Monday Morning Memo – Sept. 14

The failure illustrates the gridlock that has snared all attempts to approve a fifth round of relief and further dimming hopes of a deal before the election. The bill did give endangered Senate Republicans the chance to vote for additional virus money before November’s elections but, with the clock ticking, it seems highly unlikely there will be a deal. Senator Pat Roberts of Kansas called bipartisan talks “sort of a dead-end street” right now. Senate Appropriations Chairman Richard Shelby said it “looks” like negotiations are dead, though he added that “you never know around here.” Republicans and Democrats alike seem prepared to head into the election without passing another stimulus bill, each gambling voters will blame the other side.

In the House of Representatives, Speaker Nancy Pelosi remains firm on a baseline figure of $2.2 trillion, but some moderate House Democrats are growing increasingly worried about stalled coronavirus relief negotiations and have started to push Pelosi and other party leaders to come to the middle and break the stalemate. House members are returning to Washington this week and are scheduled to be in session for just three weeks before leaving town until November. Some Democrats have suggested passing smaller, more targeted coronavirus relief bills in the House, which might have a chance of passing the Senate, but Pelosi and Senate Minority Leader Chuck Schumer have rejected that idea, saying it weakens Democrats’ efforts to secure a broader relief package. “We don’t want to go home without a bill, but don’t be a cheap date,” Pelosi said. “When you are in a negotiation, the last place to get weak knees is at the end.”

Talk of combining a stimulus package with an end of the fiscal year funding plan is effectively dead for now. Leaders on both sides of the aisle are now advocating for a “clean” stopgap measure known as a continuing resolution (CR). Democrats and the White House have already agreed to punt this month’s shutdown threat for at least a few more months but have not agreed on an end date for the CR — likely mid-December or mid-February.

However, the idea has been rejected by Governor Andrew Cuomo for fear that the richest New Yorkers would leave the state creating an even more substantial budget hole.  “I don’t care what you increase taxes to, you couldn’t make up that deficit,” Cuomo said last week.

While many legislators advocate for tax hikes in the immediacy, the Legislature is also looking at a number of other potential revenue sources to pull New York out of a $14.5 billion hole. Senator Joseph Addabbo, the Chairman of the Senate Committee on Racing, Gaming, and Wagering, said he is optimistic that 2020 could be the year the New York passes mobile sports betting to help plug the deficit. “We got one toe in the pool but you’re not doing it properly,” Addabbo said. “If you’re going to be Excelsior. If you’re going to be New York State and pride yourself on being out in front of every other state, then let’s do gaming right. Let’s maximize revenue. Let’s maximize educational funding, job potential, and address the issue. And let’s get this thing done.”

A special session of the Legislature this fall is very likely but, without action in Washington, will probably be delayed until after Election Day. “I think the pressure is building on multiple issues, but the most immediate right now are the schools, let alone a whole host of non-profits who have not gotten any reimbursement and are still with this 20 percent cut,” said Assemblymember Pat Fahy.

Thanks for staying tuned.