Monday Morning Memo - July 18 - O'Donnell & Associates

Good Morning from the Campaign Trail…

Newsmax host Greg Kelly enlivened a somewhat sleepy governor’s race by saying, “Kathy Hochul has not really done much of anything, other than, I’m sorry but, be somebody’s wife,” during an interview with Republican candidate Lee Zeldin. Zeldin only said “She’s in over her head. She’s been a walking identity crisis,” but later offered, “Hochul has been elevated multiple times to higher positions of power capitalizing on scandal around her & taking positions she found advantageous at the time, only to flip flop to the opposite position in the future.” Governor Hochul responded, “If you’re looking for a label to give me, you can just call me ‘Governor.’” Advantage: Hochul.

Albany remained quiet with the Legislature out of session though Hochul signed legislation directing the Department of Financial Services to study overdraft fees in New York State, a bill prohibiting smoking in public parks, and a measure to require pedestrian and bicyclist safety as a part of drivers’ pre-licensing courses. One major development was the emergence of the New York State Legislative Workers United representing Senate and Assembly staff and calling on Senate Majority Leader Andrea Stewart-Cousins to voluntarily recognize the union. These hardworking men and women certainly deserve a voice and a raise.

Things are more interesting in New York City where it turns out that Mayor Eric Adams has a secret office, there is a battle over maps released Friday by the New York City Redistricting Commission that would potentially pit Council Members Justin Brannan and Alexa Aviles against one another in order to create what the Commission calls an “Asian Opportunity District” in Brooklyn, and 41 out of 51 members of the City Council–including Speaker Adrienne Adams–signed a letter to the Mayor and NYS Department of Education Chancellor David Banks asking for the reversal of recent hundreds of millions in cuts to schools which were passed in an effort to “balance budgets with declining enrollment.” This is somewhat strange because these Council Members and Speaker Adams all voted for these cuts in the budget they passed just over two weeks ago.

Once again this week all the real action was in Washington, DC….

Senate Majority Leader Chuck Schumer was confined to his residence in Brooklyn where he worked his trusty flip phone in search of a deal on climate, major legislation to promote competitiveness with China in advanced manufacturing, budget reconciliation, and so much more. However, more terrible inflation numbers—a whopping 9.1%—caused West Virginia Senator Joe Manchin, once again, to dash any Democratic hopes of a big deal. Manchin says the provisions of the omnibus bill would need to be “scrubbed much better” in light of the higher-than-expected inflation figures. “Basically, take your time and make sure we do it and do it right. We can’t afford mistakes in the highest inflation we’ve seen in the last 40 years,” said Manchin.

Manchin’s hand-wringing is shrinking Democrats hopes on climate change—a key campaign promise of President Joe Biden— specifically. After almost a year of dragging his feet on the Biden Administration’s push on climate change legislation, Manchin blamed inflation and said he was wary of raising the taxes necessary to offset the energy and climate credits. Manchin said he wants to wait for the August indicators before proceeding, kicking the discussion until after the August recess. “[People] can’t buy gasoline. They have a hard time buying groceries. Everything they buy and consume for their daily lives is a hardship to them. And can’t we wait to make sure that we do nothing to add to that?,” said Manchin.

Despite the inflation numbers, Manchin says there is still a path on legislation to give Medicare more power to negotiate lower prescription drug prices. “We know what we can pass is basically the drug pricing, OK? — on Medicare. Is there any more we can do? I don’t know but I am very, very cautious,” said Manchin.

The Senate could begin work on a pared down “chip-focused” China Competitiveness bill this week. Schumer told Senators that a floor vote to kick off the legislative process on a bill that includes $52 billion in funding for semiconductor manufacturing could come as early as this Tuesday. The slimmer bill comes as Senate Minority Leader Mitch McConnell threatened that the USICA bill would lose Republican support if Democrats continued to pursue reconciliation legislation. Commerce Secretary Gina Raimondo and Secretary of Defense Lloyd Austin are pushing to send the slimmer legislation to the President’s desk before the August recess. Austin spoke specifically in support of the chip-focused approach, saying last week “I urge Congress to pass the Bipartisan Innovation Act and fully fund the Creating Helpful Incentives to Produce Semiconductors portion of the legislation. The CHIPS Act directly supports our national defense.”

While the Senate remains stalled on Fiscal Year 2023 Appropriations, the House is full steam ahead. The House Rules Committee will meet this afternoon to prepare the House’s 2023 appropriations minibus for floor action as soon as later this week. As of last week, hundreds of amendments had been filed with the Rules Committee on the minibus legislation, which includes the appropriations bills on Agriculture, Energy-Water, Transportation-HUD, Interior-Environment, Financial Services and Military Construction-VA.

With just two session weeks left until the August recess, stakes couldn’t be higher for Democrats heading into midterms. Some in the House are even calling to cancel the coveted late summer break.

Finally, our congratulations to Jim Thorpe, arguably the greatest athlete of all time. It only took 110 years but he was finally recognized as the sole gold medal winner of the 1912 pentathlon and decathlon.

-Jack O’Donnell

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