Minnesota Gov. Tim Walz wants to hand out $10 million in forgivable loans to small businesses, he says, that were harmed by President Trump's immigration crackdown — and the reaction was about what you'd expect.
The proposal, announced Thursday, would offer between $2,500 and $25,000 per business to those who can "demonstrate substantial revenue loss during specified dates" tied to Operation Metro Surge, the federal immigration enforcement operation in the state. The loans would be forgivable, meaning Minnesota taxpayers would foot the bill for businesses that lost revenue because federal agents enforced federal law.
The timing was exquisite. The same day Walz floated his relief package, border czar Tom Homan declared Operation Metro Surge a success and announced plans to wind down the crackdown in Minnesota. Walz was proposing a remedy for a problem that was already resolving itself.
The sharpest criticism didn't center on whether affected businesses deserve sympathy. It centered on whether Tim Walz — governor of a state synonymous with massive fraud scandals — should be trusted to distribute millions in loosely supervised forgivable loans.
President Trump has claimed that fraud scandals in Minnesota have cost taxpayers more than $19 billion, the New York Post reported. That figure includes a daycare fraud scandal that generated national headlines and reports of an overseas terror group benefiting from ill-gotten welfare funds, along with luxury purchases linked to convicted fraudsters.
Against that backdrop, House Majority Whip Tom Emmer didn't mince words:
BREAKING: Tim Walz opens up a new avenue for fraud in Minnesota
Republican strategist Matt Whitlock was less diplomatic:
Al Shabaab already shopping for some new white BMW's back in Mogadishu.
Rep. Eli Crane of Arizona offered a one-liner that landed precisely because of what it referenced — the daycare fraud scandal that made Minnesota a national punchline:
Does that include learing centers?
Set aside the fraud concerns for a moment and examine the proposal on its own terms. Walz is asking taxpayers to subsidize businesses that lost revenue because the federal government enforced immigration law. Think about what that means as a governing principle: the state compensates private businesses for the consequences of lawful federal action.
If that standard holds, where does it end? Should states issue forgivable loans every time a federal policy disrupts a local economy? Should Minnesota cut checks when an EPA regulation shuts down a factory, or when a new trade agreement reshuffles supply chains? Of course not. But immigration enforcement — the one area where the left treats federal authority as an intrusion rather than a mandate — gets special treatment.
Minnesota-based tech entrepreneur Daren Cotter raised another uncomfortable question: whether businesses that closed voluntarily in protest of the federal enforcement surge would also qualify for forgivable loans. If so, the program wouldn't just be compensating economic victims — it would be subsidizing political protest with public money.
Bill Walsh, vice president of the Center of the American Experiment, a Minnesota-based public policy organization, connected the dots between the fear and the proposed fix:
It's right on brand for Tim Walz to first scare workers and shoppers from leaving their homes before proposing a new government program to help them that will likely end up adding to our state's fraud epidemic
That sequence matters. Democratic officials and allied media spent weeks warning immigrant communities that federal agents were conducting sweeps, that neighborhoods were unsafe, that people should stay indoors. Businesses in those areas saw foot traffic evaporate — not necessarily because of ICE operations themselves, but because of the panic surrounding them. Now the governor proposes spending $10 million to fix damage that his own political allies helped inflict.
Republican state Sen. Michael Holmstrom didn't need a long statement. He called the proposal:
an immediate NO from me
He followed up with the core objection:
MN taxpayers do not deserve to have more money stolen from them
Political activist David Thul offered a proposal of his own that doubled as an indictment:
How about a law that says the Walz admin can spend a dollar on these loans for every dollar they recoup from fraud investigations?
That's not just a good line. It's a framework that exposes the absurdity. A state government that hasn't demonstrated it can prevent fraud — or recover stolen funds — now wants to open a new pipeline of forgivable loans with eligibility criteria vague enough to include businesses that shut their doors by choice.
Walz's proposal isn't serious policy. It's a $10 million press release. It signals to the Democratic base that Minnesota's governor stands against federal immigration enforcement, that he views the removal of illegal immigrants as an economic harm rather than a legal obligation, and that he's willing to spend taxpayer money to make that point.
The forgivable loans won't rebuild a single community. They won't bring back a single customer. What they will do is create another government program with minimal oversight in a state that has repeatedly proven it cannot manage the programs it already has.
Operation Metro Surge is winding down. The enforcement worked. And Tim Walz's response is to write checks — with other people's money — to cushion the impact of laws being followed.
Minnesota deserves a governor who can tell the difference between a crisis and a consequence.
