New Senate: DEM 47 GOP 53
New polls:
Dem pickups: AZ NV
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Federal Judge Strikes Down ACA
Big news out of Texas late in the day on Friday, as Judge Reed O'Connor (a George W. Bush appointee) ruled that the individual mandate that is built into the ACA is no longer constitutional, and that therefore the entire law is invalid, and must therefore fall.
"But wait a minute," you might be saying right now. "Wasn't this already decided by the Supreme Court?" Yes and no. When SCOTUS took up the matter, in National Federation of Independent Business v. Sebelius, they did indeed sustain the individual mandate, with Chief Justice John Roberts surprising everyone by joining the four liberal justices to cast the deciding vote. The argument that the Court made was that the mandate was legal because it imposed a tax penalty, and so it therefore fell under Congress' constitutional right to levy taxes. However, when the Republican-controlled Congress passed its tax bill last year, it reduced the penalty to zero. Consequently, 20 Republican state attorneys general and governors filed a lawsuit claiming that there are no longer any tax implications to the mandate, and so the legal basis for the mandate doesn't exist anymore. The Trump administration declined to defend the law, so 17 Democratic state attorneys general and governors stepped to the plate, instead. Given that O'Connor has a history of vigorously asserting conservative principles (some would call it overreaching), it is hardly a surprise that the Republican plaintiffs prevailed.
The negative reaction to the ruling was swift. Legal experts generally agree that the judge's ruling is dubious, first because they find his reasoning on the tax to be questionable, and second because federal judges are supposed to adhere to the doctrine of severability, which says that even if one part of a law is unconstitutional, the other parts should be sustained, if at all possible. Quite a few people have noted that the Judge's timing, namely waiting until a Friday night, and after the midterms, suggests a partisan motivation. Said law professor Timothy Jost, of Washington and Lee University, "It's breathtaking what [O'Connor]'s doing here on a Friday night after the courts closed."
The healthcare industry was none too happy, either. "Today's decision is an unfortunate step backward for our health system that is contrary to overwhelming public sentiment," declared Barbara McAneny, president of the American Medical Association. America's Health Insurance Plans, the main trade association for the insurance industry, called the ruling "misguided and wrong." And Charles N. "Chip" Kahn III, president of the Federation of American Hospitals, opined that "the judge got it wrong," and that "this ruling would have a devastating impact on the patients we serve and the nation's health-care system as a whole." That's doctors, insurers, and hospitals—a trifecta.
So, what happens now? In the short- to medium-term, there are three things that will surely occur. The first is that Republicans, from Donald Trump on down, will sing O'Connor's praises and declare victory. The President has already started the celebration, in fact:
As I predicted all along, Obamacare has been struck down as an UNCONSTITUTIONAL disaster! Now Congress must pass a STRONG law that provides GREAT healthcare and protects pre-existing conditions. Mitch and Nancy, get it done!
— Donald J. Trump (@realDonaldTrump) December 15, 2018
Wow, but not surprisingly, ObamaCare was just ruled UNCONSTITUTIONAL by a highly respected judge in Texas. Great news for America!
— Donald J. Trump (@realDonaldTrump) December 15, 2018
The second thing that will happen is that the 17 Democratic attorneys general will promptly appeal to the United States Court of Appeals for the Fifth Circuit, and then presumably to the Supreme Court. California AG Xavier Becerra confirmed that he and his colleagues are already hard at work on their appeal. So, the matter is hardly settled, as yet. And the third thing is that there will be even greater instability in the Obamacare exchanges, as insurers grow more reluctant to invest in the system. Especially since the ruling just so happened to come right at the end of the enrollment period.
So, those are the more immediate implications. Longer-term, however, the GOP seems to have really painted itself into a corner. 20 million Americans are now insured thanks to Obamacare, and would like to remain insured. Those folks undoubtedly have millions of additional friends and relatives who would also prefer that the insurance remain in place. The midterm elections, polls, and every other indicator that one can imagine also show overwhelming support among the voting public for making sure people are covered, particularly those with pre-existing conditions. Meanwhile, if the ACA does not survive court challenges, it will be because a Republican Congress passed a tax law, a Republican president signed that tax law, that same Republican president refused to do anything to protect people's insurance from the effects of that law, and a gaggle of Republican-appointed judges prioritized the tax law over people's health. In short, it's going to be very easy for people to figure out which party to blame, if and when they lose their insurance (or their loved ones do).
Meanwhile, as you may have heard, the Democrats are about to retake control of the House. And if the ACA is gutted (or even if it isn't), it's a safe bet that they'll be passing a bill or ten meant to address this situation. Incoming Speaker Nancy Pelosi (D-CA) already promised as much in a statement:
When House Democrats take the gavel, the House of Representatives will move swiftly to formally intervene in the appeals process to uphold the life-saving protections for people with pre-existing conditions and reject Republicans' effort to destroy the Affordable Care Act.
Maybe they will reinstate the penalty for not having insurance. Even if it's just one penny, then it would be a tax again, and O'Connor's ruling would presumably be moot. Or maybe they go for Obamacare 2.0. Or maybe they go further and pass a Medicare-for-all bill. Whatever Team Pelosi chooses, they will be able to hold Republicans' feet to the fire. And the Republicans, for their part, will have three basic choices: (1) Work with the Democrats, which is unlikely; or (2) Come up with their own plan, which they haven't been able to do for 8 years, so it's unlikely they'll be able to do so now; or (3) Kill whatever the Democrats come up with, and give the blue team more ammunition for use in 2020. Given how well it worked in 2018, it is a safe bet that the Democrats will make health care their top campaign issue in 2020. This is not something the Republicans are looking forward to.
In short, we will see what happens, but for Republicans this seems to be a crystal-clear example of the old admonition: "Be careful what you wish for, because you just might get it." (Z)
Trump Knew Hush-Money Payments Were Wrong
Donald Trump's former fixer, Michael Cohen, is going to prison in March, but he is not yet through causing trouble for Trump. Yesterday, he said that Trump knew full well that ordering hush-money payments to porn star Stormy Daniels and Playboy model Karen McDougal was wrong. That admission is extremely important because to be indicted for violating campaign finance laws, someone not only has to break the law (as Trump did), but he has to know at the time that he was breaking the law. Cohen's statement is now evidence that Trump knew very clearly that he was breaking the law when he ordered the payments. That may complete the puzzle that special counsel Robert Mueller needs to put in his report an unambiguous statement that Trump violated campaign finance law.
Cohen is a confirmed liar, but it is entirely possible that AMI CEO David Pecker can confirm what Cohen said. The three of them met at least once to discuss the payment to McDougal. If Pecker and Cohen both claim that Trump knew he was breaking the law, it's two against one, even if none of the trio have stellar records of telling the truth.
Also a factor here is how the payments were made. If Trump thought paying off the women was perfectly legal, he could have just sent each one a check. Instead, Cohen went out and created a shell corporation and funneled the payment to Daniels through it. The payment to McDougal was even more complicated, tricking her into believing the National Enquirer was going to publish her story and using the Enquirer to hide the source of the money. To top it off, Trump didn't reimburse Cohen by just cutting him a couple of checks. Instead the Trump Organization reimbursed him in monthly installments, calling the reimbursements "legal fees," (and presumably claiming the legal fees as tax deductions, which would be illegal, since Cohen performed no legal services for the company). If at some point Trump is forced to explain the whole matter before Congress or a court, he is going to have to explain why he didn't just write the women checks. (V)
Trump May Offer to Push the Border Wall Fight into January
Donald Trump doesn't seem to have learned the lesson that people who mess with Rep. Nancy Pelosi (D-CA) do so at their own peril. Politico is now reporting that Trump is willing to sign a bill that funds the rest of the government for 2 weeks, pushing the budget and border wall fight into January, when the Democrats will be in charge of the House.
What Trump doesn't seem to understand is that if he does that, Speaker Pelosi is very likely to draw up a budget for the entire year, with no funding for Trump's wall, and have the House pass it. Then it will be up to the Senate to pass it or reject it and force a shutdown. It is unlikely that Senate Republicans would want to take the blame for a shutdown, so they will probably pass the hot potato and let Trump veto it, making it abundantly clear to everyone why the government shut down.
It is hard to see how Trump does better negotiating with a Democratic House in January than a Republican House this week, but he is not known for long-term planning. (V)
Trump's Inaugural Committee Is Under Investigation
Yesterday, we noted that Donald Trump's inaugural is back in the news, and not on account of a recount of attendees. No, it is because the inaugural committee may have broken the law. Reporting on this story on Friday has added quite a few more details to the picture.
Recall, first of all, that the committee raised over $100 million, which is unprecedented. There are a lot of questions about where all of this money came from. In particular, it appears that some of it may have come from foreign sources, something forbidden by federal law. Further, if the committee took money in return for political favors, that would also be a crime, even if the donor was American.
There are also many questions about how and where the money was spent, since the paperwork that has been filed with the government accounts for only about $60 million in payments. That, of course, leaves more than $40 million unaccounted for. There is some evidence that Trump profited personally from the inaugural. For example, Trump's hotel offered the committee use of the Presidential Ballroom for four days for the bargain price of $700,000. The committee may also have booked rooms and used other hotel facilities.
Making things much messier for Team Trump, as they (presumably) attempt to respond to these questions, is that their bookkeeping was amateurish, and so their records are a shambles, and are full of errors, inconsistencies, and outright falsehoods. To take one example, there was a donor named Katherine Johnson who gave $25,000 to the committee. Trump & Co. did not have her address, so they apparently decided to Google it, on the theory that there couldn't possibly be two Katherine Johnsons in the country. It must have been a pleasant surprise to them to find that Katherine Johnson is all over the Internet, and that her employer—NASA—is easily discerned. So, they put down NASA's address, and that was that, right? Not so much. It would seem that the person who helped fake the paperwork did not realize that this particular Katherine Johnson was all over the Internet because a movie about her life (Hidden Figures) was made in 2016. She is black, 100 years old, living on Social Security, and she retired from NASA more than 30 years ago. It should be pretty obvious that she did not write a $25,000 check to the Trump inaugural committee, but just in case, she's now come out and confirmed she had nothing do with it, and that she wouldn't have given even $25, since she does not like Trump.
Another example of something suspicious is that the highest single contractor was WIS Media Partners, which is run by Stephanie Winston Wolkoff, a close friend of Melania Trump. Her firm got nearly $26 million. The services it provided for that sum are not known, although part of it went to subcontractors whose services are also not known. And even if the Justice Dept. declines to follow this up, that may not end the story. The committee was incorporated as a nonprofit in Virginia, which would give Virginia AG Mark Herring (D) the authority to open an investigation himself if he decided that was worthwhile. The key to Watergate, "follow the money," may be equally true here. And obviously, the Johnson and WIS bits were caught quickly because they were so ham-fisted. One can only imagine what the feds (or the state-level authorities) will come up with when professional forensic accountants go through things with a fine-toothed comb.
Late Friday, it was also reported that the person who negotiated with the inaugural committee, when it came to prices and accommodations at Trump properties, was...Ivanka Trump. So, although Sarah Huckabee Sanders has been telling anyone who will listen that the President had nothing to do with inauguration spending, it's clear that his closest family members were involved, at the very least. And, given the way the Trumps' business runs, it is exceedingly unlikely that the Donald was not in the loop.
As we noted yesterday, this investigation may have gotten started as a result of the raid on Michael Cohen last spring. His computers were seized and there may have been records there showing illegal activity. Cohen, of course, has been semi-cooperating with the authorities, so he may have given up dirt we don't know about. Perhaps more significantly, the committee's deputy chairman, Rick Gates, has definitely been cooperating with investigators, and has very likely given up dirt we don't know about. So, it's another major headache for one Donald J. Trump, who's already got a pile of them to deal with. (V & Z)
Christie to Trump: No Thanks
Imagine a job that pays $172,200 per year and is one of the most powerful jobs in the world. Now imagine that nobody wants it. Congratulations! You are imagining the current situation surrounding the post of White House Chief of Staff. Yesterday, the fifth or sixth person reportedly turned it down (it is not clear if Rep. Mark Meadows, R-NC, turned it down or was not offered it in the end). The latest person who apparently didn't want it: former New Jersey governor Chris Christie.
After saying "no" to the President, Christie remarked: "I've told the President that now is not the right time for me or my family to undertake this serious assignment." Of course, nobody asked Christie's family to take the job, just Christie. Why might it not be a good time for him to take it? Perhaps because in three weeks the subpoenas will be landing in the White House like mosquitoes off the Potomac in June, and Christie understands all too well that being part of that will make the job unbearable at best and force him to do things that might land him in prison at worst. He already dodged a bullet once, with Bridgegate, and he may not want to take his chances again.
On the other hand, there may also be somewhat more sinister forces in play here. After all, Christie's name has been in the mix for at least a week or two, and so he's had plenty of time to figure out that the job is not right for his family. Some are speculating that the former New Jersey governor is unhappy that Trump didn't give him a plum job (Attorney General?) at the start of the administration, and that he just strung the President along so that he could deliver a little payback in the form of a public rejection. By contrast, others think that Christie was ready to take the job, but that he was vetoed by Javanka, given Jared Kushner's lingering animosity toward Christie (who put Kushner's father in jail while serving as a U.S. attorney). We may never know the truth, especially since virtually everyone with firsthand knowledge of the situation is an inveterate liar.
Still on the list are former Citizens United president David Bossie, Energy Secretary Rick Perry, and Acting AG Matthew Whitaker. Perry is probably not smart enough to actually do the job and Whitaker would be an instant liability due to his having worked for a company whose business model was scamming people. Bossie is smart enough to do the job, but is probably also smart enough to know that he would end up under the bus sooner or later. In fact, that's a pretty good summation of Trump's dilemma right now: Anyone clever enough to do the job is also clever enough to know that it's toxic, and shouldn't be touched with a 10-foot pole. It's kind of like Groucho Marx' old line: "I don't want to belong to any club that will accept me as a member." (V & Z)
Mulvaney Will Pinch Hit as Chief of Staff
We know that Chris Christie is not going to be the next chief of staff. Well, probably not, though with Donald Trump you never know for sure. It would appear that the other candidates are a tad bit underwhelming as well, because late Friday Trump tapped OMB Director Mick Mulvaney as "acting" chief of staff. Reportedly, the President made the call because he was tired of speculation about the post, and because he was tired of being embarrassed by people saying, "no, thanks!"
Nobody is entirely sure what "acting" means, or how long an "acting" chief of staff might serve. The only thing that is really clear here is that Trump is not enthused about Rick Perry, Matthew Whitaker, or David Bossie, since if any of those candidates were acceptable, they would have gotten the nod. Beyond that, though, who knows what is going on? Mulvaney reportedly made clear, multiple times, that he did not want this "promotion." Insiders say he likes his current job, and that his real aspiration is to take over at Commerce or at Treasury. Maybe Trump made clear that wasn't happening, and Mulvaney accepted this as a consolation prize. Or maybe Trump strong-armed him into it, and is hoping that "Mick the Knife" will fall in love with the gig. So, there's a good chance this could just be a temporary arrangement, and there's a good chance it could become permanent. But it's definitely been narrowed down to one of those two possibilities. (Z)
Kyl Is Retiring Again
Sen. Jon Kyl (R-AZ), who quit the Senate in 2013, is quitting it again at the end of the month. He will go back to being the highly-paid lobbyist he has been for the past 6 years, only now with renewed contacts in the Senate.
Gov. Doug Ducey (R-AZ) is under pressure from Majority Leader Mitch McConnell (R-KY) to pick Rep. Martha McSally (R-AZ), who just lost a Senate race to Sen.-elect Krysten Sinema (D-AZ). However, he is also under pressure from Arizona Republicans not to pick her, because whoever is appointed has to run in 2020 for the last 2 years of John McCain's term. Arizona Republicans were not impressed with her performance on the campaign trail in 2018, and think that in 2020, with a more Democratic-leaning electorate, she is likely to lose again.
This is probably going to be the most significant decision of Ducey's time in office. If he gives in to McConnell and McSally loses in 2020 to another relatively unknown Arizona representative, a lot of knives are going to be thrown in Ducey's direction. No matter whom he appoints, Democrats will see the seat as one of their best pick-up possibilities and will do everything they can to win it.
In the new House, Arizona will have five Democrats, all of whom are no doubt already thinking about running for the Senate. Here they are:
| District | Representative | Age | First elected |
| AZ-01 | Tom O'Halleran | 72 | 2016 |
| AZ-02 | Ann Kirkpatrick | 68 | 2012* |
| AZ-05 | Raúl Grijalva | 70 | 2002 |
| AZ-07 | Ruben Gallego | 39 | 2014 |
| AZ-09 | Greg Stanton | 48 | 2018 |
* Kirkpatrick was out of the House from 2017 to 2019 on account of her unsuccessful 2016 Senate run
On paper, Gallego looks like the kind of candidate the Democrats want: A young and telegenic Latino who was raised by a single mother and who got a degree from Harvard, after which he served in Iraq with the Marines. If the Democrats could get a Latino veteran on the Senate ballot in 2020, that would surely increase Latino turnout and put the state's 11 electoral votes in play. But no doubt other Democrats are likely to sense a competitive race here, so there could be a nasty primary. (V)
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