The Economic Mind of Tim Walz : Planet Money : NPR

In recent weeks, Minnesota Gov. Tim Walz burst from relative obscurity to co-headlining the Democratic presidential ticket. Walz’s career rocket launch was fueled by his cutting political rhetoric, folksy midwestern charm, jovial dad vibes, and progressive principles and accomplishments.

Before Walz was governor and a vice presidential candidate, he wore many hats. He was a congressman, a high school teacher, a union member, a command sergeant major in the Army National Guard, a state-championship-winning high school football coach. One hat he did not wear: lawyer. That makes him, according to The Economist, “the first non-lawyer to be on the Democratic ticket since 1980.”

While in Congress, Walz represented a conservative district that had elected only one other Democratic representative in the previous century. The conservative makeup of that district might help explain why he took political positions that are rare for Democrats, including supporting gun rights (he had an “A” rating from the NRA) and the Keystone XL pipeline, which progressive lawmakers and environmentalists opposed because of its likely environmental impacts. Despite representing a conservative district, however, Walz was also an early supporter of same-sex marriage. He also has a long history of taking populist, progressive positions on a host of economic policies, from trade to corporate bailouts.

While not as dramatic as the political transformation of his electoral counterpart JD Vance, Walz too had a political transformation over the last decade. As governor, Walz established a more progressive record than his time as a congressman, including on gun control and fighting climate change.

As governor, Walz prioritized economic issues — including greater government support for families and children — which have also been a top priority for Kamala Harris. It’s feasible that Walz’s selection could be a signal of the policies that Harris, if elected president, will try to implement during her administration.

A few weeks back, after Donald Trump picked Vance as his running mate, the Planet Money newsletter looked into Vance’s economic positions and record. Consider this newsletter the sequel. Today, we’re stepping inside the economic mind of Tim Walz.

Walzonomics

As governor, Walz prioritized increasing the economic security of kids. A couple years back in the Planet Money newsletter, we highlighted how America’s welfare system is pretty generous for the elderly but relatively stingy for kids. Comparing the United States to almost 40 other countries in the OECD, only Turkey spends less per child as a percentage of their GDP. It’s a significant reason why the US has a much higher rate of childhood poverty than other rich nations — and even a higher rate of childhood poverty than some not-so-rich countries.

As a senator, Kamala Harris co-sponsored legislation to increase the child tax credit. And, according to reporting from NPR’s Asma Khalid, Harris was “particularly passionate” on this issue when she became vice president.

During the pandemic, the Biden-Harris administration, as part of the American Rescue Plan, expanded and enhanced the childhood tax credit, helping lift millions of kids out of poverty. One study by scholars at Columbia University found it reduced childhood poverty by about 30%. But, the enhanced childhood tax credit was made only temporary, and because of politics in Washington, Congress didn’t end up renewing it.

Governor Walz wasn’t happy with that. So he implemented a state version of the childhood tax credit, which, according to the Tax Policy Center, is “one of the largest in the country.” Starting in tax year 2023, every Minnesotan taxpayer with kids can claim “$1,750 per qualifying child, with no limit on the number of children claimed.” And because the credit is fully refundable, it means that even low-income Minnesotans who don’t pay much or anything in state taxes are eligible for it.

In addition to passing a generous tax credit for kids, Walz also created a program that gives Minnesotan K-12 students free school breakfasts and lunches.

Somewhat controversially, Walz made this meal program universal. It is not means-tested, so even rich kids can get free breakfasts and lunches. At a press conference after this program’s passage, Walz defended the universality of the program from Republican attacks that it was an unnecessary giveaway to parents who didn’t need it.

“Yeah, isn’t that rich? Our Republican colleagues were concerned there would be a tax cut for the wealthiest. You can’t make some of this up if you tried,” Walz said. Walz argued that, because the food program is universal, there is less bureaucracy in administering it. State bureaucrats and schools don’t have to verify the income of kids’ parents. “We know a lot of families — this is hard. They send you lots of paperwork… [The universality of the tax credit] was meant to make it as easy as possible, knowing it’s a benefit for all of them.”

In a recent interview with the New York Times’ Ezra Klein, Walz further explained that making his school food program universal also helped eliminate divisions in school cafeterias. As a high school teacher for many years, Walz also served as a lunchroom monitor. In the past, Walz said, students who received free or subsidized lunch could be identified because they had different colored lunch tickets. He suggested that the universal nature of this program helped to eliminate class-based distinctions in schools and reduce stigma for poor kids who need assistance.

In addition, Walz told Klein, he got a lot of feedback from parents — and “especially mothers because of the unequal distribution of domestic labor” — that revealed another benefit of free school breakfast and lunches. “These were women who said, ‘Look, we didn’t qualify before. We do now. It’s an absolute tax cut for us. But it’s an absolute lifesaver for me that I don’t have to get up in the morning and either make breakfast or send one to school… So it’s a double benefit for us. I have less work. My kids eat.’ So it was actually middle-class folks who were most jazzed about this.”

Walz supported a host of other measures that support kids, including increasing funding for K-12 schools by 10 percent (a $2.2 billion increase) and signing a bill that expanded funding for kids who grew up in foster care to attend college.

Walz signed legislation that gave Minnesotan workers up to 12 weeks of paid family and medical leave as well as paid sick leave. As we’ve reported before in the Planet Money newsletter, the United States is the only rich country without a national paid leave program. The federal government only guarantees up to 12 weeks of unpaid family and medical leave, and it doesn’t even do that for all workers.

As governor, Walz worked to change that at the state level, expanding the ability of workers in his state to take paid leave. He signed legislation that gave Minnesotans up to 12 weeks of paid family and medical leave. Even more, he made the program more generous for low-income workers. The program has a progressive replacement rate, so lower income Minnesotans get a higher percentage of their income replaced when they’re on leave. The leave program is supposed to launch in 2026.

In addition, Walz provided Minnesotans with paid sick leave. Now, for every 30 hours Minnesotans work, they can earn at least one hour of sick leave up to “a maximum of 48 hours each year unless the employer agrees to a higher amount.”

Walz helped make Minnesota’s tax system one of the most progressive of any state in the country. Through a series of tax cuts, rebates, and credits for low and middle-income Minnesotans and moderate tax hikes on the rich, Walz has helped transform Minnesota’s tax system into one of the few in the nation that is “moderately progressive,” according to the Institute on Taxation and Economic Policy. Most other states, according to this think tank, tax the rich at lower rates and therefore have tax systems that aren’t progressive at all.

Walz has done a lot on the tax reform front. Facing a multibillion-dollar budget surplus, the governor was able to enact “the largest tax cut in state history.” These tax cuts included the aforementioned child tax credit as well tax rebates of up to $1,300 for working class Minnesotans, which some dubbed “Walz checks.” Walz also cut taxes for recipients of Social Security in Minnesota.

To help pay for these cuts, Walz put a new tax on multinational corporations. He put a one percent surtax on investment income over $1 million a year. Walz also increased taxes on gas to help fund infrastructure.

Walz invested heavily in Minnesota’s infrastructure. Under Walz, the state has spent billions on improving roads, bridges, and other infrastructure projects.

Walz has earned a reputation as a “YIMBY” — or, someone who has prioritized the development of new housing to help solve affordability issues. As governor, Walz took a number of actions to increase the supply and affordability of housing in Minnesota, including a billion-dollar housing investment bill that amounted to the largest single investment in housing in Minnesota history. Walz called it “a generational investment in housing.”

Walz is a former union member and a big supporter of organized labor. As a teacher, Walz was a member of the American Federation of Teachers union. And, like his counterpart JD Vance, Walz walked a picket line with auto workers. Walz also abolished noncompete agreements, which limited workers’ ability to switch jobs within an industry. He also banned companies from requiring workers to attend anti-union briefings, boosted funding for workplace safety inspections and worked to enhance worker protections, including at Amazon warehouses.

After Harris selected Walz, a range of unions praised him. “Tim Walz doesn’t just talk the talk, he walks the walk,” the United Auto Workers union wrote on X. “From delivering for working-class Americans to standing with the UAW on our picket line last year, we know which side he’s on.”

After intense, back-and-forth negotiations with Uber and Lyft, Governor Walz helped Minnesota become the first state to establish a minimum wage for Uber and Lyft drivers. In 2023, the Minnesota legislature passed a bill that would have set minimum pay rates for rideshare drivers and increased protections for them against being fired. Uber was not happy. And, after they threatened they would largely pull out of the state if the bill passed, Walz ended up vetoing the bill — his first veto.

“Rideshare drivers deserve fair wages and safe working conditions. I am committed to finding solutions that balance the interests of all parties, including drivers and riders,” Walz said about his veto. “This is not the right bill to achieve these goals. I have spent my career fighting for workers, and I will continue to work with drivers, riders, and rideshare companies to address the concerns that this bill sought to address.”

Ultimately, however, Walz successfully surmounted the intense opposition from ride-share companies and implemented a version of this policy.

Governor Walz signed a so-called “Taylor Swift bill” that requires ticket sellers to fully disclose, up front, the real price — including all fees and surcharges — of tickets to concerts, games, and other live events. This bill was apparently sponsored by a legislator unhappy that they had trouble buying a ticket to a Taylor Swift concert in Minneapolis. The new law, among other measures, requires ticket sellers to disclose the full price of live events, including all fees, up front.

Governor Walz legalized marijuana. Both as a congressman and governor, Walz has been a long-time friend of weed smokers. In 2023, he signed a bill that legalized cannabis in Minnesota and created an “Office of Cannabis Management” to oversee and regulate the new sector. The law also automatically expunged “certain prior cannabis-related records” from the criminal histories of Minnesotans.

“We’ve known for too long that prohibiting the use of cannabis hasn’t worked. By legalizing adult-use cannabis, we’re expanding our economy, creating jobs, and regulating the industry to keep Minnesotans safe,” said Governor Walz in a statement after signing the bill. “Legalizing adult-use cannabis and expunging or resentencing cannabis convictions will strengthen communities. This is the right move for Minnesota.”

Walz has a mixed record on environmental causes. As a congressman, Walz supported the creation of the Keystone XL Pipeline, which was broadly opposed by progressives and environmental groups for its potential contributions to climate change and other environmental impacts (the pipeline was ultimately scuttled).

But, as a governor, Walz signed a litany of pro-environmental bills, including a law that requires Minnesota to get 100% of its electricity from clean, renewable sources by 2040.

At the same time, however, Walz supported various causes opposed by environmentalists, including “about mining, oil pipelines, ag pollution and more,” according to The Star Tribune.

“What we have appreciated about Gov. Walz is he is very pragmatic,” Julie Lucas, executive director of MiningMinnesota, told Politico.

While serving in Congress, Walz opposed most free trade agreements he had the opportunity to vote for. Walz, for example, voted against free trade deals with Peru, Panama, and Colombia.

“Trade can be a powerful tool for good, but as we’ve seen in the past with agreements like NAFTA, sometimes these agreements work against the American worker,” then-Congressman Walz said in a 2015 statement.

When opposing free trade agreements with Colombia and Panama, Walz expressed opposition to how these countries were governed. “Although improvements have been made in recent years, Colombia still has one of the worst human rights records in the western hemisphere, especially when it comes to the rights of workers,” then-Congressman Walz said in a press release. “In light of this record, I am opposed to any trade agreement with Colombia which does not make a dramatic and sustained improvement to human rights and the rule of law in Colombia. Additionally, I am concerned about the instability and corruption of Panama’s financial institutions and oppose that agreement without a tougher crackdown on those abuses.”

Walz, however, did vote for a free trade agreement with South Korea in 2011. “When done right, I firmly believe fair trade agreements have the potential to create jobs for American workers, greater demand for American products and growth for the US economy,” Walz said in a statement. “That is exactly the kind of policy we need to pursue in times like these. In southern Minnesota, the Korea Free Trade Agreement is an exciting prospect for many of our farmers and I believe this deal is a net win for Minnesota.”

As a congressman, Walz voted against bailouts for financial and auto companies. And he voted for the Dodd-Frank Wall Street Reform and Consumer Protection Act. “Wall Street reform will help ensure that hard-working taxpayers are never again asked to bail out Wall Street for their reckless decisions,” then-Congressman Walz wrote in an op-ed after voting for Dodd-Frank. “I voted against President Bush’s original Wall Street bailout in 2008, and opposed President Obama’s attempts in 2009 to renew it because it was a raw deal for taxpayers. The next time a big bank’s mistakes threaten the economy, there won’t be a bailout, but an orderly liquidation process — and the CEOs will be the first to go.”

On his opposition to the bailout of American automakers, Walz explained in a statement, “I voted against the auto industry bailout for the same reason I voted against the Wall Street bailout: because it doesn’t do enough to protect the taxpayers who are footing the bill. Nothing in this bill will prevent the auto manufacturers and their suppliers from continuing to move jobs overseas. And we have no guarantee that spending $15 billion in taxpayers’ money will actually solve the Big Three’s problems. We must preserve and create jobs in America but this isn’t the way to do it.”

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As is clear from the above, Walz has established a lengthy track record. And not everyone loves it. After Harris selected Walz, conservatives attacked his economic record. Former Trump economic advisor Kevin Hassett, for example, characterized Walz as a “tax-and-spend liberal” and even an “avowed socialist,” pointing to a recent comment Walz had made. “Don’t ever shy away from our progressive values,” Walz said recently on a “White Dudes For Kamala” call. “One person’s socialism is another person’s neighborliness.”

Love him or hate him, the vice presidency is often just a ceremonial role that doesn’t have much power. However, Harris’s selection of Walz may say something about her commitment to progressive policy goals, like greater government support for kids and families, and perhaps a less cozy relationship with big corporations than some past Democratic administrations.

We will be closely monitoring the economic policy issues and proposals of this presidential election. Follow along with us at Planet Money, on our short daily podcast The Indicator or here at our newsletter.