Posts tagged ‘federal budget’

A Tale Of Two Budgets: Why It Matters To Your Credit Union

Nothing underscores the sharp differences between Congress and the New York State legislative processes more than the differences between how legislators in New York and Congressmen in Washington decide how to spend money.

Senate Budget Chairman, Republican Mike Enzi, greeted President Trump’s proposed $4.8 trillion dollar budget by announcing that he would not bother holding a hearing on the proposal. According to the Wyoming Senator, “nobody has listened to the President in the 23 years that I’ve been here.”

Meanwhile, New Yorkers and legislators anxiously awaited the Governor’s budget proposal with an increasing number of legislators grousing that he has too much power.

Why am I talking about this now? Because the Governor has proposed legislation in his budget, such as one addressing financial abuse of the elderly and disabled, that would have a direct operational impact on credit unions. In addition, the distinctions are important to understand as the lobbying season goes into high gear. Besides, I really enjoy the subject, so humor me a little.

Article I, section 9 of the U.S. Constitution provides that “no money shall be drawn from the Treasury, but in consequence of appropriations made by law”. In other words, the power of the purse belongs to Congress, not the President which is why the senator can be so dismissive of the President’s proposal and the President can devise a budget plan catering to his political supporters secure in the knowledge that it has not practical consequences. Given the give and take of the political process, for much of the last century, the President and Congress would ultimately engage in negotiations that resulted in a functioning spending plan. On paper the Federal fiscal year begins on October 1st and there are twelve subcommittees with jurisdiction over virtually all discretionary spending on the Federal level each of which crafts a bill for Congress to pass and the President to sign or veto.

But the system has largely broken down—a trend which pre-dates the Trump Administration. Appropriation bills are cobbled together in a last second omnibus appropriations bill, assuming one can be agreed to. Today the Federal Government is run by a series of continuing resolutions which are short term spending plans intended to keep government functioning until the President and Congress reach a final agreement.

Meanwhile on the state level the Legislature has no choice but to consider the Governor’s spending plans. As early as 1915, Henry Stimson proposed amending the state’s constitution to give the Governor the responsibility of implementing a unified executive budget. At the time, appropriations were made with little regard for the overall impact on state spending.

Stimson’s initial efforts failed but in 1927 Article 7 section 4 of the State Constitution was enacted.

In contrast to the Federal Constitution, this provision provides that the Governor must propose a budget for the upcoming fiscal year and that the “…legislature may not alter an appropriation bill submitted by the governor except to strike out or reduce items therein, but it may add thereto items of appropriation provided that such additions are stated separately and distinctly from the original items of the bill and refer each to a single object or purpose.”

This is incredibly powerful language. It means that the Governor’s executive budget has the force of law unless it is acted on by the Legislature which only has the ability to reduce or increase suggested appropriations. In addition, a series of important cases in the early 2000’s further strengthened the Governor’s hand by holding that the Governor’s budget powers applied not only to the actual amount appropriated but to the language accompanying an appropriation. That is why you have seen every Governor since George Pataki put more and more of his legislative priorities in his proposed budget.

The Governor has the right to amend his proposals and that is what will be taking place up until April as staff persons and legislative leaders haggle over the state’s spending priorities. But the legal structure means that the Governor starts these negotiations from a position of strength. The legislature could simply refuse to enact a budget by April 1st, but unlike the Federal Government the political consensus in New York has been that the public has little appetite for a government shutdown.

February 13, 2020 at 9:46 am Leave a comment

News Flash: Congress Acts Like Legislative Body

Since even lunatics have moments of extreme clarity, perhaps I shouldn’t be surprised that the House of Representatives came dangerously close to acting like a functioning legislative body yesterday and the result actually benefits credit unions.

The House took a break from its ideological frenzy to pass bipartisan legislation (H.R. 3309)supported by the credit union industry that seeks to deter Patent Troll lawsuits by making changes that, in the aggregate, will make plaintiff lawyers think twice before cranking out allegations of patent infringements to see who they can scare into a settlement. For example, the bill’s provisions would allow judges to make the losing party in litigation cover legal costs. In addition, parties bringing patent lawsuits will have to provide more specific information about the actual patent they claim is being infringed on. This may seem like common sense, but as someone who has seen patent infringement complaints sent to credit unions, it isn’t all that easy to figure out precisely what the claimed infringement is.

My quote of the day comes from Representative Peter Welch, Democrat of Vermont, who told fellow members that “patent trolling is a total and complete abuse of the patent system and a total rip off of hard working people.”

Listen, no one should underestimate the value of a patent, but when litigation over patents is actually more valuable than the inventions the patents are ostensibly designed to protect, the system is out of whack. No credit union or any business, for that matter, should have to buy or sell new products with such uncertainty about who owns what. . .

. . .Another example of potential bipartisanship is the news that Senator Patty Murray and Representative Paul Ryan are close to announcing a budget deal. While any news is good news, if press reports are accurate, the deal shows how far we have to go before a so-called grand bargain of spending cuts and tax increases put the country’s finances on a sustainable course. But there’s no need to be too negative here, Congress may actually pass its first real budget in years. We should know more by Monday. A potential sticking point is whether or not the plan includes an extension of unemployment benefits. If this emerges as a line in the sand issue for House Democrats, then Congress will soon revert back to its more accustomed posture of finger pointing and recriminations. . .

. . .One example where bi-partisanship is not going to happen any time soon is in the confirmation process. Politico is reporting that before it leaves town, the Senate will require a simple majority vote to approve the nominations of, among others, Janet Yellen to be the first woman Chair of the Federal Reserve, and Congressman Mel Watt — who has been smart enough not to quit his day job as a North Carolina Congressman pending his appointment — to head the Federal Housing Finance Agency. Does anyone find it strange that the Senate’s solution to ending partisan gridlock is to make itself more like the House of Representatives?

Have a nice weekend everyone and remember don’t be one of those lame neighbors who don’t get around to putting up Christmas lights.

December 6, 2013 at 8:31 am Leave a comment


Authored By:

Henry Meier, Esq., Senior Vice President, General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association. In addition, although Henry strives to give his readers useful and accurate information on a broad range of subjects, many of which involve legal disputes, his views are not a substitute for legal advise from retained counsel.

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