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Morning Plum: Court decision gutting subsidies will squeeze GOP governors

What you need to know about the Supreme Court's pending King v. Burwell decision, in two minutes. (Video: Kaiser Health News)

As early as today, the Supreme Court will hand down its ruling in King v. Burwell, potentially invalidating subsidies for millions of people in three dozen mostly-Republican states. That could cause insurance markets to implode over time and potentially even lead to economic disruptions as well.

So how prepared are these states for that possibility? The New York Times takes a comprehensive look at that question, and reaches a pessimistic conclusion:

In the vast majority of states that rely on the federal exchange, HealthCare.gov, there is little or no evidence that anyone has a plan to preserve the subsidies that help more than six million residents of those states afford their insurance premiums. Most of the affected states have Republican governors, and many, including Scott Walker of Wisconsin, Rick Scott of Florida and Dennis Daugaard of South Dakota, insist it is Congress’s job to come up with a remedy if the subsidies disappear.

Rather than setting up state exchanges to keep the subsidies flowing to their own constituents, Republican governors will try to argue that this is on the federal government to fix. Indeed, Scott Walker is already doing this. The finger-pointing will be epic. But Michael Leavitt, the Health and Human Services secretary under George W. Bush, says GOP governors won’t be able to dodge responsibility:

“They’re not scrambling as of yet over this,” Mr. Leavitt said. “But when the force of millions of people who are going to have their insurance affected begins to influence this debate, it’s going to look different to those who are feeling the pressure. And I think it will be the governors.”…
Mr. Leavitt is among many political observers predicting that any solution offered by Republicans in Congress in the short term would be vetoed by President Obama, at which point it would fall to governors and legislators to figure out a path forward. So he is urging those politicians to collectively persuade the Obama administration to “dramatically simplify” its tangle of rules for creating and running state exchanges.

The administration has been mum on what it might do to make things easier for states to set up exchanges, not wanting to discuss the possibility of losing the case. Presumably, if the government loses, the administration — in addition to demanding a fix from Congress — will do all it can to facilitate exchanges. But GOP governors will face pressure from the other side to sit on their thumbs:

Republican-controlled legislatures in many states that currently use the federal exchange would be unlikely to approve a switch. Many Republican state lawmakers, especially in the Deep South, have been vocal opponents of the Affordable Care Act. While some governors might be able to create exchanges by executive order, legislatures in more than half a dozen states have barred them from doing so…
Should the subsidies be blocked, conservative groups like Americans for Prosperity would pressure Republican governors and legislators not to create exchanges. In some states, including Florida and Tennessee, these groups have been effective in persuading state lawmakers to oppose expanding Medicaid under the health care law….Levi Russell, a spokesman for Americans for Prosperity, said the group would “be involved one way or another.” 

And there you have it: the Koch-funded Americans for Prosperity will enter the fray on the other side. Indeed, another group from the Koch political network is already pressing the 2016 GOP presidential candidates to specify how firm a stand they’ll take against any Republican plan to temporarily extend exchanges that doesn’t repeal the individual mandate.

The looming pressure from the right may help explain why we’ve heard little from the GOP presidential candidates on what should happen if the Court nixes subsidies. But that brings us to our next item.

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* 2016 GOP CANDIDATES GO QUIET ON OBAMACARE: Rebecca Berg has a nice piece of reporting that details the relative silence among GOP presidential candidates about the King v. Burwell lawsuit and what should be done if King wins. Rick Perry has something to say, though:

“I think you have to have a transition period. I can’t think of any other way to do this that’s thoughtful. We moved a long way when this thing became law. You don’t turn around a huge ship just overnight. It takes a transition period. I think most Americans, whether they’re strict conservatives economically, would find that to be out of the realm of appropriate.”

A transition period? To what, exactly? Meanwhile, Hillary Clinton has signaled she’ll go on offense against Republicans on the issue. And in Jeb Bush’s and Marco Rubio’s Florida, some 1.3 million people stand to lose subsidies. What will they say?

* SENATE DEMS FACE TOUGH TRADE VOTE: Politico brings us up to speed on deliberations among a bloc of around a dozen pro-trade Senate Dems, over whether to support Fast Track a second time. This week, the Senate will vote on just Fast Track, without the Trade Adjustment Assistance for workers that previously was attached to the Fast Track vote, making it easier for Dems to support it.

This bloc of Dems appears to be leaning towards supporting Fast Track again, which would give Obama the authority he wants to negotiate the Trans-Pacific Partnership, while trusting that Mitch McConnell and John Boehner will help pass TAA afterwards. Good luck!

* 2016 REPUBLICANS GRAPPLE WITH CONFEDERATE FLAG: The New York Times has a good overview of GOP presidential candidates’ positions in the debate over the Confederate flag on state capitol grounds, which has been revived by the Charleston shooting. Jeb Bush removed the flag in Florida to a “museum,” but the Times reports that neither he nor Marco Rubio “would state explicitly whether he wanted South Carolina to stop displaying a flag that is a particularly searing reminder of slavery.” Scott Walker deferred comment until the dead are buried.

The Times suggests, interestingly, that calling for the flag to come down could compromise efforts to energize white conservative voters.

* BATTLE OVER CONFEDERATE FLAG IS BACK: CNN reports that activists who have long targeted the Confederate flag for removal from South Carolina’s state capitol grounds see a new opening to finally succeed. One GOP lawmaker is set to introduce a bill to remove it, but as part of a compromise in 2000 over the flag’s fate, only a super-majority can change the current arrangement.

And so, it’s an open question whether enough GOP state lawmakers will support the new bill. As one South Carolina Democrat puts it: “The politics of the flag are the politics of the primary voter.”

* TED CRUZ: FOES OF FLAG TRYING TO ‘DIVIDE PEOPLE’: Senator and presidential candidate Ted Cruz, responding to the post-Charleston-shooting Confederate flag debate, said he understands it has become a symbol of racial oppression and slavery to many. And then:

“But I also understand those who want to remember the sacrifices of their ancestors and the traditions of their states, not the racial oppression, but the historical traditions, and I think often this issue is used as a wedge to try to divide people.”

The suggestion that those who want to remove the flag to a museum are the ones trying to divide people is an intriguing one, to say the least.

* THE CONFEDERATE FLAG AND SOUTHERN ‘HERITAGE’: E.J. Dionne supplies the crucial historical context:

If this history is all about yesteryear, why does South Carolina continue to fly the Confederate battle flag on the grounds of its state Capitol? It’s about “heritage,” we’re told. But the nature of that “heritage” is cloaked in the mists of battlefield bravery in the Civil War. And remember: The flag was put up in 1962 as the civil rights movement gained strength. White supremacy is central to the flag’s heritage.

* AND HOUSE GOP TO TARGET OBAMA’S CLIMATE RULES: National Journal raises the curtain: Today House Republicans will hold two votes designed to roll back Obama’s forthcoming rules to curb carbon emissions from existing power plans, which are intended as a centerpiece of his legacy and will probably spark a years-long legal and political battle.

The votes are a reminder that the GOP position — one that will be held by the eventual GOP presidential nominee — will have to be opposition to pretty much everything Obama proposes to do about climate change.

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