• With: Joe Rago, Jason Riley, Dan Henninger, Kim Strassel

    This is a rush transcript from "Journal Editorial Report," May 24, 2014. This copy may not be in its final form and may be updated.

    PAUL GIGOT, HOST: This week on the "Journal Editorial Report," President Obama breaks his silence as the V.A. scandal grows. He is promising to fix what's wrong. But can more money and more government solve the problem?

    Plus, what this week's primary results say about the mind-set of Republican voters and the party's prospects this November.

    And more than four years after Haiti's devastating earthquake, anger is growing over the reconstruction failures there, and the role played by Bill Clinton.


    PRESIDENT BARACK OBAMA: Today, I want every veteran to know we are going to fix whatever is wrong. And as long as I have the privilege of serving as commander-in-chief, I'm going to keep on fighting to deliver the care and the benefits and the opportunities that your families deserve.


    GIGOT: Welcome to the "Journal Editorial Report." I'm Paul Gigot.

    That was President Obama Wednesday breaking his silence over the growing Veterans Affairs scandal and promising to fix what's wrong. His remarks came a day after the VA inspector general said his office is now investigating possible misconduct at 26 facilities around the country, including a Phoenix hospital where 40 veterans allegedly died before receiving care, as staff rigged recordkeeping to cover up the long wait times.

    Joining the panel this week, Wall Street Journal columnist and deputy editor, Dan Henninger; Political Diary editor, Jason Riley; and editorial board member, Joe Rago.

    Joe, the president says we are going to get to the bottom of this, but the truth is, we know what happens at the V.A., because there have been numerous reports going to this question of waiting lines and cover-ups. What do we know?

    JOE RAGO, EDITORIAL BOARD MEMBER: Right. The truth is we're already at the bottom of this. There has been reports for years, going back to 2005 and even earlier, showing that VA staff were falsifying some of this information, juking the stats to make care look better than it really was. And it's part and parcel of a much larger bureaucratic culture of deception and low quality.

    GIGOT: Why the persistence of the wait lines?

    RAGO: What you have in the VA is a global budget where they say --


    GIGOT: A cap on spending.

    RAGO: Right. They say here's how much money you're going to have, now go provide care to everybody. And --


    GIGOT: Plus fixed benefits for the recipients. You must provide this care free.

    RAGO: Right. So what you have is a world of finite resources and infinite wants. And what they do to control costs is, basically, they ration care. They say you need to wait months or, in some cases, years to see a --


    GIGOT: We'll give you the free care, but you're going to have to wait to get it.

    RAGO: That's right.

    GIGOT: And then when the people understandably -- the veterans understandably complain they're having to wait a long time, the incentive for the bureaucracy, Jason, is covered up. Don't report it.

    JASON RILEY, POLITICAL DIARY EDITOR: Right. And this is inherent to government-controlled health care. And it's helpful we're having this conversation in the middle of a rollout of ObamaCare because this is the future of ObamaCare. Paul, if you want to see where our nationalized health care system is headed, look at the VA system, where we have all these perverse incentives in place, people doctoring wait lists to earn performance bonuses, and so forth. And there is going to be this, drip, drip, drip.

    But Joe is right. There is mock outrage on the part of Congress here, because they, too, have known about this for many, many years. But the problems we see are inherent to the system and they are not going to be solved by chopping off a few heads. This is a systemic problem.

    DAN HENNINGER, COLUMNIST & DEPUTY EDITOR: Well, consider the scale of the system. The Veterans Administration, can you guess how many employees they have? 314,000, second only to the Department of Defense. They have 1,700 health care facilities, 150 hospitals. This is just a huge bureaucracy. And neither General Shinseki nor General Douglas MacArthur could manage anything so sprawling.

    GIGOT: But what about this point about spending, which I think we're going to hear as the defense, if only Congress had appropriated more money, you won't have the limits and the lines. Let's look. We've got a chart, I think, a couple charts, which show that spending has increased, actually, over 10, 12 years, by almost 100 percent, even though patients have increased only by about 30 percent. So is there adequate spending on the VA?

    HENNINGER: You could double or triple them. And look at the chart. They have ratcheted spending up through every funding period, and yet the problem persists. This was the inspector general in 2012, two years ago: "The Veterans Administration does not have a reliable and accurate method of determining whether they are providing patients timely access to care." They can't do it. No matter how much money they have.

    RILEY: Paul, I think the short term fix -- as we said, the long-term fix is probably moving away from the V.A.-type system all together. But the short-term fix, I think, is giving these veterans access to civilian hospitals and doctors at no additional cost. That's what they need. The only people wallowing on these wait lists are poor veterans who can't afford --


    GIGOT: -- to private insurance.

    RILEY: -- and who don't have access to private insurance. And so that's what we can do in the short run, give them a voucher and give them some way access to same hospitals that nonveterans use.

    GIGOT: There is this case in Columbia, South Carolina, which has turned up in, I think, one of the inspector general reports, showing they were actually given $1 million, to send patients to lower the wait lines for colonoscopies, to private doctors. The VA center wouldn't do it! They only spent a couple hundred thousand because they wanted to keep it all in- house, because they have an incentive to do it, because the longer the lines, the more money they get.

    RAGO: Right. And colonoscopies actually went down. But I think Jason makes an essential point, which is we don't really need president as a hospital administrator. The solution here is to privatize these hospitals, if they're really as good as liberals say, and they claim the V.A. is an integrated model for the rest of the health care system. It will improve the private hospitals. If there actually were, since the evidence seems to suggest, veterans will have access to better civilian private care.

    GIGOT: You'd still give them some -- still subsidize veterans to get the quality care. But you give them the access to the quality care that, as Jason points out, particularly those who can't afford other private coverage are now denied.

    HENNINGER: Right, exactly. And I think we should point out, it's a huge - - there are dedicated people in the Veterans Administration who do good work.

    GIGOT: Sure.

    HENNINGER: But they themselves are victim of a bureaucracy they can't solve. And unless we do something like this, those people are just going to be forced to give that kind of --