Private contractors who helped design parts of the federal health insurance website told a House panel they were not given enough time for testing before the rollout. The administration announced people would have an extra six weeks – until March 31 – to obtain coverage and avoid a tax penalty. President Barack Obama renewed his push for broad immigration overhaul. Republicans said they would take up reform in smaller chunks, rather than the sweeping bill passed by the Senate in June. September job numbers were lackluster. And same sex marriage became legal in New Jersey. A panel of journalists joins Diane for analysis of the week’s top national news stories.

Guests

  • John Stanton Washington bureau chief, BuzzFeed.
  • Annie Lowrey economic policy reporter, The New York Times.
  • Jerry Seib Washington bureau chief, The Wall Street Journal.

Featured Clip

HealthCare.gov contractors testified before Congress this week about what went wrong with the health insurance website and who’s at fault. Jerry Seib of The Wall Street Journal said the investigation revealed that no one person or agency was in charge of the website and that software testing should have occurred months, not weeks, before the rollout. Annie Lowrey of The New York Times said it’s unclear who is to blame for the website flaws. “This disaster has many fathers,” Lowrey said.

Transcript

  • 10:06:53

    MS. DIANE REHMThanks for joining us. I'm Diane Rehm. Government contractors who worked on the online health insurance marketplace say more testing was needed before the rollout of healthcare.gov. President Obama calls on Congress to pass the immigration reform this year, even as prospects seem unlikely.

  • 10:07:17

    MS. DIANE REHMAnd same-sex marriage begins in New Jersey. Joining us for the national hour of the Friday News Roundup, Jerry Seib of The Wall Street Journal, Annie Lowrey of The New York Times, and John Stanton of BuzzFeed. And throughout the hour, we'll welcome your participation in the program. Give us a call, 800-433-8850. Send your email to drshow@wamu.org. Follow us on Facebook or Twitter. Welcome to all of you.

  • 10:07:54

    MR. JOHN STANTONIt's good to be here.

  • 10:07:54

    MR. JERRY SEIBHello.

  • 10:07:54

    MS. ANNIE LOWREYThanks for having me.

  • 10:07:55

    REHMGood to have you here. Jerry Seib, these contractors got a real grilling yesterday. Whose fault is it?

  • 10:08:07

    SEIBWell, I don't think we know the answer to that yet. But I think that the testament -- look, it was not a very good week for Obamacare because not only did the problems with the site on which people are supposed to log in to buy insurance continue, but the finger pointing at the hearing yesterday was pretty intense.

  • 10:08:23

    SEIBI think that we learned two things. There were two basic problems that you could filter out of the testimony yesterday. The first one with it -- there was nobody in the government who was clearly in charge. There was no one coordinator, that you had 55, maybe more, subcontractors. And normally in a case like this, as I understand it, it would be normal to have one contractor be the integrator of all these other things.

  • 10:08:46

    SEIBThe government tried to do that in-house. That didn't work. The second problem was that there was no attempt to do a full-bore test until maybe a couple weeks before the launch on Oct. 1. You know, some of the people at the hearing said, well, you would prefer months of testing rather than a couple weeks of testing. So I think those two problems emerge from the fog.

  • 10:09:05

    REHMJohn Stanton.

  • 10:09:06

    STANTONNo. I agree with Jerry. I think that one of the biggest problems you're seeing with this is that, you know, HHS is very much a bureaucracy. And you're sort of seeing the problems with that at this point is that things -- you know, they had all these contracts. The contractors clearly don't want to have anything to do with the blame from this thing. And they are trying as hard as they can to put this back on the administration. The administration is, you know, doing this tech surge, but they won't quite say who's involved with it.

  • 10:09:34

    STANTONThey don't really want to talk about things, you know, and there is an increasing call, I think, within Congress for someone's head to roll. And it's going to be interesting to see who. I don't think it's going to be Sebelius, at least not at this point. But I'm not sure there's anybody else there with the profile that would placate people in Congress.

  • 10:09:49

    REHMSecretary Sebelius was in Arizona yesterday instead of being before that House committee. She's going to appear, I gather, next week, Annie.

  • 10:10:02

    LOWREYYeah. She'll appear next week. I think that she will get the same grilling. And, you know, I think that, as John and Jerry indicated, this disaster has many fathers. It's not like there was one problem. There were a whole lot of problems. You talk to procurement experts, healthcare IT experts, insurance experts -- they all see a lot of problems with this issue.

  • 10:10:21

    LOWREYAnd I think it's just a big complicated site. And it's going to take a while to resolve these. And I think that for the Obama Administration, the policy issue is, what if you scare people from coming and getting insurance, especially young healthy people that you really need to enroll in the exchanges? The problems could get bigger if they don't hurry up and fix it.

  • 10:10:39

    REHMJerry.

  • 10:10:40

    SEIBWell, you know, I think one of the ironies here is that the -- my impression is the administration officials involved in this, all the way up to the top people in the White House, were not really worried about this problem. They were worried about a different problem, which was, what if the insurance companies don't provide a broad range of programs? And what if there's not a lot of options for consumers when they come? Will the prices be OK?

  • 10:11:00

    SEIBAnd then they felt really pretty good that in the end the marketplace itself produced the right stuff, that people could buy insurance policies that they would be happy with. The problem they didn't anticipate was that nobody could get through the door. The cash registers didn't work or whatever metaphor you want to use. So the policymakers, I think, were focused by and large someplace else -- not here.

  • 10:11:20

    REHMWhat about Congressman Frank Pallone of New Jersey, the Democrat who called the hearing a monkey court, saying Republicans were trying to scare people, Annie?

  • 10:11:34

    LOWREYYeah. I think that, you know, you had this very bitter partisan back and forth there because, at this point, Republicans are saying, this is a disaster, let's just repeal it, whereas Democrats are saying, look, this is obviously not going really well. But you repeal the law, and nobody gets health insurance. So let's fix it.

  • 10:11:50

    LOWREYAnd so this has become the next battle. And I think the issue for the Obama Administration is that if you start to get some of the funding taken away or you start to have some of these issues where you get new legislation coming out of Congress abrogating their ability to fix the problem, that could be a really big issue, and, as you had indicated, also, if they scare people away from using healthcare.gov, you're going to start having pricing problems.

  • 10:12:13

    REHMHe was concerned about the privacy area that another Republican congressman was raising.

  • 10:12:23

    STANTONYeah. You know, and I think, you know, the Republicans clearly were using this hearing and that privacy issue of, you know, all your private data's going to be out there, and it's a system that doesn't really work that well.

  • 10:12:32

    REHMBut is that true, Jerry? Is all your private information out there?

  • 10:12:34

    SEIBWell, yes, it's already out there even before the government launched its website is the real honest answer.

  • 10:12:41

    REHMYeah, that's (unintelligible)...

  • 10:12:42

    SEIBBut, you know, I don't think anybody knows that, you know, there are back end issues here, not just front end issues. The front end issues are you can't get there. The back end issues the insurance companies are worrying about is, what kind of data do we get, and how accurate is it, and is it all going to come in a comprehensible piece?

  • 10:12:59

    SEIBAnd I think privacy people are worried about, you know, what does the insurance company have the right to do with it once they get it? I think those are probably going to be sorted out. Although, honestly, I'm not sure the privacy issues related to this site are really any different or bigger than they are in general in American society today.

  • 10:13:15

    REHMWhat about the extension of the deadline, John?

  • 10:13:21

    STANTONWell, you know, the administration has made some signals that they made. They may not. They may extend it a little bit. They may extend it a lot. A lot of Democrats are now pushing them, some privately. Some like Jeanne Shaheen are sort of out there publicly saying, you need to have a longer deadline.

  • 10:13:34

    STANTONI think the problem though for the White House is that if they start to extend it, then it becomes a game of, you know, Republicans pushing them to extend it again after that and again after that and trying to get this thing pushed to at least 2016, maybe where they hope they might have a president that would be more amenable to either fully repealing it or dismantling it to the point that they're more comfortable with it.

  • 10:13:54

    REHMBut considering the delays they've already had, doesn't it make sense to extend that deadline?

  • 10:14:03

    LOWREYWell, I think it's worth clarifying which deadline we're talking about. So they could extend the enrollment period. They could also extend the deadline at which -- after which you would have the individual mandate.

  • 10:14:13

    REHMThey have to pay a fine.

  • 10:14:16

    LOWREYSo that latter piece is a bigger concern for the administration. You need the individual mandate to compel people into the marketplace. And it's bigger not just in 2014, but 2015, 2016, it kind of scales up. And I think that, look, from the administration's perspective, they need to just get people in and enrolled so that they have the good stories about, oh, I got Obamacare, and then three days later, I found out I had cancer.

  • 10:14:41

    LOWREYThey don't have those stories out there yet. I think, cynically, they would really like them. And so you start delaying them, and, I think, as John indicated, you get closer to an election where it's still a bad news story. And they would really like to change that.

  • 10:14:54

    REHMJerry, who is Jeff Zients?

  • 10:14:57

    SEIBJeff Zients is a kind of a fixer in the Obama White House, came out of the private sector, was a business consultant, has -- he came in originally to fix the Cash for Clunkers program during the days of stimulus, stayed around because people at the White House decided he was pretty good at systems, became the budget director temporarily, and now has been assigned the task of overseeing the fix-it problem -- the fix-it task on this problem.

  • 10:15:26

    SEIBAnd, you know, he's not a tech guy, but he's a business guy and a systems guy. And I think the White House believes he has the profile and a kind of a track record to show he could take on this kind of thing.

  • 10:15:36

    REHMDo you really think one man can pull this whole thing together?

  • 10:15:41

    SEIBNo. But there is kind of a need for a central brain in there. And I think that, you know, accountability and responsibility, as I said at the outset, one of the problems here that it appears that there wasn't a central brain that was designed -- that had the clear responsibility of knitting it all together. Well, now there is. One of the things I find interesting is if you talk to tech people, they will all tell you that throwing more people at a tech problem doesn't necessarily get you a result. It might just confuse things further.

  • 10:16:03

    SEIBYou have to have the right people and then a clear focus, not necessarily five times more people. And so, you know, there was a lot of talk this week about a tech surge that the president talked about. That's -- we have a tech surge of people coming in to fix the problem. That's probably good. But more people is not necessarily more solutions.

  • 10:16:21

    REHMSo where do we go from here, John?

  • 10:16:24

    SEIBYeah, come on, John.

  • 10:16:24

    STANTONThat's a great question.

  • 10:16:26

    STANTONYou know, I think they're going to have to continue to deal with this problem. Obviously with next week, with more hearings, it's going to be there. You know, there are a number of other things, though, with the system that they haven't even really started to deal with, whether it's their quotes coming back to people wrong in terms of how much they're going to have to pay for their insurance.

  • 10:16:42

    STANTONThere are a lot of problems with this thing that are going to continue to come out. And, you know, Republicans hurt themselves with the shutdown on this issue in the sense that they got a late start in sort of banging on the White House on this. But they are now finding that there are so many problems, maybe that's not such a bad thing for them. This could easily take them into the beginning of next year.

  • 10:17:00

    REHMAnd what about Kathleen Sebelius? Will she hold on to her job, Annie?

  • 10:17:07

    LOWREYUltimately, I think if she does, it will be because it will be impossible to confirm another HHS secretary. I think that probably there are some folks who think that they would like to see a big head roll like that and that ultimately the responsibility for fixing this was hers. But, again, you don't want that agency rudderless. So I think it'll be very interesting to watch what they do.

  • 10:17:28

    REHMJerry, will she hold on to her job?

  • 10:17:32

    SEIBI think so, I think, partly for the reason Annie cited, which is totally legitimate and, I think, foremost in the administration's mind, but also because I think the president likes her -- has for a long time. And, frankly, you know, having Republicans call for your head may be a way of pinning job security in this administration. I think the idea that, well, we'll give in to a bunch of Republicans who want this scalp, I don't think that's the way they think at the White House.

  • 10:17:55

    REHMDoes it seem somewhat odd that Republicans were calling for the total takedown of the Affordable Care Act and now are screaming this loudly about the website?

  • 10:18:11

    SEIBYou know, I suppose there's a certain logical inconsistency there that you wanted it not to work 'cause you wanted it to go away, and now it's not working and you're complaining about that. But, you know, I think we all kind of knew how this drama was going to play out. And we're seeing it right now.

  • 10:18:23

    REHMJerry Seib of The Wall Street Journal, Annie Lowrey of The New York Times, John Stanton of BuzzFeed. Short break here. When we come back, we'll talk about those Republican poll numbers. Stay with us.

  • 10:20:01

    REHMAnd welcome back to our National Hour of the Friday News Roundup this week with Annie Lowrey of the New York Times, John Stanton of BuzzFeed, Jerry Seib of the Wall Street Journal. Let's talk about Republican poll numbers. The public seems to be blaming Republicans for the shutdown. How badly did the standoff hurt the GOP, Annie?

  • 10:20:32

    LOWREYIt hurt them very, very badly. They were really broadly blamed for it. And I think that the issue is how long that effect will stick around. I think that there's a feeling that by 2014, by the elections, people are not going to be focusing on that anymore. And it's not clear that Democrats are going to be able to campaign on it. So we think that if you have a lot more present issues, if Obamacare is still a problem at that point, that could be a lot more decisive. And these numbers move around a lot, and it's just not clear how sticky this issue is going to be.

  • 10:21:05

    REHMJohn.

  • 10:21:05

    STANTONWell, I also think, you know, for Republicans, the good thing for them is that their districts in the House at least are so gerrymandered at this point that national polls don't tell very good of a story for them. Most of them are going to be reelected. Or, at the worst, they're going to get primaried, and there's going to be another Republican that takes their place. And so, for the party on the House side, they don't really care about these numbers that much, I think. They don't see themselves losing control.

  • 10:21:29

    STANTONIf you talk to Democratic operatives sort of off the record and get them to be a little honest, they tell you they don't think they can take control of the House in '14. They think they can get closer to that, and then they hope in '16 they're able to flip it. But -- so for them, I think, in the Senate, the Senate Republicans, I think, are much more concerned because in some of the states where they were hoping to take seats, Louisiana, other places, the shutdown could have an impact into the election.

  • 10:21:52

    STANTONMayor Landieu's very, very good about bringing home money, and any time you mess with the money train in Louisiana, she is able to capitalize on that. And I think that that has got to concern them.

  • 10:22:01

    REHMJerry Seib.

  • 10:22:02

    SEIBI think John's right. In any individual red district, I think the influence of, say, Tea Party Republicans can outweigh a national drag on the Republican Party. That's less true statewide in most states. And so therefore one of the things Republicans probably have to worry about more than losing a House is blowing another chance to win back the Senate. I think in the long run the 2016 implications are more important

  • 10:22:24

    SEIBAnd in that front, I think what Republicans probably have to worry about is the fact that the business community has sort of decided it's going to start sidling away from this version of the Republican Party, or spend its money to try to create a different less Tea Party-ish version of the Republican Party.

  • 10:22:40

    REHMBut doesn't that lead you to the question of just how divided that Republican Party is?

  • 10:22:47

    SEIBSure. And, you know, it's not that unusual for the party out of power to be divided because everybody's arguing about what do we need to do to get the White House back? That's kind of a common thing. In this case, I think you're just seeing an exacerbation of the riff that was already there in 2012, which was essentially between a sort of Tea Party Sarah Palin kind of wing and the more establishment wing. The more establishment wing got the candidate it wanted in Mitt Romney. He lost. The other side of the party says, told you so, and there you go, off to the races.

  • 10:23:15

    REHMAnnie, what does all this mean for the upcoming budget talks?

  • 10:23:21

    LOWREYSo I think it's very, very unlikely. I think that both the Democrats and Republicans, if they're being honest, it's unlikely that these talks are going to go anywhere. I think that people believe that you will just have continuing resolutions for the rest of this Congress, that this Congress is never going to be able to come together and pass something.

  • 10:23:39

    REHMWow.

  • 10:23:40

    LOWREYYeah.

  • 10:23:42

    STANTONAnd, you know, I think Republicans are terrified, but they don't know what to do about the fact that, as Annie said, this is not going to come up with anything. And they are looking at Jan. 15 and saying, there's going to be another shutdown. And, you know, you get to February, and potentially you get to another one of these debt ceiling crises. And they don't know how to get their people to the point where they can get a continuing resolution.

  • 10:24:03

    STANTONI think that they are hoping that what we saw in 2012 in September when all of the Tea Party guys sort of said, fine, we'll just do a continuing resolution because it was an election year. We don't want to have this fight right now, I think they're hoping they're going to do that sometime in early January. But, you know, you talk to these guys and a lot of them think that they won the fight over the shutdown and over the debt ceiling.

  • 10:24:22

    REHMJerry.

  • 10:24:23

    SEIBWell, I think one of the things to remember is that the discussion is now back where most people in the Republican Party think they have relative advantage, which is fiscal discipline, holding down spending. They've had some success there, you know. Discretionary spending is actually declining. That's where the cooler heads in the party wanted this conversation to be starting on Labor Day, not Obamacare.

  • 10:24:42

    SEIBWell, so I think they believe they're playing on a field of more strength right now. And they don't feel like they need to compromise the way they did to get the government reopened. They're not going to shut down the government, but, as John suggests, that doesn't mean they're going to agree easily to some deal -- some budget deal just to have one in January or February.

  • 10:24:58

    REHMSo what does that mean for agencies? What does it mean for the operation of the government, Annie?

  • 10:25:05

    LOWREYWell, sequestration is in place. It looks very unlikely that they're going to be able to do the horse trading to relax it or relieve it or get any of that money back, even though there are folks on both sides that really, really hate it as a policy, including Republicans. The Republican appropriators do not like sequestration.

  • 10:25:23

    LOWREYThey've really struggled to figure out how to budget under it. But again, the inertia is so great and the risk that people need to take to get a deal are so great that it just seems kind of unlikely that you're going to be able to do much. So maybe fiddle with the numbers in the CR, but I don't think that people are expecting a lot.

  • 10:25:41

    SEIBI do think there's some room to adjust the numbers under sequestration. I think what Republicans want to do is they want to keep the ceiling at roughly where it was under sequestration. But I think they're open to the idea of moving things around under those ceilings. And in particular, you have to remember that, when sequestration knocks its spending down again in January by $20 billion or so, all that money comes out of defense. And that really bothers Republicans more than Democrats and gives them an incentive to fiddle around with the apportionment of spending under those ceilings.

  • 10:26:09

    REHMJohn.

  • 10:26:10

    STANTONWell, I think the one thing that we don't hear a lot about, but I think is going to become a bigger problem, potentially if we do have another shutdown or a crisis, get close to one in January, is the brain drain with these agencies. You know, if you live here, you know a lot of people who work in the federal agencies.

  • 10:26:25

    STANTONAnd they're looking at this, and they're saying, I've already gotten hit by sequester. I lost a couple weeks of work where, you know, I'm getting paid back for it, but, you know, that's no fun. I had to, you know, take out payday loans or whatever to get through that period. I don't want to do this again. And you're going to lose a lot of people. And that could be a very, very serious long-term problem for the country.

  • 10:26:42

    REHMCould it be a deciding factor for Republicans as to whether to go for another shutdown?

  • 10:26:51

    STANTONI think some Republicans may like that idea, so potentially I don't...

  • 10:26:54

    REHMBecause it shrinks.

  • 10:26:55

    STANTONIt shrinks the government, right. And I -- but I don't think -- you know, I think, you know, if Mitch McConnell and John Boehner are able to figure out the math for keeping their people in line and getting the House into a place -- particularly the House -- where they can pass a CR, they may be able to avoid all this. But if they can't, you can hear these people saying, good, let's shrink the government again, you know, through just attrition.

  • 10:27:16

    REHMAnnie, we finally got September jobs numbers this week. What did it tell us about the state of the economy?

  • 10:27:27

    LOWREYSo in a lot of ways it just underscored what we kind of already knew, which is that in the private sector the U.S. is doing fine. It's doing OK. It's not great, but it's pretty good. Corporations are pretty strong, but government spending problems and -- meaning the fact that the deficit has gone down so rapidly, combined with uncertainty stemming from the federal government, which is the biggest employer in the United States, effectively the biggest company in the United States by a huge margin, it's really having an effect.

  • 10:27:57

    LOWREYAnd probably the place where we're going to see it is in the next jobs report where there's going to be some effect of the uncertainty. There's going to be some effect of job losses related both to sequestration and to the shutdown. So it's not good. The economy just continues to grow at this really sluggish 2 percent pace. And it just doesn't make things feel a lot better. The economy's repairing really slowly.

  • 10:28:19

    REHMWhat does it mean for the wind down to the stimulus, Jerry?

  • 10:28:24

    SEIBWell, it means the Fed is probably going to continue on its current path for a while longer before it begins the wind down or the tapering or whatever term you want to use to reducing the bond purchases the Fed has been doing to keep money flowing. You know, fiscal policy is contracting, so the Fed thinks it needs monetary policy that expands so that there's at least some balance. And I think that everybody looked at these somewhat underwhelming job numbers and said, well, it's locked in for a while -- the Fed's policy is locked in for at least a little while longer than it might've been.

  • 10:28:55

    REHMOK. Immigration. President Obama's called on Congress to pass immigration reform this year. What did he say? Has anything changed? It looks as though Republicans are staying right where they are, John.

  • 10:29:13

    STANTONNo, I think that's right. I think, you know, John Boehner has told his guys in the House where sort of all the action's going to happen -- have to happen at this point that he's not going to push a comprehensive bill. He won't go into a conference with the Senate on a comprehensive bill. That is a recipe for nothing to happen, even if they were to try to have votes. You know, Boehner's now telling his people that they won't vote before the end of the calendar year.

  • 10:29:35

    STANTONMost smart money is on this having some kind of votes in March or April, once they get past some of these fiscal deadlines and they can focus a little bit on it. But even then they're going to do, you know, a small bill on the border. They're going to do a small bill on e-verification, maybe something on high-tech visas maybe. But other than that, I don't see them getting very far. And then that certainly won't result in legislation getting to the president's desk, I don't think.

  • 10:29:57

    REHMAnd aren't Republicans divided on this issue as well, Jerry?

  • 10:30:02

    SEIBYeah, much more -- ironically much more divided on this issue than they are on Obamacare, which was the cause of all the trouble but actually an issue that unites Republicans. This one really divides Republicans and, you know, the argument -- you're hearing more of the argument, including from the business community, but also others this week. You saw some ads go up among people who think the Republicans ought to get on and agree to a comprehensive bill. But John's right. That's not where the House Republican caucus is right now.

  • 10:30:26

    REHMAnnie.

  • 10:30:27

    LOWREYYeah, and I think it's something that John mentioned. There's been, among Democrats, this real unwillingness to separate out a kind of less controversial high tech H1B visa portion of immigration reform from the what-do-we-do-with-the-11-million-folks-who-are-here part.

  • 10:30:44

    LOWREYYou know, there's been a willingness to say, you know, you can't have dessert unless you're eating your dinner too, right? And I think that there's still going to be an unwillingness to do the popular parts and leave really the problem -- leave the problem totally untouched with a smaller bill. And so I think it'll be interesting to watch Democrats politicking around that.

  • 10:31:02

    SEIBI think that's right, Annie. I mean, there is a real Democratic disincentive to go along with any piece meal things. Because they believe doing the easy things removes the long-term incentive for Republicans to go along with a comprehensive bill that deals with the harder things, including what do you do with the 11 million, you know, illegals who are here now? So the Democrats might like the easy parts as much as Republicans, but they don't have a political incentive to go along because that's the lever for getting a comprehensive bill.

  • 10:31:28

    REHMIt's sort of like opening the choice elements during the government shutdown. Democrats didn't want to do that either, Jerry. Same stuff.

  • 10:31:33

    SEIBYeah, for the same reason.

  • 10:31:38

    REHMSame-sex New Jersey in -- same-sex marriage in New Jersey, even as Gov. Christie had first objected, vetoed, and now we have same-sex marriage, Annie.

  • 10:31:53

    LOWREYYeah, so I think it's fascinating, if you are a person who's looking at Chris Christie as being somebody who's going to be running in a couple years for a nationwide office, to watch this, because there is a real feeling that to establish his Republican bonafides, maybe he would just continue vetoing, he would continue blocking this and that that would play well for him on a national stage. But, you know, it's another state that's coming along with it. And so I think that if you're somebody who's interested in this as a civil rights issue, you're really applauding.

  • 10:32:20

    REHMSo why'd he pull back?

  • 10:32:22

    STANTONI think he understands that this is sort of, A, in his state certainly this is where things are going. And I think, you know, if you look at Christie, he has been making these steps. He's trying to find that way to act like a conservative and to sort of come off as a fiscal conservative but not sort of a Tea Party type or a Ted Cruz type or even, you know, a Rand Paul. He is trying to find that other way to not be, say, John Huntsman and be this sort of moderate rhino as some Republicans call, but to also understand that there are certain social realities that are happening in the country now.

  • 10:32:52

    REHMJohn Stanton. He's Washington bureau chief for BuzzFeed. And you're listening to "The Diane Rehm Show." Let's talk about JP Morgan and a tentative agreement with the Justice Department for a $13 billion settlement. Annie, remind us of what this is all about and whether it's actually a victory for the Department of Justice.

  • 10:33:24

    LOWREYSure. So the $13 billion settlement, it's the biggest fine levied on a bank. And you have to -- to understand the fine, you have to go back to what happened in the financial crisis in which the bank had these kind of sudden mergers with WaMu. And it basically took a lot of the activity that had been happening that had been fraudulent and kind of brought it under this big umbrella. It's a huge sprawling bank.

  • 10:33:50

    LOWREYAnd there's a feeling that, well, why are you punishing this bank now for something that happened in another bank years ago? But JP Morgan has had just continual problems with regulators. This is not the only thing that they've been under investigation or had questions raised about.

  • 10:34:04

    LOWREYAnd so I think that looking more broadly, JP Morgan has been paying billions of dollars in fines again. And it has a lot of ongoing investigations. I think that's kind of the bigger story is whether the Obama Administration, whether justice officials have decided to be a lot more aggressive with this. Because they've gotten a lot of flak for not being hard enough on these big institutions.

  • 10:34:21

    REHMJerry.

  • 10:34:22

    SEIBWell, I think what JP Morgan wanted to do was settle all the civil litigation that was instituted by various parts of the government all at once. And it was a pretty high price tag, much higher than they wanted to pay obviously and higher than they thought when they started down this path. But they wanted to take all the civil litigation off the table at once, all government agencies. And there were several who were in that game.

  • 10:34:44

    SEIBWhat's interesting is that what the Justice Department explicitly did not take off the table was its right to proceed to a criminal case against JP Morgan. That's the other thing JP Morgan wanted and didn't get here which was, let's settle this and let's also agree you're not going to pursue any criminal investigation against the bank. And Justice essentially said, no. So that door is still open, and we'll see whether the Justice Department walks through it or not.

  • 10:35:07

    REHMIs there or was there or will there be a connection between JP Morgan and Bernie Madoff?

  • 10:35:17

    LOWREYI'm not sure about that.

  • 10:35:20

    SEIBI think it's one of the many Bernie Madoff mysteries that's not resolved, maybe not resolvable. I don't know.

  • 10:35:27

    REHMAnd not resolvable. Who knows? We have many, many issues to confront. Let's open the phones now, 800-433-8850. Let's go first to, let's see, Kevin in Chapel Hill, N.C. You're on the air.

  • 10:35:52

    KEVINHi, Diane.

  • 10:35:52

    REHMHi.

  • 10:35:53

    KEVINI just wanted to relay my experience. Everyone's talking about the dysfunctional website. Well, I tried to get into healthcare.gov, and I couldn't. So I called the 1-800 number they give you, and I got in right away. And I talked to someone there. It took about a half hour. I got signed up. I'm qualifying for my subsidy. I'm a self-employed farmer, so it's going to be fantastic for me. My premium's going to be about $100 a month for my wife and two kids and I. So you can call the 1-800 numbers. But I also have a question.

  • 10:36:22

    REHMSure.

  • 10:36:23

    KEVINIs it possible that the opponents of the ACA are jamming the portal, kind of like the group Anonymous does?

  • 10:36:31

    REHMYou know, we've heard that question several times. Certainly there's no evidence thereof, but the question keeps coming up, John Stanton.

  • 10:36:44

    STANTONIt does, and, you know, I don't think there is any evidence. I'm a little suspect of whether or not certainly Republicans would be capable of orchestrating such a thing. I don't know that they're capable of orchestrating much right now, but, you know, even the Tea Party, I'm not sure that they would be able to pull that off. And I think...

  • 10:36:58

    REHMI think they're talking about outside groups.

  • 10:37:01

    STANTONOutside groups, right, like, you know, FreedomWorks or something. I don't think that's going on. I think clearly there are such fundamental problems with the system that, you know, you don't necessarily need somebody to come in and do that.

  • 10:37:12

    REHMJerry.

  • 10:37:13

    SEIBYou know, I don't know. My guess is that if the people who are administrating the system thought that's what was happening, that's what they would be saying and they're not. So that would be detectable, I believe.

  • 10:37:22

    REHMJerry Seib of the Wall Street Journal, Annie Lowery of the New York Times, John Stanton of BuzzFeed. Short break here. More of your calls, your email your tweets when we come back. Stay with us.

  • 10:40:03

    REHMAnd welcome back. A number of you have called and emailed reminding everyone that the 1-800 number is a good way to get to healthcare.gov. And you don't just have to go onto the website, alternative means and you can get through. Let's go to Detroit, Mich. Hi there, Martin. You're on the air.

  • 10:40:35

    MARTINGood morning.

  • 10:40:36

    REHMHi.

  • 10:40:37

    MARTINWell, I've got -- my question is, the more I learn about Obamacare, it just doesn't seem like it's that big of the deal that it's going to bankrupt the country. I'd like to ask the panel, why is this issue being used to just stop everything? I mean, nothing's moving -- immigration, nothing.

  • 10:40:56

    REHMInteresting question. What do you think, Jerry?

  • 10:40:59

    SEIBWell, look, people who don't like it do think it's going to drive up cost, already is driving up cost not just for the government but for individual insurance buyers. They just have a different view of that. I think it's more important, though, to also remember that the people who don't like Obamacare, the Tea Party view of it isn't simply that they -- that the exchanges don't work or that the insurance is going to cost too much.

  • 10:41:20

    SEIBThey kind of view it as a metaphor for everything they don't like about big government, intrusions on their lives, requiring them to do things like buy insurance, asking for information from them. They see it as not just a bad program but an affront to personal liberty. And once you see it from that point of view, it doesn't really matter how well it works. It's the whole idea that they object. And they object to it, you know, quite strenuously obviously. That was the reason for the shutdown.

  • 10:41:43

    REHMAnd to Interlochen, Mich. Hi, David.

  • 10:41:49

    DAVIDHello, Diane.

  • 10:41:50

    REHMHi, there. Go right ahead, sir.

  • 10:41:53

    DAVIDYes. I've been listening over and over. Everybody is condemning the Affordable Care Act and (unintelligible) Tea Party, et cetera, as government intrusion, government take over and all the rest. But from the beginning, Obama, when he was working on the healthcare plan, he abandoned the idea of having a single-payer national healthcare. He rejected the public option when we were begging for that.

  • 10:42:20

    DAVIDAnd instead he went only with the private insurance type of a plan. And now we have all these private companies who are doing nothing more than trying to link together private insurance companies, OK? And, you know, in the process, we're seeing this massive problem being brought on by for-profit companies or private, connecting with private companies and nobody seems to be condemning it, you know, as -- this is a private side.

  • 10:42:59

    REHMAll right, sir, thanks for calling. Jerry?

  • 10:43:01

    SEIBWell, I mean, insurance companies have always kind of liked Obamacare because it had -- it has the prospect of bringing in millions of new customers. That's the first point. The second point is, it's worth remembering that the idea of health care exchanges which bring together private insurance, there are at least two Republican governors that I can remember -- one was Jon Huntsman in Utah and the other was Mitt Romney in Massachusetts -- who set up exchanges precisely because they thought it brought market forces into the healthcare game.

  • 10:43:25

    SEIBAnd so, you know, there's a certain element of that that's ironic in this whole debate.

  • 10:43:30

    REHMAnnie.

  • 10:43:31

    LOWREYYeah. And also, I just note that a lot of Democrats really wanted a public option. They really, really did.

  • 10:43:37

    REHMAnd they were disappointed.

  • 10:43:39

    LOWREYYeah, this was...

  • 10:43:40

    REHMSurely.

  • 10:43:40

    LOWREY...a huge capitulation by President Obama, they thought. But they needed the bill to pass. And the only way to get it to pass was basically to construct it in the way that they did. It took a lot of effort to bring hospital associations, medical associations, insurers on board. There was a ton of horse trading and the public option just didn't make it through.

  • 10:43:58

    STANTONWell, I think one of the things the Democrats have done -- did so poorly with Obamacare, and they've continued to do, is the fact that they did take a lot of Republican ideas, a lot of ideas from the private sector, and it's infused with a lot of that. And they never were able to make that case. They were never able to make that sell to the public to say, look, this isn't socialism. This isn't just what we want. We've taken a lot of what Republicans wanted.

  • 10:44:18

    REHMWhy not? Why were they not able to make that case?

  • 10:44:21

    STANTONYou know, I don't know, to be honest. I think they looked at...

  • 10:44:24

    REHMThey started late.

  • 10:44:26

    STANTONThey did. And they've never been able to pull that off. Even now, they sort of find themselves with, you know, the sign-ups or with, you know, the government shutdown. They cut a lot of spending, and yet they can't seem to figure out how to make those cases. They just sort of given the defensive mode, I think.

  • 10:44:41

    SEIBWell, I mean, even the individual mandate was, at one point, a conservative idea. But I think the problem politically was they had to pass this by selling Democrats on the idea. So they didn't want to hear about how private sector friendly Obamacare was. They kind of wanted to hear the opposite. And as you suggest, Diane, they were unhappy that it wasn't single player -- single-payer national health insurance program.

  • 10:45:01

    REHMAll right, to St. Louis, Mo. Good morning, Brian.

  • 10:45:07

    BRIANGood morning, Diane.

  • 10:45:08

    REHMHi.

  • 10:45:09

    BRIANThanks for taking my call.

  • 10:45:09

    REHMSure.

  • 10:45:11

    BRIANI've been playing videogames for a very, very long time, so I've been watching software and software development for a long time. And in the gaming community, it's pretty common that if your software involves logging in and there's a problem when you roll your software out on day one, well, then, of course, it was volume.

  • 10:45:27

    BRIANAnd we all in the gaming industry we know that, well, you expect to hear that. We expect that, and we don't believe it. And I was kind of surprised that nobody has brought up that little angle of, yeah, of course, they blamed it on volume. That's what they always do. People were logging in, and there was a problem with the software.

  • 10:45:41

    REHMAnnie?

  • 10:45:41

    LOWREYYeah. But I think the narrative that it was a volume problem, that kind of stuck for a couple of days, but then it became pretty clear that it was not a volume problem when people (unintelligible) that there wasn't such great volume that it should be crashing the site and that people could load the site, they just, you know, they couldn't get all the way through the system. And then it was spitting out wrong number to the insurers and everything.

  • 10:46:00

    LOWREYBut I do think -- I've talked with some IT folks about this and they point out that you virtually never have a big, complicated system like this that unrolls and on day one needs to be perfectly working. You normally start with little pilots and things. You bring systems online, and you test them. But for legal reasons, the Obama administration wasn't able to do that. That's one angle towards the large complicated problem that is healthcare.gov.

  • 10:46:25

    REHMAll right to Louisville, Ky. Hi there, Vicky.

  • 10:46:30

    VICKYGood morning, Diane. It's very, very nice to speak with you. I'm glad you're back.

  • 10:46:33

    REHMThank you.

  • 10:46:36

    VICKYI have a question. When these companies are fined these tremendous amounts of money, when the money -- where does that money go after the government gets it? Does it reduce our debt? Does it go into general accounting? Is it earmarked by congressmen? I don't know what happens to it.

  • 10:46:50

    REHMJerry?

  • 10:46:51

    SEIBWell, it depends a little bit on which agency is doing the fining. It tends to go into general revenues. In some cases, it goes specifically to the programs of the agency that's doing the fining. And in the case of JP Morgan settlement, I don't think we know yet because they actually haven't finalized the settlement, and there are multiple agencies involved, including Fannie Mae and Freddie Mac as well as the Justice Department. So it's a good question. The answer is not uniform. And I'm not sure we'd know in the case of JP Morgan just yet.

  • 10:47:17

    REHMThanks for calling. To Esteban in Huntsville, Ala. Thanks for waiting.

  • 10:47:27

    ESTEBANHi, Diane.

  • 10:47:28

    REHMHi there.

  • 10:47:28

    ESTEBANHow are you?

  • 10:47:28

    REHMI'm fine. Thank you, sir.

  • 10:47:32

    ESTEBANHearing that farmer say what he said, that just took all the ickiness of the last six weeks off of me. Man, I do love contracting. IT contractor for the government, and my company does. And the problems with these federal government contracts is baked into the system. There are contract vehicles that limit the government on who can bid on them. It might have to a minority owned. It might have to be small business.

  • 10:48:02

    ESTEBANIt might have to be some other kinds of limitation contract vehicle. And they can't -- the government doesn't have visibility into the company. So the company will bid and just bid and say they can do it. Maybe they can't. And most of them can't. They don't know if they can until after they get it. Then they hurry around and try to come with the talent after the fact. That's just the way it works. And it's not just this contract. There's a lot of others that are way worse than this one. We just don't hear about them because they don't have the visibility.

  • 10:48:32

    REHMJohn?

  • 10:48:33

    STANTONCertainly there have been, I think, for decades, problems with contracting system. I mean, you look at, you know, DOD as sort of the most famous example where you have cost overruns on, you know, F-22 engines that go on for decades. And companies that were supposed to get paid X number of dollars, you know, can quadruple that by just sort of continuing to work on it and sort of drag their feet.

  • 10:48:55

    STANTONAnd, you know, contracting reform has always been something the walks of Congress really, really want to do and anybody else doesn't want to touch because it's going to cost them campaign contributions in some cases and certainly it doesn't play well, you know, with the public. I mean, them changing those rules doesn't, you know, light a fire under anybody, you know.

  • 10:49:15

    REHMHere's an email from Steve who says: I'm writing from Fort Wayne, Ind. In the 2014 legislative session, Indiana will be voting on a constitutional amendment to ban same-sex marriage. We have a group called Freedom Indiana working to get the amendment to fail. My question is, do you think that as more states follow New Jersey and allows same-sex marriage, it's going to be easier for us in Indiana to get our marriage freedom? If not, what do you think it will take for more conservative states to finally progress, federal intervention?" Jerry?

  • 10:50:10

    SEIBWell, I think we're in an inflection point on that question. You know, before the Supreme Court rule on gay marriage, there was, over a series of years, a whole bunch of states where the popular referenda all went the other way against gay marriage. But I think that the, you know, when President Obama came out and said basically he was in favor of gay marriage, I think that was at a point where the popular center was tipping.

  • 10:50:32

    SEIBAnd certainly in our polling, you see it moving rapidly toward a pro-gay marriage position. I think what has to happen now is, state after state, people are going to have to reconsider this question. I don't think there's going to be any federal intervention because I think both the Supreme Court and I suppose certainly Congress has no particular interest in interfering what seems to be kind of a natural progression of social views on the question.

  • 10:50:54

    REHMAll right. What do you think, John?

  • 10:50:56

    STANTONOf course, I think -- one of the things -- I think that the only way you're going to see a federal or a court intervention is if you get to have such a bad patchwork of systems in the states where it's starting to have an effect, say, on commerce where someone can make an interstate commerce kind of claim or something like that. That may be where you could see it. But I agree with Jerry that I don't think anybody's going to want to get involved.

  • 10:51:14

    REHMAll right, to Charlotte, N.C. Hi, Regina.

  • 10:51:18

    REGINAGood morning, Rehm.

  • 10:51:20

    REHMHi.

  • 10:51:20

    REGINALongtime listener, first-time caller.

  • 10:51:22

    REHMThank you.

  • 10:51:24

    REGINAI have a question. I know I have access to see all the plans without going to healthcare.gov. But is there a way that the insurance providers can see if I qualify for a subsidy theirselves? I know I can apply for the plan directly with the insurance. But can they, like, speak to the government about finding out about the subsidy rather than going to that healthcare.gov, I guess, is my question.

  • 10:51:51

    REHMAnnie?

  • 10:51:52

    LOWREYSo if I'm understanding the question correctly, which I'm not sure that I can, I think that you're talking about the fact that government decided not to have a kind of private shopping option. You do kind of have to go and declare yourself and give some information about who you are first before you're allowed to go see that. And that's because, you know, there's pretty strict federal rules about who can get charged what depending on what characteristics.

  • 10:52:17

    LOWREYBut nevertheless, the different people obviously pay different amounts for insurance. And there's been a negotiation between the federal government and insurers, which I think is also what you're asking about, about those rules of what they can charge to people because there's caps and obviously in a lot of cases the taxpayer subsidizing the insurance.

  • 10:52:35

    REHMAnd income verification which I gather is pretty important. And you're listening to "The Diane Rehm Show." Let's take a call in Chicago, Ill. Hi there, Mike. You're on the air. Mike, are you there? OK, let's go down to Mark in Orlean, Va.

  • 10:53:05

    MARKGood morning. You know, I have to correct your reporter and point out that there have been some important facts missed. Your reporter just said there was a government decision to just allow shopping for various plans before you start into your personal data. And this is deploying a possible sabotage which has been overlooked.

  • 10:53:25

    MARKIt was -- it came out in testimony yesterday that someone -- and I don't know yet who it was -- two weeks before the launch disallowed the shopping option and mandated that you have to enter this personal data, which set up the system for a crash. Because when you have millions of people getting on, all required to enter this data before they could shop, it's a sure fire formula for failure.

  • 10:53:49

    REHMJerry?

  • 10:53:49

    SEIBBut my understanding was that was a decision made about how the site was going to work by the people who ran the site. They had the option all along of letting people browse but not buy if they had concerns it wasn't going to work well at first. And they chose not to go down that path. That's my understanding of...

  • 10:54:04

    MARKNo, that's just incorrect. The hearing essentially pointed out and it was unknown -- and if your reporters listen, they were clear that no one knew who it was who made that decision as a contractor to flip that switch and disallow prior to entering the data.

  • 10:54:21

    SEIBBut the assumption that a contractor made that decision as opposed to somebody in the federal government, I think that's very unclear at this point.

  • 10:54:26

    REHMAll right. And let's finally go to Jason in Richmond, Va. You're on the air.

  • 10:54:37

    JASONHi, Ms. Rehm.

  • 10:54:37

    REHMHi.

  • 10:54:39

    JASONI kind of wanted to -- I mean, the reason I called in, I wanted to go into the motivation of the Republicans being so staunchly, you know, wanting to repeal Obamacare and how it fly in the face of their platform really. I mean, they want free market and competitive markets. I mean, the insurance as it stands is not competitive in the U.S. And if you went back it would stay that way.

  • 10:55:06

    JASONAnd I remember it clearly them talking for many years about how we had the best of, you know, medical blah, blah, blah. But you start looking at the numbers of bankruptcy from medical stuff and the success the rest of the world and single payer, I mean, they're all laughing at us. And I there are -- you know, I think it's because they're getting more and more money from less and less people.

  • 10:55:28

    JASONSo you can sort of infer from that they're not, I mean, they're going to be, you know, for what's best for everyone. And I -- I would imagine that there will be this continued cognitive dissonance that you can kind of see playing out as we speak in the GOP that, I mean, I predict it's going to unravel it because people are onto this. You know what I mean? They're not -- everyone is reading more and more news instantly. And, you know, these old (word?) aren't going to stick around, you know.

  • 10:55:59

    REHMAll right, Jason, thanks for your call. Annie?

  • 10:56:03

    LOWREYWell, I think to Jason's point, if you get Republicans and get them really honest, one of their big concerns is that once you give an entitlement to somebody, so once you let them qualify for Medicaid, once you get them taxpayer-subsidized insurance, you just never take it back, right? All of the efforts to, for instance, dramatically change Medicaid or change Social Security tend to fail because people really don't like to have those programs taken away or altered once they have them.

  • 10:56:31

    LOWREYAnd I think that that's why you see such fervor among conservatives now is there's this feeling that if they don't stop it now, they're not going to stop it in 2014 or 2015.

  • 10:56:39

    STANTONWell, they've also planted their flag on Obamacare. Everything for them is based on that. And if they were to try to say, well, we can reform it, they believe and -- I think to sort of say it politely -- they would pay a price at the polls. That incumbents would lose their jobs if they try to do that.

  • 10:56:52

    REHMLast word, Jerry.

  • 10:56:54

    SEIBI do think that we're -- I think that Republicans think it's unlikely they can kill it. But we're going to see lots of efforts to play around with it.

  • 10:57:00

    REHMJerry Seib of the Wall Street Journal, Annie Lowrey of the New York Times, John Stanton of BuzzFeed, thank you all so much.

  • 10:57:11

    SEIBThank you.

  • 10:57:12

    LOWREYThank you.

  • 10:57:12

    REHMHave a great weekend, everybody. Thanks for listening. I'm Diane Rehm.

Topics + Tags

Comments

comments powered by Disqus
Most Recent Shows