Three Weeks in and Committee Deadlines Already Loom
With the Minnesota Legislature starting later in the year during the second year of the biennium, the condensed calendar has legislators and staff looking towards committee deadlines even as they enter the third week of the legislative session. Legislative committees have clearly hit the ground running with high-profile committee hearings on legislative proposals seeking to address gun violence, prevent fraud in public health programs, and respond to the state’s recent experience with U.S. Immigration and Customs Enforcement.
February Budget Forecast Update
On Friday, February 27th, Minnesota Management and Budget (MMB) released its second budget forecast of the annual cycle, commonly referred to as the “February forecast.” According to MMB, Minnesota’s budget outlook has improved with the FY 2026-27 projected balance now at $3.7 billion, which is $1.3 billion higher than the November estimate.
That improved outlook is important as MMB projects the state to have a continued structural imbalance in the FY 2028-29 biennium with of roughly $3.3 billion, including $1 billion in inflation. That leaves the state a surplus of only $377 million for the next three fiscal years combined. MMB also noted that the February forecast did not take into account looming changes at the federal level, including the potential withholding of hundreds of millions in federal Medicaid funding.
Gov. Walz Releases New Program Integrity Initiative
On Thursday, February 26th, Gov. Walz unveiled his 2026 program integrity and fraud prevention proposal. The initiative contains 18 different proposals aiming to reduce fraud within public programs. Some of those include prohibiting legislators from making direct appropriations to nonprofits, establishing a centralized office of the inspector general, expanding authority for investigation visits, increasing the use of technology to detect fraud earlier, making new payment withholding authority passed in 2025 permanent, strengthening oversight of claims submitted to managed care organizations, imposing a permanent ban on state contracts for those convicted of fraud, and increasing penalties for theft of public funds.
Legislators on both sides of the aisle have been promoting various program reform and integrity proposals for over a year. With such an even balance of legislative power, it will take significant bipartisan work to find common ground as elected officials look to address a number of high-profile instance of fraud in recent years.
Trump Administration Announces Withholding of Medicaid Funds
On Wednesday, February 25th, Vice President J.D. Vance announced that the Centers for Medicare & Medicaid Services (CMS) would be withholding approximately $259 million in federal Medicaid funding. According to the Trump Administration, a CMS review of Minnesota’s Medicaid spending in the fourth quarter of fiscal year 2025 showed $243.8 million in potentially fraudulent claims, and $15.4 million in claims for individuals who, according to the administration, do not have satisfactory immigration status. Minnesota Attorney General Keith Ellison issued a statement that his office was reviewing the matter and it would likely challenge the decision in federal court if it determined that the withholding exceeded CMS’ legal authority.
This retroactive withholding is separate from, and in addition to, the announcement last month that CMS intended to withhold about $515 million in federal Medicaid matching funds going forward on a quarterly basis until CMS determined that the state is in compliance with federal program integrity requirements. That discussion is currently the subject of an administrative appeal
Democrats Continue to Push Gun Control Legislation
The House Public Safety Finance and Policy Committee heard H.F. 3433, sponsored by Rep. Emma Greeman (DFL-Minneapolis), that would ban semi-automatic military style assault weapons. Testifiers during that committee included those involved in the school shooting at Annunciation Catholic Church in Minneapolis this past fall. While the bill failed to advance out of the evenly divided committee, many legislators committed to continue working on gun control measures.
The discussion on gun regulation continued throughout the week as the House Elections Finance and Government Operations Committee took up but was unable to pass H.F. 3351 which would allow local governments to pass their own gun regulations. Authored by Rep. Dave Pinto, (DFL-St. Paul), the bill tied on a partly line vote of 6-6 and did not advance. Lastly, the Minnesota House Education Policy Committee heard H.F. 3401, which is sponsored by Rep. Julie Greene (DFL-Edina) and would regulate the possession of firearms on school property and broaden school property firearm storage requirements. The bill failed to pass, as some members believed that the language is too vague and still needed work.
Governor Walz Introduces Gun Legislation Package
Last week, Governor Walz introduced a package of bills aimed at changing gun laws in the state of Minnesota. Those proposals include a ban on military-style assault rifles and high-capacity magazines; requiring safe storage and reporting of lost or stolen firearms; closing the ghost gun loophole; implementing a firearm insurance requirement; establishing a firearm and ammunition tax; and creating and expanding early intervention resources, including school resources, working upstream to prevent gun violence.
In December, Governor Walz used his executive power to direct state agencies to pursue a range of strategies to reduce gun violence. In January, the governor issued an executive order implementing weapons screening at the Minnesota State Capitol with the help of deterring violent crimes from happening in the Capitol building. With the governor’s proposals and the proposals from the legislators, this is a discussion that is expected to be ongoing throughout the legislative session.
Important Dates
Deadlines are as follows:
Legislative leaders also announced the schedule for legislative breaks, including:
The legislature must adjourn no later than midnight on May 18, 2026.
Congress Confronts Escalating Conflict with Iran
Congress returns this week facing an intensifying military conflict with Iran and a widening divide over the scope, legality, and long-term implications of U.S. involvement. President Donald Trump ordered a major military operation targeting the Iranian regime, marking the most significant U.S. military engagement in the region in nearly two decades. The initial U.S. and Israeli strikes eliminated Iran’s Supreme Leader, Ayatollah Ali Khamenei, along with several senior military officials.
The operation immediately altered both the geopolitical and domestic political landscape. Oil prices have risen, and global financial markets have reacted negatively. Public opinion polling indicates broad opposition among Americans to a prolonged war with Iran. Nevertheless, most congressional Republicans have aligned behind the President’s decision. Some elements within the broader conservative movement have expressed opposition, though that dissent has not translated into significant congressional resistance to date.
The President has acknowledged the possibility of sustained operations lasting a month or longer and warned of potential U.S. casualties. Iran has responded with retaliatory strikes across the region, including attacks in Israel, Kuwait, Saudi Arabia, the United Arab Emirates, Oman, Qatar, Cyprus, and Bahrain. Three U.S. service members were killed in Kuwait and nine others were injured. Several U.S. aircraft have been lost. Fighting between Hezbollah and Israel has resumed, and civilian casualties have been reported in Iran.
Democratic Response and War Powers Debate
Congressional Democrats have advanced two primary arguments. First, they contend that the military action is unlawful absent prior congressional authorization under the War Powers Resolution. Democratic leadership is pushing for votes in both chambers to reassert congressional authority, and some members have raised the prospect of impeachment proceedings.
Second, Democrats are framing the conflict as inconsistent with domestic economic priorities. They argue that a sustained military campaign focused on regime change diverts attention and resources from cost-of-living concerns and economic stability. Rising energy prices and market volatility could amplify that critique.
Complicating matters further, a deadly mass shooting in Austin, Texas has intensified debate over homeland security and immigration policy. The Department of Homeland Security remains partially shuttered amid a funding and policy impasse between the White House and congressional Democrats. House Republicans plan another vote this week on a modified DHS funding package, seeking to pressure Democrats while navigating internal disagreements over additional immigration-related provisions.
Congressional Leverage and Funding Constraints
Congress’ ability to restrain the executive branch is limited, particularly given Republican control of both chambers and strong partisan alignment behind the President. Over several decades, Congress has ceded substantial authority over foreign policy and the use of force to the executive branch. That dynamic remains in place.
However, should the administration require supplemental appropriations to sustain operations against Iran, congressional approval will be necessary. With narrow majorities in both chambers, securing additional funding could prove challenging and may require bipartisan support.
Intelligence Briefings and Member Engagement
Senior administration officials are providing classified briefings to congressional leadership and relevant committee chairs and ranking members. Secretary of State Marco Rubio and CIA Director John Ratcliffe are briefing the Gang of Eight and key committee leaders.
Additional briefings will include Secretary of Defense Pete Hegseth and Joint Chiefs of Staff Chair Dan Caine, with separate sessions for the Senate and House.
War Powers Votes This Week
Both chambers are expected to vote on war powers resolutions that will serve as proxies for support or opposition to continued military action.
In the House, a bipartisan resolution led by Ro Khanna and Tom Massie is scheduled for floor consideration Thursday. Democratic leadership supports the measure, though defections in both parties are possible.
In the Senate, Tim Kaine is advancing a bipartisan war powers resolution that could receive a vote as early as Tuesday or Wednesday. Passage would require Republican defections, which currently appear unlikely.
Key Outstanding Questions
Congress faces significant unresolved issues:
The coming days will test congressional authority, partisan unity, and the administration’s ability to sustain political and financial support for military operations.
Larkin Hoffman Public Affairs will continue to monitor congressional action, funding developments, and executive branch briefings related to this evolving conflict. We will keep clients apprised of material legislative and policy updates.
