ACA Looks to Be A-OK

Yesterday, the Supreme Court heard oral arguments in Texas v. California, the suit that a gaggle of Republican attorneys general brought in hopes of killing the Affordable Care Act (with the Trump administration later joining the suit). While it is true that inferring outcomes based on the justices' questioning can sometimes be a fool's errand, it certainly appears that most or all of the law will ultimately survive.

To understand what is going on right now, it's necessary to get into the weeds a bit and explain the arguments being made in the suit. So, bear with us. Recall that the last time SCOTUS considered the constitutionality of the ACA, in 2012's NFIB v. Sebelius, the anti-ACA forces argued that by mandating the purchase of health insurance, Congress was engaging in all sorts of unconstitutional acts, including infringements on due process, separation of church and state, and state sovereignty. Chief Justice John Roberts joined with the (then) four liberals to find that the mandate isn't actually mandatory; it offers a choice between paying the tax penalty or getting insurance. This being the case, the Court found that in passing the ACA, Congress was legally exercising its power to tax.

In 2017, following both Sebelius and a failed attempt to repeal the entire law (thanks, John McCain!), the Republican-controlled Congress zeroed out the tax penalty. This is the basis for the current suit, which has two elements to it. The first is that now that the penalty is zero, everyone is "paying" it, so it's no longer optional, it's mandatory. That means, in the view of the plaintiffs, that the mandate portion of the bill must be struck down by the Court because it is no longer constitutional.

And then there is the second element of the current suit. The Republican AGs, and everyone else who is trying to kill the ACA, do not care about the mandate, per se. After all, the mandate is currently zero, and so is not affecting anyone. No, striking down the mandate is merely the necessary precursor to the heart and soul of the suit: That the whole law is fundamentally built around the mandate, and if the mandate is no longer valid, then the whole bill is no longer valid. The legal term for this is "severability." So, what the Republicans bringing the suit are arguing is that the mandate is inseverable from the rest of the law.

And now, we can talk about the four rather significant problem areas the plaintiffs face as they try to win their case:

1. Standing: This question actually got more time during yesterday's oral arguments than any other. Newly seated justice Amy Coney Barrett attempted, and failed, to get clarity on exactly how Texas is harmed by a program that they did not adopt, and by a penalty that has no cost. The plaintiffs vaguely alluded to the impact that other states' decisions have on their home states, which caused Chief Justice John Roberts and Associate Justices Brett Kavanaugh and Clarence Thomas to wonder where this bit of legal logic might go, if taken to its extreme. Thomas, for example, wondered if a state with no mandate to wear protective masks would be allowed to sue a state that does have such a mandate.
   
   So, there is a chance that the suit gets kicked for lack of standing, and that is the end of it. If so, then the justices would explain that the states' quarrel is with Congress (which cannot be sued), and that if the states have a problem, they should take it up with the members of the House and the Senate and not with the courts.
   
   
2. Mandate: In contrast to the question of standing, relatively little time on Tuesday was spent exploring this question. The notion that a tax of zero is therefore a mandatory tax that everyone pays is clearly a bit of legal sophistry. That said, successful legal cases have been built on even more tenuous sophistries than this one. So, if the Republican AGs get any sort of a win here, it will be the striking down of the mandate.
   
   
3. Severability: This is where the plaintiffs' case runs into a whole bunch of problems, as the justices (primarily the conservatives) helpfully pointed out during oral arguments. To start with, federal courts are pretty conservative (no pun intended) with severability in general. They don't particularly like to wipe out the 95% of a law that is valid just because of the 5% of the law that was faulty. Kavanaugh, in particular, emphasized this on Tuesday, telling the Democrats' lead counsel, Don Verrilli, "I tend to agree with you on this very straightforward case for severability under our precedents, meaning that we would excise the mandate and leave the rest of the act in place."
   
   The next problem is that Congress has had plenty of opportunity to weigh in on this subject, and has consistently taken a position opposite of the one the Republicans are arguing. To start, when the ACA was originally written, Congress could have included verbiage that made the mandate inseverable from the rest, and they did not do so. "Congress knows how to write an inseverability clause," remarked Kavanaugh, "and that is not the language that they chose here." Thereafter, as Roberts noted, Congress had multiple opportunities to repeal the law (including when they zeroed out the mandate penalty) and chose not to do so. The reasons for Congress' actions (e.g., the lack of a filibuster-proof Republican majority in the Senate) are not the concern of the Court. The bottom line is that wiping out the law, or else making it inseverable from the mandate, was Congress' prerogative, and they did not exercise it on the multiple occasions they might have done so. Consequently, it is not the place of the Supreme Court to substitute its judgment. "Not our job," were Roberts' exact words.
   
   The final problem in this area is a pragmatic one. In theory, if the rest of the ACA cannot be separated from the mandate, then the whole law should have failed when the mandate was zeroed out. It has not failed (there are still tens of millions of people with Obamacare insurance), and Congress themselves even used the infrastructure created by the ACA to help implement their various COVID-19 stimulus packages. Associate Justice Samuel Alito used the metaphor of an airplane: "At the time of the first case, there was strong reason to believe that the individual mandate was like a part in an airplane that was essential to keep the plane flying, so that if that part was taken out the plane would crash. But now the part has been taken out and the plane has not crashed," he said to Acting Solicitor General Jeffrey Wall. "So if we were to decide this case the way you advocate, how would we explain why the individual mandate in its present form is essential to the operation of the act?"
   
   
4. SCOTUS Politics: If you were keeping count, you might have noticed that five of the six conservative judges (all but Neil Gorsuch) asked some pretty probing questions of the plaintiffs. The justices are surely aware that the Court is under a microscope right now, and that if they issue a very pro-Republican decision based on legal pretzel logic, their credibility could take a serious, long-term hit. And we're talking about an issue that, by and large, this group is not particularly invested in. In fact, John Roberts' tone on Tuesday suggested that he's a little irked about having to deal with this again, and that maybe he's even taking it a little personally.

Add it up, and it's hard to see how the Republican AGs and the Trump administration can prevail here, except perhaps on getting the mandate struck down, which is not what they actually care about. One or two conservative justices might have been playing devil's advocate, but five of them? That means that the foundation for what Joe Biden wants to do, health-care wise, will stay in place, though he still has the problem of an unfriendly Senate. As to the Republicans, will they keep tilting at this windmill, given that it's been a legal and electoral loser for them? Your guess is as good as ours. (Z)

Meet the New Boss, Same as the Old Boss

House Democrats were so incensed with their performance in the election that they effectively pushed out Rep. Cheri Bustos (D-IL) as head of the DCCC, and other key leadership figures may follow. Senate Democrats are a little less disappointed, or perhaps a little less prone to respond in this fashion, as they just reelected Minority Leader Chuck Schumer (D-NY) and his leadership team. At the same time, Senate Republicans reelected Majority Leader Mitch McConnell (R-KY) and his leadership team. So, the 117th U.S. Senate is going to look an awful lot like the 116th.

Meanwhile, other Senate business is rapidly sorting itself out. To wit:

• The Cabinet: Whether the Senate ends up 50/50, or with a slight majority for one party or the other, the Democrats simply cannot afford to put seats at risk, or to be left down a vote or two while waiting for special elections to be held. And so, folks like Sen. Elizabeth Warren (D-MA) and Sen. Bernie Sanders (I-VT), who aspired to a place in Joe Biden's cabinet, are acclimating to the fact that it's not plausible (and that's before we talk about the unwillingness of a likely McConnell-led Senate to confirm, or even consider, outspoken liberals like those two).
  
  
• North Carolina: The North Carolina Senate race has been called for Sen. Thom Tillis (R). Democratic challenger Cal Cunningham has conceded, his dream of being a member of the Senate at an end.
  
  
• California: Reportedly, there is enormous pressure on Gov. Gavin Newsom (D-CA) to appoint a Latino to replace Vice President-elect Kamala Harris in the Senate. Now, someone had to share this information with the Washington Post, and that someone is not named in the story, nor are they Newsom. So, you may want to take that report with just a few grains of salt, because the source may not be a neutral party in this matter. That said, appointing the state's first-ever Latino or Latina senator would be a real feather in Newsom's cap, and would make his already-excellent odds of being reelected even better.
  
  California Attorney General Xavier Becerra (D) is one of the leading candidates. On the upside, Becerra is the lead attorney in the ACA case (see above), has Washington experience as a former member of Congress, and would vacate a post that Newsom would love the chance to fill. On the downside, he's under serious consideration for Joe Biden's cabinet, and he's a little on the old to be commencing a U.S. Senate career.
  
  The other leading candidate is Secretary of State Alex Padilla (D). On the upside for him, he's from the more populous southern half of the state, he's younger than Becerra (47 compared to 62), he got more votes in 2016 than Newsom or Becerra did, and he is a long-time and avowed Newsom loyalist. On the downside, he's got zero Washington experience, and the state's Republicans dislike him with a white-hot passion.
  
  
• Georgia: Senate Republicans are pressing Donald Trump to get involved in the Georgia U.S. Senate races ASAP. They would obviously like to get him on record before his electoral position becomes even more tenuous and/or before he has an even worse meltdown than the one that is currently unfolding. Whether Trump realizes that his "fellow" Republicans are using him, and whether he cares as long as they kiss his ring, are open questions. Also an open question is whether Republican pooh-bahs have noticed that Georgia dislikes Trump so much, they just went for a Democrat for the first time in 28 years. Maybe he's not the asset they think he is.
  
  Incidentally, the state will start sending out absentee ballots on Nov. 18, the last day to register to vote in time for the special election is Dec. 7, in-person voting begins on Dec. 14, and Election Day is Jan. 5. Anyone thinking of moving to Georgia temporarily in order to vote better get started. The state's residency requirements are a little squishy, but largely involve transferring your life to the Peach State, which means things like establishing utility accounts and getting a Georgia driver's license. Such things take time.

Technically, we still await results from Alaska, but it's clear that the major question remaining as regards the next Senate is what is going to happen with those two seats from Georgia, and how quickly Newsom will tap a (Latino) replacement for Harris. Otherwise, most of the election-related dust (except Arizona and Georgia) has already settled. (Z)

The Vaccine Conspiracy Theories Are Already Flying

As we noted yesterday, Pfizer CEO Albert Bourla went on TV over the weekend to announce that his company has a COVID-19 vaccine that looks very promising, and appears to have 90% efficacy. It took less than 24 hours for the Donalds Trump, Senior and Junior, to declare that a conspiracy is underway, and that Pfizer deliberately held off on the announcement until after the election so as to hurt the President's reelection chances. As is the case approximately 99.99% of the time, the Donalds have offered no evidence in support of their claims.

In defense of Junior and Senior, if the announcement had come a week before the election, there would be plenty of Democrats claiming, without evidence, a pro-Trump conspiracy. Probably not Democrats as high profile as a president and a president's child, but just because Barack and Malia Obama would not indulge does not mean that no Democrats would. Further, Pfizer could certainly have taken note of the optics of the situation and held off a bit, since they didn't have to go public until they asked for fast-track FDA approval in a few weeks.

That said, the conspiracy theory doesn't pass even the most cursory of smell tests. For months, the prediction was that we'd be hearing something in the second or third week of November. And when did we hear from Bourla? The second week of November. If they had tried to go public, say, two weeks ago, the folks at Pfizer could have ended up with egg on their faces, as they didn't actually have enough data to reach firm conclusions at that point. They do have enough data now, even if they need a bit more data and time to clear the FDA's bar for approval.

And while Pfizer could have waited a bit longer, it's also clear why they moved forward with an announcement as soon as practicable. Pfizer's researchers have been working hard, and under enormous pressure, for months. There is a scene in the movie "The Imitation Game" where spymaster Stewart Menzies asks mathematician and cryptanalyst Alan Turing if he knows how many British servicemen have died while waiting for British intelligence to crack the German Enigma code machine. The answer: "Three...while we've been having this conversation." The sort of pressure that Menzies was trying to create must be similar to what is weighing on every scientist who is part of the race to a vaccine. If you see any of the interviews with Bourla, it's clear how thrilled and relieved he is. Not easy to keep things under your hat under those circumstances.

There is also a more...pragmatic motive for Bourla to go public as soon as is possible. Nobody wants to be Alfred Russel Wallace (beaten to the punch by Charles Darwin) or Elisha Gray (same, except by Alexander Graham Bell, and by mere hours at the patent office). Assuming the Pfizer vaccine works out, Bourla wants to make sure his team and his company get credit for being first. That's good for morale, it's good PR, and it's very good for the bottom line. Here's a graph of Pfizer's stock performance over the last week:

The price closed at $36.40 on Friday. Bourla first shared his news on Sunday and, as you can see, the price quickly spiked (to $41.92). It's now holding steady in the $39 range. Based on the closing price yesterday ($38.68), and the number of shares outstanding (5.56 billion), the company's value has increased by $12.6 billion since Friday. That might not hold (Forbes is skeptical), but you never know.

And even if Pfizer's stock returns to its previous level, at least one person is going to come out ahead. According to the terms of an arrangement made back in August, Bourla sold $5.6 million worth of stock on Monday while the share price was at its peak. These sorts of pre-arranged sales are commonplace, to limit the risk of insider trading, though our suspicion is that the Pfizer CEO was vaguely aware of what day his stock would be sold, in the sense that he circled it in bright red ink on his calendar and set six different alarms on his iPhone. So, while you might argue that there's a little bit of chicanery going on here, it's in favor of Albert Bourla's bank account. There is simply nothing to suggest that the timing of the vaccine news had anything whatsover to do with the President or the election. (Z)

Pennsylvania Got Only 10,000 Ballots after Nov. 3

Secretary of the Commonwealth Kathy Boockvar, who is Pennsylvania's top election official, spoke to reporters yesterday. And while she said a great deal, the most important detail she shared was this: The state received just 10,000 ballots between Election Day and the deadline for receipt on Nov. 6.

This is significant for two reasons. First, it makes clear that the Democrats did a heckuva job of communicating their message of "mail your ballot in early, or else vote in person." Second, and more importantly, it throws a giant wrench into Donald Trump's legal strategy. Those late-arriving ballots have been the focal point of the campaign's legal efforts in Pennsylvania and, indeed, the linchpin of their entire campaign to reclaim the presidency. Team Trump has argued that the ballots should not be counted, and while the Supreme Court did not buy that argument when they heard it, they did order that the ballots be held separately in case they revisit the matter.

Now, however, it doesn't particularly matter if they are counted or thrown out, since 10,000 ballots is far less than Joe Biden's current 47,000-vote margin in the state. Even if they are tossed, Biden's lead would still be around 40,000 votes, a quantity that is many magnitudes too large to be overcome by a recount. And without Pennsylvania, Trump cannot get to 270 EVs, even if Georgia somehow flips. So it's another nail in a coffin that, frankly, was already closed tight, lowered into the ground, and covered with the first shovelfuls of dirt. (Z)

Trump's Loose Lips Could Sink Ships

As president, Donald Trump is entitled to daily briefings on intelligence, and is also allowed to know anything else he wants to know. And while he's served, Trump has been a huge security risk. Sometimes he leaks things he shouldn't to foreign adversaries, like the time he revealed key, identifiable details about a Middle East intelligence source to Russian Foreign Minister Sergei Lavrov. Sometimes he leaks things he shouldn't on Twitter, like the time he posted a classified photograph of Iran taken by a U.S. spy satellite.

Soon, of course, Trump will be on his way out the door (whether under his own power, or dragged out kicking and screaming by the U.S. Secret Service). However, even once noon on Jan. 20 arrives, the Donald will remain careless and indiscreet. He's also in deep debt, and has a tendency to lash out when he's angry (and he will be as angry as he's ever been once Biden is sworn in). In short, ex-President Trump will be about as much of a security risk as one can possibly imagine. He could reveal classified information accidentally or deliberately, and intelligence pros are very nervous that he very well might do so.

With that said, there are a couple of silver linings. The first is that Trump barely pays attention to intelligence briefings, and he has a terrible memory. So while he might be able to give an adversary some crumbs here and there, he probably won't be able to blow a massive hole in America's intelligence gathering. The second is that someone will presumably sit down with the President (or ex-President) at some point and tell him that if he discloses information that he shouldn't, he could be subject to prosecution under the terms of the Espionage Act.

This will ultimately create a couple of challenges for President-elect Joe Biden. The bigger challenge, because it is a known unknown, is what to do when and if Trump spills some beans. The much easier challenge is deciding what to do about the President's Daily Briefing (PDB). Customarily, former presidents are given access to the PDB, in part as a perk of the office, but mostly so they are in the loop should one of their successors need their advice, or need them to act as an emissary. However, the matter is entirely at the discretion of the current president. Biden has no use for advice from Trump nor a need to use him as an emissary, since Trump is not suited for either task, and since close friend and ally Barack Obama is supremely well suited. So too is Bill Clinton, should he be needed. So, there will be no PDB for Trump once Jan. 20 arrives. He may turn that into a grievance, and one can already hear Sean Hannity whining that "every ex-president back to Eisenhower has gotten the PDB, except Donald Trump." However, Biden is not going to allow an ongoing gaping hole in America's security to exist solely to deprive Fox News of a talking point. (Z)

Trumps May Be Plotting Hostile Takeover of the RNC

Although they are not saying why—like, maybe, that the President was defeated—the Trump family is not happy with the campaign that was waged. They blame many people for this and, conveniently, none are named Trump (or Kushner). The latest person in the crosshairs is RNC Ronna McDaniel, who may have changed her name for the Donald, but who apparently did not do enough to help his electoral chances. And so, Donald Trump Jr. and Kimberly Guilfoyle are making noise about taking over the RNC, either with themselves as chair and co-chair, or with a loyalist like David Bossie running the show.

The obvious motivation here is to retain a firm grip on the Party, so as to grease the skids for a Trump to run for the White House in 2024, either Donald Sr. or one of the kiddies. The less obvious, but perhaps equally important, motivation is that the Trumps have gotten a taste of what it's like to have power and influence, and to perform rallies before adoring crowds, and they don't want to give that up. Running the RNC would be an excellent way for them to stay in the game.

The Republican Party may continue with Trumpism (that remains to be seen), but they really want to be done with the Trumps. Even if the GOP continues in the current vein, they would prefer that their next presidential candidate be a Trump clone who is smarter, shrewder, less impetuous, and more loyal to the Party than the Trumps are. Someone like Sen. Josh Hawley (R-MO) or Gov. Kristi Noem (R-SD) or Gov. Ron DeSantis (R-FL) would fit the bill. That said, GOP muckety-mucks are terrified that if the Trumps feel scorned, they will go scorched earth against the Republican Party. With apologies to Lyndon Johnson, it could be a situation where it's better to have them inside the tent pissing out, than outside the tent pissing in (that is why LBJ said he was unwilling to fire J. Edgar Hoover). So, party insiders may decide they have no choice but to accede to a hostile takeover. (Z)

The Biden Cabinet: Secretary of State

Donald Trump and his allies may be in denial, but the rest of the country has begun looking ahead to the Biden administration, which commences on Jan. 20. Everyone likes lists and horse races, so we thought we would take a look at the various Cabinet positions, and the leading candidates therein. We'll work our way through as many as we can, until Biden scoops us by announcing his picks. Working in order of seniority (and thus place in the line of succession), first up is Secretary of State:

• The Job: The Secretary of State oversees the State Department, including embassies and the members of the foreign service. They have some role in immigration policy, advise the president on foreign affairs, and often serve as a high-level emissary, particularly when important treaties are being negotiated. Also, thanks to two-plus centuries of tradition, the Great Seal of the United States lives in the Secretary's desk.
  
  
• Considerations: Among the "glamour" Cabinet posts (State, Treasury, Defense), this has become the "diversity" job. That is to say, every person who has ever led the latter two departments has been a white man, but four of the last eight confirmed secretaries of state were either women or people of color or both (if you wish to include Justice as a glamour department, then the same four of eight is true there). Biden certainly might break the glass ceiling at Treasury or Defense, but if he decides he needs more top-level diversity beyond Kamala Harris, this is the most likely place for it.
  
  In addition, while some presidents were happy to leave foreign affairs to their secretary of state and to focus on domestic affairs, Biden is a former chair of the Senate Foreign Relations Committee and ran on stabilizing the United States' relationship with the rest of the world. So, he will be very hands on and will want a secretary he can work closely with, probably one he knows well already.
  
  
• Candidate 1, Barack Obama: The 44th President of the United States would be the ideal pick for Biden. He's smooth, a skilled diplomat, and already knows most of the world's leaders. The President-elect would love to work with Obama again, and Democrats across the country would be thrilled beyond description. Senate Republicans would need all the gall in China to refuse confirmation of a former president.
  
  The one downside here: There's virtually no chance Obama would take the job. He's done his service, and even if he was tempted, Michelle Obama would undoubtedly put the kibosh on returning the family to the spotlight (and the attendant security and safety issues that entails).
  
  
• Candidate 2, Susan Rice: While Biden will want to be heavily involved with foreign affairs, and eventually will be, he may need someone to hold down the fort early on while he deals with COVID-19 and other major domestic challenges. Beyond Obama, former ambassador to the U.N. Susan Rice is the candidate most ready to hit the ground running. She has 30 years' State Department and federal government experience, two advanced degrees in international relations (both from Oxford), and is already close with Biden.
  
  The biggest problem with Rice is that she was (unfairly) tarred and feathered by Republicans over the Benghazi scandal. Surely they haven't forgotten, and it's very hard to believe she can secure confirmation from a Mitch McConnell-controlled Senate. A secondary issue is that Rice can be prickly with underlings, which is not a great feature when morale in the State Department is already very low.
  
  
• Candidate 3, Sen. Chris Coons (D-DE): He is a close friend of Biden's, as they have much in common, including service on the Senate Foreign Relations Committee, excellent people skills, and a Delaware address. Coons has lived abroad (in Kenya), and while he's pretty liberal, it would be tough for Senate Republicans to obstruct a very religious white guy who has a degree in divinity (from Yale) and who leads the Senate's weekly prayer breakfast.
  
  That said, Coons does lack hands-on diplomatic experience, as well as executive experience (his public service has been almost exclusively in legislative capacities). Also, how many prominent AARP-eligible white Delawarean men does one administration really need?
  
  
• Candidate 4, Sen. Chris Murphy (D-CT): He's been lobbying aggressively for the job, he also serves on the Senate Foreign Relations Committee, and he specializes in the Middle East, which is obviously a key spot (both Coons' and Rice's predominant area, by contrast, is Africa). He's only 47, and is seen as a rising star and a possible future presidential candidate. He's also a darling of progressives. If he did resign from the Senate, his successor (and Coons' successor, for that matter) would be chosen by a Democratic governor.
  
  On the other hand, Murphy's experience is not as extensive as that of the other people on this list. Further, he began his Senate career in Biden's fifth year as vice president, so they don't know each other well. It seems like Murphy is mostly a candidate in his own mind, since there are better places in the Cabinet to give the progressives a voice (like Labor).
  
  
• Candidate 5, Antony Blinken: Blinken is a worldly fellow who spent many of his formative years in Europe, including attending high school in Paris. He's served in many different government jobs, most notably as deputy national security adviser and deputy secretary of State under Obama, and as Democratic staff director for the Senate Foreign Relations Committee. It was in the latter capacity that Blinken met and became close friends with Biden. Since then, Blinken has been a trusted Biden adviser, and he was a key figure in running the 2020 presidential campaign.
  
  However, it seems somewhat unlikely that Biden would use up one of the crown jewels on a candidate who would make only Joe Biden happy. That is to say, there is no major (or minor) Democratic constituency that is enthusiastic about Blinken. Frankly, National Security Advisor is a much better fit. That job is not nearly as significant to the base as the State Department, and Blinken is probably better suited for NSA than State, anyhow.

Biden certainly could go off the board, but there is an excellent chance that Mike Pompeo's successor is on the list above. Next Up: Treasury. (Z)

Sorry, (Z) needs a bit more time to finish writing up the contest results.

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