Gov. Tim Walz proposed $10 million in forgivable loans for Minnesota businesses affected by the surge in federal immigration activity starting in December.

The incursion of around 3,000 federal immigration agents in Minnesota in what the Trump administration called “Operation Metro Surge” led to revenue losses for businesses, especially those in major immigrant corridors, as employees and customers stayed home out of fear of being detained by federal immigration agents.

The one-time forgivable loan proposal was announced Thursday at a Capitol press briefing, moments after U.S. border czar Tom Homan announced the end of the surge and claimed success in making the Twin Cities and Minnesota “safer.” The unprecedented federal incursion ignited massive resistance and resulted in two killings of American citizens, among other high-profile incidents.

The damage from Operation Metro Surge is still being assessed, Walz said. Minneapolis businesses are estimated to have lost $10 to $20 million a week in sales, the Star Tribune previously reported.

The relief package would apply to businesses that can demonstrate substantial revenue loss tied to the surge with revenues between $200,000 and $4 million annually. The loans would be between $2,500 to $25,000, with an opportunity to apply for 50% forgiveness after a year.

Walz acknowledged that the $10 million relief proposal is “a very small piece of” the recovery. He said that the upcoming legislative session, which starts Feb. 17, “needs to be about recovery of the damage that’s been done to us.” The prospects at the Legislature aren’t great, however: Republican House Speaker Lisa Demuth, who is also a frontrunner for the GOP nomination for governor, is likely disinclined to support anything that could even implicitly be viewed as a criticism of the Trump administration’s immigration agenda.

Henry Garnica, the owner of CentroMex Supermercado in St. Paul’s East Side, a grocery store that caters to the Hispanic community, spoke at the briefing. Federal agents visited CentroMex without a judicial warrant in December, where they faced off with residents who quickly arrived at the scene and formed a chain outside the entrance. The incident ended in the federal agents leaving.

Garnica, who immigrated from Colombia over 20 years ago and is a U.S. citizen, said that his sales have been down 30 to 40% during the federal immigration enforcement surge. He spoke wearing a whistle and showed reporters his passport that he’s been carrying: “Hopefully we don’t have to do this anymore.”

Garnica said he expects that recovering from the loss in sales will take at least three to six months.

WASHINGTON — Leaders from several agencies within the Department of Homeland Security testified before a U.S. House panel Wednesday about how a shutdown would affect the programs they oversee, though Democrats argued the hearing was a “show” that wasn’t going to get lawmakers any closer to agreement on constraints to federal immigration enforcement. 

Congress has until Friday at midnight to pass a stopgap spending bill or reach bipartisan agreement on the department’s full-year funding bill, which was held up by Democrats after the killing of two U.S. citizens by immigration agents in Minneapolis. Otherwise, the department will begin a shutdown. 

House Appropriations Committee ranking member Rosa DeLauro, D-Conn., said it was unacceptable that neither Homeland Security Secretary Kristi Noem nor any leaders from Immigration and Customs Enforcement or Customs and Border Protection were at the hearing. 

“Democrats requested that they be present. Why are they not here?” DeLauro said. “That should tell you everything you need to know about what this hearing is really all about. It is not to address the real concerns of millions of Americans over the unchecked brutality of officers within those agencies, brutality that has left two Americans dead and countless others seriously injured.”

DeLauro countered that Republicans held the hearing to imply Democrats don’t care about consistent funding for the many agencies within DHS, including the Coast Guard, Federal Emergency Management Agency, Secret Service and Transportation Security Administration.

“In fact, it is the Republican leadership that has chosen to hold your agencies hostage to avoid implementing reforms that they know are necessary to keep our community safe from Immigration and Customs Enforcement and the Customs and Border Patrol,” DeLauro said. 

Nevada Republican Rep. Mark Amodei, chairman of the Homeland Security Appropriations Subcommittee, said he opted not to invite Noem because he wanted to “talk to the operational people” and that he decided not to invite leaders of ICE and CBP since they testified in front of a separate House committee Tuesday.  

Amodei said enacting a DHS funding bill before the Friday midnight deadline seemed “like a very tall order.” 

“A shutdown has gone from a distinct possibility to a probability,” Amodei said. “But not all components will equally share the pain during a Homeland shutdown.”

Amodei said that ICE and CBP’s “missions will be largely unaffected by a shutdown,” in part, because Republicans provided the two agencies with more than $150 billion in the party’s “big, beautiful” law. 

Most Homeland Security workers will stay on duty

A government shutdown this time around, unlike the one last year, would only affect the Department of Homeland Security, since Congress has approved the other 11 annual government funding bills. 

The other agencies housed within DHS would sustain varying ramifications. In general, any employees who focus on national security issues or the protection of life and property would continue to work through a shutdown, while federal workers who don’t are supposed to be furloughed. 

Neither category of employees will receive their paychecks during the funding lapse, though federal law requires they receive back pay once Congress approves some sort of spending bill. 

Texas Rep. Henry Cuellar, the top Democrat on the Homeland Security Appropriations Subcommittee, said the “reality is that nearly 90% of the department will continue operating, even if Congress fails to complete its work by the end of the week.”

Leaders urged to give up recess next week

House Appropriations Committee Chairman Tom Cole, R-Okla., urged GOP leaders to cancel the recess scheduled for next week, when many lawmakers plan to travel to Germany for the Munich Security Conference.

Cole argued that members should stay on Capitol Hill to negotiate an agreement on Homeland Security funding if a deal isn’t reached before the deadline. 

“I will tell you personally, I think it’s unconscionable if Congress leaves and does not solve the problem,” Cole said. “I’m sure Munich is a great place. I’ve been there many times. The beer is outstanding. But we don’t need to go to a defense conference someplace in Europe when we’re not taking care of the defense of the United States of America.”

Cole said he “would be embarrassed to walk past a TSA agent that wasn’t getting paid so I could go someplace else. And that’s my personal opinion.

“That’s not necessarily the opinion of my leadership or anybody else, but we should stay here and get this resolved. We should make sure that men and women that we have already put in a terrible position once for 43 days don’t have to go through it again.”

Missing paychecks for the Coast Guard

Admiral Thomas Allan, vice commandant for the U.S. Coast Guard, told lawmakers “a funding lapse has severe and lasting challenges for our workforce, operational readiness and long-term capabilities.”

“A lapse lasting more than a few days will halt pay for the Coast Guard’s 56,000 active duty, reserve and civilian personnel,” Allan said. “This is not a distant administrative issue. The uncertainty of missing paychecks negatively impacts readiness and creates a significant financial hardship for service members and their families.”

Shutdowns, he said, “cripple morale and directly harm our ability to recruit and retain the talented Americans we need to meet growing demands.”

Ha Nguyen McNeill, acting administrator at the Transportation Security Administration, said during the 43-day government shutdown that ended in November, she heard stories about “officers sleeping in their cars at airports to save money on gas, selling their blood and plasma and taking on second jobs to make ends meet.” 

“Many were subject to late fees from missed bill payments, eviction notices, loss of child care and more. All the while, expected to serve their country and perform at the highest level when in uniform,” McNeill said. “Twelve weeks later, some are just recovering from the financial impact.”

McNeill testified that “TSA’s critical national security mission does not stop during a shutdown; around 95% or 61,000 of TSA’s employees are deemed essential and continue to work to protect the traveling public during a shutdown, while not getting paid.”

Matthew Quinn, deputy director at the United States Secret Service, said agents will continue to report to work though he emphasized a shutdown would still have consequences. 

“To the casual observer, there will be no visible difference,” Quinn said. “However, gaps in funding have a profound impact on our agency today and into the future.” 

Gregg Phillips, associate administrator in the Office of Response and Recovery at FEMA, said a shutdown “would severely disrupt FEMA’s ability to reimburse states for disaster relief costs and to support our recovery from disasters.”

WASHINGTON — Five days after federal immigration enforcement agents killed the second of his constituents, Minneapolis Mayor Jacob Frey had a message for his peers: Speak out.

“Mayors, we do not back down to bullies. We stand up for democracy,” Frey said in a speech last month in Washington, D.C., at a gathering of hundreds of mayors from around the country.

Frey left the U.S. Conference of Mayors and rode to Capitol Hill to meet members of Congress, and five days after that, President Donald Trump said that he’d pull 700 U.S. Immigration and Customs Enforcement agents out of Minneapolis. Some 2,300 would remain.

Frey, a liberal mayor governing a predominantly liberal city, illustrated his way of responding to Trump’s increasing encroachment into city limits and city business, and he urged that way — public, loud, strong — for others too.

But his path isn’t the right one for all mayors, who hold mostly nonpartisan jobs in an increasingly hyper-partisan political environment. Their jobs are primarily to pick up trash, fill potholes and keep people safe. While some view confrontation with the White House as the right approach, others are opting for accommodation — or just keeping their heads down.

Cities rely on federal money, and Trump has made it clear that more ICE agents and fewer federal dollars will flow to cities that don’t respond to his requests.

Plainfield, New Jersey, Mayor Adrian Mapp, the son of immigrants, said in an interview at the conference that some disagreements with the federal government, such as those over immigration raids, can feel like a personal and political battle. Residents expect their mayor to fight for them, he said, especially against unpopular policies or federal overreach.

“There is a sense in our community that this is what people want from their mayor — to know we’re standing up, putting resources together and doing everything we can to support those who are affected,” Mapp said.

Boots on the ground

Chris Jensen, a two-term mayor of Noblesville, Indiana, told Stateline that city leaders are often insulated from Washington’s partisan battles, and that unless those issues get local, they’re not worth engaging in.

“Mayors don’t get to go on cable news and just repeat talking points,” Jensen said. “We have to do the work every single day. Snow has to be plowed. Roads have to be built. Trash has to be picked up. That’s not partisan, that’s just governing.”

A registered Republican who used to work for former Indiana Republican Gov. Mitch Daniels, Jensen said mayors must embrace bipartisanship so they can get resources for their constituents. And federal leaders, he added, could better utilize mayors by asking them for on-the-ground data and feedback from their constituents.

“We’re the boots on the ground,” Jensen said. “If you want to talk about housing, we know how many permits we pulled. If you want to talk about mental health, we know how many crisis calls we ran. Rely on us and get out of the way when we need to move faster.”

At last month’s conference, several mayors described tensions with the Trump administration — often not naming the president directly — as having intensified in recent months, particularly around immigration enforcement, federal deployment of National Guard troops and threats of revoked federal funding.

Much of Trump’s ire, they pointed out, has been aimed at big cities with large Democratic populations. The African American Mayors Association has noted that the cities Trump has decried as lawless and in need of National Guard troops — Chicago; Los Angeles; Memphis, Tennessee; Oakland, California; and Washington — are all led by Black mayors. All have seen significant declines in violent crime.

Trump has also threatened to send troops to New Orleans, despite its falling crime rate. Mayor Helena Moreno, who took office in January, was among the mayors visiting Washington. She told constituents in an Instagram message that she grabbed a moment with Trump at another event — and worked to shift his attention to other city needs.

“I thought it was very important for the president to hear directly from me on what the city of New Orleans actually needs from the federal government,” she said in the video. The city’s homicide rate is at its lowest in 50 years, she said, and she told Trump of the city’s infrastructure needs.

“I think he was receptive,” Moreno told constituents. “I’ve always said this: That even though I might not be politically aligned with someone, that if they are in a position of power, and have the ability to help the city of New Orleans, then I want to make sure that our needs are being told … so that we can figure out if there’s a path to being able to work together.”

Pushing back

Trump had told mayors that if they didn’t agree to drop sanctuary status, which bars local police agencies from working with ICE on immigration enforcement, their federal dollars would be cut off Feb. 1.

When the funding threats from the president didn’t materialize, newly sworn-in New York City Mayor Zohran Mamdani said his administration “will continue to stand up for the city” against efforts to restrict federal funding for cities based on politics and ideology.

But Mamdani, like other mayors, has looked for ways to connect with the president, meeting with Trump in the Oval Office shortly after his election last fall.

Washington, D.C., Mayor Muriel Browser, who finishes her third term next year, has said that whoever succeeds her in office will have an especially tricky job, because of the city’s unique circumstances — the federal government can overrule local laws.

Bowser pushed back strongly against Trump in his first term, but has been more pragmatic in his second term — looking for common ground over his National Guard deployment, accelerating homeless encampment sweeps and erasing a block-long “Black Lives Matter” mural that had been painted onto the street as protest in front of the White House. At the same time, Bowser has warned that such measures could limit city autonomy.

Similarly, San Francisco Mayor Daniel Lurie persuaded Trump in a phone call last fall to hold off on surging immigration agents to the city, telling the president that the city was doing well. Trump told reporters he was giving San Francisco a chance.

But sustained pushback may have been what led to the scaling back of ICE operations in Minneapolis.

Portland, Oregon, Mayor Keith Wilson has been hoping for a similar reduction in immigration enforcement in his city as he calls for ICE officers to leave the city.

Boston Mayor Michelle Wu, who noted at the conference that mayors are facing “headwinds” at the federal level when it comes to funding, recently joined regional mayors to announce a slew of accountability measures for ICE officers.

Newark, New Jersey, Mayor Ras Baraka and Jersey City Mayor James Solomon are both advocating for state lawmakers to pass legislation limiting how much state officials and local police can cooperate with ICE agents.

Chicago Mayor Brandon Johnson signed an executive order to expand the city’s investigation into possible misconduct by ICE officers.

Cincinnati Mayor Aftab Pureval said during a panel session at the mayors conference that the administration’s use of partisan politics — and the scope of the federal government’s powers — has profoundly changed the job for mayors.

“It’s absolutely affecting trust at every level,” he said.

Stateline reporter Robbie Sequeira can be reached at rsequeira@stateline.org.