This is a rush transcript from "Journal Editorial Report," September 28, 2013. This copy may not be in its final form and may be updated.
PAUL GIGOT, HOST: This week on the "Journal Editorial Report," get ready for ObamaCare. A look at what to expect when the health insurance exchanges go live on Tuesday.
Plus, he's the man at the center of the budget showdown. So just what did Texas Senator Ted Cruz accomplish this week?
And President Obama speaks to Iran's Rouhani but will nuclear negotiations be different this time around?
Welcome to the "Journal Editorial Report." I'm Paul Gigot.
Well, are you ready for ObamaCare? With health insurance exchanges set to open Tuesday, both critics and supporters of the controversial law are waiting to find out just who will sign up and what premiums they'll pay.
President Obama said this week he has no doubt his signature piece of legislation will succeed.
(BEGIN VIDEO CLIP)
PRESIDENT BARACK OBAMA: What we are confident about is that when people look and see that they can get high-quality affordable health care for less than their cell phone bill, they're going to sign up.
(END VIDEO CLIP)
GIGOT: Joining the panel this week, Wall Street Journal columnist and deputy editor, Dan Henninger; Washington columnist, Kim Strassel; and editorial board member, Joe Rago.
So, Joe, you heard the president's optimism. What do you expect to happen on Tuesday?
JOE RAGO, EDITORIAL BOARD MEMBER: Well, I think we're expecting a very choppy rollout here, very disruptive. We've seen a lot of delays this week. The D.C. health exchange said it wouldn't be able to perform core functions. I think we're going to see the same thing in the 34 states where the federal government is running the exchanges, in lieu of the governors, and a lot of problems overtime.
Now, that said, everyone's expecting this to be such a mess that they're really judging it with the soft bigotry of low expectations.
(LAUGHTER)
GIGOT: All right, Joe. What about the premiums? What are people going to pay? Are they going to pay more than they would be paying now in the private marketplace or less as the president asserts?
RAGO: The answer's both, depending on where you live and how much income you make and how healthy you are. In general, I think premiums are going to be about 20 to 30 percent higher on average than they are in the individual market today. That will be offset a little bit by the subsidies for some people. But some people are also on the hook. The younger and healthier people are on the hook, cross-subsidizing older people, people over 40. So much more expensive. But in some cases, less, depending on who you are.
GIGOT: One of the interesting things here is that private insurance, some of the big private insurers, like Aetna, for example, are not participating in these exchanges, these government-run exchanges. For example, Aetna isn't even participating in Connecticut. Why is that, Joe?
RAGO: The exchanges are supposedly marketplaces but they're really marketplaces for political competition. The Health and Human Services Department and state insurance commissioners have been saying, well, regulations are going to increase the cost. We need you to find ways to offset some of that, to hit the cheapest price points that you can. So the insurers that are running -- that are offering policies on the exchanges are really the contractors who currently run Medicaid in a lot of states. So we've been talking about --
GIGOT: Right.
RAGO: -- rate shock here. People are going to see what I think is going to be benefit shock, where they're going to have very limited networks of doctors, hospitals and other providers and just not a lot of choices in return for some of these discounts.
GIGOT: Yeah, that's why the insurers are calling some of the products on these exchanges so-called Medicaid Plus.
So, Kim, what's the big fear inside the Obama administration about this rollout? What are they really worried about most?
KIM STRASSEL, WASHINGTON COLUMNIST: Well, you know, the problem here for Democrats, they have been telling themselves for years, you know, our problem politically is we're running against a law that has not even yet started, people don't like it, and so when they finally get it, they will understand how great it is. The big fear is that is not going to be the case. And that as you have benefit shock and price shock and you lose your doctors, and combined with people -- layoffs at companies trying to avoid to be hit by this law, reduced hours, that, in fact, there is going to be a public revolt against this, which is going to be reflected in next year's midterm elections and Democrats' hold, for instance, on the Senate.
GIGOT: Right, but the history of entitlements, Dan -- Social Security, Medicare, Medicaid -- is that despite initial glitches, people come to love the free lunch. They love the subsidies and they warm to it. And is that going to happen again this time?
DAN HENNINGER, COLUMNIST & DEPUTY EDITOR: I don't think so, Paul. Let me put it this way: Who are you going to believe about ObamaCare, Joe Rago or Barack Obama?
(LAUGHTER)
Because we just heard the president of the United States say this will provide high-quality health care for less than the cost of your cell phone bill, OK?
GIGOT: Right.
HENNINGER: And now the question is, is that going to happen? I think the consensus is, it's going to be complex, it is going to falter, it's going to be a mess. And I don't think that this entitlement is going to become as entrenched as Social Security did.
GIGOT: Well, you wrote this week in a piece that let ObamaCare fail. This thing is going to fail of its own accord, in essence.
HENNINGER: Yeah.
GIGOT: It's just too big and too complicated. Explain your argument.
HENNINGER: Well, I said let it collapse. Now, it may not literally collapse. It may not literally fail. But I think it's going to be a very poor federal program, poor health care program. There's going to be enormous problems such as people discovering that they only have a limited number of doctors to choose from or getting their bills paid is going to be complicated. When that starts happening, as is already happening, people are going to start looking for alternatives. I think that's the point when conservatives and Republicans should tell the American people, this was a big entitlement, and if in our time this thing doesn't work, we have to look for alternatives to the entitlement state and having the federal government provide services like this.
GIGOT: Joe, what do you think ultimately is going to happen? You share Dan's belief that it's going to collapse?
RAGO: No, I mean, think its problems are going to create an opportunity for a real alternative. But, you know, Paul, in the health care, government failure is usually solved by another regulation, and then that failure is solved by another regulation. So I think the problems that we're going to see in practice with the Affordable Care Act, if there isn't a real alternative offered from the Republicans, Democrats are going to come in and say, well, all doctors and hospitals need to accept government coverage.
GIGOT: OK. All right, Joe.
Thank you, all.
When we come back, one Republican Senator making his opposition to ObamaCare the centerpiece of the federal budget fight. So what did Ted Cruz accomplish this week with his 21-hour floor speech?
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
SEN. TED CRUZ, R-TEXAS: I intend to speak in opposition to ObamaCare, I intend to speak in support of defunding ObamaCare until I am no longer able to stand.
(END VIDEO CLIP)
GIGOT: Texas Senator Ted Cruz, the Republican at the center of the budget showdown, kicking off a 21-hour floor speech Tuesday aimed at drawing attention to his efforts to defund ObamaCare. But his tactics are instead drawing fire, predictably from those on the left, but also from many on the right.
We're back with Dan Henninger and Kim Strassel. And Wall Street Journal Political Diary editor, Jason Riley, also joins the panel.
So, Kim, the Senator said his goal is to defund ObamaCare. Is he making any progress toward that end?
STRASSEL: No. Here's what Senator Cruz did this week. He kept the focus on -- surprise, surprise -- Senator Cruz, but more importantly, on Republicans. And this has been the big problem here, is that what we need to have happen, if you're a conservative and you don't like this law, then the goal here should be to make, as we just talked about in the last segment, making Democrats own a law that is proving very problematic and painful for many Americans. And one of the results of this entire defund- campaign has been there has been no attention for months paid on Democrats, in particular, vulnerable Senate Democrats who come from red states that are up for elections next year. These are people like Mark Pryor in Arkansas, Mary Landrieu in Louisiana --
GIGOT: Right.
STRASSEL: -- who need to feel the pressure to actually have to vote in some way to delay or change this law.
GIGOT: So, Kim --
STRASSEL: -- but nobody's talking about that.
GIGOT: You're saying there's zero chance, no chance that the Republicans will succeed in defunding ObamaCare during this fight?
STRASSEL: Not if the leverage is government shutdown because Americans don't generally agree with that. And moreover, the president intends to veto anything like that. This is his signature achievement. The question is whether or not Republicans can find some sort of leverage that does give them some sort of changes, delay or in some way help them with the law.
GIGOT: But, Jason, it does seem that Ted Cruz is tapping into a grassroots sentiment of frustration with Washington. I mean, there really are a lot of people who say -- look at the Republican leadership and say, you know what, you're not fighting hard enough. And he's tapping into that frustration, and he's being backed by some activist groups and, of course, the talk-radio crowd, which likes this populist groundswell. Is he on to something here, Cruz?
JASON RILEY, POLITICAL DIARY EDITOR: Well, Paul, I think a lot of people agree with him. A lot of people are frustrated. And --
GIGOT: Well, we want to defund ObamaCare, too.
RILEY: Right. And the issue here is his tactics. And the long-term strategy, the long-term Republican strategy for defunding ObamaCare is winning elections, Paul, first, next year in the midterms and then ultimately the presidency. That is the only way you're going to really push back or start to roll back ObamaCare. And what Ted Cruz has managed to do is isolate people who agree with that goal in his own caucus. That simply isn't helpful. Particularly to the extent that it's taking the focus off of the fights Republicans have a shot of winning in the short term. There are Senators like Tom Coburn and David Vitter who have put together these things, such as the individual mandate, using that as leverage --
GIGOT: Delaying that for a year.
RILEY: Such as pointing out how members of Congress and their staff are trying to put loopholes in the law that exempt them from some of the provisions. That is where ObamaCare is vulnerable. And in the short run, that's where the leverage is to be had and used to push back.
GIGOT: What about Ted Cruz personally, Dan?
HENNINGER: Yeah.
GIGOT: Some of this is -- he's almost clear in saying he would like to run in 2016 and this is helping raise his profile to run for president. Did he help his personal political stature this week?
HENNINGER: Well, that remains to be seen. I mean, let's focus on the fact that there was an enormous political element here. To run for president, you need an enormous amount of national publicity and you need it fast.
GIGOT: And a fundraising base.
HENNINGER: And a fundraising base. And there's a school of thought that says, if you can get in there early and perhaps win in Iowa, in New Hampshire, you immediately become the odds-on favorite for the nomination. And if it's a bloodless strategy, he's doing a good job of running it.
And, look, we're living in a media age, and the media loves media savvy celebrities. So far, he's showing he has that ability.
GIGOT: Kim, what do you think about how Cruz has helped himself or hurt himself? Because a lot of the Republican colleagues in the Senate don't agree with what he's doing but, hey, they don't vote in Iowa.
STRASSEL: Well, right, and here's why some people have used the word "cynicism" with regard to this. As you mentioned, there is an enormous frustration out there among conservatives in the base. They lost last year's election with a candidate who wasn't a great candidate, Mitt Romney. They felt the RNC let them down. They were completely outmatched by the Obama team. And they want change in Washington. And so what Senator Cruz has done -- and I don't think anyone can argue against this -- is he has elevated his profile but he's done it very specifically by beating on his own colleagues in the Republican Party. And that sounds good with the base out there, but in the longer run, you know, you need lots and lots of friends to run for president.
GIGOT: Is he the next Ronald Reagan --
(LAUGHTER)
GIGOT: -- Jason?
RILEY: I don't think so. Reagan united the party. He didn't isolate his allies in the interest of self-promotion, and that is what Cruz is doing.
But what Cruz is also doing that's even more damaging is he's giving Reid and the Democrats an excuse to bust the spending caps and to use that leverage to do that. That is the best leverage Republicans have to bring down spending. It's working.
GIGOT: OK, Jason.
When we come back, an historic phone call between Presidents Obama and Rouhani opens the door to new talks over Iran's nuclear program. Will the outcome be different this time around?
(COMMERCIAL BREAK)
GIGOT: Iran's new president, Hassan Rouhani, made his debut on the world stage this week when he addressed the United Nations General Assembly and a series of other speeches and meetings in New York, but notably none with Barack Obama, whose White House had offered an informal encounter between the two leaders, something Iranian officials ultimately rejected. But Friday afternoon, the two leaders finally connected in a 15-minute phone call, the first communication between an American and Iranian president since 1979.
Wall Street Journal Global View columnist, Bret Stephens, joins us with more.
So, Bret, why this new enthusiasm from the Iranians, at least at the appearances level, for negotiations?
BRET STEPHENS, GLOBAL VIEW COLUMNIST: Well, I think they get the sense that the United States really would like to make a deal. Obama has given every indication that he wants to shake Rouhani's hand, that he wants to set a new tone in relations. There's the American debacle with Syria, in which the United States walked away from what appeared to be an imminent military strike, which shows just how little appetite there is in the U.S. for any kind of strike on Iran as well. So they see an America that's willing to play.
GIGOT: But that isn't what the administration says. The administration says, look, the sanctions are working, the Iranians are under pressure, and now that's why they're doing it. And this new president, Rouhani, a new moderate voice, he's impressed the rest of the Iranian leadership with how well he did in the election. So they're willing to say, all right, go see if you can cut a deal.
STEPHENS: Well, look, we've had sanctions against Iran for a very long time. And I keep -- we've been hearing about how the sanctions have been working for years and years with no change in the Iranian behavior. As for Rouhani, people forget that more than 600 candidates for president were deselected by the regime before they found six acceptable people. Rouhani has been a creature of this administration. He was a top aide to the Ayatollah Khomeini going back more than 30 years. So there's no question he looks different. He doesn't have the kind of gauche, vulgar aspects that Ahmadinejad had.
GIGOT: Right.
STEPHENS: He speaks in softer tones. But if you listen to what he says, there's relatively little difference in substance to his predecessor.
GIGOT: So what do they want? What do the Iranians hope to get out of this if Bret is right that there really isn't much change substantively in their approach?
HENNINGER: Well, I think they want to but the plug on the pressure that has been on them as a result of this. But the sanctions, you know, they're oil exports are down to a million barrels a day. Inflation is running at 39 percent. They have a restless population. They would like to try to get out from under that.
But let's understand one other thing, Paul. In the last 10 years, they have spent $100 billion on this nuclear program. And it is a huge commitment on their part and it is their key to ascending to power in the Middle East, is nuclear capability. I think, just as we're suggesting here, they are certainly willing to enter into negotiations with a sort of compliant Obama administration but I don't think there's any possibility of actually ending the Iranian nuclear program. It's going to be like North Korea where we talk for a very long time without ending it.
STEPHENS: Well, you know, Dan just utter the key phrase, "nuclear capability," because for a long time, there was a debate whether Iran wanted a nuclear weapon --
GIGOT: Right.
STEPHENS: -- or simply nuclear capability. Do they want to be a country like Japan that can produce many nuclear weapons in a very short space of time --
GIGOT: But right on the edge of a breakout capacity.
STEPHENS: Right at -- precisely. And what perhaps the debate that has been resolved, at least for the time being, within Iran's political circle is they would be content with the nuclear capability, being right on the edge. That's why you've heard Rouhani say, we will never negotiate away our right to enrich uranium. They want to develop a nuclear industrial complex that will, over time, become invulnerable to any kind of strike should they then chose to move from capability to weapons.
GIGOT: And will the U.S. -- do you think the Obama administration is willing to accept that kind of a capability, near breakout capacity, in return for a promise of not building a bomb?
STEPHENS: Well, that's -- the Obama administration has been all but explicit about that. The wild card here is, of course, the Israelis, who have insisted that a nuclear capability for them is tantamount to a nuclear Iran. I think, in this sense, the Israelis are right. Because what people forget is that possession a nuclear capability amounts to use. Very few -- no country's really used their nuclear weapons but, by possessing them, it gives then the freedom of regional action, prestige, authority and deterrence that you don't have if you're not at that stage.
GIGOT: Is there -- briefly, is there going to be a deal?
STEPHENS: I don't think so.
GIGOT: OK, wow.
All right, we have to take one more break. When we come back, "Hits and Misses" of the week.
(COMMERCIAL BREAK)
GIGOT: Time now for "Hits and Misses" of the week -- Bret?
STEPHENS: This is a hit to Larry Ellison and above all his sailing team, Oracle. They were contesting the America's Cup against New Zealand and were down 8-1 and made an astonishing comeback to take the cup. People talk a lot about the engineering that goes into these amazingly fast boats. There's no doubt there's a great deal of engineering involved. But there's also a lot of seamanship and heart. So congratulations to him and his team.
GIGOT: All right.
Joe?
RAGO: Paul, a big hit this week to Bill Gates, who apologized for control/alt/delete. Instead of using one key to log on to your P.C. in Microsoft's early days, he chose three. So control/alt/delete has persisted for almost 40 years for no reason. It's a testament to how powerful inertia is in human life.
(LAUGHTER)
GIGOT: All right.
Jason?
RILEY: This is a miss to Hillary Clinton, who endorsed Bill De Blasio for mayor of New York City recently. This is a man who honeymooned in Cuba in the 1990s and spent the 1980s in Nicaragua helping the Sandinistas fight U.S. allies down there. Hillary Clinton is probably going to run for president in 2016 and probably going to run as a moderate, but episodes like this tell you where her heart is.
GIGOT: So does Joe Lhota, the Republican, who is challenging, running against De Blasio, have a chance to rally and beat him?
RILEY: Democrats outnumber Republicans in New York 6-1, so it's an uphill fight.
(LAUGHTER)
GIGOT: All right. Thank you.
And riotous cheers in Malibu for the America's Cup.
And remember, if you have your own hit or miss, please send it to us at jer@FOXnews.com. And be sure to follow us on Twitter, @JERronFNC.
That's it for this week's show. Thanks to my panel and to all of you for watching. I'm Paul Gigot. Hope to see you right here next week.
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