Monday Morning Memo – January 16

Good morning from Selma, Alabama, the starting point of Rev. Martin Luther King Jr’s historic march in 1965 that catalyzed the Civil Rights movement. Dr. King highlighted for the world the power of nonviolent protest and his message continues to endure, “We must come to see that the end we seek is a society at peace with itself, a society that can live with its conscience.” 

The biggest news out of New York this week was Governor Kathy Hochul’s State of the State address. The theme of her speech, Achieving the New York Dream, centered around her efforts to make New York more affordable. For starters, the Governor reiterated that she will not raise taxes, declaring, “The majority of economists are predicting a recession, it’s one of the reasons why it’s clear to me we will not be raising income taxes this year.” Hochul also announced an ambitious strategy to build 800,000 new homes over the next decade as part of her New York Housing Compact, which would require Upstate municipalities to increase their housing stock by 1% every three years and Downstate municipalities, including New York City, to increase by 3% every three years. Governor Hochul offered, “Every community in New York must do their part to encourage housing growth to move our State forward and keep our economy strong. The New York Housing Compact is a comprehensive plan to spur the changes needed to create more housing, meet rising demand, and make our state a more equitable, stable, and affordable place to live.” While most people generally support building more housing, not everyone wants it to happen in their neighborhood, especially in suburban areas where residents fear large developments will not fit in with the “feel” of their towns and communities and would give localities less control over zoning matters. 

The plan also includes zoning changes to allow for higher-density buildings in proximity to MTA rail stations and legislation that would increase the number of commercial buildings that are eligible to be turned into housing or mixed-use developments. $250 million has been set aside to support and facilitate the creation of new housing and the Governor reiterated her intent to find a replacement for 421-a, the tax incentive program for housing developers that lapsed last year after progressives raised concerns about the efficacy of the program. There are still a number of proposals including the “Vacancy Reset” from the Community Housing Improvement Program, that advocates are pushing to see in the final Executive Budget Proposal in a couple of weeks.

The Governor also announced programs to strengthen New York’s health care system as well as a $1 billion plan to address mental illness in the state. On the healthcare workforce front, Hochul’s strategy focuses on ensuring the state’s healthcare infrastructure is equipped for future public health threats and learning from the problems that were exposed during the pandemic. This includes establishing a Commission on the Future of Health Care which will be tasked with developing a “comprehensive, evidence-based strategy and roadmap for transforming the health care system, guide statewide and regional planning with both short and long-term objectives across the continuum of care, make recommendations on policy, regulation, reimbursement, and other strategies to improve outcomes and transform care delivery.” Her plan also includes legislation to make it easier for traveling nurses and physicians to be licensed in New York as well as a measure to expand Medicaid coverage to include nutritionists and supportive housing facilities, among other things.

The $1 billion mental health plan will increase the state’s psychiatric inpatient capacity by 1,000 beds and calls for the creation of 3,500 new housing units for individuals with mental illness. Hochul also announced a major expansion of outpatient mental health services, with the addition of 12 comprehensive psychiatric emergency programs, 42 Assertive Community Treatment teams, 26 Certified Community Behavioral Health Clinics, 8 Safe Options Support teams, and 20 expanded-capacity Article 31 mental health clinics. On the heels of last year’s pay increase for mental healthcare workers, Senate Mental Health Committee Chair Samra Brouk wants to do more and sees this as a key opportunity to pair the funding with more support for workers in the mental health field. “The thing I’m concerned about and what I’m hoping she wants to work together on is none of this will be possible if we don’t have a workforce,” Brouk said.

The Governor also addressed another issue at the top of mind for many New Yorkers: public safety, which dominated the mid-term election cycle, saying, “Public safety is my top priority, I am committed to using every tool at my disposal to protect the people of this state, crack down on gun violence and violent crime, and invest in proven solutions that keep New Yorkers safe.” The New York State Police will receive increased funding to expand their Community Stabilization Units which have been successful in stemming the flow of illegal firearms. Hochul also vowed to work with the Legislature to clarify the state’s controversial bail laws and announced increased funding to prosecutors and District Attorney’s offices to pursue gun-related investigations. Any changes to make the state’s bail law more restrictive will certainly be met with pushback, as was evident from the reaction of advocacy groups including the Legal Aid Society which said the proposal “accomplishes nothing of value.” 

You can view all of the Governor’s proposals from her 2023 State of the State address here. 

2023 New York State Legislative Session and 118th Congress Preview

Judge Hector LaSalle, Hochul’s pick to lead the New York State Court of Appeals, will have his long-anticipated nomination hearing on Wednesday. The Governor has stuck by LaSalle despite the opposition from within her own party and pushback from outside groups, including Member of Congress Alexandria Ocasio-Cortez, the AFL-CIO and other labor unions. As of late, there has been a growing public relations push for Judge LaSalle to combat the steady chorus of opposition. Former Bronx Borough President Reuben Diaz Jr. recently came out in support of LaSalle, “I call on my friends and colleagues in the New York State Senate to afford Judge Hector LaSalle a fair opportunity to answer the tough questions and earn their vote so that history, in this case for the Latino community, can be made once again. Like every other community, Latinos want and deserve it.” Others who have also come out in support of Hochul’s nominee include Hispanic Federation Board Chair Manuel Chinea, businessman Richard Carrión, former City Council Speaker Melissa Mark-Viverito, and Reps. Adriano Espaillat and Nydia Velázquez. However, not all of those advocacy efforts are going perfectly. An op-ed from Errol Louis titled “The Railroading of Kathy Hochul’s Chief Judge Pick” was not well received for its pointed criticism and harsh remarks towards some state lawmakers as well as at least one error regarding LaSalle’s record that forced New York Magazine to offer a correction. Louis, and others, have tried to characterize LaSalle’s opposition as from the far left (including a letter from nine former Appellate Division Judges who called opponents “woke”) yet opponents include the NAACP Legal Defense Fund, the Communications Workers of America (CWA), District Council of Iron Workers, Center for Reproductive Rights Union, and the New York County Democratic Party.  

In a final push to rally around LaSalle ahead of his hearing, Hochul and many of the aforementioned supporters of Judge LaSalle held a news conference in the Bronx with a notable guest— House Minority Leader Hakeem Jeffries who provided a heavyweight endorsement, saying “Judge Hector Lasalle is highly qualified to be the chief judge of the state of New York. Period. Full stop.” 

Still, LaSalle faces strong opposition and his path to confirmation was not made any easier by the expansion of the Senate Judiciary Committee from 15 to 19 members. Aside from the disagreements over Lasalle’s background, Hochul and the Senate, or at least Senate Judiciary Chair Brad Hoylman-Sigal, disagree over whether the Constitution requires LaSalle to receive a floor vote. Hochul and her allies interpret the State Constitution to mean the full Senate must consider her nomination while Hoylman-Sigal and Senate Democrats argue that a hearing in the Senate Judiciary Committee is sufficient, saying “The Constitution does not require a floor vote, because, in addition to the Constitution, we have Senate rules.” It is very possible that the battle to decide who leads the state’s top court will end up….in the courts. 

The Legislature has a busy week ahead with committee work now in full swing. The Senate standing committees will meet on Tuesday to work through a number of bill reintroductions as will the Assembly Agriculture, Corporations, and Health Committees. On Thursday, there will be a joint Senate public hearing on the Climate Action Council’s Final Scoping Plan. The Senate will also consider a number of bills on Tuesday, including a chapter amendment on the Contractor Registration bill—the top priority for the Building Trades from last session that was signed by Governor Hochul in December—the warehouse worker protection act, and a bill to extend childcare assistance benefits. 

In Washington, President Biden is dealing with a classified documents headache of his own. Biden’s personal attorney first discovered roughly 10 classified documents at the Penn Biden Center for Diplomacy and Global Engagement, a think tank where Biden had an office after leaving the Vice Presidency. An attorney for the President said “The discovery of these documents was made by the President’s attorneys, the documents were not the subject of any previous request or inquiry by the Archives. Since that discovery, the President’s personal attorneys have cooperated with the Archives and the Department of Justice in a process to ensure that any Obama-Biden Administration records are appropriately in the possession of the Archives.” Later in the week, it was reported that Biden’s attorney found additional classified material at his home in Delaware, prompting Attorney General Merrick Garland to appoint Robert Hurr, a former U.S. attorney under Donald Trump,  as Special Counsel to investigate the matter. 

While it may not become a legal problem for the Biden team, it is certainly a major political problem. Reporters and pundits have been quick to highlight the parallels to the Trump classified documents case and the perceived hypocrisy from Biden calling out Trump’s carelessness in having unsecured classified material. The White House and Biden’s allies argue that there are important distinctions between President Biden’s documents and Trump’s including the fact that Biden’s lawyers self-reported the documents while Trump’s were the subject of an Archives request as well as the fact that Biden had less than 20 documents while Trump had over 300. Either way, it is not a good look from Biden and the White House. 

Congressman George Santos has faced a growing number of GOP lawmakers calling on him to resign, including former Speaker of the House Paul Ryan and fellow New York Republican Reps. Marcus Molinaro, Nick LaLota, Rep. Michael Lawler, Brandon Williams, and Anthony D’Esposito. Gerard Kasser, Chairman of the NYS Conservative party, released a statement calling on Santos to step down citing his “profound use of mistruths” as did the Nassau County GOP. Current House Speaker Kevin McCarthy has stood by Santos, saying it is ultimately up to the voters and that he will have committee assignments. Congressman Santos has remained defiant, indicating that he will not resign unless asked by the voters, “I was elected by 142,000 people. Until those same 142,000 people tell me they don’t want me, we’ll find out in two years.” Recent FEC filings show that Santos really likes the Italian restaurant II Bacco in Little Neck, Queens where he has spent $25,640.26 in campaign funds in the past two years. Curiously, his bill came out to exactly $199.99 on multiple occasions, 1 cent below the threshold that requires documentation of campaign expenditures. 

The largest issue lawmakers have to tackle in the near future is addressing the debt limit which was made more urgent by Treasury Secretary Janet Yellen’s letter to Congress on Friday warning that the U.S. will hit its borrowing cap this Thursday. In the past, Congress has simply raised the debt ceiling, most recently in December 2021, to avoid defaulting on payments however Republicans have vowed to oppose any debt limit increase. If the U.S. were to default on its debt, even for a short time, it would be devastating for average Americans and the global economy, with interest rate hikes, a credit rating downgrade, and billions of dollars in fees and late penalties that taxpayers would ultimately be on the hook for- as was the case in 2011. The Treasury has some reserves and can engage in financial gymnastics for a short time while lawmakers iron out a deal but Yellen warns that those options could be exhausted by June. 

The White House has called for lawmakers to work across the aisle to get a debt ceiling hike passed, saying “We believe, when it comes to the debt limit, it has been done in a bipartisan way over the years and decades. And it should be done in a bipartisan way. And it should be done without conditions. That is important here.” Republicans are expected to use the debt ceiling as leverage to extract concessions from Congressional Democrats and the White House over government spending and entitlement reform. Speaker McCarthy vowed, “We’re going to look at every single dollar spent.” 

The debt limit fight will be the first to test a number of concessions Speaker Kevin McCarthy made in his 15-vote odyssey to become Speaker. On Monday, the House approved a rules package to govern how the Chamber operates for the next two years mainly along party lines, 220-213. The terms of that rules package were largely developed in closed-door negotiations between McCarthy and members of the Freedom Caucus that put him over the finish line. Most notably, as we discussed last week, the single-member motion to bring a vote to vacate the Speakership could lead to significant roadblocks in future negotiations in the House. To that end, lawmakers are also concerned about the informal agreements beyond the rules package that McCarthy made to secure the Speakership. “What I’m concerned about is not just what’s written down here, I’m concerned by the backroom deals that Speaker McCarthy made with the Freedom Caucus in exchange for their votes. Like Republican congresswoman Nancy Mace said just this weekend, and I quote, ‘we don’t have any idea what promises were made,” said Ranking Member on the Rules Committee Democrat Jim McGovern of Massachusetts. 

-Jack O’Donnell

 

 

 

 

Ex-NY Chief Judge’s Guard Cost Millions Without Approval

The George Santos Special: “I ate at the Italian restaurant where Santos is often, for some reason, spending exactly $199.99.”

There was plenty of street parking outside of Il Bacco Italian restaurant in Little Neck, Queens, but we valeted the car anyway. Il Bacco is the favorite restaurant of serial liar and New York Congressman George Santos—a man who, by his account, made million-dollar deals as a “seasoned Wall Street financier and investor”—and I wanted the full Santos experience. He’s eaten there a lot. Or at least, that’s what his campaign finance records show. [Read more.]