This is a rush transcript from "Journal Editorial Report," July 6, 2013. This copy may not be in its final form and may be updated.
PAUL GIGOT, HOST: This week on the "Journal Editorial Report," the administration delays a key component of the Affordable Care Act. And a new report says that healthy individuals could see their premiums skyrocket. Is ObamaCare unraveling?
Plus, federal student loan rates double as Congress fights over a fix. Who is blocking a common-sense compromise?
And European leaders voice outrage over leaked reports of Americans spying. Should the U.S. bug its allies?
Welcome to the "Journal Editorial Report." I'm Paul Gigot.
The Obama administration said this week that it will postpone a key element of its Affordable Care Act until 2015, giving employers with more than 50 full-time workers another year to provide health insurance coverage. The individual mandate, however, is still on track for 2014. And a new Wall Street Journal analysis says that healthy consumers could see their insurance rates double, maybe even triple, under the exchanges set to open on October 1st.
Joining the panel this week, Wall Street Journal columnist and deputy editor, Dan Henninger; editorial board member, Joe Rago; and Washington columnist, Kim Strassel.
Joe, you have been predicting something like this for some time since you cover health care for us. Should we welcome this delay?
JOE RAGO, EDITORIAL BOARD MEMBER: Well, I think there are a few things. This indicates that they have created an apparatus that's so complex that they can't even force -- enforce it themselves. I also think that it is an admission that the critics were right. You know, lot of low- wage businesses, restaurants and hospitality, grown businesses were starting to call themselves the 49ers because they were coming right up to the edge of the mandating --
GIGOT: 50 employee maximum. This isn't leading to more health insurance.
RAGO: Right. And they were saying not -- this isn't leading to more health insurance. It's leading to fewer workers.
GIGOT: And the way this would work is, if have you more 50 employees and don't provide health insurance, you have on pay $2,000 per employee to the federal government. This fee will be -- will be waived.
RAGO: Fee will be waived for one year.
GIGOT: One year.
RAGO: In terms of -- I think businesses make decisions over the long term so is this going to change sort of the economic prospects of this? I -- I don't think so. But it is a very significant political concession.
GIGOT: Kim, on that political point, the administration slipped this out in a blog post this week. The president, of course, had had month fingerprints on it. But what -- inside of the administration, this must have been a source of enormous debate because it is embarrassing.
KIM STRASSEL, WASHINGTON COLUMNIST: This hit Washington like a bomb. And it surprised one more than Democrats and it has caused a great deal of consternation because you have to put this in context, Paul. This is happening just as the administration was holding this series of outreach meetings Democrats in Congress and encouraging them to push to get momentum for this and sell this to their constituents back home. And now this. And you -- you -- this is now, by the way, the eighth element of ObamaCare that has had some bit of a delay put on it. So you hear -- feel a real sense of pier down here among the Democratic Party and that they are going to be headed this fall into next year's midterm elections with a liability from ObamaCare and that could make 2010 look like a cake walk.
GIGOT: Dan, there is a legal element in this, too. I read the statute. It says right there in black letters that this employer mandate will be implemented in 2013 -- December 31, 2013. Can they invade Congress and just do this on their own discretion?
DAN HENNINGER, COLUMNIST & DEPUTY EDITOR: Well, in -- in theory, they should not be able to do that, Paul. But then there is the problem of reality. I mean, I think the agency at -- well the agency at the center of this is our old friends at the internal revenue service.
GIGOT: Law isn't reality?
HENNINGER: The law is reality but the reality is that the -- we have known for some months that the IRS was struggling to create an enforcement procedure to do this. This was announced by Treasury --
HENNINGER: -- which suggests very strongly that IRS told the administration we are not ready for the reporting requirements and enforcement procedures. We just don't have it. So the law not withstanding, you have the practicality of an agency that says -- I cannot do -- we cannot implement.
GIGOT: So how should Congress respond, Joe? Particularly, Republicans? Remember, the employer mandate now delayed here but the individual mandate not delayed. So businesses get a break. Individuals, no break. Should Republicans say, look, I want to extend one part of this, delay it, you have to do another part, too.
RAGO: Right, especially if this is illegal, as it appears to be. I think they should offer to say, well, we will give you the year. But let's delay all sorts of other things as well.
RAGO: And -- essentially, create a constituency for not having these rules imposed on businesses and individuals.
GIGOT: Kim, do you think that's what Republicans will do?
STRASSEL: I think they will, although there will also be a -- there will be some pushing to -- one of the arguments you have been hearing down here among Republicans is perhaps the best political strategy for dealing with ObamaCare is to simply allow to it collapse under its own weight. And so you will probably hear that argument, too, as now that the administration is admitting that it is not prepared to do this and the individual market is going to be an even bigger challenge, you will probably have some Republicans also saying that let's just see what happens.
HENNINGER: Well, the laws are encountering real problems in the states as we speak. This week, the Ohio Department of Insurance announced the individual premiums would probably rise an average of 88 percent. You have watchdog groups in California that support ObamaCare that are saying the rates being posted by the exchanges are too high. And they want actually an initiative put on the ballot to create a Proposition 13-type thing that would make it impossible to raise rates above a certain level.
GIGOT: And they're recruiting -- trying to recruit the NBA and the NFL and sports groups to be able to plead with their fans -- a lot of them are young males -- to be able to sign up for this thing. When it is probably not going to be in their self-interest to do so, because of the premiums that are going to explode for healthy people in order to finance the mandates that are supposed to help so many others.
RAGO: Right. This -- they are acting in the direct contravention of the self-interests of their viewers. This is like the AARP lobbying for some kind of special tax on Boca Raton and Scottsdale.
GIGOT: They are afraid that the young -- young people who are healthy and think, Joe, no offense to you, you will live forever. You won't --
GIGOT: That they won't sign up for health insurance because, look, they have relatively little discretionary income, so rather than pay health insurance, particularly, if it is a big policy that they really don't need, coverage they don't need, they will take that money and spend it on other things, pay the fine. How much is the fine, by the way?
RAGO: $95, Paul.