May 1, 2025

Looking forward to meeting with NYS Council members this morning at 9:15 for our Thursday morning Member Support and Public Policy discussion.  For our discussion, I will be referencing to two documents (attached) that:  1) track the steps of the ongoing federal budget reconciliation process (and specifically where we are in that process at the present time), and a chart that summarizes the marching orders for each of the House budget committees that have targets they need to meet (based on the House budget reconciliation blueprint / instructions for the committees).  You will hear the term ‘markup’ being used during this process.  The committees are negotiating as to how to meet the targets.  Hope this is helpful.

Also below please find a Newsday article indicating the Exec and the Legislature are now discussing the extraordinary powers the Governor is likely to need in the face of federal budget cuts that will undoubtedly impact the soon-to-be-enacted state budget (SFY26), and a series of short briefs from Politico indicating the President is expressing concern over House GOP plans to cut Medicaid in order to give him the tax cuts he seeks to extend (from his first term in

office).  

Gov. Hochul seeking power to cut up to $2B in state spending in an emergency

By Keshia Clukeykeshia.clukey@newsday.com

May 1, 2025 5:00 am

ALBANY — Gov. Kathy Hochul is pushing for changes in the state budget that would give her the authority to cut up to $2 billion in state spending without an official vote from the State Legislature if revenues drop unexpectedly.

The proposal, which is still being negotiated with legislative leaders, would allow the governor to create a plan for spending cuts under certain emergency circumstances that the State Legislature could choose to approve without having to return to Albany, according to a legislative source familiar with negotiations and confirmed Wednesday by State Senate Finance Committee Chair Liz Krueger (D-Manhattan).If the legislature disagrees with the governor’s plan, it would then come up with its own reduction plan, which Hochul would have to agree to, Krueger confirmed. Hochul, in Manhattan on Wednesday, told reporters she is seeking legislative changes to allow her to act quickly in the case of emergencies.

“The legislature would have to approve this, but it’s been in our laws before that give the governor in extraordinary circumstances to be able to operate very quickly to protect New York State without having to call the session, go through, as you know sometimes these debates take a long time,” Hochul said. “I want to make sure that I can work with lightning speed if a crisis arises of the magnitude that would call for this trigger.”

The proposal comes as New York and other states face increased costs because of tariffs imposed by the Trump administration on imported goods, as well as massive federal funding cuts proposed by the administration and Republicans in Congress, including to safety net programs, potentially shifting billions of dollars in Medicaid costs to the states.

Economists also have warned of a potential looming recession. Hochul and state legislative leaders have said they wouldn’t work with hypotheticals when negotiating the state’s budget, but plan instead to come back for a special session if needed. Cutting budgets midyear is “always terrible” and “transparency is crucial,” Krueger told Newsday.

On Monday, Hochul announced a “general agreement” on the $254 billion state budget that is a month late. As of Wednesday, parts of the budget were still being discussed and budget bills had yet to materialize. Negotiations are expected to take a few more days. Hochul’s office did not respond to a request for comment on details of the proposal to allow for expedited cuts.

Former Gov. Andrew M. Cuomo was given flexibility and emergency powers during the COVID-19 pandemic, including the ability to make some spending decisions. The legislature had the power to come up with an alternative plan and also maintained some power to override his actions through a majority vote of both chambers. Many of those executive powers have since expired.

Good government and fiscal conservative groups questioned whether Hochul needs emergency powers now. “We’re not talking about an emergency,” said Cam Macdonald, general counsel for the Empire Center for Public Policy, a conservative-leaning think tank. The State Legislature is technically in session through Dec. 31, he said, though the legislative session is scheduled through June 12.”They’re all now paid and expected to be full time legislators, so there shouldn’t be anything stopping anybody from coming back to Albany,” Macdonald said. Blair Horner, executive director of the New York Public Interest Research Group, also questioned the proposal, adding that the governor already has some power over whether what’s appropriated gets spent. “I don’t see the need for the legislature to cede authority to the executive for a crisis that may or may not happen,” he told Newsday. “This is the kind of thing that should be subject to some sort of public discussion, not jammed into the budget at the last minute.”

By Keshia Clukeykeshia.clukey@newsday.com

FEDERAL NEWS

Make no mistake: Medicaid is at the center of Republicans’ challenges as they try to assemble their “big, beautiful” bill. And the problems start at the very top.

Donald Trump is deeply skeptical of the emerging House Republican plan to make deep cuts to Medicaid to pay for the GOP’s megabill, our Rachael Bade, Adam Cancryn, Myah Ward and Meredith Lee Hill report. And Speaker Mike Johnson is running out of time to convince him.

Senior House Republicans are expected in the coming days to present Trump with a menu of potential Medicaid changes, along with estimates of the savings they will generate and the impacts on beneficiaries.

Among the options the White House has agreed to consider is “per capita caps” — a controversial proposal that would limit the federal allotment to states that have expanded Medicaid under the Affordable Care Act.

The Trump administration has other ideas that have nothing to do with Medicaid: White House officials have requested proposals to instead find savings by pursuing a “most favored nation” drug-purchasing policy linking certain government payments for pharmaceuticals to the lower prices paid abroad, reviving a push from his first term.

Johnson has been scrambling to secure Trump’s support, shuttling up and down Pennsylvania Avenue and calling him multiple times a day to ensure they remain in lockstep and avoid a repeat of the GOP divisions that doomed the president’s 2017 push to repeal the Affordable Care Act.

But divisions abound: While moderates continue raising concerns about rolling back Medicaid expansion, fiscal hawks have been angling for even steeper cuts to the program. House Freedom Caucus members, including Reps. Chip Roy, Andrew Clyde and chair Andy Harris, met with Energy and Commerce Chair Brett Guthrie late into Wednesday night — without reaching an agreement on how to proceed.

GOP senators, meanwhile, were briefed Wednesday on polling and options for Medicaid changes, including new work requirements, during their closed-door lunch by Foundation for Government Accountability’s Tarren Bragdon, our Jordain Carney relays. Sen. Josh Hawley issued a warning afterward, saying benefit cuts would be “catastrophically unwise.”

Back in the House, Republicans are being hammered on multiple other fronts as their megabill dreams come crashing into political reality. Johnson failed Wednesday to resolve his standoff with vulnerable Republicans over raising the cap on state and local tax deductions, even as he expects Ways and Means to take up its draft of the GOP tax plan next week, our Brian Faler reports.

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With just over three weeks until their self-imposed Memorial Day deadline to enact President Donald Trump’s “big, beautiful” domestic policy agenda, GOP lawmakers are up against the clock — and, perhaps, Trump himself — to keep momentum moving forward on the sprawling reconciliation bill.

But as Speaker Mike Johnson has leaned further into cutting Medicaid funding as a major component of fulfilling Republicans’ pledge to reduce federal spending, Trump has expressed more doubt at the political consequences of such an approach. That’s according to six people close to Trump who spoke to our Rachael Bade, Adam Cancryn, Myah Ward and Meredith Lee Hill, who told our reporting team that Trump is hesitant to enact any policy that could be painted as cutting away at the program, which he has promised to preserve.

Although various House committees have been busy throughout the week marking up the proposals under their purview, the Energy and Commerce Committee — which has jurisdiction over Medicaid policy changes — won’t review its portions of the package until Monday. Although that means Johnson has a few more days to work out the Medicaid portions with Trump, it means they would have next to no margin for error if their first attempt at marking up legislative language fails or necessitates a delay.

GOP lawmakers are continuing to scramble for places where they can cut spending, and our team shares that concerns exist over E&C’s potential strategy, which may actually look to expanding the optional Affordable Care Act Medicaid expansion program in which all but 10 states participate. Nevertheless, if Republicans make any cuts to Medicaid whatsoever, they’ll need to be prepared for Democrats to compare such a step to the GOP’s attempt to repeal the ACA during Trump’s first term, our reporters emphasize.