Kevblog: You made note that they’re not looking to Washington, they have a different motive. And yet the corollary between what happened in Minnesota and what is happening in Washington, D.C., is striking.

Carlson: Well, now they’re connected, I apologize. In other words, I would argue that it is not through the filter of ambition. It’s through the filter of ideology. Pawlenty was never into the ideology. He was into ambition. And so if the Tea Party tomorrow said that every good Tea Party member bays like wolves at night, he’d be out there warming up his vocal cords right now.

But no. These people are ideologically driven. They do not believe in compromise. And if they have to bring the state of Minnesota to its knees in order to get their point across, they frankly would do it. And I think there is a lot of fear in Washington that the same crowd would do the same thing to the debt ceiling.

Kevblog: What’s your response to what Dayton did yesterday?

Carlson: I don’t think that poor policy equals good politics.

Kevblog: Meaning?

Carlson: I think this was a poor policy decision. Very poor.

“These people are ideologically driven. They do not believe in compromise. And if they have to bring the state of Minnesota to its knees in order to get their point across, they frankly would do it.“– Arne Carlson

Kevblog: I was at the Humphrey Institute yesterday and heard him talk. He talked about how he went through his barnstorming tour, heard a bunch of people. He said that even though this is bad policy, people want this done and they want it done now. It was almost as though he saw people who described the pain that this is causing them, and he reacted emotionally. I am sure that is a difficult thing to deal with—you would know that better than almost anybody. If it’s true, that reaction may be valorous. But it doesn’t seem to be great leadership.

Carlson: I would not have done it. I mean, I am sympathetic to the predicament he is in. … You may have seen the picture in the StarTribune the other day of him holding a news conference in the Capitol all alone. That is a tragic picture. It says a lot. … Where is the team?

Gov. Mark Dayton discusses his decision to accept a Republican budget offer with ex-Humphrey public policy fellow Cassaundra Adler on Thursday. Photo by Kevin Featherly.

Carlson: Well, I mean, I think he is. He is extremely empathetic to those who are in pain. And I think that is admirable. But that has to be balanced against the good, the well-being of the state. And when you borrow, in effect, $1.4 billion from the future, you are literally robbing the future.

Kevblog: Are the schools ever going to get paid back [through the $700 million shift from schools that is part of the deal Dayton accepted]?

Carlson:No. I don’t know why they call it “borrowing.” It’s really theft. Because there is no intention to pay it back. All they will do is pass a law that solidifies the shift and then they’ll agree to pick up whatever harm has been caused on the debt side to the school districts.

I would have a real serious philosophical problem with the right of any generation to borrow from the next generation without their consent. And this is the part that the media has really missed—it happens both nationally and statewide.

My mother was a Swedish immigrant. She wrote me a letter when I became governor and she said, “I hope you have the wisdom to tell people of my age that they are not entitled to a transplant operation if it means that one student cannot further his education.” Oddly enough, that turned out to be very prophetic.

Those are the choices you have to make. Her attitude was you always favor the young. I don’t believe that my generation has the right to take from the young. Part of the American Dream has always been to leave more to the young than you yourself received.

And this particular deal flies in the face of that, as did the past four deals.

And then these New Radicals can run around and say, ‘Gee, we didn’t increase taxes.’ Well, one, they did. There are horrendous property tax increases. Two, there is no reform. And three, there is an incredible debt.

You get two hypocrisies that will come out of this. One, Republican legislators are perfectly willing to build a new stadium for the Vikings with a tax increase attached to it.

“All of a sudden a tax increase for a Vikings stadium is a high virtue. I thought it was a job killer, but apparently not.” — Arne Carlson

Kevblog: It didn’t get a lot of play yesterday, but Dayton said yesterday that if the legislators have a Vikings stadium bill ready to go he would consider it.

Carlson: So all of a sudden a tax increase for a Vikings stadium is a high virtue. I thought it was a job killer, but apparently not. The second part is what it does to the property tax. So there are tax increases in it.

So in 2013, we’ll be back into a budget session, which means the election of 2012 will revolve around our new deficit. And that new deficit will be at least $2 billion of the continuing structural deficit, which was ignored in this package. Plus the money that was borrowed form this time around. So we will have another $3-plus-billion deficit in another year and a half.

In the investment business you have a thing known as “lost opportunity.” And that lost opportunity is reflected when Pawlenty borrowed $1 billion from the tobacco settlement—and notice how they never pay back, but they’re good on the borrowing.

Part of that money was to go to medical research. Minnesota is strong in the medical research business—the University of Minnesota, the Mayo Clinic. That’s where you spin out new opportunities and create new jobs.

But we ate that money. We ate the same amount of money that goes to help lower income families with affordable healthcare. And now we’re going to borrow another $700 million from the tobacco settlement—which is more medical research going down the tubes, and another $700 million imposed on schools.

But on July 4, all the same people who do this will give these wonderful patriotic speeches about how the love their children.

This is very sad. This is something that we have to face up to. And the same goes on the federal level. These are acts that reflect a lack of courage, and I think America is ready for courage.

I think this whole thing is going to backlash tremendously in Minnesota. I think you are going to see a lot of challenges.

I don’t know if the Democrats are going to vote for this deal or not in the Legislature. But you’re going to see a lot of younger, aggressive political leadership coming out possibly on both sides of the aisle and saying, ‘Enough is enough. We’ve had enough.’

The truth is when you look at the new standards of these people that pretend to be the new Republican Party, Ronald Reagan could no longer qualify as a Republican.

Kevblog: That’s absolutely true, even though he is their icon and continuing hero.

Carlson: But they can’t answer the question, how would he clear today? He negotiated with terrorists. He opposed the anti-gay proposal in California. And he had 11 tax increases as president.

Kevblog: And signed the most liberal abortion rights law in history when he was governor of California.

Carlson: People forget about that. You are absolutely right. And he appointed a pro-choice woman to the Supreme Court. So there is no way he could clear.

The good point is that we are all starting to wake up to the idea that this movement is serious and it is also radical. David Brooks’ column in the New York Times [“The Mother of All No-Brainers,” July 4, 2011] I think, was a bellwether turning point. He didn’t give them the courtesy of calling them “conservative Republicans.

They are not conservative, and I would argue they are not traditional Republicans.

Kevblog: On the other hand, I was watching Rachel Maddow last night, and she somehow spun this deal to be a heroic deed on the part of Mark Dayton, because he included a $500 bonding bill for jobs creation—which I would think is never going to pass, anyway. That may be a condition he’s giving them, but he is going to have to give that up to, I would presume. They’ve already signaled that they’re not interested in a bonding bill this session.

Carlson: I don’t know what the negotiations were, but that is a bit of recklessness on [Maddow’s] part. I like her, and I like her show. But I think she is getting carried away.

I think there is a fundamental principal here, and that is, you pay the bill when it is due. Don’t shift it—not just to the next generation, but frankly to the immediate future.

We are talking here about buying another two years. But I will guarantee you that within a year, the new deficit numbers will be announced, and then we will all be surprised.

“I think this whole thing is going to backlash tremendously in Minnesota. … You’re going to see a lot of younger, aggressive political leadership coming out possibly on both sides of the aisle and saying, ‘Enough is enough. We’ve had enough.’” — Arne Carlson

Kevblog: My girlfriend, Tammy Nelson, is a Department of Revenue auditor. And you might think she is happy because she is probably going to be able to go back to work—and to that extent she is. But in fact, this thing broke her heart, because she felt that if she was going to make this sacrifice of enduring a layoff and losing income, even over somewhat the long term, she would do it—as long as it meant something was going to change. She thought the shutdown might give people who hate government a sense of how important state workers are. But here we’ve just had a reset, and she feels that her sacrifice has been for nothing.

Carlson: I fully agree. You could have taken that agreement last May. I think it is unfortunate.

But I think the good news is that it is going to set up a broad debate. I think there is more willingness today to take on this Radical Right than there ever has been. And I’ll bet you there are a lot of Republicans that don’t want to walk that plank.

It’s their proposal. They thought it was great when they advanced it. But I don’t think they ever thought that it would be accepted. And boy, are they going to be hard put to defend it.

Kevblog: Is there any chance, now that they can position this as Dayton’s offer and not their own offer, that they will reject it?

Carlson: I truthfully don’t know. Let me put it this way—and you are probably more sensitive to it than I am—but I have yet to hear anybody say anything good about it. The StarTribune editorialized it as a ‘Bad Deal, But Necessary.’

Well, the best you can say about it is that it is a bad deal. I don’t know if legislators are going to pour in to vote for it.