Monday, April 18, 2016

Democrats meet with governor's office on legal concerns with Medicaid line-item-veto strategy

Posted By on Mon, Apr 18, 2016 at 2:50 PM

click to enlarge BIPARTISAN POW-WOW: House Speaker Jeremy Gillam and Senate President Jonathan Dismang discuss the line-item-veto strategy with Minority Leader Gray and Rep. Tucker.
  • BIPARTISAN POW-WOW: House Speaker Jeremy Gillam and Senate President Jonathan Dismang discuss the line-item-veto strategy with Minority Leader Gray and Rep. Tucker.
Gov. Asa Hutchinson and his staff are communicating with Democrats today, trying to get buy-in for his line-item-veto plan to continue the Medicaid expansion. Democratic lawmakers have proposed some minor alterations within the same conceptual framework to ensure that the line-item scheme is on sound legal footing. 

Currently ten senators are blocking the entire Medicaid budget because of their opposition to "Arkansas Works," the governor's plan to continue the private option Medicaid expansion, which passed with overwhelming bipartisan majorities earlier this month. The governor proposes allowing the Ten to attach a Special Language amendment to the appropriation killing "Arkansas Works"; once passed, the governor would use his line item veto to nix the amendment, allowing the Medicaid expansion to continue fully funded. However, most Democrats had only a few hours to digest the plan when it was attempted on Thursday in Joint Budget, and they balked. 

One of the concerns raised by Democrats is whether a legal challenge could undo the governor's veto. Key Democrats, including Minority Leader Michael John Gray and Rep. Clarke Tucker, an attorney, met with the governor's staff this morning to discuss these concerns. 

"I'm trying to explore the legal angles," Tucker said. "We're trying to work through some alternatives that would help shore up some of the legal concerns." 

Tucker said that the Democrats' suggestions were slight tweaks that would leave the same basic framework in place proposed by the governor. He declined to comment on what those tweaks were. 

Asked whether he would support the governor's line-item-veto plan if the legal concerns were addressed via these tweaks, Tucker said, "that would help me a lot." 

"There's a lot of different legal ways to approach this," Tucker said. "One of which is the constitutionality of the veto. Another is whether the legislation might be constitutional to begin with, of its own merit."

In other words, whether the Special Language amendment itself is constitutional. 

"Because it hinges on whether it's substantive language?" I asked. 

Tucker, coy, responded: "Something like that." 

I asked the governor's office whether they were still confident that the line-item-veto strategy would withstand any lawsuit and whether the governor was amenable to the Democrats' suggested tweaks.

The governor's spokesman J.R. Davis responded: "He is confident it will hold up. The meeting was very productive and discussion will continue. The suggestion made was very helpful, and we’re still exploring it as a possibility." 

Said Tucker: "The bottom line is we're just trying to work through this in a way that eases everybody's concern and that if we do go this route that we're not stuck with a cliff where providers and recipients are stuck without coverage." 

Here's the legal lay of the land: 

Most experts that I've talked to believe that a legal challenge to the governor's line-item veto would fail, but the premise of a viable lawsuit might hinge on a couple of key questions: whether the amendment is restrictive language that dictates that the governor cannot line-item veto it without vetoing the appropriation as a whole; and whether the amendment was inappropriate substantive language that never should have been included as a Special Language amendment on fiscal-session legislation to begin with. 

On the first question, as Max has noted, there is an open question (and no precedent in the state) about whether the governor can line-item veto restrictive language. A past attorney general's opinion called into question the use of the line-item veto for a portion of an appropriation that "imposes a condition, limitation, restriction." One option for Democrats might be to change the language in the amendment killing "Arkansas Works" to make it less restrictive (hard to say how that would work in practice, since the whole point of the amendment is restrictive).  

Even if the court found that the line-item veto could not be used because the amendment was restrictive language, the aginners might still not get the outcome they're shooting for. Non-fiscal-appropriation legislation demands two-thirds approval of the legislature in order to bring up in a fiscal session. One possibility is that a court would find that the governor couldn't line-item-veto the amendment, but the very same logic might dictate that the court find the amendment itself unconstitutional. If the court found that the amendment was restrictive language, that would suggest it was substantive language that should have been brought up as legislation, getting two-thirds approval to even introduce. In other words, if the aginners' challenge found that the line item veto was inappropriate, the very same ruling might nix the legislation that the aginners want in any case. (As a major side note: In this scenario, an enormous amount of past shenanigans involving lawmakers passing de facto legislation through special language during fiscal sessions would suddenly appear to be unconstitutional.) 

Whatever the grounds, any ruling that found the amendment itself unconstitutional would be good news for backers of Medicaid expansion. The court would most likely let the appropriation stand and strike the amendment. But you never know! Another factor that Democrats are surely trying to guard against is the possibility that the court struck down the entire appropriation because of an unconstitutional amendment (possibly unleashing the "cliff" that Tucker worries about above). They may be hoping to add a severability clause as an extra safeguard so that the appropriation could stand regardless of a court's ruling on the dummy amendment. 

I asked Minority Leader Gray, who was also in the meetings with the governor's staff this morning, where the caucus was on the governor's plan. "I think it makes it easier for the caucus to support it if [the legal issues] are addressed," he said. 

"We're still looking at the legal ramifications and making sure that all traditional routes are being exhausted," Gray said. "At the end of the day the ultimate goal is to keep 270,000 people who have never had health insurance before continue to have health insurance. And to make sure that the communities and hospitals that are surviving because of this bipartisan policy continue to have that kind of support. We want to make sure this thing gets done, but we want to make sure it's get done in a reasonable and responsible way that is legal, above board, and can be embraced by both sides of the aisle." 

Gray said that Democrats and the governor's staff were "still working together to do our due diligence...and come to some resolution on some of those [legal] issues."  

"I don't think it's illegal," Gray said of the line-item veto strategy. "But there are so many shades of gray. We're making sure that no stone is unturned." 

Support for special health care reporting made possible by the Arkansas Public Policy Panel. 

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