Leaders Bowed by Compromise

A less than triumphant Governor Spitzer and Mayor Bloomberg emerged from days of tense negotiations with lawmakers with their top priorities left standing but weighed down by painful compromise and uncertainty.

The two political leaders, who are usually known for carving deep lines in the sand, resigned themselves to an outcome they had sought to avoid but couldn't refuse.

Mr. Bloomberg, who tried to use his political and financial might to quickly push his congestion-pricing plan through a skeptical Legislature, was given a yellow light by lawmakers, who yesterday agreed to form a 17-member commission that will review the mayor's plan and make recommendations by next March.

Mr. Spitzer, who presided over the first major horse-trading deal of his administration in the hopes of coming away with a victory on campaign finance, accepted a deal that would tighten political donation laws but leave contribution limits much higher than he wanted and preserve loopholes he wanted shut.

In return, he agreed to a relatively large capital-spending bill of more than $1 billion that gives the Assembly and the Senate each $300 million pots of debt money to be distributed for economic projects largely of their choosing. The executive would control a slightly larger pot of money, administration officials said. The governor also suggested that he would be willing to grant lawmakers, whose base salary is $79,000, their first pay raise since 1999, although officials said an increase wasn't part of negotiations.

Lawmakers are not expected to pass the agreed upon legislation for at least another week and warned that it could fall apart at any moment. Immediately, there was disagreement between Senate Republicans and Spitzer officials over whether the governor had agreed to give senior citizens an extra $200 million in property tax cuts. A senior Spitzer official said the governor hadn't signed on to any figure, a claim denied by Senate Republicans.

For the mayor and the governor, the deals were better than nothing.

The commission, composed of city and state officials, essentially gives the mayor another nine months to convince lawmakers of the merits of his anti-traffic plan that would charge work-day motorists $8 to drive in and out of the southern half of Manhattan.

With an overwhelming majority of Assembly Democrats against congestion pricing — which they labeled an ill-thought-out tax on the middle-class — and with fragile support in the Senate, the mayor has an uphill road ahead.

City and state officials, however, said the agreement was enough to keep New York in the running for up to $500 million in federal transportation program grants.

New York won't be able to spend any of the grant money until the Legislature and the City Council approve the plan, city officials said. The Bloomberg administration said it would begin to select companies to build the technological framework of the program, which is expected to cost at least $300 million when completed.

Mr. Bloomberg, who earlier this week lashed out at lawmakers for lacking the "guts" to accept his proposal, said he would prevail. "I am certain that through our work with the commission, our traffic plan will be implemented expeditiously," he said in a statement.

Mr. Spitzer was also optimistic, calling the campaign finance deal a "very good first step."

The governor had spent months and much political capital decrying the Legislature's refusal to rein in campaign finance laws whose relatively high limits and loopholes he says have undermined the integrity of government. The main opposition came from Senate Republicans, who are battling to preserve their slim majority in an increasingly Democratic state.

The deal he and lawmakers agreed to would slice in half the limits on individual contributions to statewide office candidates, lowering the cap to $25,000, and reduce donation limits to legislative candidates by about a third.

All sides agreed to ban contributions from lobbyists and impose limits on the currently unregulated "soft-money" accounts of party committees, setting an annual contribution limit to housekeeping accounts at $300,000, going down to $150,000 by 2013.

Wealthy donors, like Mr. Bloomberg, and big interest groups, such as the state's major health care union, have poured millions of dollars into these accounts, mostly into the committees controlled by the Democratic and Republican state parties and the Senate and Assembly majority conferences.

Legislators agreed to halve the amount that can be donated to the operating accounts of these committees. Mr. Spitzer failed to get many of the restrictions he demanded, including eliminating donations from limited liability companies, which donors have used as a vehicle for unlimited giving.

Instead, the deal only bars giving from "sham" LLCs that lack any assets. The new law, for instance, wouldn't affect donors such as billionaire real estate developer Leonard Litwin, who since 2006 has reportedly given more than $1 million to candidates and parties through his 15 LLCs.

Mr. Spitzer also failed to get any cap on political action committees, a victory for unions. He had wanted to prohibit PACs from giving more than $350,000 a year.

Proponents of stricter finance laws, who had urged a harder line, had a more subdued reaction. "It's not all what we hoped to see, but given the stalemate we felt it was an important step forward," the executive director of the nonpartisan Citizens Union in New York City, Dick Dadey, said.