Governor Hochul’s Letter to Senate GOP Leader: The ‘Big Ugly’ Reconciliation Bill Will Devastate New York Families

Governor Kathy Hochul today issued a letter to Senate Majority Leader John Thune outlining the potentially disastrous impact that the House’s proposed budget would have on New Yorkers. If enacted, the bill would gut New York’s healthcare system, strip families of crucial nutrition benefits, trigger billions in economic losses through the removal of clean energy tax credits and continue to unfairly tax hard-working New Yorkers by failing to fully repeal the SALT cap.

The House bill slashes $13.5 billion in funding for our healthcare economy through cuts to Medicaid and the Affordable Care Act marketplace, putting nearly 1.5 million New Yorkers at risk of losing their health insurance. Safety net hospitals in rural and low-income areas could be forced to shutter their doors permanently and doctors and health care providers would face financial jeopardy. The bill also significantly shrinks federal support for SNAP nutrition and food benefits, making it more difficult for the nearly three million New Yorkers who rely on SNAP to put food on the table for their families.

In addition, the House bill would put the safety and reliability of our power grid at risk by repealing tax credits that support major renewable and energy storage projects with an estimated loss of $25 billion in clean energy investments. The bill would also curtail efforts to reduce housing energy costs and improve resilience by eliminating the Green and Resilient Retrofit Program, an important resource to retrofit affordable housing stock. Other proposed measures include gutting student loan programs, levying outrageous taxes on nonprofits and universities, eliminating the popular direct-file program to simplify the tax process, and prohibiting state AI regulation.

The proposed budget would inflict all of these harms while still failing to deliver on a key promise made by New York Republicans in Congress to their constituents: a full repeal of the SALT cap. Congressional Republicans’ decision to impose a new, permanent SALT cap upholds a double-tax on New York taxpayers and unfairly burdens middle-class households.

The full text of the letter is below:

Dear Majority Leader Thune and Minority Leader Schumer:

As Governor of New York, I am writing to you ahead of the Senate’s consideration of the House reconciliation legislative package to underscore the detrimental impact this bill would have on my state. If enacted, the proposed bill would gut New York’s healthcare system, strip families of crucial nutrition benefits, trigger billions in economic losses through the removal of clean energy tax credits, stagnate growth in education and critical technology sectors, and continue to unfairly tax hard-working New Yorkers by failing to fully repeal the SALT cap. Passage of this legislation would worsen the affordability crisis and inject further instability into an already fragile economy.

Restricting Access to Healthcare: The House bill slashes $13.5 billion in funding for our healthcare economy through cuts to Medicaid and the Affordable Care Act (ACA) marketplace. Make no mistake: if the Senate passes this legislation and it is signed into law, nearly 1.5 million people in New York will lose their health insurance. Over $3 billion will be lost to our hospitals, with safety net hospitals in rural and low-income areas at significant risk of shuttering their doors permanently. These closures will harm all New Yorkers, regardless of their insurance coverage.

Reducing Food Security: The bill also significantly shrinks federal support for SNAP nutrition and food benefits, making it more difficult for the nearly three million New Yorkers who rely on SNAP to put food on the table for their families. The bill places significant administrative burdens on our state and counties and will create headaches for eligible families in receiving their benefits. States have always played a key role in SNAP; this bill decimates the longstanding federal-state partnership by penalizing states with recurring annual costs. We expect the House-passed bill to cost New York State alone over $2.1 billion annually.

Undermining Energy Modernization and Resilience: The House reconciliation package would put the safety and reliability of our power grid at risk by repealing tax credits that support major renewable and energy storage projects. The financial impact to New York from the loss of the investment tax credit alone would be $25 billion to the state’s current portfolio of large-scale clean energy investments and would further make new projects more expensive for businesses and threaten good-paying union jobs. Added fees on electric vehicles, canceled IRA transportation funding, and the rollback of EV and home energy credits would also drive-up costs statewide. The bill would also curtail efforts to reduce housing energy costs and improve resilience by eliminating the Green and Resilient Retrofit Program (GRRP), an important resource to retrofit our nation’s affordable housing stock.

Education Undermined, Disparities Widened: The House bill threatens to dismantle essential supports for low-income and nontraditional students by imposing restrictive eligibility changes for working, part-time learners; establishing harsh institutional penalties; and eliminating key federal loan programs. In New York, where nearly half of community college students attend part-time and rely heavily on Pell Grants, these changes could force thousands to drop out or incur deeper debt. Additionally, the bill eliminates some subsidized student loans and forces loan risk onto education institutions. Taken together, these provisions represent a regressive shift that threatens to widen educational disparities, destabilize community colleges and minority-serving institutions and undermine national efforts to promote affordable higher education.

Artificial Intelligence (AI) Moratorium: The House legislation also includes a highly-problematic and broad prohibition on state AI regulation for a decade. States like New York have passed laws to both invest in the incredible potential of AI and thoughtfully address potential AI harms in the face of federal inaction. Under my leadership, New York has enacted several first-in-the-nation AI safety measures, including the Safe for Kids Act to curb the addictive nature of social media for kids, and safeguards for AI Companion chatbots to reduce harmful interactions. If this federal prohibition remains in reconciliation, the impact is not merely a bureaucratic moratorium; it undermines the states’ fundamental right and responsibility to protect the safety, health, privacy, and economic vitality of its citizens.

Unfair Tax Burdens: Not only does this bill guarantee higher costs, it also fails to deliver on a key promise made by New Yorkers in your caucus to their constituents: a full repeal of the SALT cap. House Republicans’ decision to impose a new, permanent SALT cap upholds a double-tax on New York taxpayers and unfairly burdens households. The bill also levies outrageous taxes on nonprofits including universities, and eliminates the popular direct-file program that simplifies the tax filing process – all in an effort to cut taxes for the richest Americans.

These are just some of the more egregious harms this bill would inflict on my constituents. If New York Republicans in the House refuse to advocate for the best interests of their state, I will. As Governor, I must stand up for middle-class New Yorkers who cannot afford the consequences of this budget. I urge you to reject the House proposal and instead work with Leader Schumer on a bipartisan reconciliation package that delivers for working families, invests in the future, and reflects the real needs of the people we serve.

Sincerely,

Governor Kathy Hochul