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Brian Lehrer: It's the Brian Lehrer Show on WNYC. Good morning, everyone. At about 7:00 clock this morning, if you haven't heard this yet, after another all-nighter, the House of Representatives passed, by one vote, President Trump's so called big, beautiful bill. The vote was 215 to 214. As The New York Times describes it, the legislation would slash taxes, steer more money to the military and border security, and pay for some of this with cuts to Medicaid, food assistance, education and clean energy programs. The Times says the bill adds significantly to federal deficits and to the ranks of the uninsured. As New York economics reporter Greg David describes it, the bill could devastate New York's housing landscape. Greg will join us in just a minute. I'll give you one other local story related to the bill. First, the one vote margin was 215 to 214. One local Republican who actually objected to the bill helped to make that possible. Long Island Republican Andrew Garbarino abstained rather than voting no. That allowed the one vote margin to stand.

Garbarino objected to some of the cuts to clean energy projects and green energy tax tax credits in the bill. Garbarino had said yesterday, according to reports, "I think these things I'm hearing could end up killing a lot of projects that have been announced all over the country," and certainly that included in his district on the island. In the end he did not vote. He registered his objection in the context of letting the bill pass rather than sinking it, which one more no vote would have done.

Of course, for context, all the other local Republicans voted yes, all the Democrats voted no. Also for context, the bill now goes to the Senate where it could yet get changed. We'll talk to Senator Gillibrand later in the show. We'll talk about various local implications of the bill. Now Greg David reports on business and economics for the news organization THE CITY and runs the business and economics reporting program at the Craig Newmark Graduate School of Journalism at CUNY. Greg, thanks for coming on. As always, welcome back to WNYC.

Greg David: Thanks. It's always great to be here.

Brian Lehrer: I know you're combing through this bill for local winners and losers. Want to start with an overview and then we'll get into specifics?

Greg David: Sure. There are winners in the bill and that hasn't gotten much attention here in New York. One winner. They're not all rich people. People who get much of their income from tips. We're going to $25,000 in tip income is not going to be taxed as long as you don't make more than $160,000. Second group of winners. Well, people like me, I'm old and I take the standard deduction, and Trump wanted to make my Social Security tax exempt. That wasn't really feasible, but now I'm going to get an extra $4,000 on my standard deduction.

Also, there will be a group of winners, primarily in the New York suburbs, people who make several hundred thousand dollars, they have to make less than $500,000, pay very big property taxes, probably have significant income taxes and a mortgage, because now they'll be able to deduct $40,000 in state and local taxes rather than the $10,000 they used to have. When you had only $10,000 in deductions, the standard deduction for a couple was $30,000, so that group of people will also, I think, get significant tax increases.

One other group that will benefit, well, people who are getting the child tax credit will be able to get $2,500 instead of $2,000, least for the next few years, but I should point out that the way the Republicans do the tax credit, it doesn't go to the lowest, the poorest people because they tend not to have much income, but goes to the near-poor people who work, and they will benefit the most from that $500 increase.

Brian Lehrer: On that SALT tax deduction cap increase from $10,000 to $40,000 a year, how much does that solve the problem or not, and for whom? We know one of the big categories here is seniors who have a fixed income now in retirement, but their homes keep valuing under them as their primary asset. They used to get a deduction for all of the property taxes, which of course in the New York suburbs can be very high even for a modest home. Does $10,000 up to $40,000 solve that for almost all of them? Who's in and who's out of this partial solution?

Greg David: Well, I think that depends, but I would say it probably doesn't solve it very much. If you're married, the standard deduction is $30,000. If you're retired on a fixed income, you don't have much money. Even if you're paying $20,000 or $25,000 in property taxes, which could be you live in the right town or the wrong town in Westchester, they are that high, I don't think it's a big gain for that group. It's a gain for people who are making a fair amount of income, have a substantial mortgage and have large property taxes.

Brian Lehrer: It was enough to get local Republicans like Mike Lawler and Nick LaLota from the "maybe" column to the "yes" column, maybe that plus the threat of being primaried from the right. They were making that their prime issue and this was enough to satisfy them.

Greg David: Brian, you brought up the politics. It'll be very interesting in the 2026 off-year elections to see what plays out. I'm in Lawler's district by the way.

Brian Lehrer: North of the city, parts of Westchester and Rockland, Dutchess, and Putnam.

Greg David: Will he be able to sell this as important to people, or will he take a hit for the other things that are in this bill that are on the loser side for New York? Even in the SALT issue there's a wrinkle that's not getting much attention and that is that there was a workaround to the SALT cap deduction, especially for people who work for partnerships or companies like law firms, in which they could get paid through their companies not in wages but in what's called pass through income. That allowed them to benefit from the deduction because their company was taking the deduction and then they paid an equivalent amount in state income.

Well, that workaround, which has been widely used by a lot of people, is being either severely limited or eliminated that nobody's quite sure yet in that and people are trying to crunch the numbers. It could mean an $8 billion increase in taxes paid by those New Yorkers.

Now, you said who wins or loses. The issue about SALT, and you mentioned one way to look at it, is that many people, not all by any means, think that New York's very high taxes, we are number one in the country in state and local taxes, is sending people out to leave the city and leave the state. Big debate whether it's the rich people or the middle-income people.

This bill does nothing for retention of wealthy people. They won't benefit from the SALT deduction because it phases out after $500,000 and they might be losing this workaround. If you were hoping that the restoration of state and local tax deductions would help retain very wealthy people who pay an enormous amount of the New York State income tax, this bill will not do it.

Brian Lehrer: If you're just joining us, my guest for another few minutes is Greg David, who reports on business and economics for the news organization, THE CITY, and runs the business and economics reporting program at the Craig Newmark Graduate School of Journalism at CUNY. We're talking about the breaking news this morning that around 7:00 AM, after another all-nighter, the House of Representatives passed, by just one vote, President Trump's so called big, beautiful bill. We're talking about the local implications. By the way, did you see that it's now come out that Speaker Mike Johnson fell asleep and missed the vote?

Speaker 3: [inaudible 00:08:41]

Brian Lehrer: I'm sorry. Oh, I see. No, I'm just understanding now this breaking news. It looked like one thing to me originally, Garbarino abstained. I mentioned that in the intro. It looked like he was abstaining to register an objection while still letting the bill passed, but now his spokesman is saying after sitting through proceedings all night, the congressman briefly stepped out and inadvertently missed the vote. This is one of many reasons why governing should happen in the light of day, not in the dead of night. That's from Politico. Such a crucial make-or-break vote on the part of somebody who was a holdout until he fell asleep. I don't think we know yet how Garbarino would have voted.

Greg David: Brian, I don't know that we should believe anything we're hearing at the moment. Do you?

Brian Lehrer: That's fair too. Let's talk about his objection because he-- Let's see. Let me find the details on this again. Right. The issue that Garbarino is concerned about, green energy projects that'll get scrapped on Long island and around the country. Do you know why that was such an issue for a Republican from our area?

Greg David: No. He's the only one who was very big on that issue. We really have to work out how many projects are being scrapped. It's going to take a lot of work to do that. There's going to be an impact from that. Clearly, they were out to undo as much as they could of the Inflation Reduction Act, which was essentially a climate change bill. What the Republicans are going to have to take the hit on in New York is the enormous damage to the state budget.

Kathy Hochul said earlier this week that the Medicaid cuts could cost New York about $13 billion, and that's a year. Much of it comes from what's called the Essential Plan, and this is a program of health insurance that New York provides, only three other states do it, that allows people who are slightly above the area that you get really good insurance from, Obamacare, to get very good health care.

This bill says that you can't allow a group of legal immigrants to get the plan. That provision in the bill stands to cost New York as much as $7.6 billion in the Essential Plan, and this is going to set up some very difficult choices. Gavin Newsom in California has moved already to restrict their health assistance to immigrants and to impose fees on them. Are we going to do that? We have one of the lowest uninsured rates in the entire country because of our health safety net. Are we going to find a way to cover the hit in the budget?

There's another billion dollars likely to be required to deal with the federal cutback in food benefits and SNAP. I think it's very likely that we're going to have to do something about that.

Then, as you pointed out, not in this bill, but coming in the Trump budget, is enormous cuts to our housing voucher program. "Able-bodied people" will only be able to have vouchers for two years, while in New York people are on vouchers for 20 years, and that's going to present an enormous budget.

I was talking to people who really care about the state budget, and they pointed out to me that we just approved a state budget with a 12% increase in spending. We reduced our reserves by a third. Now, we did that for a good reason, to pay off an unemployment debt, but nevertheless, facing this enormous fiscal calamity, we've decided to take our reserves down from $21 billion to $14 billion.

There are enormously difficult choices coming, and the legislature and the governor passed what could only be called a fake budget. They're going to be back in, I don't know, three, four or five months to make some really difficult choices.

Brian Lehrer: Still clarifying on the Andrew Garbarino situation, because this is just emerging. His spokesperson does say that he fully intended to support the bill, so he would have voted yes. Like you say, we don't know what to believe. Did he really fall asleep? Does he just want this abstention on the record? They probably would have gone and found him and woken him up if they needed his vote. It passed by just one vote.

To be clear, he didn't abstain to make a statement. He says he fully intended to support the bill, but just fell asleep because it was the middle of the night. Would you talk a little bit more about the housing piece of this? Because you did write that separate article ominously called Trump's Budget Proposals Could Devastate New York’s Housing Landscape.

Greg David: We have the vouchers issue. We just passed a $50 million-a-year state housing voucher program, but that's peanuts in terms of what's happening. We make extensive use of vouchers. Adams and the City Council have been fighting for a couple years over how much the city was going to spend on vouchers, but we spend about $1 billion a year.

The feds are out to really reduce the use of vouchers in the Trump budget, and that's going to present billions of dollars in question as to whether the state and city need to pick up the money.

I would say that, given our homeless problem, there's going to be enormous pressure to do that. In addition, they're out to defund programs like the Community Block Development Fund. Now, you might say, "Well, what's that used for?" Well, one, it pays for about a third of the staff at the City Planning Commission. It pays for building inspectors. These are positions the city cannot allow to disappear, so we're going to have to cover those as well.

This is going to be a rolling thing. We're not going to know everything tomorrow. Some of it's going to take a year or so to work out, but we are constantly going to be faced with the issue of whether the state and the city have the resources to fill in the gaps in either their own spending or especially the social safety net or not.

Brian Lehrer: On Medicaid, on housing, on SNAP or food stamps, which are going to be cut in this. Last question. There is a city budget negotiation going on right now. This is the season for that. The new fiscal year starts July 1st, and obviously, there is a mayoral race going on right now.

With these massive local safety net and potential spending implications that you're describing in this bill, if it passes the Senate in its current form, is it too early to say how different mayoral candidates are staking out positions on how they would address these problems?

Greg David: None of them have staked on any position. It's a repeat of what happened in the state. We're going to pass a budget with a significant spending increase. There are some calls from people like Brad Lander to increase our reserves by $2 billion. They're currently about $8 billion. Justin Brannan, who's running to replace Lander, doesn't seem to want to increase the reserves. The Adams administration hasn't proposed increasing the reserves.

We're going to do what the state did. We're going to pass a budget as if nothing has changed and wait and see what happens. What the candidates say is, "I'm going to fight Trump." Some of them say, and Brad Lander has been saying this for a while, "We can't cover all the cuts." As for the hard choices that are going to be made, they're not going to be made in the budget and the candidates are not going to talk about them.

The only thing that might happen, I think, is that once the Democrats pick a candidate, in the moment we assume that's Andrew Cuomo, then there might be some reason for him to start to lay the groundwork, or whoever wins, for what's coming. Somebody put it to me, "Greg, when Cuomo became governor in 2011, he made the toughest choices. He faced a $9 billion budget deficit. He capped Medicaid spending. He capped overall spending. He created a new pension tier." Well, he just came out to-- said he would support unrolling the new pension tier.

Whenever there's been a tough choice that he could have made in this campaign, he has declined to make it. I and people who share my views have been appalled at the mayoral campaign. It's, what's the phrase, see no evil, hear no evil approach to all this.

Brian Lehrer: Well, much more to come on that as we continue to cover the mayoral race. Since I'll get to be a questioner in the broadcast and televised mayoral debate next month, Greg, with your wisdom on economic issues, I'm definitely going to replay what you just said and maybe fashion a question from it. Thank you for coming on. As always, Greg David reports on business and economic for the news organization, THE CITY, and teaches business and economics reporting at the Craig Newmark Graduate School of Journalism at CUNY. Greg, thanks a lot.

Greg David: Thank you.

Brian Lehrer: Brian Lehrer on WNYC. Much more to come.

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