Archives of the Mayor's Press Office

Date: October 16, 1997

Release #621-97

Contact: Colleen Roche/Jennifer Chait (212) 788-2958


Health And Labor Leaders Join The Mayor In Lawsuit

Mayor Rudolph W. Giuliani announced today that the City, in collaboration with District Council 37, Local 1199 of the National Health and Human Service Employees Union and the Greater New York Hospital Association, has filed a lawsuit challenging President Clinton's veto of a congressional enactment which safeguards the City's right to hundreds of millions of dollars of Medicaid funds. While the Mayor supports the concept of the line item veto, the line item veto statute, the City contends, is unconstitutional.

Joining the Mayor at today's press conference were U.S. Senator Daniel Patrick Moynihan, President of Local 1199 Dennis Rivera, President of the Greater New York Hospitals Association (GNYHA) Kenneth Raske, President of the Health and Hospitals Corporation Dr. Luis Marcos.

"The President's use of the line item veto in this instance is detrimental to the efforts of the City and its health care partners -- the City's public and voluntary hospitals and their employees -- to provide maximum health care benefits to needy individuals," said Mayor Giuliani. "Virtually all Republicans and Democrats in the City and State agree that the way in which President Clinton exercised the use of the line-item veto unfairly targets the City and State of New York. The veto cancels a provision in the federal budget bills that authorized the payment of federal matching funds to New York based on certain tax revenues collected by the state from health care providers."

The lawsuit challenges the constitutionality of the Line Item Veto Act of 1996 which gives the President the authority to "cancel" portions of duly enacted congressional laws on the ground that the act grants powers to the President that contravene the constitutional process for making federal law. Under the constitution, the President has only three choices with respect to a bill presented to him for his approval: he may approve the entire bill, veto the entire bill, or allow the bill to become law by the passage of time without his signature.

The federal Department of Health and Human Services has threatened to take back as much as $2.6 billion in federal Medicaid matching funds from New York State's health care system. To protect New York State, in the Balanced Budget Act of 1997, Congress included a provision that prevented the agency from withdrawing those funds. Then, on August 11, President Clinton vetoed that provision, again exposing New York State to the potential loss of billions of dollars to support health care for the needy and uninsured.

"The President canceled the provision based on the premise that no other state in the nation would be given this provision, and it is unfair to the rest of our nation's taxpayers," the Mayor continued. "However, as Senator Moynihan points out every year, New York State as a whole sends on average between $14-18 billion dollars more to the federal government than it receives in return. In essence, New York is subsidizing other states -- such as Arkansas and Georgia -- that receive about a billion dollars more from the federal government than they contribute each year."

New York receives a lower percentage rate of Medicaid reimbursement from the federal government than most other states. During fiscal years '95 and '96, Arkansas and Mississippi received a 73.75 and 79 percent match, respectively, on federal Medicaid dollars. New York only received a 50 percent match.

Senator Moynihan said, "I commend the City of New York, the Greater New York Hospital Association, Local 1199, National Health and Human Service Employees Union, and District Council 37, American Federation of State, County, and Municipal employees for joining together in this important lawsuit. I will support them as friend of the court in an amicus curiae brief. The line item veto has been exercised; New Yorkers have been injured. This lawsuit will surely settle the matter. It will restore Medicaid funds for New York State and it will preserve the United States Constitution."

Stanley Hill, Executive Director of DC 37, who was unable to join today's press conference, said in a written message, "President Clinton's line item veto will have a devastating impact on the Medicaid program in this city and state. The President is tying the hands of the 30,000 DC 37 members who work for the Health and Hospitals Corporation and making a hard job even harder. DC 37 is proud to join with Mayor Giuliani and the City of New York as a plaintiff in this lawsuit attacking the President's use of the line-item veto because it will have a direct, harmful impact on those who need the services of our public hospital system and those who work for that system."

Dennis Rivera, President of the 120,000 member Local 1199 said, "We join in this suit to protect the health care system that we have established in New York and to protect the health of the public which may be negatively affected by such actions."

Kenneth Raske, President of the Greater NY Hospital Association said, "The Greater New York Hospital Association regrets that it must take this unusual step of challenging the constitutionality of the Line Item Veto Act. The first historic exercise of the Presidential line item veto authority in August resulted in the cancellation of a provision that would have protected New York's system of care for all New Yorkers -- particularly the poor and uninsured. GNYHA feels compelled to join with its co-plaintiffs in this action to restore the protection that was intended by the Budget Act."

The Mayor first announced his opposition immediately following the President's veto at a press conference with federal, local and union officials at City Hall. Joining the Mayor were City Council Speaker Peter Vallone, Queens Borough President Claire Shulman, Staten Island Borough President Guy Molinari, Congressman Ed Towns, Congressman Jerrold Nadler, and Congresswoman Nydia Velasquez.

The Complaint in the suit was filed Thursday morning in the Federal District Court in Washington D.C.

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