- President Trump makes an endorsement and a job offer in a key North Carolina Senate race and Governor Josh Stein reverses state Medicaid cuts and warns legislative Republicans Medicaid funding is burning quickly.

This is State Lines.

- Quality public television is made possible through the financial contributions of viewers like you who invite you to join them in supporting PBS NC.

(upbeat music) ♪ - Welcome back to State Lines.

I'm Kelly McCullen, Joining me today for a full discussion of the state's most pressing matters, Carolina Journal's Donna King.

Hi Donna.

- Hi.

- Colin Campbell is to her right from WUNC radio.

Dawn Vaughn of the News and Observer, Capitol Bureau Chiefs, both of you, respective organizations, and Editor-in-Chief Billy Ball of Cardinal and Pine, and Donna of course you are an Editor-in-Chief as well.

Thank you so much for coming on as we head towards the end of the year and end out with the old in with the new, but we can't be quite out with the old yet.

Let's talk about Governor Josh Stein.

He reversed October's state Medicaid funding cuts this week to hospitals, nursing homes, and doctors.

The Stein administration and legislative Republicans all agree there is a state funding shortage.

They disagree over the dollar amount, but 319 million dollars seems to be the shortfall reported by the Department of Health and Human Services.

Republicans say the October cuts were unnecessary, that Medicaid funding discussions could be addressed next spring.

Collin, what's the deal?

319 million is not chump change.

Why would a governor think now we need a cut, but Republicans think we can wait six months before cuts would be necessary for Medicaid?

- I think the original thinking behind the cuts was if you sort of start the process now, if you're uncertain about whether you have the funding, the cuts can be a little bit less drastic, whereas if you wait until you completely run out of money, which I think most people seem to agree is probably sometime in the spring, then you're looking at much more serious cuts.

So legislators are saying we've got time to figure out our disagreements on exactly how to pass this funding.

They agree on the amount, they just don't agree on whether to tie it to some other children's hospital or health care funding as well.

The governor sort of tried to force their hand by putting these cuts in effect in October, but then we've seen several court decisions in the last couple weeks that have not gone the governor's way.

Different providers, different patient groups have sued to try to block these cuts and they've been successful.

So Stein acknowledged, you know, he's losing in court over this and he really has no choice but to drop the cuts, at least for now.

- Dawn, is the juice not worth the squeeze for the governor to stand his ground on Medicaid, to drag out at a reduced rate Medicaid?

Just let what will happen happen next spring.

- Well, this is his first year as governor and I think, I mean, I'm sure he was aware of this before, but now he's acutely aware that the legislature likes to do things last minute or very late.

And he had said repeatedly in his argument for why he wanted to have these cuts early before the money runs out is that you can't, you know, use a credit card and wanted to, like we were saying, like the kind of slow plan so it's not as drastic.

But Republicans have said, you know, you'll probably get the money eventually, you don't need to do this early, you've created this, and then, you know, it came to because of the lawsuits and everything that he has let it go.

And we'll see if the legislature does actually do anything before the money runs out in April.

- Billy, your colleague Michael McElroy, he gets on us sometimes, we talk too much politics and policy, bring it back towards the people.

Okay, so the people have their Medicaid funding back.

I'm thinking of those, the folks in the retirement homes and whatnot.

Talk to us about the family approach to this, set aside the politics, they get what they want now, but there is a cliff in the spring.

- Absolutely, and I think, you know, politically speaking, politicians are looking at how various elements of pain are going to fall on the people over the next few months, because this isn't happening in a vacuum.

There are other things happening.

We've got food stamp cuts coming down the road from the federal level.

We also have federal subsidies ending at the end of this year for the Affordable Care Act.

That's a lot of things happening at once that people are going to acutely feel, and I think for especially the people who are in charge, if you're up at the White House or you're running the legislature or whatever, you've got several things crashing down that are gonna make people feel like, "Well, is the roof caving in or something?"

And I think that that has to be a concern for the politicians in Raleigh and in DC, because people are gonna feel these things.

Like I mentioned with the food stamps, you're losing your food stamps, you're losing your health care insurance.

There's a lot of pain that is going to hit people at home, and those people are going to say, "I don't care how you politicians figure it out.

You just need to figure it out."

- Donna, on the Medicaid front, the Republican leadership did say, "Don't worry about it.

Next spring it will be an issue, and we will address it."

Even if you're a Republican voter heading into that primary that season, do you trust them to reach a deal?

- Absolutely, I think so, because well, one, first they've pointed out that this really didn't have to happen in October.

They had, you know, $600 million or so that was supposed to carry it till April, and they criticized DHHS for spending $100 million of that on administrative costs rather than on services and providers, but this really forced their hand.

The lawsuits forced their hand, and they had to do this because they've lost now twice.

There's two or three more lawsuits, some in the hopper, that are not gonna fall the governor, the executive branch's way.

So then, you know, part of, that's part of the challenge, right?

I think he got out in front of his skis a little bit on this issue, and now the ball really is in the hands of the legislature.

They're gonna have to come up with a deal after what's happened this fall.

- Colin, at the executive level in Washington, DC, Donald Trump handles funding, does all sorts of things and interventions in the businesses and government agencies.

Josh Stein is doing the same thing here.

Why is it different for Josh Stein, and why are Republicans suing with this exercise of executive power?

- Yeah, I mean, this is a state where the executive is very weak.

We have one of the weakest governors in the state, and the legislature really holds a lot of the cards here, whereas Washington, DC, it's a little bit the other way around, at least in the current political dynamic.

So I think that's sort of where Stein is trying to sort of exert his influence over this and sort of nudge the legislature in a direction.

It's really hard when they have near super majorities in both chambers and just are not particularly interested in listening to what the governor has to say.

- Are they listening to each other, Dawn, in any way, shape, or form?

- No.

The House and Senate are very much divided.

- Donna, let's talk about the state auditor's office.

It's released a report on our state's financial position this week.

Here's what it says.

The state has increased revenues due to Medicaid expansion, unlocking $6 billion in federal grants, personal income tax collections, they jumped nearly 4% this past year, corporate income tax collections up 2.5%, sales tax collections, Donna, a rise by $400 million.

Who says the economy's struggling?

- Well, I don't see it as rosy, perhaps, as others might.

I think there's a few red flags here.

One, I think this should weigh into the idea that revenue projections are not always what they think, and that's what we're seeing right now between the Senate and the House when they talk about wanting to cut back on the triggers that would lower taxes.

But some of the red flags I see, one, is we're $6 billion more dependent on the federal government, which is one of the issues that we have going in.

We talked about Medicaid expansion, that the federal government went on a massive spending spree four years ago, and it's financially not really stable.

Now we're even more dependent.

We have one in four people on Medicaid, and for the most part, and then when you see increases in, you know, things coming from sales tax, that means prices are higher.

You know, when we have all of these things, one of the major increases was lottery ticket sales.

That should be a huge red flag.

So, you know, this is something to really think about as they go into the next session, and we're still trying to come up with a recovery plan from the massive spending under COVID.

- But, Colin, that report had lots of green arrows and all kinds of, it looked very positive.

Donna's got a point.

Inflation makes things more expensive.

That's sales taxes.

I mean, how should we take it?

- And we are very much a growing state.

I mean, people are still moving here.

Jobs are still being added in North Carolina.

So we've got those positive numbers.

I think the big challenge going forward is if you continue to cut taxes, as it's currently set to happen in the state law, does those, do those numbers start to come down even with the growth?

And do you have the money you need to provide government services at the level that people expect to keep up with the growth?

Or do you, you know, have flat teacher salaries and, you know, public projects that get frozen or delayed?

- Donna, but on that Senate side, I must say, not Donna, Dawn, if you, if, if revenues are rising across the board and we're in an era of cutting taxes, why not just keep cutting those taxes?

- Well, you've got to make sure you have enough money to pay the bills, or you've got to change the amount of those bills.

And some fiscal conservatives are saying, well, you know, we, if we still want to cut taxes, we don't want to spend this amount of money on higher raises or other, you know, pots of money.

So that is problematic for a lot of people who are worried about, about that, whatever, whether it's raises for them, projects, something else that's funded.

So that's kind of what the fight is.

And again, there's so much, there's still uncertainty because things are so expensive now.

And how are people going to spend as a result, which is going to impact that sales tax revenue, even if it's more expensive, but if you're buying less.

And I think we're going into 2026 with a lot of financial uncertainty, not just at the state and national level, but just everybody's daily lives.

- Billy, to Donna's point, four or five years ago, the federal government infused literally trillions of dollars in this economy to help us get through a hard patch in society.

Why is it so hard to go back to some sort of normalcy with deficit spending, which of course, to Donna's point, is it making our state addicted to federal funding?

- You know, that's, that's a debate that that we've been having in this country for long before COVID and long before the pandemic, but you're absolutely right.

A lot of money was put in during COVID for, you know, what we hope is a once in a generation emergency that we, you know, at least in my lifetime, we had never seen anything like it.

So, so people needed money to, to, to make sure that they were okay, to, to help them stay afloat because a lot of people lost work as well during that period.

So there was a lot of money put into it.

I do think that down the road, the, the big question is going to be, as the federal government pulls things back, like we talked earlier about the one big, beautiful bill with the cuts to the ACA, to the food stamps, things like that.

What does that do to North Carolina's economy and to the American economy?

Because when people can't go out and, and buy their food, they're not shopping.

They're not going to your local business.

These, these things don't, you know, if you move one part of the web, it's felt elsewhere.

So I think down the road, the American economy has a lot more uncertainty than it might seem.

But, but what I saw in that report as well was that North Carolina is growing.

We're a very attractive state and you know, every time we post at Cardinal and Pine that this state is growing as fast as any state, people say, we're full up, which is funny to me.

We're not full up.

There's a lot of rural spaces, but the, but, but yeah, North Carolina is growing.

- Donna, if you're an average North Carolinian sitting around your kitchen table, to your point about sales taxes, prices are higher, you pay more in sales taxes.

Do, would voters or people who would breed an audit like this and say, are things good or things bad?

Or is there a cognitive issue where it's like, it's what I'm seeing is not what I'm feeling.

- Right, right.

And I think that is what we're seeing is that, you know, it looks like that the state is in good fiscal health.

We've got money coming in.

There's lots of people moving here, lots of retirees coming here, which is also a strain on the healthcare system.

But one of the things that we really are seeing is that people aren't feeling the certainty that it looks like on paper.

And I think that you have to really parse those numbers and say, can the federal government continue to start, you know, continue to be supplementing some of our core programs?

Or do we really need to take the opportunity and make a generational change in the way we administer policy, the way we balance our budgets, the way we, you know, do all kinds of things from our education to our healthcare.

This is an opportunity to make a change that will last for our children.

- President Donald Trump has weighed in on the Rockingham County, North Carolina State Republican Senate primary.

Current Senate President Pro Tem Phil Berger is facing Rockingham County Sheriff Sam Page in that primary.

President Trump's online post endorsed Senator Berger and also suggested that he wants to appoint Sam Page to a federal job if Sheriff Page would just drop out of that race.

Sheriff Page wrote on X that he in fact chaired Sheriffs for Trump appreciates the offer, but he's staying in the North Carolina Senate race.

Wow.

To be from Rockingham County, all this goes public.

Dawn, I don't know that, does it help Sam Page accept the federal appointment if it goes public before he accepts it?

- Well, Page says he's staying in and he does, he's, you know, thanks, but no thanks.

Because in Trump's announcement of endorsing Senate Leader Berger, he also praised Page and Page said, you know, thank you.

He liked that, you know, because both Berger and Page are Trump supporters.

But he doesn't want out.

He's, you know, he's dug in against Berger.

Of course, anything can change at any moment.

It's North Carolina politics.

But as of the time we're talking about it, he is not going to leave.

And this Berger-Page fight, I think, is going to get heightened, I guess, as the weeks come.

- Billy, it is interesting, the president gets involved in what is really a local race, but a very powerful person seeking, you know, to stay in office in Phil Berger.

How do you make of that?

- It gives you the sense of exactly what you're saying, that Phil Berger is powerful for the president of the United States to be getting into a local Senate race.

And it also shows you that there was some polling that had Berger's people concerned.

Or, you know, I think those of us who have been watching Berger and his position for a long time, at first probably assumed, oh, this guy's going to be really hard to beat, no matter what.

But clearly, there's polling that indicates that there's something for him to be concerned about and concerns over there in Rockingham County, some local concerns about the Berger family.

Local politics can be as nasty as the national politics.

So I think that we're seeing that.

I think we're also, it raises the question as well, there were accusations at one point of a quid pro quo with Berger and the president.

And, you know, hey, I'll endorse you if you gerrymander North Carolina further.

They've denied that.

But of course, Berger did take the steps to gerrymander North Carolina further.

So there's a lot of stuff happening here.

And of course, when parties are, when you have inter-party tension like this, it is interesting to people on the outside.

- I'll be really curious to see how well Trump's endorsement actually affects this.

Trump has sort of been a kingmaker in this state, in part because we've had these congressional primaries with a lot of political unknowns.

So Republican voters in those primaries see five names on the ballot and they look to President Trump to figure out, OK, who's Trump's support.

In this case, Sam Page has been the sheriff of Rockingham County for 20 years.

Phil Berger's been their senator for more than 20 years.

People in that area know both of these guys and they already have opinions about both of these guys.

So I don't know how much Trump is ultimately going to move the needle among the sort of political junkies that actually vote in a Republican primary in this kind of race.

- Well, that district has a little bit of Guilford County.

So I wonder if that's actually what's going to decide this, because Guilford doesn't know that maybe they know the sheriff of the neighboring county.

I think everyone in that area knows, you know, who Phil Berger is.

But there's, you know, a little bit there and I think it could be close.

But I think that, you know, Berger and his campaign are obviously, you know, firing on all cylinders and going against this.

- Is this race over with this Trump endorsement?

Trump's endorsement does seem to work in U.S.

House primaries on the GOP side, but this one, Sam Page, not deterred, is going to stay.

Ride or die.

- He's certainly powerful, but all politics are local, because to what you're saying, you know, everybody knows who these people are.

But that said, Berger is tremendously powerful.

He really can inarguably, it can't, he was the architect of what has happened over the last decade with North Carolina and the march toward lower taxes and economic development, all of these things.

And that's a powerful position to be in.

He wields a lot of power in the General Assembly and has certainly brought a lot of it home to Rockingham County.

But that said, Sam Page has been, and his campaign, has really stepped it up and has really launched a pretty aggressive primary challenge.

So I think it's going to be close and it's interesting that Rockingham County becomes national news.

- Colin, you travel the state and cover small towns and meet all the mayors.

When you're a state legislator, how well-known or famous are you when you go back home?

You may be a power player in Raleigh.

How does it translate back to the rural district?

- Yeah, I think that you're known on a certain level with your constituents.

Clearly, we've been in office for a long time, but there's a certain level of anonymity.

I mean, I think Rockingham County is probably different because Phil Berger's been their senator for a really long time.

But, you know, you walk around Wake County, I bet most people in Wake County couldn't name their House Representative if you ask them.

So certainly there's a level of obscurity in these races.

What's interesting about Rockingham County, I think in particular, is this is going to be somewhat of a referendum on has Phil Berger used all that political muscle and influence to better life in Rockingham County.

Certainly, we've seen political leaders bring a lot of money and earmarks and pork spending into their county.

Berger has done this to a degree, but whether people in his district feel that he has, I think will be an interesting thing to watch.

- Would there be any other legislative races, Dawn, that even compare to this race in terms of the attention that it's going to get from reporters like yourself, even up through the national outlets?

- I don't think so.

I think other races to watch are former lawmakers trying to come back, like Michael Ray, you know, swing Democrat vote.

But Berger is the most powerful Republican in the state, so I feel like that, you know, gets all of all the energy.

- All right.

The U.S.

House approved a defense authorization bill this week.

Importantly for North Carolina, yeah, defense authorization, Bragg, Lejeune, but in full federal recognition of the Lumbee tribe is in that bill.

The Lumbee were partially recognized by Congress back in the 1950s.

North Carolina recognized the tribe in the 1800s.

Opponents, Billy, including the Cherokee, say the Lumbee can't prove they descend from a tribal nation.

The U.S.

Senate expects to hold a final vote next week.

Congressman David Rouzer gave us a few comments to State Lines.

- We had the NDAA bill come before us, and that's a bill that is a must pass bill.

It's a bill that comes before the Congress every year to authorize our defense programs.

You, there is a history, I might add, of federal recognition for other tribes being attached to the NDAA bill.

And so we viewed that as a viable option and it worked.

We were able to get it through the House and and we're going to get it through the Senate.

- Congressman Rouzer is optimistic.

Billy, does it happen this time?

Is this the year?

- This is, the Lumbee recognition has been kind of a mysterious thing for a long time in North Carolina.

You've had Democrats who promised something on this.

You've had Republicans who promised Lumbee recognition, but they haven't for whatever reason, the dispute with the Cherokee, this has not happened.

You know, this is something that President Trump campaigned on as well, and he spent a lot of time in truly one of the few flip counties in North Carolina, down there in Robeson County, and the work that he did there, he promised Lumbee recognition.

So I'm a little bit surprised to see it to see it happen all of a sudden, because a lot of the conversation died down after President Trump talked about it earlier this year.

This is something that the Lumbee have been waiting on a long time, and let's be honest, it comes down to money and make that federal recognition comes with more federal dollars, and so it's a big deal for them and their communities.

- We've got a State Lines special coming up posted by my colleague David Hurst.

I'm going to look at this issue and Congressman Rouzer is part of it, so be on the lookout for that early next week.

Donna, tribal politics, I can understand the tribes coming together in the nations and saying everyone, if you're not part of it, stay out of it, but those of us who are out of that political world, why should we care about Lumbee recognition or lack thereof?

- Sure, sure.

I mean, I think if you look at it through the political lens, exactly what Billy said, this is an area that could be very conservative and it could be something that makes a difference in very, very close elections, an area that now feels very supported by the president because of that promise, and one of the first things he did when he came into office was direct the Department of Interior to start pursuing Lumbee recognition, but one of the positive things I think we also see is in our own congressional delegation, there's been a bipartisan effort, certainly led by Congressman Rouzer and Tillis and Budd on the Senate are going to be efforting it, so it is something that's getting, it's quite, it could really make a difference in a North Carolina election, but it's been brewing for a long time, it's had a lot of support for a long time.

- Not unanimous though, right?

How did everyone get on board at the end?

- Well, you still see, I think, Congressman Chuck Edwards, who represents the area that the Cherokee call home in Western North Carolina, still strongly opposed to this.

- But those are his constituents.

- Yeah, I mean that, it makes sense that he would be opposed to it, but you do have, I think, Senator Thom Tillis, Senator Ted Budd that are on board with President Trump and allowing this for the Lumbee.

It would be interesting to see the sort of the resources that that brings to a very impoverished region of the state, and whether it paves the way for other Eastern North Carolina, smaller American Indian tribes to get similar status, because right now you have, the Cherokee is the only one in the state with federal recognition, you've got a handful of other smaller tribes, including the Lumbee, that would like to have a piece of that pie going forward, but just have not been able to make that happen.

- Dawn, to Billy's point about the Lumbee recognition, Donald Trump made a big deal of it, he said it got really quiet.

When it comes to these kind of legislation, do you want to be loud about it, or do you want it to quietly slip by and get to his desk for a signature?

- Well, it seems like because there is a lot of support for it, and I mean like that's the reason, and not just the loud factors, also that if this happens for the Lumbees, they're going to have a lot more political influence, it could, I mean, change things economically, a lot of different ways.

There are a lot of votes in that area of the state.

- And to Colin's point, as he said, this is one of the poorest areas of North Carolina.

They've been hit really hard by storms, their schools were hit really hard by flooding, there's a lot of need in that community, so I think the drive is obvious why they want it.

- And self-governance is coming, possibly.

I can't put the cart before the horse, but final topic, National Conference of State Legislators are outlining two big issues they think are going to affect state houses nationwide, artificial intelligence and budget revenue.

They expect it to be dominant across America in '26.

The conference's CEO is Tim Storybilly.

He says the picture is very clear and most U.S.

state-level leaders already know this is coming.

To your point, Donna, end of COVID funding, funding cuts from the one big beautiful bill, state tax cuts that have been on a trend downward are shaping the debate as well, planning for Medicaid, planning for food stamp cuts in '27, whole lot going on and a lot of it is dollars going in reverse, cuts, reductions in revenue.

- Yeah, and as I mentioned earlier, all these things happening at the same time.

You know, the average person does not sit here paying attention to what's happening in DC or in Raleigh like we do, the folks sitting at this table.

They tend to learn about these things when they come down and it actually affects them at home.

A lot of these things are going to come down at the same time, between the food stamps, between the ACA subsidies, Medicaid expansion is in jeopardy.

All these things happening, people are going to feel it at once and like I said, they're going to direct their political anger at whoever's in charge, whether that's the governor, whether it's the legislature, whether that is Congress or the president.

And so I think it's one of the many reasons why the 2026 elections are so unpredictable, because people are going to feel this.

- Donna, with these upcoming mandated changes, they have to, states have to plan for who gets to squeeze, our congressional delegation or the state?

- I think it's going to be the states and that's what's going to happen.

We saw a politically opportunist, massive expansion in these entitlement programs and states are going to have to figure out what is their recovery plan, because they're not going to be able to depend on the federal government long-term.

- Colin, what do you make of this conference?

Do they have clout?

Is it influential?

I know lots of lawmakers go to these conferences and they study and they talk about these issues.

- Yeah, you know, we sit here focused all on North Carolina, but there's a lot of idea sharing that goes on between different legislators.

Conservatives and Democrats all have their own associations that they go to and swap ideas and draft legislation between different states.

So a lot of these topics are definitely going to result in bills that get filed here during the short session in April.

- Money's one problem, Dawn.

You got AI out there, too.

They don't know what to do about AI.

- I think we'll see some - Representative Jake Johnson has already talked about there's going to be some AI regulation legislation in the spring, but on the money point, I just wanted to say that, you know, everyone is saying, you know, the fact that the state doesn't have a budget, if it does, that doesn't necessarily mean there's going to be a lot more money for things.

It could also be bad news for some people, too, if there's cuts or definitely if, you know, the raises battle much lower raises than people are hoping for.

- That's our show.

Thank you so much for sharing your insight.

Happy holidays.

We're not gone yet for the year.

Thank you for watching us.

Email your thoughts and opinions to statelines@pbsnc.org I'm Kelly McCullen Thank you so much for watching.

♪ - Quality public television is made possible through the financial contributions of viewers like you, who invite you to join them in supporting PBS NC.