Stirring the Pot

Good morning from New York, New York, where some are celebrating Columbus Day and others are marking Indigenous Peoples’ Day.

As we enter the third week of a government shutdown, the effects are becoming more acute as federal employees, including air traffic controllers and national park staff, are furloughed or miss paychecks, and thousands of other federal workers received RIFs or “reduction in force” notices, effectively terminating their employment as threatened/promised by President Donald Trump at the outset of the shutdown. 

The Senate is scheduled to return tomorrow to vote on the GOP continuing resolution (CR) for an eighth time, but there is no indication from Senate Minority Leader Chuck Schumer that this vote will be any different than the first seven votes. Democrats have remained united—so far at least—in their opposition to a seven-week CR that does not include an extension of Obamacare subsidies, financial support that is set to expire at the end of the year. GOP leadership has said they are open to allowing a vote on the expiring Obamacare subsidies in exchange for Democratic votes to reopen the government… first. Senate Majority Whip John Barrasso (R-Wyo.) insisted, “We need to open the government, and then we can have all the discussions and votes and talks and all of those things.” Short on trust, some Senate Democrats have expressed a willingness to vote for a roughly two-week CR to give Republicans a chance to make good on their promise to hold a vote on healthcare subsidies before health insurance marketplaces open on November 1st. Senator Reuben Gallego (D-Ariz.) said, “The short-term CR that I’m willing to vote for is something that is a couple of days before Nov. 1. So that way, we have time to actually work on a real bill with ACA extensions. And if they don’t give us the ACA extensions, then we could go back to the same position, go back to shutting down again.” 

At least one crack—and a loud one at that—has appeared in the Republican lines. In a lengthy social media post, Rep. Marjorie Taylor-Greene (R-Ga.) declared, “I’m absolutely disgusted that health insurance premiums will DOUBLE if the tax credits expire this year. Also, I think health insurance and all insurance is a scam, just be clear! Not a single Republican in leadership talked to us about this or has given us a plan to help Americans deal with their health insurance premiums DOUBLING!!!” House Speaker Mike Johnson dismissed Greene’s concerns, telling reporters, “Congresswoman Greene does not serve on the committees of jurisdiction to deal with those specialized issues, and she’s probably not read that in on some of that, because it’s still been sort of in their silos of the people who specialize in those issues.” Still, we are hearing from other members who are quietly concerned about these increases hurting Republicans at the ballot box.

More troubling for Johnson and Thune were President Trump’s comments last week that seemingly opened the door to cutting a deal with Democrats to end the shutdown. In the Oval Office last week, Trump said he would “like to see a deal made for great health care” and that he was “talking to Democrats about it.” The comments were a stark departure from Thune and Johnson’s position that Democrats must concede and reopen the government before any negotiations on healthcare. Trump deviated further from the script when asked about back pay for federal workers following Johnson’s comments that he supports back pay and that “the president believes that as well.” Just hours later, back on script, Trump struck a different tune: "I would say it depends on who we’re talking about. For the most part, we’re going to take care of our people, but for some people, they don’t deserve to be taken care of.” Johnson has so far rejected a standalone bill guaranteeing pay for air traffic controllers and military members, hoping to use the uncertainty and political pressure to further squeeze Democrats into submission (though it looks like Trump has found a way to pay the military and neutralized this issue).

Worth a look: House Minority Leader Hakeem Jeffries (D-NY) and Hudson Valley Rep. Mike Lawler (R-NY) had a heated exchange in the Capitol last week. 

In New York, Rep. Elise Stefanik (R-NY) is continuing to lay the groundwork for an expected gubernatorial challenge to incumbent New York Governor Kathy Hochul. Stefanik, who now has $12 million on hand after raising $3.2 million in the third quarter, released an internal poll last week showing her trailing Hochul by only 5 points in a hypothetical General Election next November. The GrayHouse poll shows Stefanik leading Hochul among voters who are “informed” of Hochul’s policy positions, especially her endorsement of New York City Mayoral candidate—and Democratic Socialist—Zohran Mamdani. In a statement, Stefanik’s campaign said, “This poll is devastating for the Worst Governor in America. Kathy Hochul’s dismal record of failure and bending the knee to Commie Mamdani is causing her already weak support to crater across New York.” Hochul’s campaign pushed back on the poll, which varies dramatically from other publicly available polling, including a Siena University poll last month that found Hochul leading Stefanik by a 25-point margin. Hochul campaign spokesperson Sarafina Chitika offered in a statement, “Sellout Elise Stefanik is so scared to face Governor Hochul she’s made up a new opponent—anything to hide her extreme record of gutting New Yorkers’ health care, jacking up prices, and throwing her constituents under the bus to serve Donald Trump.”

In important state government news, the Division of the Budget issued a call letter last week with the familiar order for state agencies to keep funding requests flat for the upcoming fiscal year. Budget Director Blake Washington wrote, “Moving forward, agency budget requests for State Fiscal Year (SFY) 2027 should not exceed the total SFY 2026 Enacted Budget agency funding levels, excluding one-time investments. As always, the effectiveness of all agency functions, programs, and services should be reviewed, and all expenditures should be examined. Unnecessary duplication or overlaps should be eliminated.” Less familiar was Washington’s second directive: reviewing agency rules and regulations to identify obsolete or duplicitous policies. Washington offered, “Therefore, in addition to your budget requests, state agencies should review agency rules, regulations, or public-facing policies and propose for repeal or reform those which are outdated or obsolete.” Hochul has said that the federal cuts in Washington will result in a roughly $3 billion loss for New York, on top of the already anticipated $7.5 billion budget gap. 

The Division of the Budget is expected to release its mid-year update to the current financial plan later this month in anticipation of the “Quick Start” meeting between DOB, both Chambers of the Legislature, and the State Comptroller’s Office to discuss initial estimates for revenue and spending. Those estimates form the baseline for where all parties expect to start when Hochul presents her Executive Budget in January.

We also found out this week who will be representing the Senate in those meetings. Senate Majority Leader Andrea Stewart-Cousins appointed Christopher Friend, a long-serving and well-respected staff member, as the new Secretary of Finance. Friend previously served in the Assembly and the Division of the Budget. Friend will serve as the Senate’s counterpart to Budget Director Washington and Assembly Ways and Means Secretary Philip Fields. He replaces former Secretary of Finance David Friedfel.

New York’s fiscal challenges and providing health care to the neediest New Yorkers will be the dominant issues heading into the 2026-2027 Executive Budget season. Stay tuned.

In addition to the vetoes, 72 other bills were delivered by the Legislature, thus beginning the clock for her to act. Dan Clark’s Capitol Confidential has a more detailed look at both the vetoes here and the other bills here.

Expect bills to start moving quickly over the next couple of months!

-Jack O’Donnell

Which political party is to blame for the federal government shutdown?