Changing public attitudes have led to a decline in U.S. soda sales. But health expert Marion Nestle believes many people still consume unhealthy amounts of sugary drinks. She argues beverage companies are spending millions on research that misleads consumers.
President Barack Obama signs the VA reform bill. Republican primaries are held in five states. And former White House Press Secretary James Brady dies at 73. A panel of journalists joins Diane for analysis of the week’s top national news stories.
- Reid Wilson staff writer, The Washington Post; he writes The Post's political tipsheet email called "Read In."
- Michael Scherer Washington bureau chief, TIME.
- Margaret Talev White House correspondent, Bloomberg.
Featured Clip: Should President Obama Call Congress Back Into Session To Pass Immigration Reform?
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Watch our panel of journalists live in studio with this video stream.
MS. DIANE REHMThanks for joining us. I'm Diane Rehm. President Obama signs a bill to improve healthcare for veterans. Republicans face off in primaries in five states and former White House press secretary James Brady dies at age 73. Joining me for the domestic hour of the Friday News Roundup, Reid Wilson of The Washington Post, Margaret Talev of Bloomberg and Michael Scherer of TIME magazine.
MS. DIANE REHMAnd throughout the hour, I'll look forward to hearing from you. Join us by phone at 800-433-8850. Send an email to firstname.lastname@example.org. Follow us on Facebook or send us a tweet. And happy Friday to you.
MR. REID WILSONGood morning.
MR. MICHAEL SCHERERGood morning.
MS. MARGARET TALEVGood morning.
REHMGood to see all of you. And by the way, you can see all of our guests on live video stream at drshow.org. You're waving to everybody. You know, this was one week when it seems to me that the international news is really overshadowing everything, but we're going to move on and we'll get to international news in the next hour.
REHMYesterday, Reid Wilson, President Obama signed into law a measure to address all the problems the VA has been having. Talk about what's in that.
WILSONWell, in this bill, it's a $16 billion dollar bill that Congress passed by a wide bipartisan majority last week before they left town. It allows the VA hospitals to -- I think the most significant part is to fire and discipline some of the senior administrators, all the administrators who have caused a lot of these problems and, you know, hid the waiting lists and kept veterans waiting for care for so long.
WILSONIt allows those hospitals to hire more doctors and nurses to deal with the back log that has been building over not just the last few years, but the last few decades and it allows veterans who are either far away from veterans affairs clinics or who have been waiting for a long time to get some private care, to get care that's not through the VA system by issuing them a card.
WILSONThe White House has been actively trying to solve this problem because anytime veterans issues become a major headline, it is an incredible political headache. Nobody is against helping veterans and helping them get medical care. The new Veterans Affairs secretary, Robert McDonald, is in Phoenix today visiting the VA clinic there.
WILSONThat was where this sort of scandal started to break, where a lot of the news of the waiting lists first came out.
REHMAnd Margaret Talev, how long do you think it's going to take all this to really get up and running?
TALEVReally years because the test of this is how far does this money go, the $10 billion for sort of extra care if you can't get it through the VA. That's gonna be gone like this. People are gonna want a piece of that, right? To reform a system that has been troubled for -- in an entrenched way for so long is really much more difficult than it sounds.
TALEVAnd what both parties agreed to is a political solution, I mean, actually getting into the nitty-gritty of it when you have still a war, a combat mission, that's not quite over yet. We still have more folks coming back from Afghanistan. We have another wave of veterans who, you know, did four and five tours. This is, like, it's very expensive, very complicated commitment.
TALEVThe brain injuries, even if the system was running well, it would be difficult to care for these veterans.
SCHERERThere is a sort of silver lining, I think, we can pause and recognize here. This is an instance in which the U.S. Congress, which can't accomplish anything these days, actually was able to come together, agree on something they deeply disagreed about a month ago. I mean, the Republicans had wanted only $10 billion. Democrats had wanted $25 billion.
SCHERERThey came to a compromise at $16 billion. And it's also worth saying that even though Margaret's absolutely right, that the VA has enormous problems and these problems have gone back decades. You can find audits and reports...
SCHERER...pointing to this. And a decade from now, there will still be problems. It's also true that the VA is an incredibly popular and functioning healthcare system for an enormous amount of Americans who still, in polls, say they generally like the care they're getting from the VA.
REHMSo how optimistic are veterans themselves about McDonald at the head?
SCHERERI've heard only good things about him.
SCHERERI think Shinseki had divided veterans groups. In part, because, you know, obviously the scandals were building up during his tenure, but also he hadn't done the outreach he probably needed to do, including the public outreach to work with veterans groups. McDonald's the former CEO of Procter & Gamble. He's coming with a lot of experience, too.
SCHERERI think everybody's gonna give him a chance to work on this. I don't think the expectation is that a year or two from now this enormous bureaucracy will be in ship shape and there won't be any IG report that says there's a big problem somewhere, but I do think there's a lot of optimism that the bureaucracy will move in the right direction.
REHMAll right. Let's talk about White House executive orders and when President Obama might do something of an executive order on the immigration issue, Margaret.
TALEVWell, we all thought that we were probably looking at Labor Day or right around after Labor Day, although among White House reporters, there's been a real swell of speculation this week because the White House has just confirmed that the president's going to come home for a couple days in the middle of his Martha's Vineyard vacation for "internal meetings."
TALEVSo that has really raised the specter of either would there be some big, you know, announcement or will there at least be the prepositioning for a big announcement. But the plan this summer has been to kind of ride out the summer until Republicans declared their half of immigration completely dead and said, we're not -- there's nothing we're going to do. And then, the White House could say, well, you've forced us into this position.
TALEVHere's this report that Homeland Security and the attorney general have prepared and the president thinks he has the authority to do X, Y, Z.
REHMSo what might be in the executive order?
SCHERERIt could be incredibly sweeping and very controversial. I mean, he could extend DACA, which is the deferred action program he put into place in 2012 for minors who came to the country through no fault of their own, giving them two year work permits, allowing them to basically live here legally, temporarily until a permanent immigration solution is found.
SCHERERHe could extend that to families of all members -- people who already have DACA, he could extend it broader to, you know, everybody who could've been covered by the Senate bill, which would be millions of Americans. I mean, the legal restrictions on him, at least given what the courts have said already -- I mean, this could change. This could be challenged in the future. Give him pretty broad latitude when it comes to deciding how he's going to enforce immigration law.
SCHERERSo you could have a situation in which we walk in after Labor Day and the country's immigration discussion is totally turned on its head.
REHMBut what about these 52,000 children and people who've crossed the border?
WILSONWell, it actually appears that the backlog that is causing so many problems around the country may be alleviated a little bit. Earlier this week, the state of Massachusetts offered to house a number of these children, the 52,000 or 57,000 who've come across, tens of thousands, however many it is. And the federal government said thanks but no thanks.
WILSONWe have enough space. The governor...
WILSONThat's a good question. But a lot the immigrants who have come across have found other locations or have been placed in other locations already so they don't necessarily need to be shipped all over the country.
TALEVJust the money.
TALEVJust the money, please.
SCHERERThe vast majority of these kids who are coming over are placed with relatives so they have -- they're temporarily housed. The debate you hear over, you know, whether we should build a new facility or kids being housed in military bases, those are permanent facilities. Most of these kids are moving through in three or four weeks. There's a background check of the parents.
SCHERERBut most of the kid that come across have relatives who live here, know how to contact them, know how to alert them. They're getting caught, essentially, on purpose. They know they're going to be caught when they cross the Rio Grande and then they're placed with their families. And this is one of the things that the White House has been trying to change.
SCHERERIt ends up being its own incentive in a way because the deportation process can take years and these kids who are living in sometimes horrific conditions in Central America are able to enroll in American schools and live in a much safer environment at least for that amount of time.
REHMAnd as we heard on "Morning Edition" this morning, some of these families are paying the freight to these criminals who are bringing these kids over.
SCHERERAnd the criminals are, in a lot of cases, marketing their services with misinformation, and there's been a big State Department effort to increase advertising in countries like Honduras. I mean, the line that the coyotes are delivering to the families is if you make it across the border, you're going to get to stay forever, which is not true.
SCHERERBut it is -- but the word of mouth is, from people who have relatives who live in the United States, in many cases without papers, that in the short term it is true because these kids do get placed and they are able to live here for the time being.
REHMAnd now the Texas Border Patrol has been called out, Margaret.
TALEVWell, that's right. And that goes also to speak about the political element of all of this, which has a lot to do with the question of timing. You've got these midterm elections coming up in November and for the White House and for the Republicans, the calculation is in key races in pivotal places where it really matters, do the Democrats stir up support among the base and boost turnout by the president doing a power play before November and if so, how soon before November?
TALEVAnd vice versa, could there be a backlash in swing states with sort of moderate to conservative white voters about this sort of thing?
REHMSo you've got Texas Gov. Rick Perry calling out the game wardens to patrol the border.
WILSONWell, remember when he called out the National Guard last week, a number of people started to point out that the National Guard can't actually do anything on the border. They can't apprehend people, they basically could make sure that people didn't die on the border and that was about it. All of the local law enforcement pushed back and said we don't actually need these people here.
WILSONThe fascinating thing about all this, though, as much as we're talking about it, it has not been a major issue in individual races that will be decided in this November's election. There are only three candidates around the entire country who have run advertisements talking about immigration reform and they are all Republicans taking hard line positions in New Hampshire, Arkansas and Michigan.
REHMAll right. We'll take a short break. You can see all of our guests on live video stream. Go to drshow.org. We'll be right back.
REHMAnd welcome back to the domestic jour of our Friday News Roundup. If you've just joined us, we are video live streaming this hour of the Friday News Roundup this week with Margaret Talev, White House correspondent for Bloomberg, Michael Scherer of TIME magazine, Reid Wilson of The Washington Post.
REHMLet's talk about these inversions. I think big news on this, a lot of fronts this week. We did a program on it Monday morning and boy, everybody came out and started doing stuff on inversions. What's going on, Margaret?
TALEVSo the practice, in sort of simple terms -- it's not simple, but involves a U.S. company shifting its headquarters overseas to avoid paying U.S. taxes or to show how much they have to pay in U.S. taxes.
TALEVAnd it's becoming like a more popular technique, which is why the administration has begun focusing on it more. I was talking with Rich Rubin, who is the Bloomberg correspondent who's like the guru on inversions and asking him about it. And he had told me that this has really been done a total of 50 times, but 20 of them since 2012.
TALEVSo it's really like this accelerating trend. And many of the companies you never heard of them. Some of them you have, like Chiquita, Medtronic. And Walgreens actually just abandoned them to do it.
REHMReversed itself, yeah.
TALEVAnd then the markets reacted.
TALEVSo this is something that investors pay a lot of attention to, companies pay a lot of attention to. And for President Obama it has been, again, sort of a fairness -- economic fairness political hammer as well saying, look, this is like an unpatriotic thing to do. And the middle class should be outraged about it.
REHMSo President Obama is considering an executive order on this, Reid.
WILSONThe Treasury Secretary Jack Lew has said that they can -- that they are examining what they can do. And what they might be able to do has something to do with how they classify debt versus equity. If a U.S. company claims that they have a bunch of debt, they can take a tax break from it.
WILSONWell, if one of these foreign companies loads up its U.S. subsidiary with a bunch of debt so that they both avoid the corporate taxes on the profits and get a tax break on the debt, the Treasury Department thinks it might be able to say, no that's actually an equity and you don't get the tax break. So that would remove one of the incentives.
WILSONJust one, but it actually would cover a significant portion of the companies that have actually inverted, if you will.
REHMHow do you think it might affect public reaction to those companies?
SCHERERMost of the companies that have been doing this are now the sort of consumer staple companies. I mean, Chiquita would be the exception. A lot of them are pharmaceutical companies. And when you go to your doctor and get a prescription, you don't really think, I'm not going to take that pill because he's based in Ireland.
SCHERERBut I think there is a political issue here. I mean, really what we're seeing is a game of chicken between Washington and Wall Street. And Wall Street keeps saying you have to reform the corporate tax rate. We need tax reform or we're going to move overseas. Washington says, we're going to reform the corporate tax rate but we just can't quite do it yet.
SCHERERAnd so what's happened is the companies are saying, well, we're not waiting any longer. We're going overseas. The U.S. tax rate is too high. And what you see here is the White House pushing back and basically changing the corporate boardroom calculations saying, look, you can't be certain that you're going to actually get the tax benefits you think you're going to get. And I think that will change behavior.
SCHERERAnd there's also, I think -- America is not that happy with Wall Street right now. I think most voters actually feel in their bones that this isn't really fair to play games. I mean, these companies are benefiting from being based in the U.S. in all other ways.
REHMAnd making huge profits.
SCHERERMaking huge amounts of money. So...
TALEVWell, there's another game of chicken at work too, and that's the one between President Obama and the Congress.
TALEVAnd, you know, when we talk -- there really is a theme here. It doesn't seem like it, between immigration and the inversions issue, which is President Obama saying, look, I'm sick of you guys just not engaging. Like...
REHM...not giving anything.
TALEV...the Republicans tactic being to not consider stuff that's important to me because it's important to me.
TALEVAnd so you've seen over the course of the last month or so this sort of idea of impeachment be floated, forcing John Boehner into a corner where he has to say, we're not going to impeach the president. And that has really empowered Obama to take the ball and run with it and to say, okay, well, if you're not going to impeach me and you're going to sue me, then here's what I'm going to do. I'm going to make my own laws on immigration. I'm going to make my own laws on tax policy. If you don't like it you can take me to court. I think I'll win. And in the meantime, I think I'll win in the court of public opinion.
REHMSo what happened to Walgreens yesterday on Wall Street?
TALEVI mean, you know, the shares plunged, they did. And some analysts have said it was an overreaction. But nonetheless, that sends a signal to other companies who are looking at inversions on both sides, either doing it or not doing it. But even to put yourself in that specter is maybe more trouble than it's worth.
REHMSo it 's stockholders who are annoyed because...
TALEVIt's risk. It's volatility.
REHMYeah, exactly. All right. Let's talk about Bank of America and what they appear to be near agreeing to, Reid Wilson.
WILSONWell, it appears that Bank of America is close to agreeing to a 16 to $17 billion settlement with the Justice Department over its sales of mortgage-backed securities in the run up to the great recession. They offered to settle after a federal district judge ruled that they had to pay more than $1 billion in a separate case.
WILSONThey realized they had lost all their leverage and so they went to the Justice Department apparently after Eric Holder said, settle today or I'm suing you tomorrow. This settlement, it looks like it'll be about $9 billion in cash, $7 billion in consumer relief. We don't exactly know the contours of the deal.
REHMHow does that work, 7 billion in consumer relief?
TALEVActually, we've been talking about this because it will be really interesting to see how it works. But my understanding in general terms is that it's going to be used to settle both federal and state claims. So it will be for claims that are already in the pipeline and distributed somehow. But that's about what I know.
REHMDistributed to consumers who lost their homes or how? We don't know yet.
TALEVI don't think people are going to be made whole.
REHMBut see, what I'm hearing is that lots of money is going into the U.S. Treasury. But I'm not hearing that the people who were hurt by these practices are going to be made whole.
TALEV...will be made whole again. That's right.
SCHERERAnd there's two classes of people who got hurt. The people who were given mortgages that they couldn't pay and then lost their homes as a result of it, and also the investors who were deceived by the packaging of these mortgages. I mean, the lawsuits here are about -- you know, there was also one -- a settlement with CitiGroup, a settlement with JP Morgan.
SCHERERAnd the basic issue here is that during the real estate boom, these banks were saying, we have, you know, gold-plated, grade A mortgages with people with great credit. And they're going to be able to pay. And in truth the incentives within the bank that made bankers basically cut corners and they were packaging garbage as gold-plated stuff. And that was the issue.
SCHERERAnd, you know, one of the unknowns right now is whether these settlements -- the banks will have the money to pay, they'll pay, they'll move on. But whether the internal controls in the banks have been changed enough to prevent this sort of thing from repeating itself the next time we have a real estate boom.
REHMAnd is anybody going to jail?
WILSONIt doesn't appear so at the moment.
REHMAnd I think that on top of the money itself, I think that makes people very angry.
TALEVAnd that has been one of the criticisms of the settlement. But also if you look at it from the other side, there's been these settlements against Citi, against JP Morgan. This will be the largest one. And from the administration's perspective, money talks and this is real money. And you can dissuade people from being bad actors. But, you know, these mortgages got passed on and passed on and passed on and passed on until nobody ever remembered who was underwriting what or who was responsible for what anymore. This is more of a punishment than it is making things right.
REHMAll right. Let's talk about the primaries held in five states this week. Give us an overview, Reid.
WILSONWell, in the five states that held primaries, Michigan, Kansas, Missouri, Washington and Tennessee, there were a lot of hopes from Republicans -- or from sort of anti-establishment Republicans that they would be able to beat one, if not two, incumbent United States senators, Senator Pat Roberts from Kansas, Senator Lamar Alexander from Tennessee. And in both cases they came close. Roberts won by about seven points on Tuesday and Alexander won by nine points on Wednesday -- I'm sorry, on Thursday.
WILSONAnd across the board there were a number of House incumbents, Republican incumbents who won with very -- by very small margins. There's a congressman in Tennessee who won by about a point-and-a-half. There's another one in Tennessee who is ahead at the moment by 33 votes out of about 80,000 cast or so. And in places like Kansas and Michigan, there were a number of candidates, incumbent Republicans who came close to losing to challengers. In one case only one incumbent lost, a congressman named Kerry Bentivolio who was sort of an accidental congressman to begin with.
WILSONBut by and large, the establishment has won the battles this year in the Republican primaries but they haven't won by a lot. And that means that in the long run, you know, Republicans still have to watch their backs as they go into these primaries. There are a lot of conservative voters who are very angry with members of their own party.
SCHERERThis is the first cycle in three cycles where the Republican Party will be going into a general election for Senate races without the handicap of an under-qualified Tea Party candidate. And I think the top line story here is that that interparty battle has been battled to a draw. We're sort of frozen in place. There's no -- you know, Ted Cruz is still in office, Rand Paul is still flying high. But there's not a new round of establishment Republicans losing seats. And Republicans are looking very strong because of it going into the general election in November.
SCHERERThe irony of that, of course, is that incumbents are doing very well in primaries this cycle. And, you know, approval of incumbents is at or near or below historic lows. You know, the American people are sort of uniformly disgusted with their members of congress. And at the same time they keep electing them back in office.
REHMI have an email to that effect from Dick who says, "Polls indicate congress is at an historic low in terms of popular voter confidence. More than 50 percent of Americans disapprove of their own member of congress or woman. This is historically unheard of. Do you think this could be reflected in the upcoming congressional elections," Margaret.
TALEVI mean, I'm sure that's what Mitch McConnell's worried about, right. But the question then becomes, is this just deep and pervasive cynicism? In other words, are they disgusted with their own guy but the guy who's running against their own guy is even worse? You know, it is a shift but what the shift means matters in terms of that context. And overall what happened for Alexander and for Roberts really is probably reassuring for Mitch McConnell as he hopes to retain his position and then take the helm, you know, of the Senate.
TALEVBut what you said about Ted Cruz and Rand Paul is really interesting. Because of course, you know, the rise of the Tea Party and the Libertarians may be, you know, slightly slowed now we're at a draw in terms of the Senate races but with the presidential election...
REHM...and with Eric Cantor's loss way back. But tell me about the Alison Grimes and Mitch McConnell battle going on.
SCHERERIt continues to be one of the most exciting battles in the nation, not just because of the two candidates but also because Mitch McConnell is on the verge of getting what he has always wanted, which is control of the U.S. Senate. You know, the current projections are Republicans are likely to pick up control of the Senate. He will become the majority leader.
REHMThey need six seats.
SCHERERYeah, that's right. And he would become the majority leader except that he's got to get through his own state first. And Alison Lundergan Grimes has proven herself to be a real candidate -- I mean, a real contender. She's got, I think, a pretty impressive slew of ads hitting McConnell. And she's doing all this in a year that is not one in which a Democrat in Kentucky on paper should be doing quite as well as she's doing.
REHMIs it true that this could be shaping up to $100 million race?
WILSONAbsolutely. The primary election alone cost about -- somewhere between 20 and $25 million. And that was McConnell dispatching a challenger from the right. And he -- which he did pretty easily. So it took him 25 million bucks to do it pretty easily. What's it going to take for a competitive general election?
REHMAnd you're listening to "The Diane Rehm Show." And they both went to speak at this annual Fancy Farm picnic?
WILSONThis is a great event. It is unique in American political history and political tradition. It's an event in far western Kentucky in the middle of nowhere. It's a fundraiser for a Catholic church out there, St. Jerome's. They bus in thousands of people. Attendance very year is like 5,000 people in the middle of nowhere.
WILSONThere's no stoplight in this town. And the -- all the candidates sit there on stage, all the elected officials. Senator Rand Paul who's not on the ballot was there. The governor was there. And they don't only give a political speech talking about their own benefits, they actually insult their opponents. And I don't mean...
REHMAnd the opponent is sitting right there.
WILSONYeah, is sitting right there, yeah.
WILSONI don't mean they attack or they criticize their...
REHMYeah, they just insult...
WILSONThey insult them. It is...
REHMIt's not funny, I gather.
WILSONWell, it's humorous.
WILSONIt's meant to be...
TALEVWe should do like a debate in 2016. At least that's what the presidential debate should become.
WILSONIt would be great. It would be great. But this event is -- they get up there and, you know, half the fans are rabid Democratic partisans and half the fans are rabid Republican partisans. And so you've got to stand there and give a speech while half the crowd is shouting at you and yelling insults right back at you.
REHMSo these 5,000 people then are hand-picked to be representative of each side?
WILSONThey're -- well, they're bussed in by the two sides.
REHMOh, I see.
WILSONIt's seen as an organizational -- a test of your organizational strength. It's also seen as just a test of whether or not you can stand the heat. So if one of these candidates had gotten up and started sweating all over the place and forgetting all their lines, well they would've heard -- never heard the end of it in the local press. The local Kentucky media takes this event extremely seriously.
REHMSo how did she do and how did he do?
TALEVWell, the most interesting thing about her performance and the most interesting thing in general about her conduct in the last week or so has been her embrace of Bill Clinton to the obvious exclusion of Barack Obama. I'm a Bill Clinton Democrat. And that tells you everything you need to know about the way she's running, the way other candidates are running, the way she wants to (unintelligible) ...
REHMBut how do people in Kentucky feel about Bill Clinton?
WILSONHe won the state twice, yeah.
TALEVActually, it's pretty good. They actually feel -- and, by the way, better than they do about Barack Obama, which is really what matters. I mean, she can't take away -- she can't completely distance herself from the party which is controlled by Barack Obama. But what she can do -- and it's all sort of coded language, it's what isn't said as much as what is said.
REHMAnd what about Montana's race and Senator John Walsh?
SCHERERIt's sudden excitement in Montana. A couple weeks ago the New York Times ran a piece showing that John Walsh, when he was in graduate school, had plagiarized basically his Master's thesis. Like, large parts of it were just cut and pasted from other documents. Walsh initially tried to push back. He was a military veteran. He explained he had just returned from the war in Iraq. He was in a very stressful time in his life. He said it was a very isolated incident.
SCHERERBut it came in the context of the fact that everyone -- it was pretty clear to everyone that he was going to lose. And then this was another dagger in his back. And I think for Democrats it became an issue of whether he would start affecting down ballot races. And so this week, he decided to back out.
REHMMichael Scherer, Washington bureau chief for TIME magazine. Short break. Your calls when we come back.
REHMAnd welcome back to the domestic hour of our Friday news roundup. And if you're just joining us, you can also watch live video of our show. Go to drshow.org and there we are. I'm going to open the phones and take some calls, 800-433-8850. First to Ed in Kalamazoo, MI. Hi, Ed, you're on the air.
EDHi. Yes, hello. I just wanted to hear if you would comment on -- there was an incident in Iowa at a political -- I don't know what you call -- a banquet where -- not banquet but, you know, eat out and Rand Paul was sitting on a table with Representative Steve King eating. And two dreamers came up to confront Representative Steve King on DACA. And it got very heated because Steve King is of course the most extreme. And I find him kind of rude and just to spit vomit, despicable and he's extremely rude...
REHMWell, let's leave off the adjectives and just tell us what you want to know.
EDWell, the dreamers asked Steve King about what his position was going to be on DACA. And Rand Paul was sitting right next to Steve King, which is a kind of an odd combination.
EDAnd Rand Paul left after about a minute of this discussion between the dreamers and Steve King. Rand Paul's people just evacuated the area completely. He wasn't even going to be on camera.
REHMAll right, talk about that, Michael.
SCHERERI thought it was a fascinating video. And it's still online, so anybody can watch it. It showed -- it illustrated as clear as anything this year the real danger Republicans have with the immigration issue going into 2016. You know, the ability to do this sort of ambush -- this was an ambush by two DREAM Act activists in states like Iowa and New Hampshire is enormous. And when you're running for president, you have to be prepared for activists of all sort to come up to you and talk to you.
SCHERERAnd for all of that to be on video. And these activists were very effective in getting their message across. Steve King, as is his reputation, didn't deal with it quite as well as he probably could have.
REHMWhat'd he do?
SCHERERAt one point, he grabbed the woman's hand. He said, you speak English well, right? He, you know, they're two accomplished undocumented young people and he said, you have no respect for the law. I mean, it became rather hostile. And he was sort of demonstrating what Republicans, like Reince Priebus, are terrified of going into 2016 that Latinos and people who are concerned about this immigration issue from the other side just come to believe again that Republicans don't have their interest in mind.
TALEVAll right, if you sit through dinner with King while he's saying this and you don't say anything, you become complicit in what he's saying and then that attaches to you. If you say to the antagonist in front of the cameras, I don't agree with King, you know, here's my position, then you've created a wedge and you're not even, like, out of the gate yet. So, it is -- and Marco Rubio's going to have a similar -- a different version of the same problem as he's repositioned himself on immigration.
WILSONThis whole thing might -- the sort of -- my cynical political mind takes this as another example of how well Rand Paul is preparing to run for president. He recognized the danger of the situation.
TALEVHe got out fast.
WILSONHe got -- and by the way, he didn't...
REHMHe gets up and leaves right away.
WILSONHe got up and left, still chewing his burger, you know, with the sort of look of terror on his face. But instead of -- instead of running and hiding, I mean, he went and talked to journalists, which is -- that's sort of the best of any possible bad option to choose from.
TALEVHiding in plain view.
WILSONYeah, go talk to the journalist and answer some questions about politics and maybe they won't notice. And they didn't see that particular incident at the moment until it hit online. So Paul has done a very sort of workman-like job of building a foundation in several early primary states. Iowa where he is right now, I think he's still there, touring the state. New Hampshire, Michigan, some other early states, hiring some top staffers and laying the groundwork more obviously than almost any other candidate who is possibly thinking of running.
REHMAll right, to West Palm Beach, Florida. Hi, Randy, you're on the air.
RANDYHi there. I'm an attorney. I do -- most of work is foreclosure defense. And I have to say, I'm really disappointed in the Department of Justice. This is not the first settlement that Bank of America has entered into with the federal government and it acts as Band-Aid and sort of smoke and mirrors to distract people from the wrongdoing by Bank of America, including things like falsely appraising properties to give them larger mortgages and get more money of the mortgage that way.
RANDYAnd then faking documents. I mean, the disclosures that are coming out of the settlement agreement and the housing and urban development, Office of the Inspector General memoranda where they found Bank of America falsifying documents and faking affidavits and not providing valid evidence in order to foreclose and take people's homes. And then the treatment that Bank of America gives to homeowners when they try to modify mortgages, it's appalling.
RANDYThey ask again and again and again for the papers. And this is not a small matter. This is -- this takes hours and hours of work for the homeowners and the state work together. They deny having received it when there's proof that they've received it. It's just smoke and mirrors and it's not helping the homeowners.
REHMAll right, Michael?
SCHERERI think those are all real points. A lot of these bad mortgages were because of a bank called Countrywide Financial, which Bank of America purchased shortly after the financial crisis began. And history will record that they were one of the worst actors of any bank in terms of a lot of these practices. And agree with the caller. The question here is not about the dollar figure, it could be 17 billion, it could be 25 billion, 100 billion.
SCHERERThe question is, is it enough to force changes in internal controls at these banks to prevent these sort of abuses from happening again. And we don't have the answer to that.
REHMWell, they've got lots of money.
SCHERERThey got -- no, and Bank of America, I mean, is trading well on this news. I mean, the idea that they are going to have to pay $17 billion is not seen from the investment community as a terrible, horrible thing. It's seen as Bank of America being able to turn the page and move on.
TALEVRight, it's a resolution.
SCHERERIt's a resolution.
SCHERERAnd they've actually, you know, they're able to -- there's recent announcement they can increase their dividend. So the bank is actually doing pretty well.
TALEVBut, you know, to Randy's point, I mean, I actually looked at these numbers and I didn't -- I have forgotten how big they were, mostly -- largely because of Countrywide. But it was $965 billion in mortgage-backed securities and 245 billion of those either defaulted or were delinquent, like almost a third, more than a quarter.
REHMWow. Yeah. Here's an email from Mel. He says, "Confronted by a do-nothing Congress in the '40s, President Truman called members back to Washington into special session. The problems of governance today are different, but they are as demanding of action. Why doesn't President Obama call his do-nothing Congress back to work?" My answer would be, what good would it do?
TALEVHe's going to do it by executive power.
TALEVHe's given up on them entirely.
WILSONHe will get more of what he wants, more of his agenda through if he takes action on executive orders, which -- executive authority, which he now believes he has a mandate to do because Congress couldn't pass an immigration bill and, frankly, they asked him to.
REHMAll right, let's go to Jon in Miami, FL. Hi, you're on the air.
JONHello, Diane. Thank you for taking my call and I love your show.
JONThe comment I have really is about the inversion situation. As an American, I'm literally outraged that these corporations, you know, besides all the process, the billions of dollars of process that they're making paying their executive, you know, millions in compensation and, you know, and again creating that whole income gap, income inequality, they're still working to drop more on the back of the middle class by not paying their taxes.
JONYet they expect, you know, services from the government. They want a strong military. They want to protect their interests abroad. They want a justice system in case, you know, somebody, you know, challenges their profits or their patents. It's just outrageous. And what's really outrageous about this is that, you know, both parties can't come to a moral understanding, well, this is wrong.
REHMAll right. And, of course, that's what the president says, it's just plain not fair.
SCHERERAnd I think the caller makes a point connecting this income inequality. You know, the backdrop here is that a lot of the pharmaceutical companies are doing this are because they aren't able to make new drugs that make them new money. And so, they're trying to raise their share price by changing their tax status. And a lot of the increase in the stock market over the last several years has gone up considerably is because of companies finding ways of raising their stock price that don't involve employing more people or making more stuff and selling it, because these companies are having a difficult time.
SCHERERAnd the effect is that the windfall from this goes to investors and the people who, in a normal economy, would be benefiting, workers who actually get hired to make whatever the thing is being sold is not having it. The other issue we have here is there's something like $2 trillion in overseas profits that American companies are holding overseas...
REHMAnd not paying taxes on.
SCHERERSo they don't have to pay taxes on. And there is growing lobbying pressure to try and get some sort of free ride from Congress, you know, another tax holiday sort of thing. So instead of 35 percent...
REHMSort of a bargain, yeah.
SCHERERYeah, we'll pay 20 percent, we'll bring it back.
SCHERERAnd that very well may happen in the next several years.
REHMAnd we've had several emails like this one from Karl who says, "If a corporation moves its seat to another country, does it give up its ability to make U.S. political contributions through a PAC?"
WILSONWell, no, because there are U.S. subsidiaries of these corporations and those U.S. subsidiaries can still give to whether it's a political action committee or a superPAC or some of these outside groups that's spending tens if not hundreds of millions of dollars on the election. So, short answer, no.
REHMAll right, let's go to David in Lexington, MA. Hi there.
DAVIDHi, Diane and guests. I'm a liberal Democrat and I feel very strongly that the surge, the specter of an amnesty begets more illegal immigration. If President Obama does a legalization by fiat, I'm going to be absolutely furious with him. And I read in TIME magazine last week that that could tip the Senate to the Republicans. I hope we keep the -- we Democrats keep the Senate. But I can tell you, I hope the Republicans keep the House.
REHMAll right, sir, you've got lots of strong feelings about immigration.
SCHERERI think the caller is right in that the political impact of whatever the president does later this summer is going to be far more ambiguous than it was in 2012. As we said earlier, there's only really one Senate race where there's a sizable Hispanic population that could be moved by this. That's very different from the 2012 campaign where a lot of the swing states and the Latino vote was generally incredibly important.
SCHERERAnd it was shown in the polls on election day that the Latino community really responded to what the president had done over the course of that year. We don't really know the political outcome of this. The -- I think at the White House, part of this is politics but also part of it is 2016. They're not making -- they're going to make this -- they're timing this for the midterm elections, but this is a broader party branding thing. And they think in the long run, two, four years out, this will help them.
REHMAnd, of course, let's not forget the human beings involved. And you're listening to "The Diane Rehm Show." And to Dennis in Alexandria, KY. You're on the air.
DENNISThank you, Diane. Tremendous honor. Quick comment. Attended the Fancy Farm picnic last Sunday. This is a Kentucky tradition that's gone back over 130 years. And if you're wanting to be taken seriously in Kentucky for any state office, you have to attend this picnic. And it's a terrific political theater and they do skewer each other quite well. And everybody takes as well as they give at the picnic.
DENNISIt's interesting and a lot of fun. But when the candidates are faced with their speeches, they clear out pretty quick. They did not like the going around the crowd, shaking hands and all that.
REHMYeah. So how did you think it went? I mean, did one of the two come out a winner?
DENNISLike I said, they both gave as well as they got.
DENNISReally no political points are scored at the Fancy Farm picnic. It's all a lot of tongue-in-cheek, but still serious barbs being thrown at each other. And...
DENNIS...whether one came out ahead of the other, that's for the voters to decide.
REHMIndeed. Thank so much for calling in. This week really a major figure in the Reagan White House and ever since because he was wounded in the assassination attempt on President Reagan. James Brady died. He had been press secretary to Ronald Reagan. Remind us what happened.
SCHERERHe was with the president shortly after his election in 1981 as they exited the Capital Hilton. And a deranged gunman opened fire. And as a result, Brady was paralyzed. And a very popular figure at the time, I think well-loved by the press corps, had worked for a number of candidates. He didn't disappear from public life and he ended up beginning a campaign.
REHMAnd his wife Sarah.
SCHERERWith his wife, that's right, that culminated in the early '90s with the passage of the Brady Gun Bill and the background check system we now have for guns really is a testament to his lobbying work.
REHMYou think that could ever pass today?
SCHERERNo, it would not pass today.
SCHERERIt wouldn't pass today. But I think it's also possible that in a few years somebody will be able to build upon that. I don't think that's a permanent thing. And so I think he was able to leave a really important legacy, not just a personal one, but a policy one as well.
TALEVBoth because he was such an affable guy...
TALEV...because he wore the burden of what had happened to him every day in his life and because he was a Republican and it worked for a Republican, he became tremendously important symbol of the bipartisanships that exist. You wouldn't know it to look at the votes in Congress, but for gun control. And that became increasingly either important in Congress over the years as this has become a more and more polarized issue.
TALEVYou saw with the Sandy Hook tragedy, no ability for President Obama to move the ball at all, which was tremendously frustrating to James Brady and his wife in the coming years as well.
REHMWell, I -- I'm sure I join many of our listeners in offering condolences to Sarah Brady and her family. James Brady was 73 when he died yesterday. Reid Wilson, Margaret Talev, Michael Scherer, thank you all.
WILSONThank you, Diane.
REHMAnd thanks for listening. I'm Diane Rehm.
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