HERE AND SAVE US FROM THIS.

♪♪ >> ERIC: HERE WITH MORE CONTEXT ON THE STATE BUDGET SITUATION, REPUBLICAN HOUSE MAJORITY LEADER HARRY NISKA, WHO HAILS FROM RAMSEY, MINNESOTA.

AND HOUSE D.F.L.

FLOOR LEADER JAMIE LONG.

HE CALLS MINNEAPOLIS HOME.

LEADER NISKA, DOES THIS FORECAST HAVE ANY IMPACT ON THE NEGOTIATIONS TO COME ON A BALANCED BUDGET THAT YOU HAVE TO DO?

>> WELL ...

IT HAS A LOT -- A HUGE IMPACT.

IT SHOULD HAVE A HUGE IMPACT ON HOW WE THINK ABOUT THE FUTURE OF TATE GOVERNMENT, HOW WE LOOK AT WHAT WE'VE DONE IN THE PAST COUPLE OF YEARS AND HOW WE NEED TO CHANGE DIRECTION.

REMEMBER, WE HAD AN $18 BILLION SURPLUS, A RECORD SURPLUS, JUST TWO YEARS AGO.

NOW WE'RE LOOKING AT A $6 BILLION EFICIT IN JUST A FEW SHORT YEARS.

THAT'S A PRETTY SERIOUS PROBLEM, BUT OUR FISCAL HOUSE AND IT SHOWS A PRETTY SERIOUS IMBALANCE IN THE WAY OUR STATE ECONOMY IS GOING.

OUR GOVERNMENT IS TOO BIG AND OUR PRIVATE ECONOMY IS BEING STIFLED BY IT.

>> Eric: THESE ARE PROJECTIONS 28 MONTHS OR SO OUT.

AND I WONDER IF YOU CAN JUST DEAL WITH THIS YEAR'S BUDGET, KICK THE CAN DOWN THE ROAD AND IN THE 2026 SESSION DEAL WITH THE OUTYEARS AT THAT POINT?

>> WELL, WE HAD RESPONSIBLE BUDGETS THE LAST TWO YEARS AND THAT'S PROVE YENL BECAUSE WE HAVE $3.7 BILLION CASH ON HAND.

WE HAVE $3.5 BILLION IN RESERVES, THE LAWEST BUDGET RESERVES EVER.

>> Eric: NOBODY WANTS TO USE THAT.

>> BUT WE HAVE THAT AVAILABLE FOR US.

THE BIGGEST RISK RIGHT NOW TO OUR BUDGET IS DONALD TRUMP AND THAT IS BECAUSE WE HAVE SEEN THE TWO BIGGEST CHANGES FROM THE NOVEMBER FORECAST WERE A RISE IN INFLATION AND A DECREASE IN THE PROJECTED ECONOMIC GROWTH, AND NOW WE HAVE CONGRESSIONAL REPUBLICANS SAYING THAT THEY WANT TO CUT MEDICAID WHICH COULD HAVE A $1.5 BILLION IMPACT PER YEAR ON OUR STATE BUDGET.

>> Cathy: REPRESENTATIVE, HOW ARE YOU UGOING TO -- THERE'S A LOT OF FINGER POLITICAL POINTS BEING MADE IN THE PROCESS.

BUT HOW TO PLAN TO BUSH-WHACK YOUR WAY THROUGH THE UNCERTAINTY?

>> THE DEMOCRATS HAVE A TRUMP DEFLECTION STRATEGY.

THEY WANT TO DISTRACT FROM THE FACT THAT WE WENT HAVE A $18.5 BILLION SURPLUS TO NOW JUST A MAYBE $3 BILLION OF CASH AND WE'RE BLEEDING CASH.

THAT'S A BIGGER PROBLEM ND IT'S FRANKLY SENATOR OF A CERTAINTY THAN WHAT'S GOING ON, COMING FROM WASHINGTON.

IF WE DO SEE SOME CUTS FROM WASHINGTON, IT'S GOING TO BE DWARFED BY THE BLEEDING OF CASH THAT'S CAUSED BY THE MASSIVE OVERSPENDING COMPARED TO OUR REINHARDT THAT'S COMING IN.

DRIVEN BY MINNESOTA POLICY.

WE'RE ANOTHER FEDERAL PUNDITS.

WE RE STATE LAWMAKERS.

WE HAVE TO DEAL WITH THE SITUATION AS IT COMES TO US.

AND THE SITUATION AS IT COMES TO US IS THAT OUR GOVERNMENT HERE IS TOO BIG.

AND OUR REINHARDTS ARE NOT KEEPING UP WITH IT AND A LOT -- >> Cathy: BUT EVEN THE BUDGET FORECASTERS THIS WEEK WERE SAYING THERE IS THIS DEFINITE UNCERTAINTY AND IT'S REALLY HARD, BUSINESSES DON'T EVEN KNOW WHAT TO DO WITH THIS IN TERMS OF THEIR BUDGETING.

>> THERE IS UNCERTAINTY.

THERE'S ALWAYS UNCERTAINTY AND WHAT THEY SAID, EVEN SETTING ASIDE THAT UNCERTAINTY IS, WE HAVE A STRUCTURAL IMBALANCE DRIVEN BY MINNESOTA POLICY AND IT'S GROWING, A GROWING STRUCTURAL IMBALANCE.

IT'S $3 BILLION STRUCTURAL DEFICIT NEXT BUDGET CYCLE.

AND THEN $6 BILLION THE CYCLE AFTER THAT.

THAT'S THE REAL PROBLEM.

THAT'S THE CERTAINTY THAT WE HAVE TO DEAL WITH AT OUR LEVEL.

AND THEN WE HAVE TO LOOK AT WHAT COMES DOWN FROM THE FEDERAL -- >> Cathy: AND REPUBLICANS WERE WARNING YOU ALL ABOUT THIS, THIS STRUCTURAL DEFICIT.

THAT WAS EVEN A COUPLE SESSIONS AGO WHEN THEY WERE KIND OF SOUNDING THE ALARM.

>> REPUBLICANS WANTED TO GIVE MORE MONEY AWAY TO THE WEALTHIEST MINNESOTANS WHICH WOULD HAVE MADE OUR BUDGET SITUATION WORSE RIGHT NOW.

WE CERTAINLY HAVE LONG-TERM CHALLENGES AND THAT'S DUE TO OUR DEMOGRAPHIC CHANGES.

BUT FOR THIS BIENNIUM, WE HAVE A $456 MILLION SURPLUS RIGHT NOW.

BUT WE HAVE THESE THREATS COMING FROM THE FEDERAL GOVERNMENT IGHT NOW AND THAT'S WHAT WE'RE GOING TO HAVE TO DEAL WITH THIS YEAR.

REPRESENTATIVE NISKA SAID HE'D LIKE TO SEE OUR GOVERNMENT SHRINK.

I'M CURIOUS IF HE SUPPORTS THE PROPOSALS COMING OUT OF CONGRESS TO CUT $1.5 BILLION A YEAR OUT OF OUR BUDGET WHICH HELPS ONE IN FOUR MINNESOTANS.

>> WHAT THEY'RE TALKING ABOUT IN WASHINGTON IS TRYING TO FIND EFFICIENCIES AND RID OUT FRAUD.

IN THE FEDERAL GOVERNMENT, THERE'S -- THE FEDERAL BUREAUCRACY JUST LIKE THE STATE BUREAUCRACY UNDER D.F.L.

CONTROL IS WAY TOO BIG, AND MINNESOTANS, AMERICANS, ACROSS THE BOARD, KNOW THAT WE NEED TO FIND SOME REFORMS AND SOME SAVINGS AT THE FEDERAL LEVEL.

AND AT THE STATE LEVEL.

THE FEDS ARE STILL WORKING OUT HOW THAT'S GOING TO WORK.

WE'LL TAKE THAT AS IT COMES.

BUT THE FACT OF THE MATTER IS, WE NEED A MORE IBRANT PRIVATE ECONOMY IN MINNESOTA, ONE THAT'S NOT STIFLED BY THE REGULATION, THE GROWTH IN STATE GOVERNMENT.

HUNDREDS OF F.T.E.s, FULL-TIME EMPLOYEES, THE STATE BUREAUCRACY UNDER THE DFL TRIFECTA.

WE'VE GOT TO GET THAT UNDER CONTROL.

>> Eric: WE'LL KNOW MUCH MORE TUESDAY NIGHT AFTER THE SPECIAL ELECTION IN DISTRICT 40B, SHOREVIEW, ROSEVILLE, AND IS THAT GOING TO DETERMINE HOW THE -- LIKE, THE BUDGET TARGETING NEGOTIATIONS ARE GOING TO GO AND THE END OF SESSION NEGOTIATIONS DEPENDING UPON WHO WINS THERE?

>> WELL, IT SURE WILL.

WE CERTAINLY -- >> Eric: SEEMS LIKE A D.F.L.

THE DISTRICT.

>> WE WON IT BY 30 POINTS LAST TIME.

SO WE FEEL GOOD.

BUT WE'RE WORKING HARD.

BUT OUR EXPECTATION IS WE'LL DO WELL.

IF YOU'RE IN THAT DISTRICT, PLEASE VOTE.

BUT WE'RE GOING TO HOPEFULLY BACK TO A TIE.

>> Eric: WHAT HAVE YOU ACCOMPLISHED AS REPUBLICANS IN THE HOUSE WITH THE 67 THAT YOU HAVE.

YOU CAN'T PASS A BILL UNTIL YOU GET 68.

WHAT HAVE YOU ACCOMPLISHED SO FAR?

>> THERE ARE SOME BILLS WE HAVE PASSED.

FOR THINGS WE THINK ARE COMMON SENSE.

AND WE HAVEN'T GOT DEMOCRATIC SUPPORT ON SOME OF THOSE BILLS, BUT WE HAVE WHAT DONE IS WE'VE SET UP -- FIRST OF ALL, CONVERSATIONS ACROSS THE AISLE ABOUT EITHER SCENARIO, WHETHER WE'RE 8-66 OR 67-67.

ABOUT A LOT OF THOSE POLICY ISSUES.

AND WE'VE TRIED TO MAKE -- MOVE THE BALL FORWARD.

WE DO UNDERSTAND THAT EITHER WAY, WHETHER IT'S REPUBLICAN MAJORITY OR A TIE IN THE HOUSE, WE'RE GOING TO HAVE TO WORK TOGETHER, WITH A D.F.L.

SENATE.

CLOSELY DIVIDED HOUSE EITHER WAY AND A D.F.L.

GOVERNOR.

WE HAVE TO GET A BUDGET PASSED AND WE'RE GOING TO HAVE TO WORK ACROSS THE AISLE.

>> NOT A LOT.

>> Eric: YOU WERE LATE TO THE GAME.

YOU GUYS WERE NO-SHOWING EARLY.

>> WE HAD TO PROTECT THE VOTERS AND E DID.

BUT I THINK WE ARE AT A PLACE WHERE WE COULD HAVE GOTTEN STARTED EARLY, WE HAD A SHOOT FIRST BILL WHICH WOULD HAVE MADE GUN VIOLATION PREVENTION WORSE, AND MONDAY WE HAVE A BILL TO TRY TO DELAY PAID AND FAMILY MEDICAL LEAVE WHICH IS HELPING PEOPLE WHO ARE HAVING NEW BORN KIDS, THAT'S EXTREMELY POPULAR WITH MINNESOTANS, THESE ARE THINGS THAT ARE EATING UP FLOOR TIME WHEN WE COULD BE WORKING TOGETHER ON A BIPARTISAN BASIS ON THE BUDGET.

>> Cathy: SO FINAL QUESTION.

AND I'M WONDERING OF COURSE AS YOU HEAD INTO THE FINAL TWO AND A HALF MONTHS OF SESSION, RIGHT, SO MIGHT YOU STILL HAVE TO PLAN IN CASE FEDERAL MONEY GOES AWAY?

HOW DO YOU DO THAT?

I HAVEN'T HEARD N ANSWER REALLY.

>> YEAH, I THINK THAT WE'RE LOOKING AT ALL CONTINGENCIES, AND T'S CERTAINLY POSSIBLE THAT HERE WOULD NEED TO BE ADJUSTMENTS TO THE BUDGET IF THINGS CHANGE FROM THE FEDERAL GOVERNMENT.

OBVIOUSLY THAT'S ALWAYS THE CASE, RIGHT?

WE NEVER KNOW IF A FLOOD IS GOING TO HAPPEN, IF SOME OTHER KIND OF NATURAL DISASTER IS GOING TO HAPPEN.

IF FEDERAL POLICY CHANGES.

AND THAT AFFECTS MINNESOTA STATE GOVERNMENT.

WE WOULD HAVE TO ADJUST AS STATE POLICY MAKERS NO MATTER WHAT.

>> Eric: GOT TO RUN.