Monday Morning Memo – April 17

Good Morning from Albany, NY… where there is still no State Fiscal Year 2023-2024 Budget. A final budget or another extender will have to be in place by noon on Tuesday for the state to make payroll. 

Rank and file members return to Albany today where the Leaders and Secretaries have been steadily negotiating.  Both the Assembly and Senate are scheduled to return to Session at 1 p.m.

While we expect another extender—likely today—momentum continues to build towards a final deal, perhaps as soon as later this week or weekend. While there is still no final deal on bail or housing, some broad outlines of an agreement are emerging. 

On bail, the deal would drop the “least-restrictive” requirement language in the most serious cases. That gets more complicated with the inclusion of discovery reform. One plan, pushed by district attorneys, would give prosecutors more time to hand over evidence while also establishing a time limit for when defense lawyers can file a challenge that all evidence has been produced. Criminal justice advocacy groups are vehemently opposed to the plan, including the Legal Aid Society which said in a statement, “This 11th hour ploy to gut one of the most transformative reforms Albany has codified in recent memory is a shameless attempt by prosecutors to revert back to the days when discovery practices skewed heavily in their favor.” There appears to be room for an agreement here that helps prosecutors while also keeping the spirit of the original reforms. We shall see.

On housing, the broad outline includes additional incentives for communities to approve new housing as well as additional time and layers for local officials to weigh in before any potential sanctions or overrule, but negotiations remain stuck on what—if any—power Albany will have to overrule those decisions.  Any deal will include additional tenant protections, but what those are—and if those protections include “good cause”—remain to be determined.  Additional issues including 421a and the “Vacancy Reset” from the Community Housing Improvement Program also remain alive in negotiations.

Of course, other major issues such as lifting the cap on charter schools, MTA (and Upstate transit) funding, and most broadly—revenue or who is taxed and how much— remain open. Nonetheless, the betting here is on one (1) more extender and then a final deal. 

In non-budget news, Governor Hochul announced the nomination of Judge Rowan D. Wilson to serve as Chief Justice of the New York State Court of Appeals. In a statement, the Governor said, “The Chief Judge of the Court of Appeals not only leads the State’s highest court, but is also responsible for managing the diverse and complex courts across the State. New Yorkers deserve a strong, effective, and thoughtful leader, and I am proud to nominate Judge Wilson as Chief Judge.” Judge Wilson, who has served as an Associate Justice on the Court of Appeals since 2017, would be the first African-American to serve as Chief Judge if confirmed.

The Governor also announced her intention to nominate attorney Caitlin Halligan to replace Wilson as an Associate Judge on the Court of Appeals. Halligan, who was on the shortlist to be nominated for Chief Judge, has previously served as New York’s Solicitor General and was retained by Hochul in private practice in anticipation of a lawsuit with the Legislature over her first nominee, Judge Hector LaSalle. 

The Governor’s roll out of Wilson as her nominee went much smoother and was more warmly received from fellow Democrats than her nomination of Judge LaSalle which—as we discussed extensively—set off a months-long battle between the Executive branch and Legislature.

Deputy Senate Majority Leader Michael Gianaris signaled his support of Wilson saying, “I am particularly excited about the prospect of Judge Wilson leading our state’s highest court as Chief Judge. He is exactly the type of person who can restore the integrity and reputation of the Court of Appeals after the damaging tenure of the previous administration.” 

Republicans in the Legislature have threatened a lawsuit over the nomination, challenging legislation rushed into law that would allow the Governor to nominate a sitting Court of Appeals Associate Judge for the top position and use the same list of finalists prepared by the Commission on Judicial Nominations to fill the associate judge vacancy. Senator Anthony Palumbo, the Ranking Member on the Senate Judiciary Committee said plainly, “The bill is unconstitutional.” A spokeswoman for the Governor defended the policy saying, “Given that the court has been operating with vacancy since last summer, this legislation would create a path to quickly restore the court to full strength.” 

Republicans—and some other observers—see the rush as a coordinated effort to seat a new majority on the Court of Appeals that would be favorable to Democrats redistricting argument that would allow for new Congressional lines in 2024. More to come on this.

A hearing on Judge Wilson’s nomination in the Senate Judiciary Committee is expected today while Caitlin Halligan’s hearing is scheduled for Tuesday.  Expect both to be confirmed.

ALERT: The Legislature will be working on quite a bit of non-budget related matters this week. Over 20 Committees will meet to discuss, and advance, a slew of legislation on matters ranging from Education to Healthcare. It is clear that Committee Chairs, Program & Counsel staff, and others in Albany are setting the stage for a “post-budget policy season” and the order of business in advance of the June 8^th end of Legislative Session. Over 12,000 bills have been introduced between the two Houses! You can take a look at Senate agendas here and Assembly agendas here.

Lawmakers return to Washington, D.C. this week following the April Recess and the main agenda item for House Republicans will be putting together a debt limit proposal that can gain the support of the various wings of the Conference. Speaker Kevin McCarthy is preparing to present a framework package to his members this week that would extend the debt limit until May 2024. The proposal would reduce spending to FY2022 levels and leadership is debating either a cap on non-defense discretionary spending or a cap on overall discretionary spending. Also included is a 1% limit on budget growth for the next ten years as well as work requirements for social programs, repealing various green tax credits, and a slew of regulatory repeals. Given that the proposal is dead in the Senate, the wide-ranging proposal is intended to satisfy every corner of the House GOP and jump start negotiations with the White House. Observers will be watching to see how various Republican factions react to the proposal.

Later today, Speaker McCarthy will speak at the New York Stock Exchange (10 a.m.) to tout his plan and convince Wall Street of the need to cut spending before further raising the debt limit. Former Speaker of the House John Boehner famously went to Wall Street in 2011 to convey the same hardline message, but his brinksmanship with President Obama ultimately brought the U.S. to the edge of default and caused a temporary downgrade in the nation’s credit rating. 

The Senate will reconvene today, as well. However, Senator Dianne Feinstein, 89, will remain at home in California while she recovers from illness. While many of her colleagues in Congress offer respect for her long and storied career, some are beginning to get frustrated that her prolonged absences are hampering Democrat’s ability to get things done in a 51-49 Senate. So far, Feinstein has missed 60 of 82 votes in the current Congress. Her absence is even more acute given her position on the Senate Judiciary Committee which is no longer able to advance President Biden’s federal judge nominees until she returns. Feinstein has asked Senate Majority Leader Chuck Schumer to temporarily replace her on the Senate Judiciary Committee. However, that would require 60 votes in the Senate and it is not likely Senate Republican are going to make it any easier for President Biden to appoint federal judges to lifetime terms. 

Rep. Ro Khanna, a prominent progressive in California, took to twitter to call on Feinstein to resign saying, “It’s time for @SenFeinstein to resign. We need to put the country ahead of personal loyalty. While she has had a lifetime of public service, it is obvious she can no longer fulfill her duties. Not speaking out undermines our credibility as elected representatives of the people.” Feinstein announced she will retire at the end of her term in 2024. If she left early, California Governor Gavin Newsom would appoint someone to serve out the remainder of her term. That is tricky as the primary to fill the seat includes prominent House Members including Katie Porter, Adam Schiff, and Barbara Lee. Khanna supports Lee while much of the establishment has lined up behind Schiff

President Biden’s nominee to lead the Department of Labor, Julie Su, could face a contentious nomination hearing with Republicans seemingly unified in opposition. Su previously served as the California labor secretary has been serving as Acting Secretary of the DOL since former secretary Marty Walsh left on March 15th to the head the NHL Players Association. Republicans and business groups, including some food delivery and ride-sharing services, have concerns over Su’s work to implement a law in California that hampered the ability of individuals to work as independent contractors. The AFL-CIO, one of the nation’s largest and most politically active unions, applauded Biden’s nomination of Su, saying in a statement, “there’s no one more dedicated and qualified to defend the fundamental rights of working people than Julie Su.” The Senate Committee on Health, Education, Labor, and Pensions (HELP) is scheduled to hold Su’s hearing on Thursday.

With the MLB season underway and the NHL and NBA playoffs beginning, the teams that win their respective championships may be waiting a while for their White House visit. So far, the Golden State Warriors are the only 2022 championship team to have visited the White House. Typically the visits are scheduled when the team is already going to be in D.C. for a game, but with the tight schedules of both the President and professional athletes, it doesn’t always work out that way.

The President himself is a sports fan, but his administration has not partnered or engaged with athletes and sports teams at the level of Barack Obama or even Donald Trump, who famously served fast food buffets to visiting championship teams. These nonpolitical, bipartisan events are the type of engagement that President Biden typically enjoys, but for now, the championship trophies will have to do.

-Jack O’Donnell

 

 

 

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