Say what?
*edit*
That isn't a conversation option? And now he is telling me to go aid Pacer; but I don't want to lower my rep with NCR. What do I do now? I have spent an hour sitting in this one spot waiting for people to reply, and nothing has been solved yet. Great. Love this game.
/sarcasm
Well. Had you actually done the optional objectives earlier, you would have this option.
These involved going around to the squatter camps in Freeside or asking Julie Farkas what the NCR was up to in Freeside. Getting info from one of those led you to a secret MCR supply/food drop for NCR citizens only, and you would have met the Major of that NCR contingent there. She would have told you they sent a messenger to the Kings, and he came back beaten up. This opens up new dialogue with Pacey and The King since the King never knew a messenger was sent because Pacey intercepted him and beat him up. When you tell him this he has you go to talk down the NCR from killing Pacey instead of asking you to kill them.
But since you skipped all that for some reason, the only way to resolve this quest is to now kill the NCR.