On July 3rd, the United States House of Representatives narrowly passed the Senate’s version of the “One Big Beautiful Bill Act” after House Speaker Mike Johnson managed to ease concerns of both moderate and conservative Republicans. The legislation includes significant cuts in federal spending, including to Medicaid and food assistance. President Donald Trump signed the bill into law on Independence Day.
In response to the bill’s signage, Governor Kathy Hochul said, “today, while Americans celebrate the birth of this great nation, Donald Trump and Washington Republicans are celebrating something else: making life harder for working families. There’s nothing beautiful about this bill. It’s a big, ugly betrayal – stripping healthcare, hiking costs and slashing food assistance for millions. And it was made possible by New York’s seven Republican members of Congress. They wrote it. They endorsed it. Now they’re cheering it on, selling out the very people they were sent to Washington to represent. I’ve been very clear that no state can backfill the massive cuts in this bill or undo the damage Republicans just caused. But my team and I are working closely with the Legislature to brace for the impact and protect as many New Yorkers as possible.”
On July 10th, New York State Budget Director Blake Washington echoed the sentiments of the Governor when announcing that the federal spending bill will result in a $3 billion loss in federal funds for the next fiscal year, which is on top of the $7.5 billion budget deficit that was already projected. Washington also said there will be a $750 million impact from Medicaid cuts in the final quarter of the current fiscal year, which he believes the state should be able to manage through. However, he said the other losses will lead to difficult decisions. “These are going to require challenging discussions in the next handful of months and into next year’s budget,” he said. “We’ll do it with the legislative leaders, but there’s no taxing our way out of this, there’s not a way the state of New York can finance what’s been hoisted upon us. There’s no way any state can do that frankly, so there’s going to be hard decisions as we move forward.”
After meeting with their respective conferences, New York’s legislative leaders have said, as of now, they have no plans to return later this year for a Special Session to address the impacts of the “One Big Beautiful Bill Act.” “We are obviously ready to come back should we have to come back, [but] at this moment, that is not what we know right now,” Senate Majority Leader Stewart-Cousins told reporters during a virtual press conference. Senate Finance Chair Liz Krueger echoed the Majority Leader, specifically saying the $750 million gap in Medicaid can be addressed with reserve funds. Currently, New York has about $14 billion remaining in reserves after using $8 billion to pay off the unemployment insurance debt. Further, Assembly Ways & Means Committee Chair Gary Pretlow said he expects the Governor to use the power given to her by the Legislature this year to make spending adjustments up to $2 billion without legislative approval. “She very well could engage the Legislature, but I don’t know if she would or not,” Pretlow said. “She asked for the authority to do this and she got it.”
A spokesperson for Assembly Speaker Carl Heastie said discussions regarding the impacts of the spending bill are still being discussed by the Assembly Democratic Conference. Likewise, a spokesperson for Governor Kathy Hochul said they are still evaluating the impacts and that conversations with the Legislature remain ongoing.