This is a rush transcript from "Journal Editorial Report," December 13, 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 White House releases new ObamaCare enrollment numbers but not the ones that really matter. If the law is finally working, why the secrecy?
Plus, a bipartisan budget accord averts another government shutdown but angers some conservatives. Was it the best deal Republicans could get?
And if you thought the IRS targeting scandal was over, think again. We'll tell you about the agency's latest efforts to silence Tea Party groups.
Welcome to the "Journal Editorial Report." I'm Paul Gigot.
The White House released new ObamaCare enrollment numbers this week, boasting four times as many federal exchange signups in November as in the previous month. Health and Human Services Secretary Kathleen Sebelius told a House committee Wednesday that over 364,000 Americans have now enrolled in the federal and state health insurance exchanges, a number that several Republicans on the committee questioned.
(BEGIN VIDEO CLIP)
UNIDENTIFIED CONGRESSMAN: Of these 364,000 Americans, do you know how many of those individuals will actually have coverage in effect on January 1, 2014?
KATHLEEN SEBELIUS, HEALTH AND HUMAN SERVICES SECRETARY: Once they pay their premium, they'll have coverage in effect.
UNIDENTIFIED CONGRESSMAN: So you don't know that these are the ones who just selected a plan but haven't paid their first payment on their premium?
SEBELIUS: Some may have paid, some may have not. We're giving you the enrollment numbers.
(END VIDEO CLIP)
GIGOT: Joining the panel this week, Wall Street Journal columnist and deputy editor, Dan Henninger; editorial board member, Joe Rago; and Washington columnist, Kim Strassel.
So, Joe, that was a pretty telling exchange between Secretary Sebelius and the committee. Are we getting the accurate figures?
JOE RAGO, EDITORIAL BOARD MEMBER: No. What they were talking about is the industry standard for determining when somebody has enrolled in a health care plan. HHS has invented its own standard to say, if you've selected a plan on the exchange, that's what counts.
If they really wanted to shed light on how enrollment is going, they would say whose signing up, what their demographics are, what their health status is, what plans they're signing up for, and what their goals are over time.
GIGOT: So that 364,000 figure is only the people who actually have enrolled in the front end of the exchange, not people who may actually get coverage?
RAGO: That's right. They haven't paid their premium yet, potentially. There's very low numbers I'm hearing from the industry, in the nature of maybe a quarter of people have paid so far. And --
GIGOT: A quarter of those who have supposedly signed up?
RAGO: That's right. So the real figures could be substantially lower, especially when you build in the errors and duplication that the exchanges are sending the industry.
GIGOT: And that payment, the writing of the check is a big event because a lot of people enroll in insurance but then when you actually have to sign up, they say, well, that price is pretty expensive, I don't think I'll do that.
RAGO: Right. They're used to the automatic deductions of the employer-sponsored market. They're facing much more out-of-pocket costs than they ever expected.
GIGOT: Kim, what -- how do you explain this reluctance to really come clean by HHS and just fess up? They've had the debacle now for a couple months. You'd think they'd say, we're going to be transparent, let's get it all out on the table. Why not?
KIM STRASSEL, WASHINGTON COLUMNIST: Because in the administration's mind -- and they're probably right on this -- this is balancing on a knife edge, OK? There is all this. They manage to quell a little bit of the furor in Congress by setting this deadline of November 30th when the website was supposed to function again. But if these stories continue to roll in, Paul, about people losing their doctors, losing their networks, not signing up, what's going to happen, their members are going to go home at Christmas and they're going to come back in January renewed to -- again, Democrats began calling for changes. The administration is trying to avoid this. And their answer to it is just create a black box around this program and release no information.
DAN HENNINGER, COLUMNIST & DEPUTY EDITOR: You know, what's interesting, Paul, you just mentioned being transparent. In the private sector, in the corporate world, this kind of goes back to the Tylenol -- some tainted Tylenol scandal about 25 years ago. It is a rule of thumb that if you have a big problem like this, you have to put out all the information you can. You cannot hide stuff, because the public won't believe you. And you'll be discredited.
GIGOT: Or stop buying Tylenol.
HENNINGER: They'll stop buying Tylenol.
GIGOT: Your stock price will fall off a cliff.
The administration is doing precisely the opposite. This is state-of- the-art public relations and they're doing state-of-the-art public non- relations. So the program is losing support. It's been shown in the polls. 50 percent of the insured in the "Wall Street Journal" poll said they think ObamaCare is a bad idea now.
GIGOT: Joe, new rules issued on Thursday by the administration are also telling, because they delay some of the implementation of ObamaCare. Tell us.
RAGO: What they say is the insurers are supposed to back-date coverage to January 1st whenever they figure out that maybe somebody's enrolled in their plan or whenever that beneficiary happens to pay. It also tells the insurers to treat out-of-network doctors as in-network doctors for the time being and threatens them -- threatens to kick the insurers off the exchanges if they don't comply. I think when we're talking about public relations here, they're terrified that somebody who thinks they have coverage, through no fault of their own, will go to their doctor and find out they're no longer covered or have some expensive medical condition.
GIGOT: But, Joe, that sounds like a tacit emission that this whole thing should have been delayed another year because they just weren't ready. I mean, they're essentially -- what you're describing is waiving the rules they imposed.
RAGO: Right. When you're trying to regulate the time/space continuum, you have a major problem on your hands.
GIGOT: Kim, we have a new poll this week, the NBC/WSJ poll that showed -- I think they asked ObamaCare, good idea or bad idea. 34 percent only said good idea. 50 percent said bad idea. So this doesn't look like it's improving for the administration.
STRASSEL: No, it's not. You know, this is why you see the clampdown on information. Some of the other news we had this week, House Oversight Committee Chairman Darrell Issa sent a note to Kathleen Sebelius saying, look we're trying to get information from the contractors who messed this up and, apparently, you're telling them not to give documents to us. That could be an obstruction of justice. So we've got HHS telling contractors not to cooperate with Congress. You've got them sitting on all of this data. Then, on the excuse part, too, it's fascinating. The other thing Sebelius did this week is come out and say, oh, I'm going to ask the inspector general of HHS to do an investigation into what went wrong here, as if that's in any doubt.
GIGOT: All right, well, keep digging, folks. We've got to follow it since the administration doesn't want to.
When we come back, a closer look at conservative anger over this week's budget deal. Did the GOP sell out or was it the best bargain they could get?
GIGOT: The House passed a bipartisan budget bill Thursday, avoiding another government shutdown fiasco, but raising anger among some conservatives who think the deal is a bad bargain for Republicans and the country.
(BEGIN VIDEO CLIP)
SEN. RAND PAUL, R-KY.: It's worse than the status go. The status quo will spend $60 billion less than the budget deal over the next two years. Over 10 years, this deal will add $7 trillion to the deficit. It does not significantly alter our course. We're still on a course for disaster.
(END VIDEO CLIP)
GIGOT: We're back with Dan Henninger and Kim Strassel. And also Wall Street Journal assistant editorial page editor, James Freeman, also joins us.
So, Dan, is Rand Paul right or is Paul Ryan, the architect or the negotiator of this deal, right when he says it's a small step in the right direction?
HENNINGER: I think Congressman Ryan has the better of this. It's a small step in the right direction, especially with the fact that they've now got federal workers paying more into their pensions. This kind of corresponds with what Republican governors have been doing in states. It makes it seem as though the Republican at least have a coherent strategy.
As to Rand Paul, Senator Paul, during the shutdown, which so damaged the Republican brand, was kind of missing in action. Now suddenly, he steps forward at this point -- he's beginning to look like a sailor on a boat that's kind of tacking with the wind, depending on which direction it's going in. I think this whole episode, quite frankly, whether it's Ted Cruz earlier in the shutdown and now this, is damaging everyone in Washington. The public's attitude towards Washington is very negative.
More and more to my mind, this is creating an opening for a Republican governor out here who is not a part of this Roman Coliseum in Washington.
GIGOT: No tax increases, James, as Democrats wanted?
JAMES FREEMAN, ASSISTANT EDITORIAL PAGE EDITOR: Well --
GIGOT: Hey, hey, hey.
FREEMAN: -- higher fees.
GIGOT: No tax increases. No increase in jobless benefits as Democrats wanted. And some entitlement reform as Democrats didn't want. Now, the cost for that was they increased some near-term spending and broke the budget caps for two years, which is -- which I wish they hadn't done.
GIGOT: But net on net, what do you think?
FREEMAN: Could have been worse, is maybe the headline. I think Paul Ryan did maybe the best he could, given the problem created for him by so- called national security hawks in the GOP Congress. Basically --
GIGOT: And don't forget the Appropriations Committee.
FREEMAN: Yeah. Refusing to acknowledge that there's waste to be cut in the Pentagon budget. And also, I think, extremely short sighted. We're not going to be a military superpower if we're no longer an economic superpower. So you've got to restrain the size of government, the overall cost, and -- I would say, yes, this is a big reform, a big step forward to get Democrats on board an entitlement -- even though it's modest. I think, as a moment, that part of it is helpful. But this really should have been a better deal.
GIGOT: Kim, were you surprised by the number of Republicans who voted for this? 169 to 62 in the end. That was surprising. They had got -- 162 -- I think Democrats. But that was a big margin for Republicans, considering all of these conservative activists who said they're opposed.
STRASSEL: Yeah. I think you're seeing a couple of things happen here. One, this is the lingering memory of the shutdown, OK? And the lesson a lot of Republicans learned from that was that when their party is divided and when they decide to have a big fight in public and then there's something like a shutdown as a consequence, bad things happen to the party. And had this deal not happened, had Paul Ryan not done it, for all kinds of reasons, that was where they were headed again. A lot of people didn't do that. That argument was made to them.
I think, too, what you're seeing as well is a little diminishing of the power of some of these outside groups, which -- you know, John Boehner took a whack at him this week.
STRASSEL: Heritage Action and Freedom Works, who had come out and criticized this Paul Ryan deal before they'd even seen the details of it. And I think there's a growing feeling among some Republicans that these groups seem more interested in highlighting GOP divides, fund-raising off of it, and that they're not always focused on the kind of well being in future politics.
GIGOT: Dan, what do you think of what this does to Paul Ryan's presidential possibilities, where he was the V.P. candidate the last time, national figure within the party? But was he taking one for the team here in a way to help the party in the House and in Congress maybe retake the Senate but that may end up damaging his presidential prospects?
HENNINGER: I disagree with that, Paul. I think maybe in terms of presidential prospects, it has increased his stature. And I'll give you one example. Back when Marco Rubio was trying to do immigration reform --
HENNINGER: -- and taking criticism, no question, Paul Ryan would have been supporting and was supporting Rubio on immigration reform.
GIGOT: Rubio, that's right.
HENNINGER: Marco Rubio, in the past week, came out and said he cannot vote for this budget reform. And Paul Ryan was asked about that and said, maybe he should read it and that might change his opinion.
But I think that says something at the margin about the political principles of the two guys and that Ryan is at least being consistent and is making a consistent argument. I think at the presidential level, that kind of leadership is, in fact, what the public is looking for.
GIGOT: James what do you make of this split between Boehner and the conservative groups? It can't help with the Republican Party if they go into an election year divided.
FREEMAN: No, but I think you can understand, in this case, there are times where the outside groups are not helpful, maybe many times.
But this really -- this is an important moment. I mean, I miss the sequester already.
It was that one brief shining moment where the government actually spent less than it had in previous years.
GIGOT: But do you side with Boehner or do you side with the activist groups? Was Boehner right to rebuke them for opposing the deal before it was out there?
FREEMAN: Well, again, I think if you want to talk about who -- OK, they opposed it. You knew it was going -- they were going to break the sequester. I think that's somewhat disingenuous. The Republicans telegraphed that they were going to go there. But, look, blame the people who forced the Republicans to spend more.
GIGOT: All right, yes. OK.
When we come back, six months after we first found out about its Tea Party targeting, the IRS has a new plan to silence conservative groups. The details are next.
GIGOT: Well, if you thought IRS targeting was a thing of the past, think again. We learned this summer that the agency singled out Tea Party groups applying for tax-exempt status for extra scrutiny. And now it looks like they are at it again, attempting to further restrict the political speech of conservatives with new regulations.
Kim Strassel has details.
So, Kim, you wrote in your column this week about these new IRS regulations, which they've issued, which will focus on so-called 501-C-4 nonprofit groups, so-called social welfare groups that are supposed to be allowed to participate in politics as long as it's not more than 50 percent of what they do. At least that was the traditional definition. So how has that changed?
STRASSEL: Treasury put out these rules over the kind of media blackout of Thanksgiving, as usual. And what these rules basically have done is say, here's a new category of all these different things that you are not allowed to do any more if you still want to claim that you're a tax except group under 501-C-4 status.
STRASSEL: Now, the administration and treasury came out and claimed that this was necessary and useful because it was going to clarify what was, in fact, a very confusing rule. What we have just find out in the past week, House Ways and Means investigators are now comparing this rule to all of those tax-exempt applications from Tea Party groups that were targeted in the first round. What they're discovering is this rule looks like it was reverse engineered. Meaning, it appears that treasury has taken all those activities that these Tea Party groups were set up to do and restricted them. And so rather than being a clarifying rule, this rule is, as House Ways and Means Chairman Dave Camp said to us this week, it's about shutting these groups down. It's a new form of targeting, only more expansive, systematic, and with the force of law.
GIGOT: What about the point though that the administration makes? We've heard time and again from our friends on the left that actually these rules were ambiguous and, therefore, you do need, for the sake of the IRS and for these groups themselves, the clarity that says, A, this is allowed, B, this isn't, C, this is allowed, D, this isn't. What about that?
STRASSEL: One of the reasons that these rules are a bit ambiguous is because who is to say what is social welfare, Paul?
A lot of these Tea Party groups, for instance, were set up because they wanted to educate Americans about the problems of big debt. OK? Is that not social welfare? And really, is it for the IRS to claim that it's not?
Another aspect of this, though, too, Paul, is that these rules were designed only to apply to groups acting as social welfare. If you're a 501-C-3 like charitable group, for instance --
STRASSEL: -- or more importantly, a 501-C-5, which is a union, you're still allowed to do all these activities that have been restricted for a 501-C-4.
GIGOT: So you're saying that these new rules are skewed so they'll end up covering more conservative groups while exempting most union activities and many convention charities that still operate politically on the left, is that fair?
STRASSEL: Absolutely, for all kinds of interesting reason. It's the 501-C-4 category, the social welfare group category, where most conservative organizations have swelled into in the past couple of years. And it's what Democrats are most concerned about in terms of elections. So they're focusing all their efforts on that category, because they know it will do the most damage to President Obama's political opponents.
GIGOT: Dan, what's the larger political context here for these new IRS rules? You would think there would be some political cost here for the administration to do this, given the uproar in the spring and summer.
HENNINGER: I think basically, the way to understand this, Paul, is it all goes back to the Citizens United decision which allowed corporations to --
GIGOT: By the Supreme Court?
HENNINGER: By the Supreme Court. The Democrats are obsessed with Citizens United. Barack Obama himself criticized the justices sitting in front of him at one of his State of the Union speeches over it. They're afraid that private groups, like corporations, might give money to some of the advocacy groups to do this kind of political outreach. And they want the names of those corporations exposed so that they can then harass and intimidate them with campaigns, saying that we will boycott your product if you support these groups. They're afraid that all this money is going to come in and tip the balance against their politics. And so they're going to intimidate these people out of politics with IRS rules and with disclosure.
GIGOT: Joe, the Democrats and the administration, the president, in particular, he's changing his tune, the tone of his reaction to the IRS scandal now from what he did when it was first announced when he expressed real outrage. Now he's saying something different.
RAGO: Right. If he really means that, I think he'll get the IRS out of the business of regulating political speech at all. You know, why is the agency that's set up to collect revenues -- its ever aggrandizing powers are spreading into dispensing entitlements, whether through health care or the earned-income-tax credit. If he really means it, he'll just make it a neutral arbiter and get it out of this or that technicality here.
GIGOT: You know what, Joe? I don't think that's going to happen --
RAGO: I'm not holding my breath.
GIGOT: -- as wise as it would be.
We have to take one more break. When we come back, "Hits and Misses" of the week.
GIGOT: Time now for "Hits and Misses" of the week.
Dan, first to you.
HENNINGER: Well, a hit to Time magazine which named its "Person of the Year" this week. And in the run-up to it, the week before, it was widely rumored the "Person of the Year" was going to be Miley Cyrus or Edward Snowden, of Russia, or even Kathleen Sebelius. Well, as it turned out, it was Pope Francis I. You've got to ask yourself, what kind of editorial mind can hold in its head the same time the twerking Miley Cyrus and Pope Francis I? In any event, we have to thank God for small favors. The pope came in first.
RAGO: Paul, a word on the most important story of the week, if not all-time, when Danish Prime Minister Helle Thorning-Schmidt and President Obama took a selfie at Nelson Mandela's funeral. Was she really a Danish Toaster Strudel --
-- and he a hormone-addled frat boy on the way to the roadhouse, as "The New York Post" immortally put it? A bodice ripper?
Have we forgotten about Bill Clinton?
A miss. This was not an international incident.
GIGOT: All right.
FREEMAN: Paul, I'd like to strike a serious note here.
This is a miss to the National Football League saying no tailgating at this year's Super Bowl. No grills. No easy chairs you can pull out of the back of the truck and -- I just -- I think it's a very dangerous precedent. You wonder, where does it go from here. Do they say, yes, they can play without a ball, without end zones? But very disturbing.
GIGOT: The real outrage in Manhattan though is no limousine drop-offs at the stadium. That's going to crimp a lot of the style --
GIGOT: -- from the folks in this town.
Remember, if you have your own hit or miss, please send it to us at email@example.com. And be sure to follow us on Twitter at JERonFNC.
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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