishops seem to be indicating support for Dayton’s plan, they threw a curve ball in asking that a slew of contentious social issues, opposed by Dayton and supported by Republicans, be included in any final negotiations.

The bishops are asking for a ban on taxpayer-funded abortion and a ban on certain types of stem cell research. In addition, the bishops are seeking scholarships and vouchers for private schools, programs that have been tried in other states and that have benefited the bottom line of Catholic schools.

“These policies should be a part of any final budget agreement because they promote both the sanctity of life and educational opportunity for parents and students who could not otherwise afford it,” Jason Adkins, executive director of MCC . “Protecting human life from conception to natural death, as well as supporting parental choice in education, has been and will remain priorities for Minnesota’s Catholic bishops.”

Republicans brought those issues to the bargaining table just before a lack of compromise brought the state to a shutdown.

The bishops’ request follows a move by an interfaith group of religious leaders who went to the Capitol on Tuesday to deliver a letter, signed by 235 congregation heads across the state, seeking a just solution to the budget impasse. No legislators came forward to receive their letter or gifts of bread, milk and honey — symbols of Minnesota’s abundance — in person.

Debate continued on Friday over what killed the budget talks between Gov. Mark Dayton and Republican leadership. Certainly, a no-taxes pledge by the Republican majority in the Minnesota Legislature and Dayton’s insistence that new revenues be raised by wealthy Minnesotans played a significant part, but social issues — especially abortion — seem to have played a part in the stalemate as well.

On Thursday, Republicans included several controversial issues in its budget negotiations. Rep. Larry Hosch, DFL-St. Joseph, told St. Cloud WJON, “Other issues came into the discussion, very controversial ones, such as stem cell funding, school vouchers, a request to have the redistricting map signed by the governor if he agreed to the map.”

Rep. Steve Gottwalt, R-St. Cloud, said there was nothing wrong with that. He’s also a sponsor of most of the controversial issues brought up in negotiations.

“In a negotiation it is common for you to bring things forward and say lets talk about these things, these are things that are important to our side,” he told WJON. “What is unconscionable is to look at that and say, okay that means I’m pulling everybody back and I’m walking away without doing anything.”

The effort to bring divisive social issues into the budget negotiation did not sit well with civil liberties groups. The Minnesota chapter of the ACLU released a statement Friday criticizing Republicans.

“While Minnesotans were led to believe that the crux of the debate was a fundamental disagreement over the amount the state should spend on government, it is now clear that the republican negotiators added extreme policy changes to their list of demands. The policies had varying levels of support during the recently completed legislative session, but none were signed into law,” said Chuck Samuelson, director of ACLU-MN. “To try negotiating away the constitutional rights of Minnesotans in exchange for a balance budget deal is a troubling abuse of power. At the ALCU of Minnesota we continue to have grave concerns about the constitutionality of several of the proposed provisions and will keep monitoring the legislature.”

The group praised Dayton for no caving.

“Although the result is a government shutdown, which will adversely impact many Minnesotans, we believe there is no price tag for preserving constitutional rights and thank Governor Dayton for standing strong. At the same time, our hearts go out to the thousands of Minnesotans who will be negatively impacted by the shutdown,” Samuelson said.

Dayton told reporters on Friday afternoon that budget talks aren’t likely to resume until after the holiday weekend.

During budget negotiations the week before Friday’s government shutdown, Republican leaders pressed Gov. Mark Dayton to include a ban on abortions at 20 weeks gestation, a ban on taxpayer-funded abortions and a ban on some forms of stem cell research. Even as the shutdown of Minnesota government had begun, the principal anti-abortion lobby, Minnesota Citizens Concerned for Life, continued to push its agenda.

MinnPost’s Doug Grow notes that the controversial issues were included in budget talks:

In the end, Republicans and Dayton weren’t only separated by fiscal issues. Republicans apparently were still loading bills with other goodies from their platform. In the final days of negotiations, Republicans were still insisting on legislation supporting voter ID and restrictions on abortion and stem cell research in their talks with Dayton.

After the talks had collapsed, Koch said those were matters that could have been “hammered out” with just a bit more negotiating. Fiscal issues were the key divide, she said.

The Star Tribune noted the same:

Talks may have also broken down because an earlier GOP offer asked Dayton to accept controversial policy positions the Republicans pushed for this year, including photo ID requirements at the polls and abortion restrictions. An offer sheet provided to the Star Tribune said the policy adoptions were in exchange for “new revenue in a compromise offer.”

On Thursday, as last-ditch efforts at a budget deal were being negotiated, MCCL pressed for a renewed ban on somatic cell nuclear transfer, a method used in stem cell research and a technique the group calls “human cloning.”

“The 2009 Legislature ushered through a session law provision that provided for a two-year ban on state funding of all forms of human cloning. Because this provision expires on June 30, MCCL has supported legislative efforts to either ban human cloning or to enact a statutory prohibition on taxpayer funding of human cloning,” the group said in a statement Thursday afternoon. “Both of these efforts were ultimately included in omnibus bills and vetoed by Gov. Dayton. If no language is included in the final budget agreement, Minnesota’s established pro-life policy on human cloning will end and Minnesota taxpayers can legally be forced to fund human cloning and human cloning experimentation.”

The group had been pushing the ban on some forms of stem cell research all session.

And by Friday morning, about 9 hours into the state government shutdown, MCCL was urging a ban on taxpayer-funded abortions on Twitter.

“MN taxpayers have paid $17 million for elective abortions since the MN Supreme Court forced the state to fundi abortions,” the group wrote, including a link to its legislative page on the issue.

Sen. Tom Bakk told Minnesota Public Radio on Friday morning that it was shameful that the GOP included “things like restricting a women’s right to choose, things like making it a crime for the University of Minnesota and Mayo Clinic to do stem cell research.”

“There was this huge list of things they just had to have to even borrow money,” he said of the final negotiations where the GOP wanted to shift education funding down the road and borrow from future tobacco settlement money.

He said that even former Gov. Tim Pawlenty demanded social policy be removed from budget negotiations during his tenure.

Also included were the GOP’s redistricting plan and voter ID. Here’s the GOP’s budget negotiation document obtained by the Star Tribune:
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A representative from a union that represents 13,000 state employees said Gov. Mark Dayton’s letter to public employees in the wake of a possible government shutdown was a “class act” and “exemplary.”

“It was a very class act to send notice to all state employees,” Richard Kolodziejski, the legislative affairs director for the Minnesota Association of Professional Employees (MAPE) told the Minnesota Independent. “We think it’s exemplary he’s acknowledged state employees. We’ve been fighting. We certainly don’t think anyone should be out of work. We support his proposal.”

Dayton sent the letter Wednesday, which thanked state employees for their work, saying he considers “virtually all services provided by the state to be essential.”

“I know that I speak for my entire cabinet when I say that we greatly value you and all of our state’s dedicated employees,” Dayton wrote. “We deeply appreciate your hard work and the high-quality services you provide to millions of Minnesotans.  It is precisely those Minnesotans, those services, and your ability to deliver them, for which I am negotiating.”

On Wednesday, Dayton also submitted a list of services to Ramsey County District Court, which he said his office deemed “most critical.” The list includes services from corrections and human services to the Minnesota Zoological Gardens and the Pollution Control Agency. The governor’s office identifies these areas as “priority one and two” services.

“Only minimal levels of staff and operating expenses that are necessary to continue, secure, or support these operations are requested to continue in the event of a government shutdown,” the list states. “All others are recommended to close.”

The list of services the governor has deemed critical encompasses more than 13,200 full-time equivalent state employees, but Kolodziejski said there’s no way of knowing how many of those employees are a part of MAPE.

“Our key message, what we want the citizens of the state to understand is our people want to work,” Kolodziejski said. “We don’t represent people, we don’t advocate for people to be unemployed.”

Meanwhile, on Thursday, the Associated Press reported that Dayton and GOP lawmakers were still not close to reaching a deal on the state’s budget, with Dayton turning down a Republican proposal to drop $200 million in tax cuts to work towards the governor’s plan.

House Speaker Kurt Zellers called the proposal “the biggest compromise of the negotiations,” but Dayton said shifting the money from tax cuts to spending programs wouldn’t move the GOP above a $34 billion cap for the next two years of state funding, the AP said. The $200 million in income, property and business tax cuts would shift toward spending increases in education, public safety, Local Government Aid and flood relief projects, the lawmakers said.

Republican lawmakers also said Dayton should match their proposal by dropping his request for tax increases.

Dayton called  the offer a “non-proposal” and said it’s the most disappointed he’s been after months of budget talks. He said dropping his proposed tax increase would force him to back spending cuts he finds unconscionable.

As expected, Gov. Mark Dayton vetoed all budget bills Tuesday that were submitted by the Republicans. His message to the GOP: “Compromise.” Dayton also hit Republicans for including divisive social issues in their budgets.

In the higher education bill, Dayton said he wouldn’t accept restrictions on stem cell research, a provision that was heavily debated in the Legislature. Republicans, and a few DFLers, moved to include a ban on somatic cell nuclear transfer, as well as all products from that procedure in University of Minnesota research, in the budget bill.

“The definition included in the bill is vague and could threaten further development of stem cell research,” Dayton said.

The education budget bill included a private school voucher program that would allow for taxpayer subsidies for religious schooling. Dayton called the provision “unwise.”

“I am disappointed that the bill creates a private school voucher program, an experiment that has not worked in other states,” he wrote. “Until our public schools are funded at adequate and sustainable levels, a diversion of public funds to private schools is unwise.”

The Health and Human Services bill contained health care cuts for 140,000 Minnesotans, which Dayton called “unconscionable.”

He also said the bill had become “a vehicle for divisive social issues,” such as a ban on stem cell research and a ban on the implementation of the Affordable Care Act.

In the Public Safety budget bill, Dayton criticized cuts and changes to the Department of Civil Rights.

“Discrimination remains a serious problem in Minnesota,” he wrote. “Your extreme cut in funding, along with your policy language, would weaken the Human Rights Act and lessen the effectiveness of the Department of Human Rights. This I will not allow.”

In a press statement announcing the vetoes, Dayton accused Republicans of failing to compromise.

“In the spirit of compromise, more than one week ago, I cut my proposal in half, in the hopes that an offer to meet in the middle would spur action towards the balanced solution the people of Minnesota have asked for,” said Dayton. “Instead, you chose to present me with an all-cuts approach, one that has serious consequences for Minnesotans, and that I do not believe is in line with our shared commitment to build a better Minnesota.”

He concluded, “Compromise is never easy, because each person must give up something that is important. Compromise requires us to agree to items that we don’t agree with. That is the only way we will reconcile our differences on the state’s budget. I am returning this and the other budget bills to you with the hope that you will choose to work with me, to find a fair, responsible, and balanced solution.”

Rep. Paul Ryan of Wisconsin introduced the Republican budget proposal on Tuesday, a budget that would spend $6.2 trillion less than President Obama’s budget, repeal funding for the Affordable Care Act, phase in a voucher system for Medicare, and cut $700 billion from Medicaid over the next decade. Minnesota’s political leaders were quick to respond to the proposal, with reactions falling along partisan lines.

Tim Pawlenty, a potential candidate in 2012, praised the budget:

Thanks to Paul Ryan in Congress, the American people finally have someone offering real leadership in Washington. President Obama has failed to lead and make tough choices his entire time in the White House. While the budget is going to be debated for several months to come, the more immediate issue we face is President Obama’s plans to raise the debt ceiling next month. That’s a really bad idea. With over $14 trillion debt already, we should not allow Washington’s big spenders to put us further in the hole. We must get our fiscal house in order with real spending cuts and with real structural reforms that stop the spending spree before it bankrupts our country.

In an email to supporters, Rep. John Kline called the budget “tough” and “responsible.”

Earlier today, House Budget Committee Chairman Paul Ryan (Wis.) unveiled “The Path to Prosperity: Restoring America’s Promise” – the GOP FY 2012 budget resolution. The proposal we have unveiled is a tough, responsible budget that will help America’s job creators put our nation back to work, secure America’s future by stopping Washington from spending money it doesn’t have, and preserve benefits for today’s seniors while strengthening the safety net for our children and grandchildren. This budget will restore economic certainty and put our nation back on the path to prosperity.

Rep. Michele Bachmann was a bit measured in her reaction to the budget:

“The fiscal disaster that’s been perpetuated by record levels of government spending is threatening to ruin our country. We need a way out and this plan merits our full attention. House Republicans are offering a budget resolution that is focused on job creation and debt reduction; the two key issues that the American people sent us here to address. This plan is proof that the new majority is heeding the calls of the American people to cut spending.

“The choice before us could not be clearer. President Obama’s spending plan will batter our economy and destroy jobs by adding $9.1 trillion to our national debt over the next ten years and raising taxes by $1.5 trillion. In stark contrast, the Republican plan cuts $6.2 trillion in spending from the President’s budget. The plan intends to fully repeal ObamaCare and cut spending for it. This is what I have been working towards all along.

“I look forward to reviewing this plan further. It is time to put our nation on a sustainable fiscal path.”

Rep. Keith Ellison, along with Progressive Caucus co-chair Raul Grijalva, penned an opinion piece zt Politico criticizing the budget. Here’s an excerpt:

In fact, this budget that punishes working families, while putting more of our tax dollars in the pockets of the rich, is nothing more than a Republican Roadmap to Ruin.

We know what happened during the 2000s — when Republicans failed to protect U.S. consumers, let Wall Street police itself and rigged the tax code in favor of a fortunate few. The Great Recession isn’t a coincidence — it’s cause and effect.

What do we see after years of corporate handouts at the expense of working families? Millions of Americans have lost their jobs and can’t find new ones. Millions of Americans have been kicked out of their homes. Americans who work hard every day and play by the rules can’t afford to send their kids to college.

House Republicans passed a bill on Thursday that calls for a budget bill containing $61 billion in cuts to become law if the Senate does not pass a spending plan by Wednesday. Bachmann, along with all but 15 Republicans, voted for the bill that would “deem” the budget bill into law, also known as a “self-executing rule.” One year ago, Bachmann called a similar bill “violence to the Constitution” and suggested impeachment if Democrats “deemed and passed” health care reform into law.

The move was not unanimous among Republicans. Libertarians such as Rep. Ron Paul of Texas voted against it, as did fellow Texas Rep. Louie Gohmert, who said the bill “violates my conscious and the Constitution, and I cannot vote for it.”

All of Minnesota’s Republican members of Congress voted for the self-executing rule.

On Sean Hannity’s Fox show last year, Bachmann said of the deem-and-pass strategy and former Speaker Nancy Pelosi, “That should laugh her out of the House and there should be people that are calling for impeachment off of something like this. That’s how bad this is. I mean, trust me, Dennis Hastert never could have gotten away with this.”

In fact, Bachmann took to numerous media outlets to oppose the strategy, which Democrats soon dropped in favor of an up or down vote. The measure at the time was being proposed by New York Rep. Louise Slaughter.

“They use the Slaughter rule in the House, something that hasn’t been done before,” Bachmann told NewsMax’s Ronald Kessler.

And on Fox’s Red Eye, Bachmann told the host, “It does great violence to the Constitution. We call it the ‘slaughter the House rule.’ It’s never been done before in the history of the Congress.”

Bachmann was rebuked by fact-checkers when she made the claim that deem and pass was never used before, and she quickly backtracked.

Rep. Steny Hoyer, D-Maryland, criticized Bachmann on the House floor on Thursday over the bill.

“But they pretend in their language what is clearly contrary to the Constitution. Because they say, if it doesn’t pass, the provisions of H.R. 1, the bill they’ve sent to the Senate, passed by the house on February 19, 2011, are hereby enacted into law. In other words, we’re going to deem it passed,” he said. “Michelle Bachmann, apparently may be a candidate for president said this, that deem and pass ‘ignored the constitution and warranted the impeachment of the House Speaker… there should be people that are calling for impeachment off of something like this.’”

Leaders on Capitol Hill have given indications that they are close to reaching a compromise that would prevent a shutdown of the federal government. The speculative compromise would include $33 billion in cuts, well below the $61 billion the Republicans in the House have proposed. Rep. Michele Bachmann criticized the deal saying that the Democrats want the government to shut down and that they would not compromise. Bachmann said she and the tea party would not compromise either.

The Blue Dog Democrats have been a target of negotiations with Republicans seeking to woo them to their side as a compromise takes shape.

Rep. Collin Peterson of the Blue Dogs said the talks of compromise weren’t “all that effective” in an interview with Talking Points Memo. He cited House Majority Whip Kevin McCarthy (R-CA), who Peterson said “talked down to” conservative and moderate Democrats.

And on the other side of the aisle, talks looked ready to break down on Thursday as House Speaker John Boehner balked at the $33 billion figure after pressure from tea party members. To make matters worse, Bachmann made several media appearances on behalf of the Tea Party Caucus to demand that any compromise include the defunding of health care reform, a provision that President Obama and the Democratic Senate are likely to reject.

In an interview with conservative website NewsMax, Bachmann said that Democrats want a government shutdown and would not compromise.

“That is that the Democrats’ political plan is to shut down government because they think they will benefit from doing that,” said Bachmann. “Now we know that if the government shuts down it’s not the tea party’s fault, it’s the Democrats’ fault, because they’ve made a decision they’re not interested in compromise. They just want to see the government shut down.”

“They aren’t interested in a practical solution, and I think people all across the United States are tired of political games.”

But while she criticized Democrats for allegedly being unwilling to compromise, she stated she wouldn’t budge either.

“What I’m going along with is to be able to have defunding of ‘Obamacare.’ I cannot vote for a budget bill unless it has the defunding of ‘Obamacare.’ We’re talking about well over $1 trillion over a number of years and this will break the bank in the United States.”

Bachmann repeated that at a tea party rally in Washington, D.C., on Thursday.

Here’s Bachmann speaking with CNS News:

On Wednesday, the Twin Cities Tea Party Patriots sent out an action alert demanding that House Speaker John Boehner ask for $100 billion in cuts.

Stand Up To Insure We Get Cuts. Call your Congressmen and Senators. 33 Billion is not enough. As of this writing the Drudge Report is reporting a deal between the House and Senate for 33 Billion in Cuts. What happened to the 100 Billion in cuts!!!!!!! We need to burn the phone lines in Washington. Please Call on 3/31 and Melt The Phone Lines… Call!!! Call!!! Call!!! Call!!! Melt the Lines!!!!!!!!!!!!!

Tea Party Nation founder Judson Phillips took Boehner to task for even suggesting a $33 billion cut.

Charlie Sheen is now making more sense than John Boehner. Early on, the GOP promised to cut $100 billion from the budget. The Republicans in the House quickly went squishy on that and had to be cajoled into cutting only $61 billion. Now, John Boehner is saying when the Senate comes back and they start negotiating…the $61 billion figure is not safe.

Rick Unger of Forbes quipped, “Charlie Sheen may be making more sense than Speaker Boehner, but unlike Sheen, the Speaker is clearly not winning.”

Bachmann has already started her push for adding a provision to defund health care reform to the mix. On Wednesday, she introduced a bill to defund the $105 billion she insists was “hidden” in the Affordable Care Act.

Sens. Al Franken and Amy Klobuchar are among 62 U.S. Senators — 32 Republicans and 32 Democrats — who’ve signed a letter urging President Obama to do more to reduce the federal deficit. Drafted by Democratic Sen. Michael Bennet of Colorado and Republican Mike Johanns of Nebraska, the letter left many pundits scratching their heads: If so many senators are pushing Obama to engage in deficit reduction ideas, why haven’t they done it themselves?

“Beyond FY2011 funding decisions, we urge you to engage in a broader discussion about a comprehensive deficit reduction package,” the letter states. “Specifically, we hope that the discussion will include discretionary budget cuts, entitlement changes and tax reform.”

The letter says that negotiations on budget issues will be more successful with Obama’s support.

The fact that a supermajority of senators — it takes 60 pass legislation in the Senate — are urging Obama to act on the deficit wasn’t lost on the Washington Post’s Ezra Klein:

In this letter, 64 senators manage to sound like an interest group begging the White House for support rather than a supermajority of the United States Senate — which is to say, a coalition of men and women who could, on their own, draft and pass the very legislation they’re talking about. Which raises the question: Why are they writing this letter rather than the legislation this letter claims to want?

The letter urges Obama to support the Simpson-Bowles Commission’s recommendations for tackling the budget. That commission was a bipartisan effort put together by Obama to generate ideas for reducing the deficit.

Matthew Yglesias added his own thoughts:

The first thing that’s ridiculous about this, is that if 64 Senators want to vote for the Simpson-Bowles Commission’s recommendations, then there’s nothing stopping them from voting for the Simpson-Bowles Commission’s recommendations. They don’t need support from Barack Obama to do so. If anything, Barack Obama endorsing Simpson-Bowles would make it more difficult for Republicans to endorse it.

The full letter can be viewed here:

Bennet-Johanns Letter to the President