Monday Morning Memo - Dec. 19 - O'Donnell & Associates

Good morning from New York…

Here are the biggest issues we are watching before the holidays:

New York

1.) More Legislation

Governor Kathy Hochul has just under two weeks left to make her way through the bills that have passed both houses in the Legislature before the December 31st deadline. This past week, the Governor signed a bill to further protect victims of hate crimes from being mistreated by insurance companies and a bill to end the “puppy mill to pet store pipeline,” by prohibiting the sale of dogs, cats, and rabbits by retail pet shops. Other bills that were signed this week include a legislative package aimed at protecting tenants and promoting affordability, a bill making it easier for off-site caterers to secure alcohol licenses, and legislation to crack down on violent crime against police officers.

The Governor vetoed a bill that would have banned non-essential helicopter traffic from the Hudson River Park Heliport and would have allowed New Yorkers to sue helicopters causing “excess noise.” Helicopter tours of NYC and private helicopter travel have become more common in the city and some were hoping this bill would help cut down on the noise. Hochul also vetoed a bill that would have limited the emissions of certain pollutants, with a focus on environmental justice communities. The Governor said the bill was “duplicative” and indicated that the state’s overall climate goals already correct the problems the bill was written to address.

As of Monday, the Governor had three weeks to decide on 265 bills. New York Focus has a list of them all.

Notable bills that still need to be signed or vetoed by the Governor include the Grieving Families Act which would update the process by which families can claim financial compensation in a wrongful death suit as well as the Digital Fair Repair Act, which would require manufacturers to make repair and diagnostic information public to prevent large companies from having a monopoly over repair services. The Governor must also decide on the Contractor Registration bill, establishing a registration for contractors and subcontractors engaged in public work. Another bill worth watching is Assembly Member Daniel O’Donnell and Senator Brad Hoylman’s bill requiring insurance coverage for pre-exposure prophylaxis and post-exposure prophylaxis to prevent HIV infection, which advocates have pushed as an essential pillar in the fight to end the HIV/AIDS epidemic in New York State.

2.) New York’s Top Judge

The Governor has until Friday to announce her pick to succeed Judge Janet DiFiore as the Chief Judge of New York’s highest court, the Court of Appeals. DiFiore was appointed by Andrew Cuomo and was routinely ridiculed by state Democrats for pulling the Court to the right before ultimately stepping down over the summer in the face of an ethics investigation. Now, Hochul’s choice to replace her has become a political litmus test, especially among those on the left of her party who would like to see the Court return to a more liberal bend. Either way, it is a consequential decision for Hochul.

The Chief Judge oversees the entirety of the state’s court system, not just the Court of Appeals. That will give Hochul’s pick oversight over millions of cases, thousands of state and local judges, and hundreds of courtrooms. The Court of Appeals played a key role in the redistricting saga that occurred over the summer and further electoral questions will surely be an issue that the new Chief Judge will have to rule on. The conservative-leaning U.S. Supreme Court has been increasingly deferential to state courts, ceding authority on issues such as abortion, gun control, privacy rights, and religious freedoms, all of which could likely come before the seven-member Court of Appeals.

Hochul will choose from a list of seven names selected by the NY Judicial Commission that includes Court of Appeals Associate Judge Anthony Cannataro, Yale Law School Professor Abbe Gluck, Appellate Division President Justice Hector LaSalle, Albany Law School Dean Alicia Ouellette, Deputy Chief Administrative Judge for Justice Initiatives Edwina G. Richardson-Mendelson, Associate Justice of the Appellate Division Jeffry Oing, and Corey L. Stoughton, the attorney-in-charge at The Legal Aid Society. Three other justices on the Court of Appeals, all of whom regularly challenged and dissented with DiFiore, were left off the shortlist by the panel of which a majority of members were appointed by DiFiore.

3.) Unusual Cooperation

New Yorkers are not generally accustomed to the Governor and the Mayor of New York City getting along very well. (For a refresher, here is New York Magazine’s “The Bill de Blasio-Andrew Cuomo Feud: A Retrospective.”) However, the current Governor and Mayor seem to have struck a different tone: cooperation. Just this week, they announced a number of joint ventures, including the “New New York: Making New York Work For Everyone” Action Plan. The plan is made up of a set of 40 proposals intended to “serve as a roadmap for the city’s future and make New York City an even better place to live and work.”

The panel was led by two former NYC deputy mayors, Richard Buery and Daniel Doctoroff, with the following goals:

Reimagine New York City’s commercial districts as vibrant 24/7 destinations: Transforming New York City’s single-use business districts into great places where people live, work, and play.
Make it easier for New Yorkers to get to work: Improving commutes into Manhattan while strengthening employment hubs and workspaces across the five boroughs so people can work closer to home.
Generate inclusive, future-focused growth: Supporting the growth of jobs and innovation and breaking down barriers to economic mobility.

Both leaders were quick to tout the work of the other, with Hochul saying “Thanks to an extraordinary partnership with Mayor Adams and the New New York Panel, this report is providing the road map toward a stronger, fairer, and more accessible New York” and Adams adding “ I want to thank Governor Hochul and the entire panel for their partnership in this critical effort to put our city on the right track, and I look forward to moving that work forward together.” The same day, Hochul and Adams announced the groundbreaking on a 174-unit, mixed-use housing development in Brooklyn that will also include affordable housing units and 7,600 square feet of retail.

4.) State Budget

Governor Hochul also gave a preview of her budget plan for the upcoming year and offered that there will be no new taxes as part of her financial plan, saying “I don’t believe raising taxes at a time when we just cut taxes makes sense. We just did that a year ago. I’m not going to turn around say we’re raising your taxes. I don’t foresee that.” Hochul also gave a warning that the State should not get accustomed to the windfall of federal stimulus money and pandemic aid that bolstered past budgets, especially in the face of a looming economic downturn.

State Budget Director Robert Mujica, who is slated to depart State government at the end of the year, echoed Hochul’s concerns, but emphasized that the state is in a good place to deal with macroeconomic threats. He said the state’s budget is “holding up well” and added, “We have the reserves that are there to dull the impact of any kind of mild recession.” Part of budget discussions will be whether to continue a suspension of the state gas tax after it is scheduled to expire at the end of the year.

5.) Upcoming Legislation Session

Here are some important upcoming dates as New York kicks off the 2023 Legislative Session:

January 1st- Inauguration

January 4th- First Day of Session

January 10th- State of the State Address

February 1st- Executive Budget Due

April 1st- Beginning of new Fiscal Year

June 8th- Last Day of Session

Governor Hochul has hinted at some of her priorities for the 2023 Legislative Session which will be formally laid out in her State of the State address. At the New New York press conference, Hochul said, “The jobs are there, the housing is not” before teasing that her new housing plan will include 800,000 new housing units over the next decade. The Legislature is sure to have priories of its own, including renewed efforts on Good Cause Eviction as well as any of the bills the Governor vetoes in the remaining days of 2022.

We will have a full 2023 legislative preview in our next publication on January 2nd.

Washington, D.C

1.) Lame Duck

The lame-duck session is always an unusual time in Washington. On the one hand, there is a feeling of optimism heading into the holidays where lawmakers and staff can unplug from the toils of politics. Some lawmakers are fresh off of reelection and looking forward to a new term, while others are retiring or leaving the body, equally looking forward to never having to return to Washington again. Given that elections just occurred and the next meaningful election won’t take place until 2024, legislators are also more willing to actually legislate and get things done rather than play politics.

On the other hand, the lame-duck session is a catch-22 for the outgoing party in power. While there is an urgency to do the bare minimum and get home in time for the holidays, the lame-duck session is often the last chance to get things accomplished before the new Congress is sworn in. From 1990 to 1998, there was no legislative session following November elections.

(The House convened during the lame duck in 1998 to consider impeachment against President Clinton.) In 2008, the Senate only voted twice during the lame duck, once to approve extended unemployment benefits and the other to vote on a bailout for the auto industry, which failed to pass. In 2018, congressional leaders came to a funding agreement which President Trump ended up opposing over money for the border which subsequently shut the government down for five weeks.

Democrats will maintain control of the Senate, but with the GOP in control of the House, getting any of their legislative priorities across the finish line is going to be a tall task. In addition to the government spending bill which has to be addressed, lawmakers are sorting out which legislation will make its way into what will likely be the final legislative package passed this year. Leadership is likely to include a bill that provides $37 billion in additional aid to Ukraine as well as funds to aid in disaster recovery and future emergency preparedness. They are also likely to attach a bill that reforms the Electoral Count Act in response to the election denialism and attack on the Capitol in 2020. As part of the negotiations over the Inflation Reduction Act, Democrats brought Senator Joe Manchin’s (D-W.V) energy permitting proposal for a vote but it failed to advance. Manchin said “Once again, Mitch McConnell and Republican leadership have put their own political agenda above the needs of the American people.”

2.) Budget Deal

Congress passed a one-week stop-gap spending bill on Friday to buy themselves time to come to an agreement on a larger, omnibus spending package. Kevin McCarthy whipped House Republicans against the vote, hoping to delay a spending bill until the new Congress when the GOP will control the House. Nine Republicans eventually broke with McCarthy and the measure passed the House 224-201 and 71-19 in the Senate. Senator Lindsey Graham (R-S.C.), who voted for the stop-gap bill and supports a larger omnibus package said of the House GOP’s efforts to stall a spending bill, “They’re having enough problems trying to find a speaker — much less pass a bill.”

Both sides seem optimistic that they will agree to a longer-term spending bill and still get home in time for the holidays, despite the obstruction from some in the House Republican caucus. Rep. Rosa DeLauro (D-Conn.), chairwoman of the House Appropriations Committee said, “We have a framework that provides a path forward to enact an omnibus next week.” The two other top appropriators at the Capitol, Senator Patrick Leahy (D-Vt.) and Senator Richard Shelby (R-Ala.), shared DeLauro’s optimism and are confident a deal will be reached. Between retiring members who want to see their priorities funded before they leave Congress and returning members who are skeptical of potential Speaker Kevin McCarthy acting in good faith, there is a broad enough coalition to pass the $1.7 trillion omnibus spending deal. Senator Roy Blunt, a Republican from Missouri who is retiring said, “I don’t think any new Congress should be forced into trying to do the last Congress’s work, and even more so if you’re changing control, I just think it’s asking for big problems.”

The differences in opinion over domestic and defense spending totals that were holding up the larger bill seem to have been ironed out or at least brought to a place that both parties can live with. The defense total that lawmakers seem to have settled on is $858 billion, as outlined in the National Defense Authorization Act that passed Congress last week and is awaiting President Biden’s signature. Democrats need some Republican support to get the bill over the required 60-vote threshold and the increase in defense spending, along with the provision repealing the vaccine mandate for members of the military, will be enough for most R’s to support the package.

3.) McCarthy

If anyone in Washington is hoping for a Christmas miracle, it is current House minority leader Kevin McCarthy. Despite no serious challenger and the lobbying efforts of former President Donald Trump on his behalf, McCarthy has still yet to garner the necessary support among his conference to become Speaker of the House when Congress reconvenes in January. McCarthy is facing a mini-revolt from the far right of his party, who see him as part of the “establishment” despite having the public support of Rep. Majorie Taylor Greene, for now. Among the holdouts are Rep. Matt Gaetz (R- FL), the de facto ring leader of the “Never Kevin” movement, Andy Biggs (R-AZ), who is running against McCarthy, and Reps. Ralph Northam (R-S.C.) and Bob Good (R-VA). In an anonymous ballot election to nominate a speaker, 36 House Republicans voted against McCarthy but he still obtained the majority of votes needed within his party to be formally nominated. When it comes to the actual election on January 3rd, McCarthy will need a majority of the entire 435-member House of Representatives and with a razor-thin R majority, he cannot afford many defections.

As the prospect of a long, drawn-out floor vote draws closer, McCarthy seems to be losing patience saying, “Well, we’re still continuing to talk, but they have not moved, but it would delay everything, getting committees up and running, being able to do the things that…need to get done right away. People look at us and believe are you ready to be the majority if this is what’s happening? How can you pass the big bills? How can you change the course of history? How can you secure the border? How can you become energy-independent? …It’s all in jeopardy.”

For historical reference, Speaker Nancy Pelosi was roughly a dozen votes short in 2018 before cutting a number of deals that eventually won her enough votes to secure the gavel on the first ballot. McCarthy is eager to make a deal, however there does not seem to be a deal to be made. He has already indicated he will pursue a number of the priorities that the holdouts would like to see done, including expelling some Democrats from committee assignments, impeaching Biden’s cabinet officials, and giving a broader group of members a seat on the Republican Steering Committee which hands out committee appointments and makes other important decisions regarding the direction of the conference. A major item on the far-right wish list, which McCarthy is glad to grant, is an investigation of the committee investigating January 6th. The group also released a broader set of policy demands that they would like to see enacted by McCarthy should they decide to vote for him. However, Matt Gaetz says he needs more than McCarthy’s word, saying on his podcast, “we don’t trust Kevin McCarthy to deliver on any changes to the rules that he promises.” One measure that McCarthy has wholeheartedly rejected is a rules change that would allow a snap vote to remove a sitting speaker at any time, a tactic former Republican Speaker John Boehner once called “legislative terrorism.”

So far, the concessions from McCarthy and entreaties from Trump have not been enough to sway Gaetz, Biggs, and the other “Never Kevin” Republicans. If that holds, we could be headed for a contested Speaker’s race where no one has the necessary votes and alternate candidates could emerge as the vote goes into multiple ballots. In 1855, it took 2 months and 133 ballots to elect a Speaker. While it likely will not take that long, there are multiple scenarios where the vote could turn into a drawn-out process and the House is not able to conduct official business or even establish operating rules until a Speaker is chosen. If McCarthy fails to win on the first voice vote from the Clerk, they could repeat this procedure until someone does reach a majority. If that proves futile, Republicans could vote to change the way they elect a speaker, such as accepting a plurality of votes rather than a majority. They could also adjourn the House while members negotiate. Since there will be no Speaker, the House Clerk, Cheryl L. Johnson, will be in charge of the rules and procedure. Members are free to seek recognition to make motions, propose resolutions, or generally anything to muddy the waters or delay the vote. Between the archaic procedures of the House and the vigor of modern-day partisan politics, the vote on January 3rd is sure to produce some parliamentary fireworks.

4.) Hatch Act

White House Press Secretary Karine Jean-Pierre is over six months into her new job as White House Press Secretary after Jen Psaki stepped away in May. Since then, she has shown an uncanny reverence to the Hatch Act which is a 1939 law that prohibits executive branch employees from campaigning or engaging in political activities while on the job in their official government capacity. The Hatch Act is one of the most routinely broken laws in Washington and enforcement usually comes in the form of a small fine or strongly worded letter. Psaki received a Hatch Act violation for saying the White House was “going to do everything we can” to help former Gov. Terry McAuliffe in a White House press briefing. The Trump administration seemed to take pride in violating the Act and Trump even held a campaign event on the White House lawn.

But Jean-Pierre’s invocation of the Hatch Act seems to be more of a way to evade uncomfortable questions in the briefing room rather than strict adherence to a relatively obscure law. She has declined to answer questions like “Does President Joe Biden have any advice for Jon Fetterman as he recovers from a stroke?” and “How did he feel when Sen. Raphael Warnock declined to say whether he would support Biden in 2024?” on the grounds she is prohibited from discussing that by the Hatch Act. She has also declined from commenting on topics like disgraced FTX founder Sam Bankman-Fried’s political contributions, Hunter Biden’s laptop, and Elon Musk’s political antics, offering “I am covered by the Hatch Act, which I’m happy to say over and over again because we believe in the rule of law here.”

Congratulations to Congressman Joe Morelle (D, NY-25) who was appointed by Incoming Minority Leader Hakeem Jeffries to serve as the ranking member on the House Administration Committee, which is tasked with overseeing the day-to-day operation of the House as well as overnight of federal elections. In a statement Jeffries said, “Congressman Joe Morelle is a leader in our Caucus who is deeply respected by Members on both sides of the aisle for his ability to bring people together to get things done. His reputation as a problem solver and fighter for our Democratic values dates back to his service as Majority Leader in the New York State Assembly. In Congress, Joe has been a champion for Upstate New York and has worked relentlessly to lower costs for working families. He brings a depth of experience to this critical role as a result of his dedicated service on the Rules, Budget, and Appropriations Committees.”

And finally, last minute Christmas shopping on your mind this week? Check out United States Senator Kyrsten Sinema’s secondhand boutique.

Merry Christmas! Happy Hanukkah! Happy Holidays to all! We will be spending time with family and friends next weekend but will be back on January 2nd with our 2023 Legislative Preview.

-Jack O’Donnell

December 19, 1843

“A Christmas Carol” by Charles Dickens is published, 6,000 copies sold.

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