Major Tax Language is Coming in 30-Day Budget Amendments

Tune into Capitol Tonight this Tuesday, January 30th, to see BSJ partner Jack O'Donnell give live commentary on the President's State of the Union address at 9 PM.

Visit the Capital Tonight website by clicking here for more details. 

Mujica: Major Tax Language is Coming in 30-Day Budget Amendments

Expect a big chunk of tax law around Valentine's Day, state Budget Director Robert Mujica said Wednesday.

Gov. Andrew Cuomo's top fiscal lieutenant told a gathering of tax wonks he was optimistic lawmakers will pass legislation before the state's April 1 budget deadline and that the Democratic governor will have a proposal on the table by the second week of February — the 30-day deadline by which budget bills can be amended.

That language will also address a $1.5 billion "stealth tax hike" on New Yorkers that was the subject of a bill passed Tuesday by the state Senate, Mujica said, and a litany of other potential pitfalls.

"I have scary conversations every week with tax experts on my team who come in and say, we found this other piece in the bill that will cost us $2 billion if we don't fix it. ... There are just quirks in the bill," he said at a breakfast event hosted by the Citizens Budget Commission at CUNY's Graduate School of Journalism.

"I understand the Legislature wanted to pass a bill yesterday, but there are so many pieces here," Mujica continued. "We want to make sure it's done comprehensively and we don't miss anything. That's the point of taking a deliberative process, waiting for the 30-day period, because we want to make sure we get it right."

He also repeated that language to somehow "thwart" new federal limits on the deductibility of state and local taxes would be included, drawn from a menu of options released last week by the Department of Taxation and Finance.

"It's very realistic. We have started drafting," Mujica said. "We issued that report because we wanted to make sure that it was a public process, everyone saw what the options are. We're getting a lot of feedback."

Cuomo Signs Executive Order on Net Neutrality Protections

Gov. Andrew Cuomo signed an executive order directing the state's government not to enter into any contracts for internet service unless the internet service providers agree to follow net neutrality principles, according to a news release.

Public schools and libraries Tuesday lobbied at the New York State Capitol calling for legislation that would similarly leverage the state's contracting power to provide public institutions some protection.

While the state can't ban companies for veering from net neutrality rules, it can choose not to do business with them — the basis for Cuomo's executive order.

The Cable Telecommunications Association of New York, in response to calls for net neutrality protections, said it opposes the order.

The order would impact any internet service contract or contract renewal entered into on or after March 1.

The order also requires the Department of Public Service to evaluate potential actions to promote net neutrality.

Read the executive order here.

Federal Budget Talks Progress, as Senate Dems Drop Dreamer Demand

Senate Democrats are willing to drop their demand that relief for Dreamers be tied to any long-term budget agreement — a potential boost for spending talks, but one that could face opposition from their House counterparts.

The shift comes in response to the deal struck between Senate leaders Monday to reopen the government and begin debate on an immigration bill next month. Meanwhile, budget negotiators are expressing optimism that a two-year agreement to lift stiff caps on defense and domestic spending is increasingly within reach.

But House Democrats have signaled they are not ready to go along with a long-term budget deal without a fix to the Deferred Action for Childhood Arrivals program that President Donald Trump is ending.

The division among Democrats is complicating negotiations, as lawmakers in both parties face intense pressure — and a two-week time crunch — to show progress on government funding, immigration and a raft of other issues that have resulted in the government operating on stopgap spending bills since September.

Both parties are eager for a long-term budget agreement, with GOP defense hawks furious about uncertainty for the Pentagon and liberal Democrats concerned about deep cuts to domestic programs. But any legislation to boost spending by upwards of $250 billion over two years would likely need broad bipartisan backing in both chambers, as House conservatives have already hinted they’ll balk.

Read more here. 

The Road to 2018: The Latest on Campaigns Across the State

Sources: DeFrancisco Will Launch Gubernatorial Campaign

Former Pataki Lieutenant Eyes Governor's Race 

Cuomo Pledges To Be ‘Very, Very, Very Active’ In House Races

What happens if Mayor Lovely Warren leaves for Albany?

Republican Assini Withdraws From NY-25 Consideration

Kolb Gets Seneca GOP Nod

Stephanie Miner Rules Out Bid for Congress, but May Yet Challenge Cuomo

Special Election in Senate District 37

LoHud: Cuomo Freezes Out Residents of Senate District 37

    A Look at This Week's News 

• In a Comically Drawn Pennsylvania District, the Voters Are Not Amused
• ‘Beetle Bailey’ Creator Mort Walker, 94, Created Laughter ‘Nearly Every Day of His Life’
• Ancient Crocodiles Once Feasted on Giant Tortoises on This Island
• Cuomo Stays Quiet on Percoco Trial
• New York City Puts Up $100 Million To Create A Biotech Hub
• If You’re a Purist About Scotch Whisky, You Might Find This Hard to Swallow
•  

Important Upcoming Events 

• January 29th—51st Annual Conservative Party Political Action Conference (CPPAC)
• January 29th—Joint Legislative Budget Hearing on Economic Development 
• January 30th—President Trump Delivers State of the Union Address to Joint Session of Congress
• January 30th-31st—New York State Association of Counties Legislative Conference 

Upcoming Receptions

• Reception honoring Senator Jim Tedisco (R)—January 29th @ 5:30 PM-Albany
• Reception honoring MOA Andrew Raia (R)—January 29th @ 5:30 PM-Albany
• Reception honoring Senator Ken LaValle (R)—January 29th @ 5:30 PM-Albany
• Reception honoring Senator Andrew Lanza (R)—January 29th @ 5:30 PM-Albany
• Reception honoring Senator Chris Jacobs (R)—January 29th @ 5:30 PM-Albany
• Reception honoring MOA Brian Kolb (R)—January 29th @ 5:30 PM-Albany
• Reception honoring Senator Tom Croci (R)—January 29th @ 5:30 PM-Albany
• Reception honoring MOA Gary Pretlow (D)—January 29th @ 6:00 PM-Albany
• Reception honoring MOA Michael Benedetto (D)—January 30th @ 8:00 AM-Albany
• Reception honoring Senator Michael Ranzenhofer (R)—February 1st @ 6:00 PM-Depew 
• Reception honoring Republican Assembly Campaign Committee—February 1st @ 7:00 PM-Buffalo

Featured Read: Schumer’s to-do list: Fix DACA, win the Senate, manage Trump

Until the government shutdown last week, Senate Minority Leader Charles E. Schumer believed cutting a deal with President Trump was his best chance to protect “dreamers,” the more than 1 million undocumented immigrants who had arrived in this country as children.

Now the faith has been broken, and the Democratic leader says he is charting a new path.

“Unless Donald Trump realizes that the kind of deal I offered is good for him, it’s better that he stays away,” Schumer (D-N.Y.) said in an interview last week, sipping seltzer by a crackling fire in his Capitol office off the Senate floor. “If he disappears, we still, I think, have a very good chance to pass things, as long as he doesn’t mess it all up, which could very well happen.”

Schumer blames the impasse over immigration and the subsequent shutdown on Trump’s inability to strike a consistent position in private and public statements, fraying his trust in the president’s usefulness as a negotiating partner.

But the episode also publicly exposed a divide among Senate Democrats and created the greatest challenge of Schumer’s one-year tenure as minority leader. His most vulnerable members, facing difficult reelection bids this year in conservative states, were unwilling to keep the government closed over immigration. Activists, meanwhile, were enraged, and some of them convened in protest outside Schumer’s Brooklyn home.

That divide is likely to complicate Schumer’s role in this year’s midterm elections, in which Democrats hope to pick up two seats to take control of the Senate — but in which they are also defending 10 vulnerable incumbents in states that Trump won in 2016.

Schumer’s gamble, at the moment, is that failure to secure protections for dreamers will fall on Republicans — and that Trump-state Democrats will be able to survive by tacking away from the more liberal wing of the party on immigration and other issues.

At the center of Schumer’s challenges is his relationship with Trump, perhaps the most intriguing cross-party bond in Washington. While Schumer blames Trump for the impasse -- and some polls agree -- others squarely blame Democrats for the shutdown. For some, the burden is now on Schumer to find a way forward.

The two New Yorkers, who both trace their roots to the outer boroughs of New York City, have quietly built a rapport over the last year, even as they clashed in public over the major policy fights. “I like him!” Trump exclaimed, in an impromptu gaggle with the reporters after the shutdown. “I like Schumer!”

The immigration fight has deepened a divide between the two men. While flying back from Switzerland Friday, Trump returned to name-calling, blaming Schumer for the dwindling chances of replacing the Obama-era Deferred Action for Childhood Arrivals program, which Trump ended last year.

“DACA has been made increasingly difficult by the fact that Cryin’ Chuck Schumer took such a beating over the shutdown that he is unable to act on immigration!” Trump tweeted.

It’s true that Democrats’ short-lived resolve over the shutdown undermined a key point of leverage they had promised to use for months: To refuse any agreement on a future budget with Republicans unless protections were included for the roughly 1.8 million dreamers brought to the country illegally by their parents.

After he agreed to reopen the government last week, Schumer admitted that any prolonged shutdown would likely work against Democratic interests, lowering the odds of it being used again. “You’ve got to be strategic and if things went too long, yeah, people might have turned against the dreamers,” Schumer said of the shutdown.

House Minority Leader Nancy Pelosi (D-Calif.), who, like Schumer, continues to link negotiations on the budget with a deal for dreamers, voted against reopening the government following the shutdown.

Brian Fallon, a former senior aide to Schumer, said the leader was undermined by a moderate effort to end the shutdown quickly. “Schumer’s play was to ensure as much unity as possible,” Fallon said. “He voted for the proposal knowing how much heat he would take.”

Amid the recriminations, Schumer still says Democrats have come out stronger because of the government shutdown. He said they were able to elevate the issue of protecting DACA recipients and obtain a commitment from Republicans for Senate floor votes on the issue in February.

“We have heightened awareness of the dreamers. It is much harder for Republicans to back off. Or just sweep it under the rug, which they have been doing for a year,” Schumer said.

But there is broad agreement that a bipartisan solution will be harder to achieve without Trump’s direct involvement. Both Senate Majority Leader Mitch McConnell (R-Ky.) and House Speaker Paul D. Ryan (R-Wis.) had hoped for the cover of the president’s support, which would help them bring along votes for a compromise, Schumer said. “That was the strategy.”

In the wake of the collapse, several separate groups of lawmakers have been meeting to outline possible deals in the House and Senate. White House aides have also prepared their own plan, which is expected to be formally released on Monday, tying a path to citizenship for undocumented youths to billions in border wall funding, increases in immigration enforcement and dramatic changes to the visa system for legal immigrants.

Democrats, including Schumer, have ruled out the proposal as unworkable. Conservative groups seeking to restrict immigration also reacted with outrage to the Trump proposal of a path to citizenship for more than 1 million undocumented immigrants.

Some in the Senate have joined Schumer’s call for Trump to keep his distance. “My preference would be for the Senate to proceed and legislate and try to come up with an agreement without a lot of input from the administration other than technical assistance,” said Sen. Susan Collins (R-Maine), a key Republican broker of a bipartisan deal.

From their first discussions on the issue of people protected by DACA, Schumer felt he had reason for hope, though the signals were often contradictory. Last September, Trump backed away from what Schumer called an agreement at a private White House dinner with the president to handle the dreamer issue independently from a physical border wall.

Nearly three weeks ago, Trump said he would “take the heat” if Congress struck a bipartisan compromise that resolved the issue of dreamers and dealt with border security. But when a bipartisan group of senators brought him such a compromise on Jan. 11, he dismissed it out of hand, using vulgar language to describe some African nations and Haiti.

Senate Minority Leader Charles E. Schumer works in his leadership office on Capitol Hill. (Melina Mara/The Washington Post)

Then on Jan. 19, Schumer said Trump called him and proposed they cut a deal to prevent another budget extension without a DACA fix. At that meeting, the two discussed $25 billion in new spending for construction of a border wall.

The government shut down less than 12 hours later. Schumer later formally withdrew his $25 billion offer, a move that Republicans later said proved he isn’t serious about reaching a deal.

Democrats concluded that it was better to sign onto a shutdown with Trump’s erratic behavior in the headlines than to wait.

“If he were to call me again, I’d go in and talk to him again,” Schumer said of Trump. But the Democrat said he also gave White House Chief of Staff John F. Kelly a warning about allowing Trump to take advice from immigration restrictionists including White House adviser Stephen Miller and Sen. Tom Cotton (R-Ark.).

“You will never have a deal if Cotton and Miller have veto power,” Schumer said he told Kelly.

If there is a silver lining for Schumer, it is that he believes the shutdown is unlikely to dent the high hopes Democrats have for the fall. If there is no resolution this spring and young people previously given status are deported in large numbers, the cost will fall harder on Republicans, he said.

“The specter of deportations is hanging there,” he said. “That could be devastating to Paul Ryan’s caucus and particularly the most vulnerable members.”

At the same time, Schumer wants to keep Democrats focused on an economic populist message in the fall, in part for the sake of those 10 Democrats in Trump states. With only three realistic pickup opportunities, holding those seats is crucial.

In several of those vulnerable states, including Montana, Missouri and Indiana, the issue of immigration could hurt Democratic incumbents, most of whom maneuvered during the shutdown to avoid votes that could be seen as choosing immigration over military funding. “We believe strongly in the dreamers, but we can’t just let that occupy the whole stage,” Schumer said. “We have to fight for middle class.”

He spends an enormous amount of energy making sure his five most vulnerable 2018 incumbents are protected to vote as they need. His direction to the caucus has been to focus 2018 messaging on retaking the economic populist message from Trump.

“He is helping the wealthy and corporations; we are fighting for the middle class,” Schumer said. “That is the sentence.”

The recent signs, he said, are good for Democrats. “Across the country, large numbers of voters, even those who support Donald Trump, would prefer a check on Donald Trump rather than someone who will just go along with Donald Trump,” he said.

So far, Schumer has succeeded in keeping his caucus united behind his leadership. Even those who fiercely opposed reopening the government praised him after the ordeal. “I’m going to disagree on strategy at times, but I support my leader 100 percent,” said Sen. Cory Booker (D-N.J.), a likely 2020 presidential candidate who voted against reopening the government.

In the months to come, those divisions may become more stark, as the party divides itself over issues such as whether to seek impeachment of Trump or support single-payer health care.

“There are a good number of base voters who may want him impeached, but they are going to vote in the election for a Democrat whether that person is for impeachment or not,” he said.

In recent months, Schumer, 67, has traded his Diet Coke and dinnertime dessert habits for seltzer and cherry-flavored Luden’s cough drops, which are similarly sweet but lack both calories and aspartame, which he blamed for increasing his appetite. “You have 20 of them, it’s only 80 calories,” he said.

Asked about the immigration protesters that recently gathered outside his Brooklyn apartment building — “If Chuck won’t let us dream, we won’t let him sleep,” they chanted — Schumer said he loved the energy, which reminded him of his own start in politics as a Democratic organizer trying to defeat President Lyndon B. Johnson in the 1968 New Hampshire primary.

“I think it’s great for us. I don’t mind the occasional brickbats,” he said. “I’d much rather have it directed at me than some of the senators that are running.”

He also benefited by not being in New York when the protesters tried to wake him up.

“I was here,” he said.

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