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Journal Editorial Report

Supreme Court wraps up term on liberal note

This is a rush transcript from "Journal Editorial Report," June 27, 2015. This copy may not be in its final form and may be updated.

PAUL GIGOT, HOST: This week on the "Journal Editorial Report," from gay marriage to ObamaCare, the Supreme Court moves left as it wraps up its term. We'll analyze all the big decisions and what they mean for the political landscape heading into 2016.

And as Charleston buries its dead, a look at that community's response to the slaying of nine black church members and the debate it has sparked over race in America.

Welcome to the "Journal Editorial Report." I'm Paul Gigot.

Two landmark decisions from the Supreme Court this week as the justices wrap up their term on a decidedly liberal note. In a 6-3 vote, the court ruled Thursday that insurance subsidies are valid even in states that did not set up exchanges, marking the second time in three years that the justices have saved President Obama's signature health care law.

And on Friday, the justices issued a 5-4 decision affirming the constitutional right of gay couples to marry in all 50 states.

For more, I'm joined by Wall Street Journal columnist and deputy editor, Dan Henninger; editorial board member, Joe Rago; and Manhattan Institute senior fellow and Wall Street Journal columnist, Jason Riley.

Joe, second time in three years Chief Justice John Roberts has re-written a law himself, basically. The first time he said, a penalty, that's the way the law put it, is really a tax. He redefined that. And this time, he said exchanges set up by the states and federal government, though there's not federal government part of those sentences in the law.

JOE RAGO, EDITORIAL PAGE MEMBER: No. If they were a bankruptcy law, for example, this would be an open-and-shut case. It's right there in the statute.

GIGOT: Clear letter would have been subsidies only --

RAGO: Subsidies only available in exchanges established by the state. He rewrote it, as you said, and he's created a super statue out of the Affordable Care Act saying, well, Congress didn't really mean that so it's sort of the law of good intentions going forward.

GIGOT: And he also wrote it in a way that said that a -- so that a Republican president and a new IRS would not be able to redefine the law through a different regulation by reinterpreting the statute.

RAGO: Right. When we say he rewrote the law, he literally rewrote the law.

(LAUGHTER)

There will not be any deference to the regulatory agencies on this. He's interpreted it and that's the law going forward.

GIGOT: Jason, what does this tell you about Chief Justice Roberts?

(LAUGHTER)

JASON RILEY, COLUMNIST & MANHATTAN INSTITUTE SENIOR FELLOW: Well, I think -- I'll let Justice Scalia speak for me.

(LAUGHTER)

I think he really laid it out. We might be in unprecedented territory here, taking four commonly understood, plain-English words, you know, "established by the state" and simply saying they don't mean what you might think they mean, here's what they really mean. And courts, you know, that's sort of judicial activism might be unprecedented. And that's what I think --

(CROSSTALK)

GIGOT: The point I worry about, Dan, is that this is going to give new license to the executive branch to basically say, well, Congress might have wrote "X" but we really think it meant "Y," and we're going to, therefore, interpret -- write a rule, a regulation, that represents why, and the courts will back them up.

DAN HENNINGER, COLUMNIST & DEPUTY EDITOR: They will, Paul. And I think it's not merely the executive branch whose power gets augmented and expanded here but even the legislative branch, which is allowed to do sloppy legislating like this, and if their intent or their hearts even is in the right place, the courts have to take it into consideration, so that you have both the executive branch in Washington and the Congress itself now being told by the Supreme Court, more or less, whatever you do, we will figure out and make it work, which invests tremendous amounts of power in Washington, much more than any of us had ever feared.

RILEY: And I think it undermines the authority of the court. It -- it -- politicizing the court in this way undermines its authority. And I think that's the long-term damage here.

GIGOT: Jason, the Texas housing case, disparate impact, which means you can find bias by the use of statistics as opposed to actually finding and identifying disparate racial treatment.

RILEY: Right.

GIGOT: They justified that, 5-4, Justice Kennedy, in housing, extending that disparate law in housing where it had not been before.

RILEY: Right. And the left will take this and run with it, Paul. There's a whole cottage industry out there, both within the Obama administration, particularly through the Equal Employment --

(CROSSTALK)

GIGOT: EEOC, Equal Employment Commission.

RILEY: Equal Employment Commission, yes.

GIGOT: Alphabet soup.

(LAUGHTER)

RILEY: A whole group of lawyers there who specialize in doing this. So you'll see this applied to everything from test scores to bank loans to job applications and so forth. They're really going to take this and run. And it is not what the Fair Housing Act actually said. It did not say you could use this sort of analysis to determine discrimination, that wherever you see imbalance in outcomes, that automatically means racial discrimination took place.

HENNINGER: A piece of what we were just saying?

GIGOT: Let's go for a three-fer here. You've got the Supreme Court decision on gay marriage, 504. Justice Kennedy wrote it. Finding a constitutional right, all 50 states must now, even those that don't, must honor gay marriages.

HENNINGER: I think the point to emphasize is the one that Justice Scalia did, setting aside the issue of gay rights, this was something that was bound, rather than allowing the states to work through the democratic process and try to discover what the people of those states believe, nine members of the Supreme Court decided that because they felt it exists in the Constitution that they would impose this idea on the entire country.  Again, all we have been doing is sitting here talking about Washington expanding power in a way that really is quite striking.

GIGOT: And the irony is that the gay marriage has been spreading throughout the country through the democratic process successfully.

HENNINGER: Yeah.

GIGOT: And now this essentially preempts that debate and says this is -- this is -- what does this tell us? When I asked the same question that I asked, Jason, what does this tell you, Joe, about Chief Justice John Roberts and the Roberts court? Because it tells me the accusation -- the claim that this is a liberal -- conservative court, it doesn't really hold up.

RAGO: No, I don't think it does. You know, Justice Roberts is in the four-member minority on this case, wrote a good opinion saying --

GIGOT: The gay marriage case.

RAGO: The gay marriage case. In those 11 states where either the voters or the legislators have passed gay marriage, it's been healthy for American self-government. The interesting thing in his opinion is he uses the exact same language as the ObamaCare case where he says --

(CROSSTALK)

GIGOT: Where he was in the majority on the other side.

RAGO: Right.

(LAUGHTER)

We're not qualified to write the laws. That's the job of the political branch.

RILEY: I don't know what it tells you about Chief Justice Roberts. The same judicial activism he denounces in one case, he endorses in another.  It's very confusing.

GIGOT: Well, does that raise a question, Dan, of the political motivations here for the chief justice? Is he really thinking in his role as the chief justice, that I have to be more of a politician here and I didn't want the court to overturn ObamaCare because the damage to the court from critics would be so severe --

HENNINGER: I agree.

GIGOT: -- that I just have to invent some language to be -- to rewrite the statute myself to preserve it.

HENNINGER: If I had to read something into his mind this time, if was that if they had overturned the Affordable Care Act, then it would have fallen to the Republicans in Congress, who really had no idea what they wanted to do and the chaos, the Supreme Court would have gotten blamed for creating this fiasco. But that's a stretch, though, for a Supreme justice to --

GIGOT: It doesn't speak well of the court.

Still ahead, the Supreme Court's decisions on gay marriage and ObamaCare are sure to put those issues front and center in the 2016 campaign. We'll look at the policy implications and the political fallout from this week's rulings next.

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM, R-S.C.: Whoever the Republican Party may nominate, the one thing I can assure you is that they will repeal and replace ObamaCare with something better.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

GIGOT: The Republican presidential candidates are weighing in on this week's Supreme Court decisions, vowing to repeal and replace ObamaCare in the wake of the subsidy ruling, and warning of the risk to religious freedom from the justices' vote to legalize gay marriage. So how will both issues play out in the 2016 campaign?

We're back with Dan Henninger and Joe Rago. And Wall Street Journal Potomac Watch columnist, Kim Strassel, also joins us.

So, Kim, was there really -- was there some quiet relief among Republicans in Washington? They're denouncing the decision on ObamaCare publically, but privately, is there some relief they don't have to do much this year?

KIM STRASSEL, POTOMAC WATCH COLUMNIST: There were huge sighs of relief, Paul --

(LAUGHTER)

-- especially, I think, among some of the presidential candidates. Because here's the fear, the fear was the court would overturn the subsidies and then congressional Republicans would be unable to deal with the chaos that followed and it would leave the Republican candidates to have to pick up the pieces. So now what's happened, this is put behind us and they are clear to focus on offering their own plans for replacing ObamaCare.

GIGOT: Right.

STRASSEL: And I think that what really matters with this decision, Paul, is, by elevating Obamacare, by putting so much attention on it, it's also created a new standard I think for the Republican candidates. Every one of them is going to call for repeal. Every one of them is going to put out a plan for replacement. I think the new question for voters will be which of them can sell the concept of free market health care to the public.

GIGOT: Joe, what's likely to happen this year or the rest of this Congress? This means that President Obama, he is not going to sign a repeal bill. But do you think Republicans might be able to put at least a substantial partial repeal on his desk?

RAGO: They might through reconciliation, which is sort of a budget process that allows you to get around the filibuster in the Senate, so a straight majority. It might be something that comes to his desk. I don't think it will go very far. Maybe they'll chip around the edges.

The real value here is if the subsidies had been overturned, they would have had to do something and that --

(CROSSTALK)

GIGOT: To address those lost subsidies?

RAGO: To address those lost subsidies. And they started thinking seriously about health care in a way that they have not done for quite a long time, where they actually have to propose some sort of substantial substantive reform alternative. So it was healthy for Republican thinks, even though the case didn't really go the way they wanted it to.

GIGOT: So, they might be able to repeal the medical device tax, which is a funding mechanism for ObamaCare. They might do something about the rationing board. The House voted to repeal that this week. The Senate may take that up, too. But nothing big is likely to get through until 2016, 2017, with a new president, Democratic or Republican.

So that does, as Kim says, Dan, put the onus on the Republican candidates to offer a plan. Basically, they have to offer a plan that isn't just repeal, but is this is how my replacement plan is better than the -- what you thought you've seen with ObamaCare with its high and rising health care costs, which is limited choice and so on. Can Republicans do that?

HENNINGER: You are raising the specter of 10 Republican candidates running around describing their plan to replace --

GIGOT: There will be one who wins, OK?

(LAUGHTER)

So whoever wins the nomination will have that to take to the voters, no?

HENNINGER: I think they'll have to come up with a framework. But I worry bit, like Kim, that it will be its own form of chaos out there trying to talk about health insurance. It does put a tremendous premium on the political skills of these candidates, to be able to talk about these things, convey it to the American people in a way that makes them understand why it matters to them. It's not just about things like guaranteed issue and access and so forth. They're going to have to make it compelling, and they have an opportunity here to do that.

GIGOT: Kim, what about the implications of the gay marriage decision?  This is now a part of the Constitution, the right to gay marriage, so the only way you can overturn it is with a constitutional amendment. That takes an inordinately large vote in the House and Senate and then also ratification in most of the states. So do you think that should be a focus of the Republican -- some of the Republicans? Because some are already talking like that.

STRASSEL: There's no question that a number of them are going to propose that. I think that that is potentially, Paul, a waste of political energy, because it's very hard to do. A smart Republican --

(CROSSTALK)

GIGOT: It has no chance of passing?

STRASSEL: No chance.

The smart Republicans are going to be the ones that are going to embrace this opportunity to put aside, as it were, the specific question of gay marriage and instead talk about the principles at stake here. One of those is, of course, states right, which resonates a lot of with voters. I think another one will be the importance of getting a Republican into the White House that can appoint members to the Supreme Court that are going to respect things like states' rights. And I think the other principle that they'll be talking about, the smart Republicans, is religious liberty and the attacks you've seen on this. And, of course, this case is another example of that.

GIGOT: Could, paradoxically, Dan, these two decisions actually help Republicans?

(CROSSTALK)

HENNINGER: I think they'll energize them for sure.

GIGOT: You think so?

HENNINGER: Yeah, I do. I think they're going to go on offense. It will put Hillary Clinton on defense having to defend, especially the Affordable Care Act. And Hillary will run defending Washington, Washington and all of its manifest powers, because that's what she's going to be promising. The Republicans are going to be able to explain why that won't work.

GIGOT: Thank you all very much.

When we come back, as the nation mourns the victims of the Charleston church massacre, we'll look at a community's remarkable response and the renewed debate over race in America.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

PRESIDENT BARACK OBAMA: -- cannot imagine how the city of Charleston, under the good and wise leadership of Mayor Riley --

(APPLAUSE)

OBAMA: -- how the state of South Carolina, how the United States of America would respond not merely with revulsion at his evil act, but with big-hearted generosity, and more importantly, with a thoughtful introspection and self-examination that we so rarely see in public life.

(END VIDEO CLIP)

GIGOT: President Obama delivering the eulogy Friday at the funeral of slain Pastor Clementa Pinckney, a South Carolina State Senator and one of nine black church members gunned down at Emanuel AME Church in Charleston.

So, Jason, you've watched the reaction this week, extraordinary in so many ways. What does it tell you about the state of race relations in America?

RILEY: Well, the initial response, Paul, was quite touching and heartening. I mean, it was almost like a natural disaster or a space shuttle crashing or something like that. I mean, the entire country seemed tremendously moved by this, tremendously revolted by it.

(CROSSTALK)

RILEY: And, of course, it was all the more so because it was the whole country and there was this racial aspect to what happened. I think that shows tremendous progress.

GIGOT: And the church members expressing forgiveness so movingly --

RILEY: Yes.

GIGOT: -- while confronting the perpetrator.

RILEY: What, of course, has happened, though, as the days have passed -- and maybe this was an inevitable -- but people have attached all kinds of agendas to the mourning process. And instead of being mourned as individuals, what you're seeing are these deaths being used as sort of props in a racial narrative in this country that the left frankly wants to continue pushing.

GIGOT: But is that succeeding? I'm not so sure it is because it seems --

(CROSSTALK)

RILEY: I don't know. Everything from the Confederate flag to voter I.D. laws to the Voting Rights Act has now been dragged into this mourning process. And, you know, we'll have to see how it plays out. And maybe it was inevitable. But I think you're going to see a lot of exploitation frankly of this tragedy going forward, particularly by liberals.

GIGOT: But the Confederate flag has always been a point of polarization, at least in the last 20, 30 years, in South Carolina and the south.

RILEY: Sure.

GIGOT: And it seems to me that that gracious gesture, that civility, that forgiveness on the part of the people in that church triggered a response among political actors in South Carolina, Nikki Haley, the governor, flanked by Tim Scott, the Republican black Senator, first black Senator from South Carolina since Reconstruction, and the rest of the politicians.  They said, let's take down that flag because it is a symbol of polarization.

(CROSSTALK)

GIGOT: Isn't that a welcome gesture?

RILEY: Sure. Certainly. I will not miss that flag. Like a lot of other people said, I think it does belong in a museum. But at the same time, Paul, I'm not going to pretend that this wouldn't have happened if that flag had not been flying on state grounds --

(CROSSTALK)

RILEY: -- which is the narrative that the left seems to be running with here.

GIGOT: Dan, you know, you've watched these issues for a long time. You know, there's a claim -- the president said that racism continues to exist in America. Of course, it does. I mean, those of us who believe in original sin know that. You can't take that out of the hearts of men and women. But the point is, is there the same institutional racism that is in these private or public institutions that we saw 50 years ago?

HENNINGER: No.

GIGOT: We said no in an editorial last week and we were criticized by the left for it. What's your response to that?

HENNINGER: Well, we did that because I think we're trying to make a distinction between the racism that existed for over 100 years in the United States, much of it which was systemic, meaning institutional --

GIGOT: Jim Crow, that period, yes.

HENNINGER: Right. It was legal. It was systemic. Black people could not get into a college. They will not be served in diners. They would not be allowed to stay at hotels. You know, Louis Armstrong could not stay at a white hotel even though he was performing for white people. That's different than saying there are instances of racism that exist in society today.

But the problem is, once one has said that, what -- how do you get past it?  Then what is the point of just simply asserting that? Example, inner city schools, public schools, kids are failing in those schools. Greatest moral issue in the country. Why are they failing? If one says racism, that doesn't take us anywhere. We've got to get past the point of just making these assertions.

RILEY: Paul, institutional racism does not explain these gaps in learning or employment or income in America. Black culture, particularly a black culture prominent in the inner city, goes a lot further explaining these outcomes. The left does not want to talk about that. They want to push racism as an all-purpose explanation of bad outcomes. And they're wrong on this.

GIGOT: Still, I think South Carolina had a triumph and a lesson for America this week.

We have to take one more break. When we come back, our "Hits & Misses" of the week.

(COMMERCIAL BREAK)

GIGOT: Time now for "Hits & Misses" of the week.

Kim, start us off.

STRASSEL: This is a miss to the Obama administration for hiding just how extensive the damage was of this Chinese hack of the Office of personnel Management. We are only now finding out weeks after the news broke that it wasn't just the data of federal employees that was stolen, but in many cases, classified background checks of people who work for the government or wanted to work for government, information that can endanger our intelligence operations around the globe. This is the fifth serious hack of government databases in just the last few years and it's about time the administration explains what it's going to do about it.

GIGOT: All right, Kim, thanks.

Jason?

RILEY: This is a hit for New York Mayor Bill de Blasio for his decision, however reluctantly, to hire 1,300 new police officers in the city. It's an acknowledgment --

(CROSSTALK)

GIGOT: That's a lot of cops.

RILEY: It's also an acknowledgement that the increase in shootings and murders in the city may not be just a blip. It's also an acknowledgement, Paul, in the dangerous communities, the cops are not the problem. In fact, the cops are part of the solution.

GIGOT: All right, Jason.

Dan?

HENNINGER: I'm giving a hit in memory of Don Featherstone, the fellow, who in 1957, created the plastic lawn flamingo, the famous pink flamingo.

GIGOT: You grew up with one of those on your lawn?

(LAUGHTER)

HENNINGER: Well, I remember there was one next door.

(LAUGHTER)

Don Featherstone once said an empty lawn is like an empty coffee table, and he filled lawns with hundreds of thousands of pink flamingos.

GIGOT: All right. And you are going to get a little one, put on the desk just in --

(CROSSTALK)

HENNINGER: In memory? I think I will.

(LAUGHTER)

Maybe four or five.

(LAUGHTER)

GIGOT: All right.

And remember, if you have your own hit or miss, be sure to tweet it to us, @JERonFNC.

That's it for this week's show. Thanks to my panel and especially to all of you for watching. I'm Paul Gigot. Hope to see you right here next week.

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