The GOP's Indiana problem heading into 2016

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Indiana Gov. Mike Pence says his state will not seek to change a new "religious freedom" law that allows businesses to decline to serve gay, lesbian, bisexual and transgendered customers. And he said opponents had mischaracterized the law as enshrining discrimination via legal statute.

But Pence gave a shaky performance Sunday on ABC's "This Week," repeatedly refusing to answer simple yes or no questions on whether the law would allow business owners to refuse to serve gays and lesbians. And in so doing, Pence highlighted a problem for Republicans heading into the 2016 elections.

The Indiana governor, who may himself seek the nomination, repeatedly referred to the Religious Freedom Restoration Act signed by then-President Bill Clinton over 20 years ago and similar legislation once supported by then-Illinois state legislator Barack Obama. But ABC host George Stephanopoulos noted that at the time Obama supported the law, Illinois had a provision barring discrimination based on sexual orientation, something Indiana lacks.

And White House press secretary Joshua Earnest blasted Pence on the same show, saying the governor was "in damage-control mode … and he's got damage to fix." Earnest added that "it should be easy for leaders in this country to stand up and say that it is wrong to discriminate against people just because of who they love."

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The problem for Pence and Republicans is that the general public has evolved rapidly on the issue of gay rights while the activist base of the GOP has not.

The party's 2016 GOP candidates may now need to back the law in the primary process so as not to anger the religious right, notably Iowa caucus kingmaker Bob Vander Plaats, who strongly supports the measure. But support for the law could come back to damage the eventual nominee in a general election in which swing voters could be easily moved by charges of discrimination against gays.

The American evolution on the issue of gay rights cannot be overstated. In 1996, just 27 percent of Americans favored allowing gays to marry. That number is now 54 percent and rising. In a March 2013 Washington Post/ABC News poll, 69 percent of respondents opposed businesses being allowed to refuse to serve gays and lesbians.

And support skews to the younger voters whom a successful general election candidate will need to bring to the polls in November of next year. Nearly 70 percent of millennials support same sex marriage.

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Indiana's new law—and Pence's defense of it—brought a massive reaction from corporate and pop culture figures.

The NCAA, which holds the Final Four in Indianapolis this weekend, said it would have to rethink future events in the state. Apple CEO Tim Cook, who recently came out as gay, blasted the decision in a Tweet: "Apple is open for everyone. We are deeply disappointed in Indiana's new law and calling on Arkansas Gov. to veto the similar #HB1228." Indianapolis' own mayor ripped the law.

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Cook: Deeply disappointed in Indiana's new law

The law is likely come up repeatedly in debates and other forums as the 2016 GOP campaign moves forward. Candidates and potential candidates courting the religious right vote including Ted Cruz, Bobby Jindal, Pence, Mike Huckabee and others may feel comfortable simply embracing the law as a defense of traditional Christian values.

But it could prove trickier for candidates running in the more moderate, establishment, business-friendly lane, including Jeb Bush, Scott Walker and Marco Rubio. It would be hard to see Bush, who is attempting to reinvent the "compassionate conservatism" of his elder brother's campaign, embracing the Indiana law.

The question will be how Bush couches his response to it in a way that does not reduce his chance of being the "second choice" of Christian conservatives for the GOP nomination. Bush has been clear—including at the recent CPAC conference in Washington—that he does not expect to be the top choice of Christian conservatives. But if he goes too far in condemning the Indiana law, he could drop down to among the last choices.

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For candidates such as Bush, Walker and Rubio—and perhaps the entire GOP field—it would have been a lot easier had Pence just vetoed the law. But he didn't and now they all have to deal with the fallout.

—Ben White is Politico's chief economic correspondent and a CNBC contributor. He also authors the daily tip sheet Politico Morning Money [politico.com/morningmoney]. Follow him on Twitter @morningmoneyben.