- Hi, I'm Marc Rotterman.

Coming up on "Front Row," the US economy slides into a recession, Medicaid expansion stalls in North Carolina, and Senator Thom Tillis voices his support for the same-sex marriage bill.

Next.

- [Announcer] Major funding for "Front Row with Marc Rotterman" is provided by Robert L. Luddy, additional funding provided by Patricia and Koo Yuen through the Yuen Foundation, committed to bridging cultural differences in our communities, and by... Funding for the Lightning Round, provided by Nicholas B. and Lucy Mayo Boddie Foundation, A.E.

Finley Foundation, NC Realtors, Rifenburg Construction, Stefan Gleason.

A complete list of funders can be found at pbsnc.org/frontrow.

[dramatic music] ♪ - Welcome back!

Joining the conversation, Mitch Kokai with the John Locke Foundation, political analyst Joe Stewart, Colin Campbell, editor of "the North County Tribute," and Donna King with "Carolina Journal."

Okay, Mitch, why don't we begin with the latest on the US economy?

- The Bureau of Economic Analysis reported on Thursday that the gross domestic product, GDP, otherwise known as the nation's economy, had fallen by 0.9% from April through June.

That followed a 1.6% decline in the first quarter of this year.

So that's two consecutive quarters of negative growth.

Now you've seen on social media this definition of recession that's been passed around that includes two consecutive quarters of negative growth.

It's not entirely true that that's what happens, because another group called the National Bureau of Economic Research is the one that actually declares a recession, and it won't happen until months from now, perhaps, even after it's over, but most everyone says two quarters of negative growth is a recession.

Every recession that we've had since World War II has had two quarters of negative growth, and the Biden Administration has been trying to redefine recession.

Janet Yellen, the treasury secretary, is saying, "No, we're just in a transition to slower growth," but whether we actually are in a recession yet or not is really a debate for the academics and policy wants.

What's really important, politically, is what people feel.

Do they feel like we're in a recession?

- That's absolutely correct.

And by the way, don't you think the Biden Administration's trying to, Joe, spin their way out of this?

- Well, absolutely.

They need some good news, and this is bad news, and I think the conventional wisdom about recessions is a recession is when your neighbor loses his job, it's a depression when you lose your job.

- [Marc] Ronald Reagan said that.

- And that's about where we are.

And I think we're seeing now, in the economy still, unemployment's relatively low.

Employers are talking about needing to fill jobs that they can't find applicants for, but some employers are starting to lay people off, and so, folks that maybe were part of the Great Recession, wanting to get back into the job market, may find there's just not jobs available, and that is a very high probability of exacerbating this receding economy that we're facing right now.

- Donna, clearly though, Washington hasn't gotten a joke on spending, have they?

- No, clearly not.

I mean, we see even more big spending bills coming out just this week, and that spending is really exacerbating this problem, and one of the things that we've seen now, as Joe mentioned, was the labor market starting to tighten.

For a while, it was a job shoppers market, and, right now, it's tightening up and you're seeing people pull back on some spending.

Now they're spending more-- - Participation, though, is down, right?

- It is, it is, and people are spending more, but that's mostly because prices are up, and that's something, you know, when inflation happens, people have to spend more, unfortunately, but the consumer confidence is down.

Some people had maybe saved a little bit.

There was a lot of handouts from the federal government during COVID.

So it may have masked the problem that we're seeing right now, but now with the labor market starting to tighten up, people are running out of that savings that they may have gotten, consumer confidence is down, and I think we're gonna see even more of this down the road.

- Are consumers, Colin, changing their habits?

- You know, the polling and data I've seen, at least initially, and this I think is gonna probably change pretty quickly.

if we see more lay-offs and things like that, but people are saying that they're tightening their wallets, but a lot of consumer spending has not really decreased.

I mean, vacation destinations are still insanely popular this summer because people want to get out there and they're willing to spend the money, but, like we said earlier, if you start seeing your neighbor or your coworker gets laid-off, then, suddenly, you have to really watch your spending, and that's where people tighten up even more so than they have just with inflation on its own.

- Mitch, though, retailers like Walmart are adjusting?

- Yeah, I mean, retailers have to adjust.

Everyone's adjusting to what we're seeing with the economy.

I think one of the interesting things is we mentioned the Reagan statement about recession and depression.

The last line of his statement was, "and it's a recovery when Jimmy Carter loses his job," and I think that's what Republicans... And that's what Republicans are looking at now.

- He had a great way with words, didn't he?

- He did, and that's what Republicans are looking at now, and saying, "Look it's the Biden Administration "and its policies that are causing these problems."

Remember that when you go to the polls in November.

- Okay, I wanna talk about the prospects for Medicaid expansion this year in North Carolina.

I think they took a hit this week, according to your report.

- Yeah, absolutely.

There was a lot of optimism at the beginning of July about where Medicaid stood.

When the state budget was signed into law, there was this, sort of, carefully choreographed joint statement from Senate leader Phil Berger, House Speaker, Tim Moore, and the governor saying we intend to work very closely on negotiations to get towards a solution on Medicaid expansion, and the governor even said he was optimistic that it could happen by the end of July, where the legislature came into town this past week, was here for about two days, but only just, sort of, for a perfunctory no-vote session.

Most lawmakers didn't even drive to Raleigh, and we learned from Senate leader Phil Berger then that there is no real solution right around the corner.

The negotiations are still happening, but they're not even happening with legislators.

They're happening with the stakeholder groups, the insurance companies, the hospital groups trying to come up with some sort of agreement, and the big sticking point seems to be around some of these other regulatory changes that are part of the equation for Medicaid, most notably, certificate of need, which is the state regulatory framework by which hospitals and other healthcare facilities can expand.

They have to go through this process to establish that they're needed, not just that, you know, we'd like to spend the money and build a new hospital in Raleigh or wherever else, and that's an issue where, apparently, the Hospital Association is not, according to Phil Berger, not willing to come to-- - He was pretty critical of the hospitals.

- Yeah.

For a guy who actually gets campaign contributions from the Hospital Association, he blamed them for the reason that we have an impasse, and they've been receiving potential compromise offers and haven't agreed to move down the court at all.

- Mitch, does the speaker have the votes to get this through if there is a deal?

- That, I think, is still a matter of question of whether he could get enough votes in there.

I think they had enough votes to, sort of, kick the can down the road, and have this study where the Health and Human Services department would come back with some proposals that perhaps could get a vote in December.

But I don't think that there are votes in the House right now today to go ahead with the Medicaid expansion that the Senate wants.

And then the other key piece, and we've talked about this ever since that Senate bill came out is the Senate said, "Look, if we're gonna do this Medicaid expansion that's gonna increase demand for services, we've gotta increase the supply of healthcare and do these things like the certificate of need or letting the advanced practice nurses have the full range of their ability to practice."

So they're really staying tied to that, that if you're gonna do something on the demand side, you gotta do something on the supply side.

- Well, isn't there an incentive for federal funding though?

- There is right now, the Biden administration has got a carrot out there about $1.2 billion in sort of startup funds for the 12 remaining states that haven't expanded.

But what Mitch is talking about really is what the Senate is saying is a key component to this.

If you're going to expand it, you have to make sure people can get an appointment.

Because right now, in other states that have expanded, they've gotten way more enrollment, spent a lot more money than they thought.

We have the benefit of watching what's happened there.

And statistically, Medicaid enrollees have poorer health outcomes.

And a lot of times, it's because they don't have consistent care, they can't get consistent appointments.

And a big part of that is improving access by things like certificate of need.

And the hospital association is very powerful in North Carolina.

And I think that they're really preventing that from happening.

- Joe, put this in context, my friend.

- Well, I think it was Henry VIII that said famously, "Planning weddings is something I've gotten pretty good at."

[all laughing] They're gonna learn from the experiences of negotiating other high profile types of initiatives between not just the legislature, but with the governor.

And I think because governor Cooper is so committed to expansion, he's gonna push with all of his energy to try to get this done by the time he leaves the governor's office in two years.

And quite frankly, the thing we need to remember is, we started with the legislature, both House and Senate, really not too strongly in support of any kind of expansion.

They've agreed on a destination.

I think a lot of this is probably just playing out the negotiation through the usual legislative process of push and shove.

I get a little, you get a little, and they'll come to some point of resolution on this.

- Wrap this up in about 20 seconds, my friend.

- Yeah so, one other thing Senate Leader Phil Berger said this week is he still thinks there's a 75% chance that we get to an agreement on Medicaid expansion, but by the end of the next session.

So we're really talking next year, maybe even the year after, before we get some resolution.

- Okay, Donna, I wanna talk about Senator Thom Tillis.

He jumped into Culture Wars this week.

- Yes, so the US House, the House of Representatives in Washington, DC passed a bill called the defense, a bill that would repeal the defense of marriage act.

Basically what this bill does is replace marriage as being rather than between a man and a woman, between spouses.

And it says that if it's valid under state law, then it's valid under federal law.

That's basically what it is.

The House has passed it.

Senator Tillis has indicated that if he gets the opportunity, he would probably vote in favor of it, would support it, which has gotten a little bit of blowback from some folks in North Carolina who say "Hey look, 10 years ago- - Social conservatives.

- Social conservatives who say 10 years ago when you were at the wheel as speaker of the House, we passed amendment one, which you may remember defined marriage as between a man and a woman.

It was later overturned in federal court, but certainly he's gotten some criticism about this.

But I also know that he's been working on some of these other things that this may not bubble up to the top over in the Senate.

- Let me ask you this, has North Carolina changed, you think, in the last 30 years since Jesse Helms was in, Colin?

- I think, certainly, on this issue, even just since amendment one, the constitutional amendment banning gay marriage in the state passed, I think the numbers have shifted somewhat and Tillis is recognizing that, and that they may shift further in the years to come.

Thom Tillis is not on the ballot until 2026.

People's attitudes, the political makeup of the state can change.

And so I think that may be sort of why he's positioning himself a little bit more moderately on these social issues.

- Do you think he wants to run for governor?

- Well, there have been a lot of rumors about that, and this would certainly seem to be a complicating factor if indeed he's gonna face a Republican primary for governor in 2024.

I think elements of the Republican party that typically vote in Republican primaries would take exception with the position he's taken.

I think Senator Tillis throughout his political career has been the kind of politician that says what he thinks and he pursues the things that he thinks are important.

Maybe this is a nod to the notion of North Carolina's changing political landscape, suburban voters being a slightly more progressive on issues like this.

- Is he trying to contrast himself with Mark Robinson, the Lieutenant Governor?

- Well, perhaps.

But I would say this, and I know Senator Tillis pretty well, I think this is something he just believes strongly.

- Do you think, Mitch, he's been consistent over the year on issues like social conservative issues, culture issues, immigration?

- I think there are times when people who are critics of Senator Tillis will say that he's guilty of a flip flop or of making a major change in this position.

I think though, he would say that he is a person whose position evolves if the facts evolve.

And I think in this case, basically, what he has said when people have asked him, "Well, why are you supporting?"

is he's saying, "Look, this is a bill that just, basically, codifies into federal law where things stand today."

The whole issue of this coming up is because of that Dobbs decision when- - What justice Thomas said afterwards- - Right, the Dobbs decision.

- Tell people about that.

- The Dobbs decision throughout the old Roe V Wade precedent on abortion and in a concurring opinion, justice Thomas said "Look, this was based on the substantive due process, which I think," meaning justice Thomas, "is a bad legal doctrine."

Let's examine some of the other things that are based on substantive due process.

One of which is the same sex marriage issue.

So a lot of people are saying, "Look, if the Supreme Court is thinking about throwing this out, we need to put it into federal law."

And I think that's what Tillis' approach has been is that, hey, this is where things stand now, all this bill would do is codify what the law is.

- Donna, have we heard from Senator Burr on this issue?

- No, and not positive that we would.

And one of the things that the critics of this bill say is look, you're gonna open this floodgate of lawsuits from folks who may be litigious activist groups anyway suing anybody who has a government contract to serve taxpayers that maybe doesn't believes that a marriage is between a man and a woman.

They may go after faith-based foster care groups, things like that.

That's what the critics are saying.

I think if that is what it becomes, because Senator Tillis, when he was speaker said that he wasn't sure amendment one was gonna hold up anyway.

I think he may see that the lawsuit piece of it might be a problem.

- Wrap in about 30 seconds, my friend.

- Yeah, this is probably just the first of what will be a lot of discussion about these sort of social issues in the midterm elections.

I think Republicans see this as an important issue set for base Republican voters.

They wanna make sure that their voters don't fail to turn out because of all of the publicity about this probably being a red wave election.

And these are issues that those voters feel very strongly about.

- And so, I think we're gonna see more on these types of issues throughout the fall.

- Joe, I'm coming right back to you.

Let's talk about the 13th congressional district race.

A lot of people view that as a toss-up.

- It absolutely is a toss-up, the new districts in lucky 13, what we might call, is Wake County, Johnston County, part of Harnett, and part of Wayne County.

Wake makes up more than half of the total and Harnett about a third more.

So just a little portion of those more rural counties.

In the new district boundaries, Cooper won in 2020 with 53% of the vote in those areas now, and Biden only with 50%.

So, you can see the margins are pretty close.

And the thing about a district that has razor thin margins is it really matters what kind of whisker you are if you wanna try to win it.

And so, here we see two candidates, Wiley Nickel, who's currently a State Senator, originally from California.

Ran for the legislature in California back in 2006, moved to Cary in 2009 as an attorney, criminal defense lawyer, mid forties, two kids.

He's running a campaign that he says is a people powered campaign, sort of a traditional, democratic way to think of things.

Bo Hines, in his mid-twenties, was a football player at NC State, went to Yale, was injured.

Wasn't able to complete his football career, married once, divorced, married again now.

He says he's a hundred percent pro-life, pro-gun, pro-free speech and pro-Trump and we're seeing a little bit.

- The first candidate, right?

- Yeah, absolutely and we're seeing a little bit of a migration from the people that were supporting Madison Cawthorne in terms of the political consultants.

Hal Weatherman is now working for the Hines campaign.

The key is, Nickel has done a little better in terms of fundraising.

And I think the strategy for Nickel is to try to portray Hines as a carpet bagger, that he's not from there and he's a MAGA Republican and that should scare those suburban voters in Wake County.

I think for Hines, he's gotta make the case that he is the Trump-endorsed candidate and that's gonna turn out Republican voters for him.

- Mitch, how important is Trump in this race?

- I think he's gonna play a major role because the main reason that Bo Hines won the primary was, he kept saying "I'm the guy that Trump supports."

He didn't really say a whole lot, other than those basic things that you mentioned, the pro-life, pro gun, but he also said, "I'm the Trump guy," and that was really enough to help him win the primary, so I suspect that he will still be interested in talking about his association with President Trump and I'm also guessing that Wiley Nickel is going to try to appeal to the anti-Trump voters in that district saying, "Hines is the Trump guy and that's the only thing he has going for him," so it'll be interesting to see.

- Colin, your take on this race?

- Yeah, so this will be interesting to one to watch.

You've already seen Wiley Nickel's campaign come out, trying to tie Bo Hines to Madison Cawthorne, the recently defeated, very controversial Congressman from western North Carolina, largely because of their age.

There's not that many similarities between the two.

And so, if you're able to sort of, portray Hines as more of an extremist for what essentially is kind of a moderate district, I think that could advantage Nickel, but in a lot of senses, these guys are sort of, corks bobbing on the sea of the political landscape nationally and I think that'll have a big part in this.

- Donna, who do you give the edge to?

- Well, I think it's really gonna come down to out-of-state money.

Democrats nationally have said that they are really, that the Wiley Nickel support and that race is really important to them to maintaining control of Congress and certainly national Democrats are coming in, but now we have representative Kevin McCarthy's gonna be campaigning with Bo Hines in August.

So, he'll be down in North Carolina from what we're hearing.

- I think you'll see Trump here, too.

- I think you'll see Trump here.

So, Republicans and Democrats on both sides of this race are coming in because they see it as a critical piece to control the House.

- We should also mention Saboto's crystal ball.

Just flip this from toss up to leans Republican, saying this is the type of district that'll usually vote against the president's party in a midterm.

- Your crystal ball.

Final seconds.

- Well, I think a big part of it, and Mitch makes a great point.

It'll be the Ted Budd race, if the Budd campaign can help turn out voters in the 13th district, - [Moderator] Great point.

- I think that raises the Hines vote and increases his chance of success.

- Okay, I wanna go to the most under-reported story of the week, Mitch.

- We have had a lot of reports about inflation and a lot of questions about what is causing inflation.

My under-reported story is a bill in Congress that would have the economic and budget officials in the administration have to determine the economic and inflationary impact of President Biden's executive actions, this is a bill that is co-sponsored by Patrick McHenry of North Carolina, along with Elise Stefanik of New York, who's a major player in the House Republican caucus.

Exactly.

She's the chair of that committee.

They and another sponsor are moving forward with this bill.

It really has no chance in a Congress that's led by Democrats but if the Republicans are able to win control of the House in the next chamber, you might see a bill like this on the floor again next year.

- And by the way, Patrick McHenry may well be the chairman of House financial services committee, Joe under-reported?

- Yes, the federal minimum wage, $7.25 turned 13 years old this week.

And if I remember having a 13 year old, it's surly and find you to be an idiot, so.

What we see now that inflation has driven down the value of the minimum wage to its lowest value ever, and with the number of states increasing minimum wages at the state level and the fact that employers are having to pay higher wages just to attract the workers that they want, probably the federal minimum wage isn't as relevant a thing as it once was, but it's not been changed in a long time and is not really holding its value against the cost of goods and services.

- Was there any appetite here to raise it?

- I don't think so at this point.

It's one of those things that the business community says, you know, let the marketplace drive what the right rate is.

[both men talking at once] Yeah, so far that's been the prevailing argument here.

- Colin, under-reported?

- So there's a Amicus brief in the Leandro Education Funding case this week filed by a group of about 50 or so business leaders from across the state.

- [Moderator] Did you talk to Mitch about this?

[everyone laughing] - Leandro takes one of my topics.

- Oh yeah, to get you going on this one, but yeah, what was interesting to me about this group of 50 business leaders, it was fairly bipartisan, not surprising that left-leaning business leaders would urge the state Supreme Court to uphold the lower courts ruling to transfer money from the state's treasury, hundreds of million dollars to support this remedial education funding plan.

But you also saw the leaders of the SAS Institute, Jim Goodnight on there.

Sepi Saidi, who's the chair of the North Carolina chamber on there as well, so sort of going against the state legislator's position on this, which is that, only the legislature can spend money on education and this case ought to be thrown out.

- Jim Goodnight is very interested in public education as is his wife, right?

- Oh, absolutely, yeah and so I think that's what you're seeing here is there's a big group of public education supporters that have decided to weigh in and take sides on this case.

- Donna.

- So, under we hear a lot of ribbon cuttings, a lot of announcements about jobs coming here and incentive packages but we're not hearing as much about those who are saying no, they're giving the money back, they've agreed to an incentive package and now have found that they can't meet the staffing requirements or because of COVID, people wanna work remote, they can't move their headquarters, Microsoft, Advanced Auto Parts, a few others have said, "You know what?

We're not gonna be able to meet our end of the deal."

And it's led critics of these incentive packages to say, "Look, stop picking winners and losers.

Just reduce the taxes for all businesses and that will bring them here.

- Well, how much do you think housing costs and the cost of housing here has gone up, like 20%, impacts these decisions, you think?

- I think a bigger impact to it would be the move to remote work.

I think a lot of times when they wanna create jobs in North Carolina, they may already have those folks somewhere else.

For example, Advanced Auto Parts would be moving their headquarters from Norfolk to Raleigh.

A lot of those folks may have been remote for the last year and a half and it's hard to get 'em to move.

- So you think these big incentive packages may be on the ropes a little bit?

- Well, I think that that's hard because people who support the idea say, look, if everybody else is doing it, we need to do it too.

But critics say, look, if we had no corporate income tax, they would come.

We wouldn't be picking winners and losers.

We wouldn't have the federal government deciding who's getting that check.

- Okay, let's go to the Lightning Round.

Who's up and who's down this week, Mitch?

- Up, felons who want to vote in North Carolina elections as part of an order that came out from the North Carolina Court of Appeals.

Wednesday marked the first day that felons who have completed active prison time but are still on probation, parole, or post-release supervision can register to vote in the November election.

And unless the State Supreme Court says otherwise, they will be voting.

Could be as many as 56,000 people.

My down, gas prices, at least temporarily.

We've seen that gas prices have fallen a bit.

On Wednesday-- - What do you attribute that to?

- I think you have people who are changing their habits because of the high prices- - One million barrels are being released from our strategic reserves today, right?

- That helps as well, but I think it's mainly people saying, look, with gas this high, we're changing the way that we're going about things.

- Okay, my friend.

- Yeah, up, interestingly enough, build your own casket business, increasingly finding favor with the market.

- It's always good to plan ahead.

- Do you know something?

[all laughing] But apparently getting one of these build your own is only $700, where the average family spends 2,000 to $3,000 on a casket.

Interestingly enough, a story reported in The Wall Street Journal.

One of the owners of this company, when asked the question what sort of special effects do people want with these caskets they're making themselves?

He said, I see a lot of camouflage.

I'm not sure why you would need a camouflage casket, but there you go.

Down, Raleigh mayor, Mary-Ann Baldwin, Democratic party endorsing her opponent.

She said, I've got $500,000 in the bank.

So thank you very little.

- [Mark] Colin.

- Up, sticking with the city council theme, Charlotte Democrats, despite a year in which Republicans are expected to do really well, they held their ground on the Charlotte city council and kept roughly the same balance of power there.

Without Republicans taking back some of the seats held by Democrats.

- Low voter turnout across the state-- - 11% in Charlotte to pick your city leaders, really bad.

But it's late July, lots of people are on vacation and not paying attention.

Down, Governor Roy Cooper's presidential prospects.

There was an article in Slate this week assessing different possible candidates that said, Cooper is just too boring.

That he is what it would look like if a sweater designed a human.

So not, not great news for Cooper there.

- All emails to Colin Campbell at... [all laughing] Who's up next, Dawn.

- I'm gonna say up, prayer in schools.

We're seeing just sort of bubbling up in Michigan, Florida, a few places, people starting to talk about prayer in public schools, whether it's led by a coach, or it's a study of some sort.

I think it's interesting.

It's probably stemming from what we saw coming from the US Supreme Court.

We may be seeing more of it.

I think it's interesting.

Down, Gerald Baker, Wake County.

He is the sheriff of Wake County, Raleigh, the capital city.

He lost his primary by a lot.

So he had a primary runoff this week and his challenger, Willie Rowe, got 75% of the vote.

He'll now-- - Republican in that race is?

- Donny Harrison.

So now Willie Rowe-- - Former sheriff.

- He was the former sheriff.

He lost to Baker.

And now he will be back on the ballot and going against Willie Rowe.

- Mitch, headline next week.

- Federal judge extends her order against law on lying in election campaigns.

- Is that an antiquated law, in your view?

- Well, it is an old law.

It was put in place in 1931.

And apparently there had never been any prosecution on it before.

And I think it does, it does present some problems 'cause it basically would say government can decide what is fact and what is not.

A lot of people would have a problem with that.

- Joe, headline next week.

- Yeah, Biden got COVID.

He's had economic issues now, tensions with China over Taiwan.

The president needs a win.

He needs something he can point to as a success for his administration heading into the midterms.

- Headline next week.

- Well, we have all these announcement about electric vehicles.

First electric cars to be manufactured in North Carolina.

This week, there was an announcement about electric boats.

Next week, electric airplanes to be manufactured here.

- Quickly, headline next week, Dawn.

- We'll be watching the state board of elections.

They may be reconsidering a Green Party nomination to the ballot.

- Okay, great job, panel.

That's it for us.

Thanks for watching.

We gotta roll.

See you next week on "Front Row."

[dramatic music] ♪ - [Announcer] Major funding for "Front Row with Marc Rotterman" is provided by Robert L. Luddy.

Additional funding provided by Patricia and Koo Yuen through the Yuen Foundation, committed to bridging cultural differences in our communities.

And by... Funding for the Lightning Round provided by Nicholas B. and Lucy Mayo Boddie Foundation, A.E.

Finley Foundation, NC Realtors, Rifenburg Construction, Stefan Gleason.

A complete list of funders can be found at pbsnc.org/frontrow.

[dramatic music] ♪