Gov. Tim Walz was a darling of the left last year. Now he’s at odds with Minnesota progressives.

Two years after he signed a liberal policy blitz into law, Gov. Tim Walz stood before reporters Thursday to announce a budget deal that cuts spending and scales back health coverage for undocumented immigrants.

It was a notable shift back toward the center for Walz, done out of fiscal and political necessity as a possible multibillion-dollar deficit looms and Republicans in a tied House demand moderation.

The pushback from the left was immediate.

“You’re killing our communities!” a group of progressive DFL lawmakers chanted outside the governor’s office, disrupting Walz’s announcement as they protested the immigrant health care rollback.

Gesturing at the legislators banging on his office door, Walz said, “This is what happens when you compromise.”

Walz became a darling of the left when he ran for vice president last year and touted Minnesota‘s 2023 progressive agenda on the national stage. But the budget agreement he struck with legislative leaders serves as a reminder of his new political reality and willingness to make decisions that are unpopular with some fellow Democrats.

“The criticism has been now for a lot of Democrats, ‘They moved too far to the left, got out of the mainstream, they need to move back to the center,’” said David Schultz, a political science professor at Hamline University.

“I think that’s what Walz is trying to do, is trying to reposition himself as the centrist candidate. Not the governor from the state that is from the left, but the governor from the state that works.”

Walz is expected to seek a third consecutive term as governor in 2026, though he hasn’t formally announced his plans. He also hasn’t ruled out another run for national office in 2028.

The governor has kept up his national profile, holding town halls in Republican congressional districts and appearing on popular podcasts. He’s scheduled to speak this month at state political conventions in South Carolina and California; South Carolina was the first nominating state in the 2024 Democratic presidential primary, and California has the largest number of delegates at the party’s nominating convention.

Schultz said Walz could be trying to moderate his positions ahead of a national run.

California Gov. Gavin Newsom, another Democrat considering a 2028 bid for the White House, also has proposed cutting health care coverage for undocumented immigrants to balance his state’s budget.

The decision was difficult for DFL leaders, as the program letting the immigrants enroll in state-funded MinnesotaCare just started in January. The program has cost more than expected, prompting GOP lawmakers to call for its repeal.

Walz was the only top Democrat to publicly indicate he was willing to change the program. He telegraphed the deal ahead of time, telling reporters he was open to changes as long as the program still covered children.

And that’s where Walz and legislative leaders landed, maintaining the coverage only for the kids of undocumented adults.

“Budgets are fiscal documents, and they are moral documents, and I think at the end of the day to get the deal done, we all compromised on this,” Walz said Thursday. “It’s not about punishing people.”

Progressive elected officials from the Capitol in St. Paul to Minneapolis condemned the change, demanding that Walz and legislative leaders reverse course. They protested Friday alongside faith groups and unions.

“Stripping health care away from our communities is just inhumane and wrong,” said Minneapolis City Council Member Jason Chavez. “I would hope that the governor changes his opinion on this situation.”

It was reminiscent of the pressure Walz faced from progressives two years ago to sign a bill providing pay raises and job protections to rideshare drivers. Scores of the drivers rallied outside the governor’s Capitol office then, chanting for him to sign the legislation, but he vetoed it after Uber and Lyft threatened to pull out of Minnesota markets.

Lawmakers came back the following year and passed a rideshare bill that the companies could tolerate, and Walz signed it into law.

“Before they had total control of government for the last two years, [Walz] found himself in this position fairly regularly where the far left of the Democratic Party were being somewhat critical of him because he was having to compromise,” said Sen. Zach Duckworth, R-Lakeville. “We’re right back to where we used to be.”

But Duckworth, who’s mulling a run for governor in 2026, said it’s hard to reconcile this Walz with the one who signed a suite of progressive policies into law two years ago: “If compromise isn’t necessary, he’s 110% OK with us going as far left as he has to.”

“I think when you look at folks like Gov. Newsom or Gov. Walz or any politician that’s looking at doing something more nationally … they try to position themselves to have the best of both worlds,” Duckworth added.

Sen. Nick Frentz, DFL-North Mankato, has known Walz for two decades. He said he believes the governor is simply responding to voters’ changing needs. Voters in last year’s election showed they value pocketbook issues and bipartisanship, Frentz said.

There are signs that Minnesota is moving closer to the middle, he said. U.S. Rep. Angie Craig easily won re-election last fall on a moderate Democratic platform. Minneapolis City Council Member Katie Cashman, a progressive, recently lost the DFL endorsement to a more moderate challenger. And the St. Paul City Council recently weakened its rent control ordinance.

“The pendulum swings back and forth,” Frentz said. “Wouldn’t the governor of a state and his choices and what he’s willing to agree to typically reflect stuff like that?”

Walz won praise from DFL and GOP legislative leaders after they emerged from negotiations with the budget deal. House DFL Leader Melissa Hortman of Brooklyn Park said Walz kept everyone focused on “the end goal of fiscal responsibility.”

GOP House Speaker Lisa Demuth, who criticized Walz this year for not meeting with Republicans, thanked the governor for bringing the majority leaders into one room and including GOP Senate Minority Leader Mark Johnson.

“We worked well together,” said Demuth, R-Cold Spring. “And I am very proud of the work that we did.”