According to Governor Pence, there's nothing at all wrong with the Indiana law; it's them durned outside agitators. But even though it's fine, he's going to fix it.
This is a Pandora's box on every level. A real fix will require the governors and legislatures of both Arkansas and Indiana to face up to their attitudes about gay citizens, tolerance and how we do business. And for all 12 Republican presidential candidates it's time to choose between conflicting realities and conflicting political strategies.
First the merits. It's clear that the Indiana and Arkansas laws would permit businesses and individuals to refuse service to gays, as both supporters and opponents now agree. They differ as to whether that is "discrimination" or a mere exercise of religious freedom. For most of the country that technical distinction doesn't matter; Americans object to any law which permits such refusal of service.
How to fix it? Many states balance religious freedoms and service refusal by also having anti-discrimination laws specifically protecting sexual orientation. There's been discussion of unspecified limitations that permit some service refusals (Does a kosher or halal butcher have to slaughter a pig?) but outlawing most refusals if the service is offered generally and without reservation. It will be very, very difficult for Indiana's legislature and governor to pass such language without infuriating their political base and adopting laws they have always refused to support.
The evangelical wing of the Republican Party has deeply held beliefs about public acceptance of homosexuality. These folks are not likely to step back and shrug their shoulders when anti-discrimination laws are extended to gays or clever lawyers tap dance around the central issue.
What makes it more difficult is that this battle is pitting the two wings of the Republican coalition against each other. Social conservatives are being confronted by all kinds of corporate business interests, including the Indiana Chamber of Commerce, of all things. They are in a flop sweat over mushrooming efforts to economically boycott the Hoosier State.
It's taken great skill for Republican leaders to paper over this inherent split, but that day is over. The Indiana law dabbled in expansive notions of corporate personhood. (Exactly what religion is a corporation, and how do we know?) The same theory that was advanced against Obamacare, and in Citizens United, is now a focus in this debate.
What's likely to come out of this, in the short run, is a set of proposed amendments that will satisfy no one in Indiana and Arkansas and no one in the boycott movement. There will be much parsing of words and valiant attempts to please everyone. It won't work.