April 7, 2025
First, this morning the Senate and Assembly introduced a third Emergency Budget Appropriation Extender bill (S7239, Krueger/ A7695, Pretlow) with a Message of Necessity from the Governor to provide for an emergency appropriation of funding through April 9th, as final state budget negotiations continue. Both houses will pass it today and negotiations will continue in hopes of reaching an agreement this week. More updates to follow as we hear more on the status of discussions.
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Here’s what’s happening in Washington as it relates to ongoing budget maneuvers:
Note: If you want to skip the details (below) I get it. Just (please) read the next section on Advocacy and know that once Congress recesses for the coming holidays (recess starts 4/10) there are numerous opportunities for you and your colleagues to weigh in in your local districts with your representatives – even the lawmakers who are clearly in our camp.
ADVOCACY
Right now the House is framing the massive cuts they want to make to the Medicaid Program as related only to fraud, waste and abuse. But there is really no way for them to get there without making massive cuts to the bone of the Medicaid Program. For those of you represented by a NYS Republican, what will make the most meaningful impact now and throughout the recess will be your ability to sustain your advocacy for the entire time Congress is out , and to share stories of children, adults and families in your community whose lives depend on (or have been meaningfully improved) by Medicaid.
Back to the story:
Congress is going out on a long recess beginning later this week (April 10) leaving the House little time to pass a concurrent budget resolution that reflects any amendments that align with or push back on the Senate plan of action, before they depart. If they don’t get it done this week, it will wait until the last week in April. But at the end of the day the House committees will be getting reconciliation instructions shortly and the body must markup and report out on its revised House resolution by 5/9. One of the primary tactics advocates and some lawmakers are relying on now is to delay critical votes by challenging procedural and other violations of the rules pertaining to reconciliation.
Summary:
On Saturday the Senate passed its budget blueprint. The Resolution contains deep cuts to Medicaid, Medicare and Social Security, while the House continues to call for far deeper cuts than the Senate is currently calling for.
The Senate leaders instructions to its key committees is vague and deeply problematic for fiscal hawks who care about lowering the federal deficit (more on this below).
The Senate resolution includes both tax cuts and Medicaid cuts. Fiscally conservative Senate Republicans are now pushing back on the Senate’s plan to mitigate the cuts by raising the federal deficit exponentially. This idea has created division in the Senate that may not be easy to resolve.
Timing:
House Speaker Mike Johnson wants a fully formed Senate Reconciliation bill to be passed by Memorial Day, and he wants the House to be done with its reconciliation business by June 9. To get there, Johnson has stated House committees will get their reconciliation instructions shortly and the body must markup and report on its resolution by 5/9 (non-binding).
Important note: The final House resolution is likely to include extreme changes related to state use of ‘provider taxes’ (think MCO Tax here in NYS), state directed payments, and other cost shifts typically used by states to maximize federal revenue. Elimination of these cost shifts will likely devastate state budgets. New York State relies heavily on the ‘provider taxes’ to generate federal funds. The House Reso could also include proposals to institute Medicaid work requirements and/or changes to Medicaid expansion that is the result of the implementation of healthcare reform under the Obama administration.
Details:
The House (remember: Republicans are in the majority) passed its own Budget blueprint last month to include a savings target for its Energy and Commerce Committee of $880B from areas of the federal budget under the Committee’s control (Medicare, Medicaid, etc.).
On Saturday the Senate advanced a budget blueprint that calls for significantly lower spending cuts than its House counterpart, setting the bodies up for a clash in reconciling the two plans. However, the details are messy and (currently) vague.
The Senate resolution calls for $4 billion in budget cuts, a pittance compared with the $1.5 trillion goal set out by the House in its own budget wishlist earlier this year. However, the blueprint preserves the House’s directive that the Energy and Commerce Committee, which oversees Medicare and Medicaid, find $880 billion in spending cuts over 10 years.
The final blueprint allows the Senate Committee on Finance, which also has jurisdiction over Medicare and Medicaid as well as taxes and other fiscal policy, to add up to $1.5 trillion to the federal deficit. (SOURCE: MODERN HEALTHCARE, STAT NEWS)
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NYS Dems seek ways to push back against expected cuts from Trump, Congress
By Keshia Clukey, Newsday
April 7, 2025 5:00 am
ALBANY — New York Democratic lawmakers, looking for ways to defend against President Donald Trump’s intended funding cuts, have proposed legislation that would allow the state to keep the tax dollars it owes the federal government to fill the gaps.
The bill would allow the state to withhold payments, including state workers’ federal tax contributions, if the federal government fails to follow court orders to pay the funds it owes the state.
“This bill is about Democrats bringing a gun to a gunfight and about us doing what our charter lays out, which is our responsibility to protect New Yorkers,” State Sen. Jessica Ramos (D-Jackson Heights), the bill’s Senate sponsor, said. “As legislators, what we’re looking to do is ensure that there is no lapse in services to our most vulnerable population.”
The proposal comes as the Trump administration and Republicans in Congress look to make massive cuts to federal funding streams, including safety-net programs such as shifting billions of dollars in Medicaid costs to the states — funding states have said they can’t possibly make up.
WHAT NEWSDAY FOUND
- New York Democratic lawmakers are looking for ways to defend against President Donald Trump’s intended funding cuts.
- They have proposed legislation that would allow the state to keep the tax dollars it owes the federal government.
- Opponents say the bill could hurt state employees whose income withholdings would be kept from the federal government.
“Here’s the sad truth: there is no state in the nation that has the resources to backfill these sweeping cuts,” Democratic Gov. Kathy Hochul said in a March 28 news release announcing more than $360 million in federal cuts to New York health programs, including addiction and mental health support services.
With the uncertainty over funding and the Trump administration’s past resistance to obeying court orders on fiscal matters, New York and other blue states are exploring ways to push back, legal experts and lawmakers said.
“In a time where the federal government is shrinking and there is intense confusion about the future, states are going to be looking inwardly and making sure that they’re meeting their obligations to their citizens to perform basic services,” said Ted De Barbieri, a law professor and director of the Community Economic Development Clinic at Albany Law School.
New York’s bill would essentially give state officials the go-ahead to violate federal law, withholding funds including employee federal tax dollars, federal grant payments and potentially even employee Medicaid and Social Security contributions, which likely would trigger a federal court battle, according to bill sponsors and legal experts.
Similar legislation has been proposed in Maryland.
Opponents of the New York bill say it could hurt state employees whose income withholdings would be kept from the federal government.
“I think it puts the state employees in a very, very difficult situation,” Assemb. Ed Ra (R-Garden City) told Newsday. “I think that, realistically speaking, it’s not something we should do or could do. If a court order says that the feds have to give us the money, I think the feds have to give us the money. There’s always, obviously, subsequent court routes you can take if that’s not being complied with.”
‘Uncharted territory’
State lawmakers are in the process of negotiating a proposed $252 billion state budget, which was due Tuesday, and includes approximately $91 billion in federal dollars — funding that may be at risk.
Hochul and other Democratic state leaders have called on members of the Republican-led Congress to oppose the cuts, and state Attorney General Letitia James, along with other attorneys general, are suing the administration for slashing health funds previously allocated by Congress.
In the interim, some Democrats are looking to provide the state options.
“We are in completely uncharted territory. Every day brings a new action by the Trump administration that those of us used to coloring inside the lines would not have been able to imagine,” said Assemb. Micah Lasher (D-Manhattan), who is sponsoring the Ramos bill in the Assembly. “We are all going to have to get a lot more creative, a lot more strategic and a lot more aggressive in figuring out how to respond.”
The bill, known as the “Reciprocal Enforcement of Claims On Unpaid or Reduced State Entitlements Act,” or RECOURSE Act, would trigger a series of events if the federal government fails to follow a court order to release funds owed to the state. The state comptroller would be required to create a report of the federal funds being withheld and what funds the state owes the federal government. The governor, comptroller and state budget director would then have to unanimously agree to direct the state tax department to withhold payments to the federal government, according to the bill.
It would potentially equate to several billion dollars, Lasher told Newsday.
The federal withholdings on the nearly 179,000 state employees’ paychecks from 2024 was nearly $2.29 billion, according to the state comptroller’s office. The number doesn’t include employees who are exempt or for whom federal taxes aren’t otherwise withheld.
The comptroller, attorney general and budget office declined to comment on the bill. Hochul spokesman Avi Small said the governor would review the legislation if it passes both houses.
Court battles ahead
If a private employer were to not pay employee federal withholdings, it would be a federal crime and they would be subject to criminal penalties, said Cam Macdonald, general counsel for the Empire Center for Public Policy, a conservative think tank.
State employee withholdings are no different, he said. “It’s not the state’s money. It doesn’t actually have any rights to that money.”
The bill’s aim is to deter the federal government from failing to comply with court orders and give the state leverage in the event that there’s a legal fight, Lasher said.
It also would give the state a way to make itself financially whole while lawsuits against the Trump administration over executive orders and staff and funding cuts continue to build up in the court system, said Sen. Liz Krueger (D-Manhattan), chair of the Senate Finance Committee, who is cosponsoring the bill.
“Soon the courts will be so piled up with all these lawsuits that we won’t live long enough for them all to get done … so why don’t we just hold the money we owe them and use it instead,” she told Newsday. “We have an obligation as the state government to be exceptionally creative, think out of the box and attempt ways to hold ourselves whole and continue to provide services for 19.5 million New Yorkers, so I expect there are a lot of new ideas that will come out and be tested about how we do exactly that.”
Krueger and other bill sponsors acknowledged that if passed, this legislation would likely be challenged by the Trump administration. The White House did not respond to a request for comment on the bill.
Republicans Ra and Senate Minority Leader Rob Ortt argue Democrats should instead focus on state finances.
“I think we need to get our fiscal house in order,” Ortt told reporters Tuesday when asked about federal cuts.
Nothing is final yet, Ra told Newsday. “The overall conversation right now is about the potential of this and the potential of that. I think that we’re a long way from having certainty as to exactly what any of this stuff looks like,” he said. “I do think we need to be responsible in passing this budget, we need to hold onto our reserves, we need to not drive up spending further, we need to not drive up our out-year budget gap so that if we do have to adjust later on we’re in the best possible position to do so.”
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New York refuses to comply with Trump’s anti-DEI order
BY MADINA TOURÉ | 04/05/2025 02:20 PM EDT, Politico PRO
NEW YORK — The state Education Department has refused to comply with a Trump administration directive that it scrap diversity, equity and inclusion programs.
The refusal marks the most significant challenge to President Donald Trump’s demand to state education commissioners to certify the elimination of DEI initiatives they consider to be unlawful — or risk losing billions in federal funding.
The federal Education Department on Thursday instructed the commissioners to certify that they are in compliance with Title VI, a federal anti-discrimination law, in 10 days. Federal officials pointed to a 2023 Supreme Court ruling that gutted affirmative action in college admissions.
“NYSED is unaware of any authority that USDOE has to demand that a State Education Agency … agree to its interpretation of a judicial decision or change the terms and conditions of NYSED’s award without formal administrative process,” wrote Daniel Morton-Bentley, counsel and deputy commissioner.
“We understand that the current administration seeks to censor anything it deems ‘diversity, equity & inclusion’ … But there are no federal or state laws prohibiting the principles of DEI,” Morton-Bentley continued. “And USDOE has yet to define what practices it believes violate Title VI.”
He also noted the order marks “an abrupt shift” from Trump’s first term, when former Education Secretary Betsy DeVos informed staff that “[d]iversity and inclusion are the cornerstones of high organizational performance.”
Morton-Bentley also questioned whether the 2023 Supreme Court decision was applicable in this instance, arguing it does not have the “totemic significance that you have assigned to it.”
“This case prohibits consideration of race in college admissions,” he said. “USDOE is entitled to make whatever policy pronouncements it wants — but cannot conflate policy with law.”
The Daily News first reported news of the state’s pushback.
J.P. O’Hare, a state spokesperson, told POLITICO the department will continue to work with schools to boost “equity, access and opportunities in education.”
“The New York State Education Department has consistently certified, on multiple occasions, that it does and will comply with Title VI of the Civil Rights Act of 1964,” O’Hare said in a statement. “Given the fact that USDOE is already in possession of the guarantees by NYSED, no further certification will be forthcoming.”
Spokespeople for the federal Education Department did not immediately respond to a request for comment.
The state’s influential teachers union welcomed the news.
“(We) proudly support the State Education Department’s stand against this disgraceful attempt to weaponize federal power against our schools,” New York State United Teachers union President Melinda Person said in a statement. “This directive is nothing more than an attack on our students, our educators, and the progress we’ve fought to achieve.”
Why this matters: The order is the latest attempt by the Trump administration to target institutions over DEI practices.
New York Attorney General Letitia James previously told districts “to continue building inclusive learning environments for their students.”
The New York City public school system receives $2 billion in federal funding that could be at risk if it does not adhere to Trump’s order. Schools Chancellor Melissa Aviles-Ramos touted the city’s diversity when asked about it Thursday.
“Diversity is a superpower here in New York City,” Aviles-Ramos told reporters. “We are always going to honor that. We are always going to make sure that we are serving every single child and family in New York City and that’s what today is about.”