- [Announcer] The One Big, Beautiful Bill causes ripples in North Carolina politics and US.

Senator Thom Tillis says he's not seeking reelection to US Senate.

This is State Lines.

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[thoughtful instrumental music] ♪ - Welcome to State Lines on this 4th of July weekend.

I'm Kelly McCullen.

Joining me today, good friends, political analyst, Joe Stewart.

Dawn Vaughan of The News and Observer is to his right and to her right, the John Locke Foundation's Mitch Kokai.

Hello, Mitch.

Colin Campbell in seat four, of course.

He is a reporter.

Man's the Capital Bureau in part at WUNC Radio 'cause the team's expanded down there.

What was once one is now three.

- Yeah, no, it's nice to have company in the tiny little capital bureau.

Cozy though.

- And it's gonna be so boring now with the break, summer vacation for everyone in the legislature.

And they don't get a break because the US Senate voted 51 50 this week to pass what President Donald Trump is calling his One Big Beautiful Bill.

I'm sure you've heard all about it.

Well, North Carolina Senator Ted Budd voted yes on it with US Senator Thom Tillis voting no.

Every Republican US Congress member supported the bill, leaving a debate about the One Big Beautiful Bill's future effects on North Carolina.

- Now, Republicans are about to make a mistake on healthcare and betraying a promise.

It is inescapable that this bill in its current form will betray the very promise that Donald J. Trump made in the Oval Office or in the cabinet room when I was there with finance, where he said, we can go after waste, fraud, and abuse on any programs.

- I've been assured by our legislative leaders, our Republican legislative leaders, that they have the bandwidth, they have the ability to pick up that cost.

So at the end of the day, I don't think folks who truly need Medicaid, those who are disabled, you know, a single parent who's raising a child.

I don't think those folks are gonna be impacted.

And I'm convinced that the way this language of the bill is, and also importantly, how the administration executes the rollout that people who need this service are not gonna lose it.

- All right, there is a real debate here.

Tillis, we'll talk about what he's not going to do in 2026 a little bit later in this program.

One senator said this is a broken promise, otherwise the bill's okay, except one big broken promise on Medicaid.

And then here's Tim Moore saying, oh, our legislators have bandwidth.

They do have bandwidth, they do have capacity, but do they have the want to?

- That's the big question because the whole reason Medicaid expansion got through two years ago in North Carolina was the caveat that if the federal government stops covering its share, it automatically goes away.

There's a trigger in the law that recognizes the state doesn't necessarily have the resources to fund a lot of these people in the expansion population.

And what Congressman Moore is talking about in his clip you saw was the original Medicaid population.

He's saying, we're not taking anything away from the people who had Medicaid in North Carolina two or three years ago.

What Tillis is talking about is the 600,000 plus people who got Medicaid through expansion who aren't in that, I think as US Senator Ted Budd put it, the people it was originally intended for.

So that's sort of the big discrepancy here and the rhetoric you're seeing is what's gonna happen to that expansion population.

I just don't see the legislature ponying up the amount of money necessary to keep that in place given all the other, you know, tight budget issues that they're dealing with this year.

- Mitch, we can talk philosophy of politics and whether we expand the quote welfare state to include Medicaid expansion.

I know many Republicans in this state realized that that Medicaid expansion's working class folks, many of 'em voted.

MAGA, and now there's a philosophical difference here.

How does this play out?

- It's gonna be interesting to see.

Now, I should point out the John Locke Foundation, my group, argued for years, "Don't expand Medicaid," and one of the factors was just this very reason.

We said, "Eventually, someone up in DC is gonna realize that you can't cover 90% of the cost for this expansion population," which is largely working-age adults without children, it's not the traditional Medicaid population, for which the federal government is only covering about 2/3 of the cost.

So that seems to be coming home to roost.

But there is the issue of now that 600,000-plus people are on because of expansion, will North Carolina's legislative leaders say, "Eh, see ya," or will they find some way to make it work?

They didn't do anything in their budget negotiations to set aside money for this possibility, even knowing that it might happen.

But it's hard to think that folks who need to get reelected, year after year after year, are going to say, "Well, we're not gonna think about these 600,000 people who we put on this program."

- The state did put them on the program by approving it, Dawn, but as I was told, the federal government can print its own money and deficit spend, this state cannot.

It's funding a lien recovery.

The surpluses are getting smaller.

This could be messy this fall.

- I think this will be part of the state budget fight.

And you know, we just saw the clip of Tim Moore, and I don't remember him being an enthusiastic Medicaid expansion supporter- - Right.

[laughing] - for a long time.

I think he, you know, was one of the holdouts for a while.

And it was a big fight for the longest time.

And the Senate finally came around, Senate Republicans, because of thinking the money, you know, would be there and it made more financial sense.

But when it comes to voting and voters, it's different when they're gonna give you something versus take something away.

And people do not like it when the government takes something away from them.

And that's gonna be the big problem here, and I think that was a lot of Tillis's argument, beyond like what you think of, you know, should they be able to have access to this healthcare coverage or not?

It's that you were part of this and the government is suddenly gonna make you not part of it anymore.

Voters aren't gonna like that.

- It's a huge price tag, Joe.

But more importantly, the one time conservative leaders in this state trust their federal government, that promise is kept all of one year.

[laughing] - [laughing] Yeah, yeah, I think that's the particular challenge.

This is all relatively recent in North Carolina.

So if people are to lose the benefit, they will have lost it only after having had it for a short period of time.

It's important, I think, to step back, the public policy idea here is, if more people are able to get their healthcare provided for, that the quality of their life is greater because they're getting preventative medicine that might not otherwise be available to them if they're not insured in one way or another, the desire is to decrease the amount of money that has to be spent in healthcare and produce better outcomes by having more people in the healthcare system as a result of having insurance.

So there are consequences of having people enrolled in Medicaid from an expanse standpoint.

There are consequences for having people not enrolled in a [laughing] healthcare plan.

And it's gonna be up to the legislature to figure out what is the lesser of those two in terms of a financial consequence for the state.

- I don't see Republicans in the legislature to suddenly wanna spend money on if the federal government's taking it away.

I think that would be a hard sell for them, especially with this current tax battle between the House and Senate.

- And remember, they would actually have to take action to do it because the law that expanded Medicaid said that if the 90% match ends, it goes away.

So they would actually, it's not like they could just let it happen.

If they wanted to cover this, they have to take an active step, pass a bill that they both agree to.

- Yeah, that One Big Beautiful Bill certainly would affect, not just North Carolina's state budget, other states will be challenged with this.

However, in our state, there is no new budget deal yet for '25-'26.

If federal reimbursement of Medicaid expansion costs do drop below 90%, to your point, Mitch, state law automatically repeals and reverts back to the legacy Medicaid program from an expanded version.

That would see over 600,000 North Carolinians potentially lose Medicare coverage or Medicaid coverage, Medicaid coverage.

That federal bill's requirement also that able-bodied people work in order to get Medicaid, that's gonna trim Medicaid enrollment.

So let's set the stage for the fall.

No budget.

They're gonna talk to some degree about working a deal or many budgets, but this is a big deal.

Might there be a silver lining in not reaching a deal on June 30th?

This might be something we talk about October 1st.

- Well, certainly it makes it easier to have these discussions if you haven't already just wrapped up a budget and say, "We wanna set this to the side."

Remember that one of the reasons that we have no budget is back in 2016, the General Assembly passed a budget bill and the governor signed it that said, "If you don't have a new budget when the old budget runs out on June 30th of the odd-numbered year, the old budget remains in place."

The good news about that is you don't have these continuing fights over continuing resolutions on what to put in and what to put out and have debates.

The bad news is there's much less incentive to come up with a deal, which the General Assembly after a few years kind of figured out.

"Oh, we really don't have to have a budget deal."

And it's especially less incentive if you are on the side that wants to spend less.

So in this case, the Senate, which is looking at what the spending is, what the long-term obligations are beyond the two years, also looking at the tax implication, they look at status quo and they say, "The status quo, the current budget, the current budget law, is better than what the House wants.

Why would we negotiate something that's gonna make it worse from our perspective, the Senate perspective, than what's already in place?"

And so I think that's gonna make it very difficult for the two sides to come to some sort of agreement if what the House wants is worse than status quo from the Senate's perspective.

- But Colin, there is no status quo.

When world events are calm, when state events are calm, we can do things like this policy-wise.

There is Helene.

You're talking $700 million going out about every three months.

Now we've got the Medic...

It would be a Medicaid cliff.

We've got a so-called fiscal cliff.

That's more partisan.

Democrats think the world will end.

Republicans say the gravy will continue.

- Yeah, and you've got the food stamp issue too, with federal government in the Big Beautiful Bill pushing that to the states to some degree.

So there's a lot of financial pressures here that I think should come home to roost in the next few months.

We've been at a point where you ask legislators, "Well, are you preparing for the prospect of federal funding cuts and how that affects the state?"

And they sort of take this "well, we'll cross that bridge when we come to it" approach.

But you know, once this bill potentially becomes law, then we've crossed the bridge now, so by the end of this year, they're gonna have to do something or the lack of action means various programs, whether it's Medicaid or food stamps or something else, goes away.

So that gives them the pressure that they're sort of lacking by not having the pressure to do a budget by June 30th.

- Well, the fiscal cliff, it worries Democrats, but also worries House Republicans, not Senate Republicans or Senate Leader Berger.

And he'll say when reporters, when we ask about there being no budget, he says, "Well, we do have a budget."

And he's referring to that continuing resolution.

And they still would need to pass, 'cause it would mean that... Like, funding levels, you would have to pass certain things just because of, you know, general increased costs, even if you don't do raises and that sort of thing.

But I mean, it's really like the ball's in Berger's court and it's his advantage right now for if he wants to say, you know, "The House isn't gonna move on these taxes, so, you know, no deal."

And they traded their kind of like, you know, pressure budgets, like "here's what we want," at the end, but when they left at the end of June, they didn't even agree on what day to come back to still disagree.

- Yeah.

This is a bridge farther than past years, right?

Like, usually it's the mini-budget are okay to get those through the adjournment resolutions, an easy pass.

This time, none of that.

- So, I mean, Berger wants to do what he and when, you know, former Speaker Moore had done, you come back for a couple of days once a month and work stuff out.

But, you know, House Speaker Hall has said that they might wanna pass more than the budget and wanna put things through, you know, a committee, not have just a conference report.

So we could see more if they do actually come back, we could see more than just the budget.

- And Kelly, you mentioned Helene relief and one thing that we saw was that while they couldn't agree on anything else, they did pass another Helene relief package.

So when they really have their minds to it, they can reach an agreement.

- What I think the challenge though, a state, like any other enterprise, needs to have a budget in place so that the people running the entity can plan and effectively deploy the resources to the purpose for which the agencies have been established under the law.

We continue to grow as a state, 120,000 new residents every year.

We're in fierce competition to be a player in a 21st century economy.

There's a lot of stuff that we need to do to maintain the status that we've earned as a desirable place for businesses to come and create jobs and for economic opportunity.

A budget isn't just an important part of how government should work, and missing that deadline just isn't good.

- I'll leave it right there.

I had a follow up, but that's- [all laughing] Yeah, I mean, that's your opinion though, you know?

- Self-imposed deadline, right?

I mean, the fiscal year did start, but there's no law that says that the budget has to be passed.

And we also don't have a set date that they adjourn, either.

So they kind of, you know, built this system up for themselves.

- To Joe's point, Mitch, if they can't pass a budget bill, that should be something they take six months to do.

That should be able to, that should be feasible.

And when you get something like Medicaid cuts dropped on you, SNAP, the food stamps dropped on you, where you're gonna have to backfill loss of federal funds, you still could have a hurricane on Eastern part of North Carolina this fall.

How do you govern during those times when a six month budget process fails?

- Well, they certainly can do a budget.

If they had to do a budget, if they didn't have that provision that said the old budget remains in place, they would have.

Even if it took some continuing resolutions, they would've reached it, but they don't have to.

And so I think one of the points that Colin was making earlier was that if you have this, the 600,000 people on Medicaid who all of a sudden are not gonna be covered, if the state doesn't cover it, the food stamps issue, that'll be something they have to do.

So it'll be, well, you know, like Helene, they're gonna say, all right, we don't really wanna come to the table, but we will because we have to.

- And Colin, in the absence of a new budget bill on June 30th to take effect July 1st, we're just in a different era of how North Carolina can run its budgets.

To his point, they don't have to have a budget by June 30th.

So why not take a break, catch your breath, get your energy back, and come back and talk policy?

- I mean, that's the advantage.

And once you see some of the federal stuff shake out, they may actually end up being glad that they didn't spend money now when they need some in reserves for a few years, 'cause the next year or so, 'cause there's money piling up, I mean, they're still collecting taxes from us all.

So there's like billions of dollars just sitting in the bank account that may come in handy in this process.

The pressure point, of course, is that schools start soon.

They need enrollment growth funding.

State employees generally like to get a raise because with inflation, if you don't get a raise, you're getting a pay cut.

- Senator Thom Tillis' opposition to Donald Trump's signature legislation immediately drew a Trump promise he'd run a Republican primary challenger for the Tillis US Senate seat.

So Senator Tillis side stepped all the drama by saying he's not seeking reelection in 2026 to the Senate.

He says he'd rather spend time with his family than spend time in DC, Joe.

He had a quote he released, I dunno if he said it or whether he wrote it, but he said, "For about these people in Congress, many of them, after they get elected, they don't bother to do the hard work to research the policies they seek to implement, and understand the consequences those policies could have on that young adult living in a trailer park struggling To make ends meet."

Which Thom Tillis, that's his story, came out of lower income means worked his way to US Senate.

He seems tired of it.

- Well, I think this is a decision that was made in large part based on the decision to vote against this particular bill.

I know Senator Tillis was actively doing the things the United States Senator does, even as or late as last week in terms of preparing to run for reelection.

I think legitimately he recognized with the president's stated intention to find a primary opponent would be very difficult.

But if you go back to the very start of Thom Tillis's political career in North Carolina, 2006, he ran against a very favorably disposed a Republican conservative John Rhodes in a district in Mecklenburg County, beat him in a Republican primary.

In his entire ascendancy, he's had a lot of controversy and conflict with his own party was censured by the North Carolina Republican Party.

But, you know, Tillis himself, I heard say one time when he was accused of being a RINO, Republican in name only, he was a Republican in need of outcomes.

He said he was the kind of guy that wanted to go to Washington and get stuff done and he was gonna stand up for the things that he wanted to get accomplished.

And he did that in this particular instance and made the decision that he would accept the political consequences so just made the decision not to run again.

Now, I kind of wonder, coming back, is Thom Tillis immediately a prospect for governor in 2028?

Does his political career end now?

Or is this just a new chapter?

- That's totally what I thought.

Just that's totally, that's what I was thinking.

Because if you think about, you know, when Stein's up, that's a a different era.

So he's running first, second term, he beat Mark Robinson very easily, but that was, you know, because of the candidates in the race also.

So what's Stein's second term, you know, plan gonna be, and then Tillis what you were saying about, he doesn't always please Republicans, but he is pleased enough of 'em that, you know, he's won statewide and maybe he's gonna get, you know, that everybody wants those unaffiliated voters even though they, you know, typically vote Democrat or typically vote Republican.

They don't always, and they have to be excited to come vote for somebody.

And Tillis is this national figure now because he stood up to Donald Trump and not a lot of Republicans are willing to do that.

And I don't think people are gonna forget it.

So he could run for Governor.

- Mitch, not a lot of North Carolina Republican elected leaders in Congress are willing to stand up to Donald Trump, or they all just happen to agree with Trump policies.

- Well, they certainly agree with Trump policies in most respects, which is true of Thom Tillis.

I mean before this fallout over the big beautiful bill, I think it was said, he typically sided with the president 90 or 90% or more of the time.

And even in his statement talking about not running for reelection, he didn't criticize Trump.

The criticism was for voters who would criticize people for not being independent thinkers.

So I think most of them do align themselves with Trump, but those who will stray from the party line like Tillis are gonna get called on it.

And that's something that he wasn't willing to take anymore.

Now people have asked me if I was surprised about his announcement.

Yes, I was surprised like everyone else, but maybe in retrospect, if you look at what was stacked up in front of him, we shouldn't have been.

Polls showed him with about 25, 26% support among the general population, less than half of Republicans, only 18% of independents.

And that was before Donald Trump said he wanted to primary him.

So it was gonna be a tough road for Thom Tillis going forward anyway.

I think the fight over the bill probably was the last nail on the coffin.

Joe and I had a chance to talk about this earlier this week.

The announcement also came, I think the day after his wedding anniversary.

And I think maybe he and his wife just sat there, said, "Do we wanna deal with this anymore?"

- I had heard, we'd heard that for years people would come backstage and say there was some talk that maybe Thom Tillis...

I mean he loves being a senator and being a statesman, but it was, you know, it's hard to be in DC.

- Yeah, I've heard that.

- The political environment is getting harder and harder.

I mean, you saw Congressman Patrick McHenry bow out on sort of similar front of just like, this is not fun anymore.

- And don't forget, Trump chased Richard Burr- - Yeah.

- over the insiders trading and COVID or the allegations of all that.

They went after him, and some democratic senators did the same thing.

- Yeah, these Republican politicians who won their seat before Trump endorsement was sort of the make or break.

Those are the folks who are sort of getting pushed towards the exits.

And I think with Tillis, some of the realization was with this bill, with the Medicaid cuts, if he voted for them, you know, he's gonna potentially be in a race with former governor, Roy Cooper, the guy who pushed for Medicaid expansion for years and years.

And so then, the race comes down to this person voted to take away healthcare for 600,000 people.

This person pushed to have it.

And that's not a winning argument in a general election.

But if he votes no, then Trump was obviously looking to primary him.

And that's a, you know, deal killer in a primary, - Trump endorsements have not helped people in the past.

- They help you in the primary, not the general.

- Right, and Trump endorsement means you're gonna lose, you know, some years and some years, it might help you win.

And we're only in 2025, so we don't know what's gonna happen in the next couple of years.

- And back to your point on Tillis running for governor, I think that's something he probably would be interested doing.

But if he's gonna remain a Republican, he still has to win a Republican primary.

- [Panelist] Right.

- I don't know that the Republican primary voters are gonna like him any more in 2028 than they do right now.

- Well, and I think the final point is he is the United States Senator for 18 more months.

I mean, the one thing we knew about this bill is they lost three Republicans, including Tillis.

They won Murkowski of Alaska because they made a concession within the bills.

So there's clearly at least four Republicans in the Senate that might be willing to go against the party.

They've gotta somehow figure out how to navigate Tom Tillis.

Tilley's term is over.

- Let's have some fun talk about, now, the democratic race.

All of a sudden, out of nowhere, comes Roy Cooper when there's no incumbent.

It's an open race in 26.

And Wally Nichols been out there a year campaigning, what happens in that Democratic primary?

Joe, put on your hat of a prediction.

- Well, yeah, the safest prediction to make in politics is that it's impossible to predict politics.

But I think here both parties have a keen interest in trying to avoid contentious primaries.

I think the question is, can they?

I mean an open seat Senate race in a midterm election, we can assume as history has dictated, it'll be beneficial to some extent to Democrats because of Republicans in the White House.

The opposite's true when the Democrats in the White House.

So, maybe it's perceived as being slightly more favorable.

Democrats have not done well in the United States Senate races in the last several occasions that we've had those sorts of contests.

I think Cooper's very close to a decision.

I'm still not entirely sure his heart is in it, but he may be being compelled by National Democrats at this point because they see it as a opportunity to pick up a seat and control the balance of power.

But who else is out there that would be interested?

- Where was a congressman and he's been running and actively seeking this, willing to?

- Because he also got, you know, drawn out his district so he's got a, you know, like that was the next thing to do for the time.

Everyone's always assumed, you know, that it'll be Cooper.

But Cooper's, you know, and you've had Morgan Jackson on the show before, like if he was here, maybe he, you know, Cooper's big plan was to run against Tillis and whatever, when he was gonna announce, maybe it would've happened today if Tillis hadn't dropped out.

And suddenly, he's gotta come up with a new plan of how is, who is he gonna, assuming he wants the primary, who is he gonna run against?

Is it gonna be, you know, Trump's daughter-in-law, Laura Trump who hasn't lived in, doesn't live in North Carolina, I think she lives in Florida?

Is it gonna be, you know, Tim Moore?

Is it gonna be, you know, Pat Harrigan?

Like who is it gonna be?

So, Cooper's strategy now is he's gotta think about how is he gonna present himself not knowing who the opponent is.

My guess is he is waiting until Republicans sort it out.

- If Trump makes an endorsement soon, then he has a pretty good sense of who his opponent might be.

And I think if he's reluctant to get in there, if he doesn't really wanna do it, but if he can be convinced that he's the only guy who can win, then I think that sort of appeal to his, you know, patriotism as a North Carolinian and an American could convince him.

But if it looks like Republicans run a candidate who's not gonna be very competitive in the general election, then maybe it doesn't matter if it's Wiley Nickel or somebody else.

- Who's the Democratic nominee, and Cooper can enjoy retirement.

- And he's not gonna wanna run if he's gonna lose, 'cause he likes that, never losing.

- Mitch, go to that GOP side.

We've heard Michael Whatley, the chairman, you've got Pat Harrigan, the US representative.

We've, Don Brown's out west.

Two other candidates have already declared- - Right.

Nelson's already- - Laura Trump.

How should, how should North Carolina Republican voters see this?

Should they wait for Donald Trump to tell them who should represent North Carolina?

Should they go in there and pick the candidate they want based on campaigning across this state to Republican audiences?

- Well, the people should always select who they want regardless of who anyone else endorses.

But what I think will happen is that the people with the money, with the fundraising apparatus, with the operatives, they're gonna wait to see what Donald Trump does.

Because they remember the last senate, senate race when you had a former governor, former congressman, current congressman, who was the least known of them, were in a primary race.

Trump came in and picked the least known congressman and it was over.

And so I don't think anyone wants to get involved in this if they think that Trump's gonna come in and stomp on, on whatever their plans are.

And on the Democratic side, if you are someone who's not Wiley Nickel, and would be interested in this race, you're gonna wait till you find out if Cooper gets in.

'Cause if Cooper gets in, that basically ends it on the Democratic side.

So both parties are kind of in a waiting game.

- But why?

What's the deal with candidates wanting to run for office, and then somebody gets in, you just quit?

So voters, your primary voters have no choice.

This is happening, this is happening a lot.

What, what is the point?

It's democracy, right?

Or republican form of government, Joe?

- Right.

Well, I do think the, the president has a vested in, any president has a vested interest in who the, who the Congress contains.

And so it's not surprising, and this is a particular president who has a, perhaps a different perspective on what party politics have played, how it played out historically.

But I think it's a foregone conclusion that the Republican nominee for the United States Senate is someone Donald Trump wants.

And that the decision of who enters this race will be determined in large part based on conversations at the White House.

- And we'll leave it at that.

Happy 4th of July weekend to you and to everyone out there.

Thank you so much for being on the show.

As always, be safe out there.

It's always important to see you as well.

And I hope you have a great holiday weekend.

If you have, you should have thoughts and opinions after what we've discussed this weekend.

Email me, statelines@pbsnc.org.

We'll read every email, share a few with the panel if you wanna have a policy idea.

I'm Kelly McCullen.

I appreciate you watching.

I hope you have a great 4th of July, and we'll see you next time.

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