Is health care back as a campaign issue?

Bevin wins the top job in Kentucky after campaigning against ObamaCare. Reaction from 'Journal Editorial Report'

This is a rush transcript from "Journal Editorial Report," November 7, 2015. This copy may not be in its final form and may be updated.

PAUL GIGOT, FOX HOST: This week on the "Journal Editorial Report," ObamaCare helps the GOP pick up a governor's seat in Kentucky as the law's troubled co-ops continue to collapse. Is health care back as a campaign issue?

Plus, an uptick in crime reveals a rift between President Obama and some of his own top law enforcement officials. Is the "Ferguson Effect" real?

All that, and Ben Carson's campaign pushes back after questions arise about his past.

But first, these headlines.

(FOX NEWS REPORT)

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

ObamaCare returned to the campaign trail in a big way this week with Republicans picking up the Kentucky governorship for only the second time in 44 years. Businessman Matt Bevin made his opposition to the president's signature health care law a centerpiece of his campaign. His surprise win comes as 12 of the 23 co-ops created under ObamaCare have announced they will close by the end of the year, leaving tens of thousands of Americans scrambling for coverage and billions of taxpayer-funded loans at risk.

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, Kim, let's talk about the Kentucky race. This is a race where the Republican was trailing for almost all of the campaign until a late advertising barrage aimed at ObamaCare and President Obama. Was that decisive?

KIM STRASSEL, WASHINGTON COLUMNIST: Yeah. I mean, you have to actually look at Kentucky's history here. This was a state that the Democratic governor, Democratic attorney general, they embraced ObamaCare, bucked the trend of a lot of states. He decided to set up his own state exchange there. He went for the president's Medicaid expansion. They bragged they were held up as a model by the left across the country and --

(CROSSTALK)

GIGOT: It was a show case.

STRASSEL: Yes.

GIGOT: It was presented as a show case of the law.

STRASSEL: Yes, but huge problems. One of the co-ops that exploded, exploded in Kentucky, leaving about 50,000 people without coverage. Hospitals have been slammed with new Medicaid patients, which forced them to slash services. Bevin ran on all of this and marked a remarkable victory. Not only him, but the Republicans ended up winning four of six statewide offices.

GIGOT: Wow.

Let's talk about the issue of the co-ops, Joe, which is not just in Kentucky. 12 of 23 failing around the country. Lots of people. What's going on?

JOE RAGO, EDITORIAL BOARD MEMBER: If you remember, the co-ops were created as a consolation prize for liberals in 2010 for the ObamaCare debate. These were government-backed insurers that sort of had an implicit federal subsidy. So what they did was --

GIGOT: Instead of a single payer?

RAGO: Instead of single payer. And what they did was they severely and artificially under priced their policies to grab market share in the states. So they came out and said, don't go to the commercial health insurers, come here, be part of the co-op. That meant they weren't taking in enough revenue to cover medical claims. They started posting huge losses. They were expecting for the federal government to come in with a bailout, and in a variety of ways over the years, Congress cut it off. The money wasn't there. So they are all failing one by one.

GIGOT: But they had seed money from the government, which would be lost presumably. What are we talking about?

RAGO: They took out $2.5 billion from the federal government. I don't think any of it will be paid back. Certainly not the half that's been lost so far. The other ones, even if they manage to struggle through the next few years, they are not bringing in the revenue to pay that back.

GIGOT: The customers now have to go out and find new insurance for 2016. If they can, right? Not necessarily able -- everyone might not be able to get the policies they had with the other exchanges.

RAGO: Right. They will potentially migrate to a plan. That might mean switching doctors. That might mean -- it will certainly mean higher costs for them because they wanted these artificially low prices.

GIGOT: And maybe narrower doctor networks, that they may not get the hospital of their choice. "The New York Post" reports this week that some cancer patients at Memorial Sloan Kettering will be dumped from the plan because -- their care at that hospital may be at risk because Republic, the New York co-op, was the only one that included that hospital in the network.

RAGO: Right. One in five people in the New York exchange joined that co- op. It's about 25 percent in Utah. We are talking about big disruptions and big volatility amid these failures.

GIGOT: Dan, radio silence as I look at the mainstream media about this.
It's like it's not happening.

(LAUGHTER)

You know, I'm sorry. Sweep it under the carpet. It's astonishing. This is a huge failure.

DAN HENNINGER, COLUMNIST & DEPUTY EDITOR: It's a fiasco, wouldn't you say?
People affected by it know it is happening to them. Politically, this is a big problem for Democrats and Hillary Clinton. For Democrats, look, this ObamaCare was supposed to be a model of the liberal state. The experts would explain and design something to benefit the middle class. This was obviously above the expert's pay grade. It is too complicated to reorganize the American health care system. Now, Hillary Clinton is joined at the hip. She cannot run for president now separating herself from ObamaCare. Whoever runs against her, as in Kentucky, will run this down her throat the entire campaign.

GIGOT: One point I want to ask you about, Joe. Ken Conrad, from North Dakota, says Republicans sabotaged these exchanges, which were going to run perfectly well otherwise. What do you think?

RAGO: I think it's silly. If you look at the law, it was designed in 2010, when the Republicans couldn't stop the swinging door. They were cut out of the congressional process. Now for them to get the blame, I think is silly. These things sabotage themselves.

GIGOT: All right, Joe.

Thank you all.

When we come back, an uptick in crime in some U.S. cities reveals a riff between President Obama and some of his top law enforcement officials. Is the "Ferguson Effect" real?

(COMMERCIAL BREAK)

GIGOT: Another law enforcement official weighing in this week on the uptick in crime in some American cities, with the head of the Drug Enforcement Agency saying FBI Director James Comey was, quote, "spot-on" when he suggested that the so-called "Ferguson Effect" was taking its toll on policing. Here are Comey's comments at a law enforcement conference in Chicago last week.

(BEGIN VIDEO CLIP)

JAMES COMEY, FBI DIRECTOR: I spoke to officers in one big city at a precinct that described it as being surrounded by young people with mobile phones, video cameras rolling as they step out of the car taunting them, asking them what they want and why they are there. They described a feeling of being under siege and were honest and said we don't feel much like getting out of our cars.

(END VIDEO CLIP)

GIGOT: President Obama appeared to push back on those comments at the same conference the next day.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We do have to stick with the facts. What we can't do is cherry pick data or use anecdotal evidence to drive policy or to feed political agendas.

(END VIDEO CLIP)

GIGOT: Wall Street Journal columnist, Jason Riley joins us with more.

Jason, mediate this dispute.

(LAUGHTER)

Is James Comey picking facts and anecdotes to serve a political agenda?

JASON RILEY, COLUMNIST: I think what you have are competing priorities here, Paul. The FBI wants to fight crime.

(CROSSTALK)

RILEY: President Obama wants to mobilize the political constituency. He has cast his lot with the Black Lives Matter movement crowd who want to scapegoat law enforcement for the social pathology we see in many of our inner cities. It is not just -- it is not just the officials at the Justice Department talking about this. Reporters have been hearing this, talking to precincts on the ground in the cities. Everyone is hearing the same thing. That cops feel hesitant to get out of their cars. They feel the environment is toxic right now.

GIGOT: How big an increase in crime are we talking about?

RILEY: It's quite big. In several major cities, dozens of major cities in America from New York, Baltimore, other places.

(CROSSTALK)

GIGOT: Milwaukie, places where they have seen these incidents?

RILEY: There's a spike in violent crime over last year. That's very real.
Those aren't made up or cherry-picked figures as the president describes.

GIGOT: What about the argument that this off of a low bottom? We read decreases in crime for a long time. This may be a temporary blip.

RILEY: It may be. It may be. I don't think Comey ruled that out or anyone ruled that out. Crime goes up for many different reasons. We don't always know why. Clearly, this seems to be playing some role in how cops feel comfortable doing their job, getting out of their cars, being aggressive. The shame here is that these are the communities that need the aggressive policing because these are where the criminals ply their trade.

GIGOT: Let's listen to Chris Christie as he addresses the same issue.

(BEGIN VIDEO CLIP)

GOV. CHRIS CHRISTIE, R-N.J., PRESIDENTIAL CANDIDATE: We have liberal policies that tied the hands behind the backs of police officers.
Then, when incidents happen, accuse them of misconduct first and do the investigation later. And you have a president of the United States who doesn't support law enforcement. He simply doesn't.

(END VIDEO CLIP)

GIGOT: Kim, what do you think of Christie's broad side here? Does he have an issue that might work for him or some other Republican in the election?

STRASSEL: It's resonating. Not a surprise. Look, we spend a lot of time in campaigns thinking about taxes, health care, all this stuff. First and foremost, voters want a sense of security, a feeling that they can go outside. There isn't going to be a riot, that the police are in charge, that things are generally safe. This is potentially a huge problem for President Obama and Hillary Clinton and the other nominees. Parts of the party are, indeed, as Jason said, pushing them very much to fall in line with the Black Lives Matter movement. If you end up out of that coming up with more upheaval, more disturbances and a sense of chaos out there, that could feed into a lot of voters. That's the point Christie is making.

GIGOT: Dan, what do you think of this?

HENNINGER: Well, I think Chris Christie has a point. The president keeps talking about anecdotes. We have to find out what the experts think about this. We don't have time to do that. Every metropolitan newspaper, The Washington Post, The Chicago Tribute, The New York Times, The New Yorker, are reporting every weekend the uptick in violent crime. It's real. In the city of New York, Commissioner Ray Kelly, when he was leaving his job, said his next goal was to get control of the gangs. What after that was they ended Stop and Frisk in New York. And gang violence has risen. What's going on is real.

GIGOT: Jason, what do you think of the politics of this? How will this play in the campaign?

RILEY: We have seen how it's played in the Democratic campaign with --

(CROSSTALK)

GIGOT: They are all signing up with the Black Lives Matter movement.

RILEY: Exactly. Exactly. Republicans, I would like to think they will hold their ground here. I'd like to think that they're not going to buckle under and see this as black outreach, so to speak, in casting their lot with the Black Lives Matter crowd. I don't think soft-on-crime policies help the poor black communities. I think that -- and the president right now is, again, pushing this agenda that suggests that this black pathology we see is a result of a racist criminal justice system and not black behavior, which I think has it exactly backwards.

GIGOT: All right.

Thank you all.

When we come back, the stage is set for next week's Republican debate in Milwaukee. As Marco Rubio and Ben Carson's poll numbers rise, so does the scrutiny. Could either candidate's past spell trouble for their future?

(COMMERCIAL BREAK)

GIGOT: Well, the stage is set for next week's the Fox Business Network/Wall Street Journal presidential debate in Milwaukee. This time around, there will be only eight candidates on the main stage, with Chris Christie and Mike Huckabee failing to qualify for Tuesday night's primetime showdown. And as Ben Carson and Marco Rubio continue to rise in the polls, the scrutiny is growing, with both candidates facing question this is week about their pasts.

We are back with Jason Riley and Dan Henninger.

So, Dan, I will miss Chris Christie in the debate. I think he added a lot to those contests.

HENNINGER: Yes, well, Chris Christie himself isn't whining about it. On Friday, he was on at least three or four networks saying he'll show up anywhere they put up a podium.

(CROSSTALK)

GIGOT: And he believes it. It will.

HENNINGER: And he believes it. Look, these networks didn't ask for 12 or 15 people to run for president. I have to admit, it's kind of hard to get that many people on a stage. Everyone is out there looking for media exposure. Live by the media, die by the media. Ask Ben Carson.

GIGOT: All right.

So let's talk about it, Jason. Now we have press reports that some of Ben Carson's memoir, details about his past, aren't accurate. Take that on.

RILEY: Well, I don't know that this will be a fatal turn of events for him. It is troubling. Ben Carson, right now, his biography, his Horatio Alger story is his campaign. He's risen in the polls based on this inspiring story about his life, and based on his honesty and trustworthiness. That is what the polls tell us.

GIGOT: And it's -- it is an amazing story.

RILEY: It is.

GIGOT: Up from poverty --

RILEY: It truly is an amazing story.

GIGOT: -- to the pinnacle of the medical profession.

RILEY: Right. But, now we're calling into question about what he's written about in his book, what he has been saying in speeches, what's he said in interviews over the years is, in fact, true. And what I think the danger here is for Ben Carson is that the press smells blood now. He is going to receive unbelievable scrutiny right now. It's going to be, I think, a detraction from what he wants to talk about in terms of expanding this campaign beyond his biography.

GIGOT: Dan, when I look at the CNN story, which looked at nine people from his past, and who he knew as a young man, and said we can't corroborate the stories about some of the things he did. Carson says they happened, but you could interview 900 people from my past and they wouldn't know necessarily everything I did as a kid.

HENNINGER: Yes, memory plays tricks on people. The West Point story was reported by Politico, which by the end of the day Friday was rewriting the headline because they had mischaracterized Ben Carson's confusion about his West Point story.

GIGOT: And that's the claim that he makes in his memoir that he had --

HENNINGER: Been offered a scholarship.

GIGOT: -- been offered a scholarship to West Point.

HENNINGER: They originally reported that he then said was admitted to West Point but then declined to go. He never said that.

GIGOT: He never said he was accepted at West Point. He never said he was admitted to West Point. And there's also some discrepancies about when he might have met with the late General Westmoreland.

RILEY: But there's another point here, Paul. There's this appetite in the Republican primary voting -- Republican primary voters right now for outsiders, for non-professional politicians.

GIGOT: Right.

RILEY: One downside of that, though, is you risk coming up with someone who has not been vetted, who has not been tested. And that's the danger here. And I think that's something you have to keep in mind when you're picking a presidential candidate.

GIGOT: But what if a lot of Republican voters say, you know what, these details are not critical. They don't undermine the larger story, the narrative of his life. In fact, look, the press corps cannot abide, cannot abide a black conservative who rises and does well and wants to attain public office. They may say, you know what, this is something that I don't really hold against him.

HENNINGER: That could well happen. I mean, we are in unchartered territory right now. It's a kind of political media bonfire with Donald Trump getting in and suddenly the celebrity runs to the top of the polls. It's difficult to predict which way it's going. One has to assume, to Jason's point, that eventually, the system will want some substance out of these candidates and they won't be able to just wing it on personal narratives. I think that's why Ted Cruz and Marco Rubio have begun to rise in the polls.

GIGOT: All right, let's talk about Marco Rubio and his credit card problems, those issues about his personal finances. Trump says they're a disaster. There's no question, he's not a man of great financial means. Is that going to hurt him?

HENNINGER: Well, there's risk and opportunity here for Marco Rubio. The risk is there might be something to that, that people have doubts about his experience. The opportunity, though, is that everyone's fighting for media attention and now he's getting it. The question is, how will he handle it.
By and large, Marco Rubio has been very good at addressing problems like this. And he has the opportunity, I think, to impress people who are looking to see how he responds.

GIGOT: Jason, Mitt Romney in 2012 was hit because he was rich. Now we've got Rubio being hit because he's not rich.

(LAUGHTER)

RILEY: Yeah. And he has been vetted for this. During his Senate run, he was vetted. An Ethics Commission in 2012 looked at this and cleared him. He used a credit card belonging to the Republican Party, bought some things personally with it, but paid for it. At the end of the month, he went through the charges and paid for everything.

GIGOT: Everything was paid for.

RILEY: So I don't think there's much here. Where he's vulnerable here is in the youth and inexperience argument that is going to be thrown at him.

GIGOT: You think this plays into that?

RILEY: I think that does play into it. He has to turn that around and say, look, I am the future, put me on the stage next to Hillary Clinton and people will see the contrast. I can do this.

GIGOT: This will be a test for both Carson and Rubio to see how they can pass this crucible.

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.

Kim, start us off.

STRASSEL: This is a hit to Pennsylvania Rep. Tim Murphy who, this week started again his push to get through the House a complete overall of the federal laws and dollars that govern a broken mental health system. Ever since the campus shooting out in Oregon, Democrats are again suggesting that all these tragedies come down to guns. The real problem is a broken system that prevents families from getting care for their sick loved ones and that diverts and wastes money from better treatment. If Republicans really want a fresh start on an old debate, they should be putting all their weight behind this bill.

GIGOT: Hear, hear, Kim.

Joe?

RAGO: This week, we're coming up on the big -- this month, we're coming up on the big Paris climate conference. The big breakthrough this year is supposed to be a deal between China and the U.S. on carbon. Well, this week, we learned that Chinese coal use was actually 17 percent higher than they've been reporting in the official statistics. To give you a sense of the scale, 17 percent in China is equal to 70 percent of all U.S. carbon emissions. So this is actually a hit for the rule of law and political accountability, which China lacks and the U.S. should promote.

GIGOT: All right.

Jason?

RILEY: This is a hit for Janine Hampton, the black Tea Party Republican who was just elected lieutenant governor of Kentucky. I think it's a nice rejoinder to this argument on the left that conservatism equals racism, Paul. But I think it's also good news for the black electorate who should do a better job of taking advantage of our two-party system. This could help that development.

GIGOT: Thanks, Jason.

Thank you, all.

That's it for this week's show. Thanks to my panel and to all of you for watching. I'm Paul Gigot. We hope to see you right here next week.

END

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