Does the VA scandal show ObamaCare's ultimate destination?

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 --


GIGOT: It's the incentives in a government-run system.

When we come back, what this week's primary results tell us about the mood of the Republican electorate and the chances for a GOP Senate take-back this November.


GIGOT: A half dozen states held primaries Tuesday and give us a clearer picture, not only of the mood of the Republican electorate, but of the party's chances for taking back the Senate in November. In Kentucky, Senate minority leader, Mitch McConnell, easily defeated Tea Party challenger, Matt Bevin, setting up a showdown with Democratic secretary of state, Alison Lundgren Grimes. Both gave a hint Tuesday night of their general election strategy.


SEN. MITCH MCCONNELL, R-KY., SENATE MINORITY LEADER: My opponent is in this race because Barack Obama and Harry Reid want her to be in this race. There's a reason, my friends, a reason every Hollywood liberal is sending her a check.

ALISON LUNDERGEN GRIMES, D-KY., CONGRESSIONAL CANDIDATE: We all know Washington is broken. It's not working for Kentucky. And after 30 years, it is Mitch McConnell at the center of the gridlock, obstruction and extreme partisanship that we see.

I'll answer to the people of this state. I won't answer to the president, no matter who he or she might be.



GIGOT: We're back with Dan Henninger and Jason Riley. And Wall Street Journal Potomac Watch columnist, Kim Strassel, also joins the panel.

So, Kim, what are we learning in general about the mood of the electorate this primary season? Is it as angry and focused as it was in 2010?

KIM STRASSEL, POTOMAC WATCH COLUMNIST: I think what we're learning, Paul, is that the voters and the donors on the Republican side want to win. The theme here, you've had a lot of outside groups that have been pushing what's been called the Republican civil war, the idea that all of these primaries show a divide between the, quote, "establishment candidates" and quote, "Tea Party candidates." What the voters understand, it is more important to simply choose the best candidate.

And they seem to understand as well, too, that the conservative grass roots have moved most candidates, even those that supposedly come from the establishment, more in a reform direction. And, in fact, a lot of the people who started out in the Tea Party today run a lot of Republican, state and local organizations. So that divide isn't really there. And they're focused on quality. And what's coming out of these primaries are much better candidates than the GOP has had in a long time.

GIGOT: But, you know, Jason, what's interesting, the challengers to the incumbents do not seem to be winning. Incumbents are winning, which suggests there isn't the same throw-the-bums-out mode.



RILEY: It's not an anti-incumbent mood. You look at Pat Robertson in Kansas; Mitch McConnell, who we were just discussing; John Cornyn down in Texas; Lindsey Graham in South Carolina. I think the voters have determined the problem is not that the Senate, at least, is not conservative enough. It's not -- it's that there aren't enough Republicans there. And Mitch McConnell isn't running the place. That's the problem. And voters get that.

And I think what's also interesting here is that voters realized it was very important in some of these races, particularly in Kentucky and in Georgia, to field strong statewide candidates, because the Democrats in those states -- Republicans are pretty confident about both states But the Democrats are fielding strong candidates. There in Connecticut, you saw Grimes had good name I.D., secretary of state --

GIGOT: Plenty of money.

RILEY: And plenty of money. And the same down in Georgia where Michelle Nunn is going to be the Democratic nominee, daughter of a former Senator. Again, has good name I.D., and can raise money.

GIGOT: Wait a minute, Jason. You're saying that Mitch McConnell is the strongest candidate. He's only, I think, basically, a point or two behind Grimes, which basically means they're tied. And he has been an incumbent for a long time. And his popularity in the state is not that great.

RILEY: It's not great. But he typically had tough re-election rates. He has sailed, you know, with 80 percent of the vote in Kentucky. But he is a proven conservative. He knows how to win. He has the name recognition. And I think his opponent, his Tea Party challenger, would have fared much worse in a statewide election.

GIGOT: But let me ask you about this idea, these mainstream candidates, OK? Some of these -- they served in office. They -- Thom Tillis in North Carolina, I think he's speaker of the assembly down there. Will these candidates be able to win? Because in 2012, we saw, in Montana, for example, with Denny Rayberg, and North Dakota with Rick Berg, these were establishment Republicans, members of Congress, who got thumped. They turned out to be really lousy candidates. Could we see the same thing happen here?

HENNINGER: I think it's less likely, Paul. You know, politics is not amateur baseball. It is a profession. And you need strong professionals. It's interesting, when we go through the list of these Senatorial incumbents, Senators Cornyn, McConnell, Graham, Roberts. These are guys who know how to do politics. They know how to campaign. And I think, as we have been suggesting here, that the voters have decided that they want the Republican circular firing squad disbanded.


And secondly, to Ms. Grimes' point about gridlock in Washington, the fact that nothing has gotten done has allowed Republican voters to focus on Barack Obama. And they want him and the Democrats out. And I think they've got a really laser-like focus on accomplishing that now, which is overcoming a lot of these other concerns.

GIGOT: Kim, what about the next week's primary in Mississippi, where Thad Cochran, who is a long-time Senator and, I think, 76 years old, being challenged by a state senator by the name of Chris McDaniel. Some people are describing that as the Tea Party's last stand here this cycle. How is that race going?

STRASSEL: Yeah, I think this is the one that, you know, Republican Party is most concerned about in terms of their incumbents. Mr. Cochran has been hit pretty hard. He's an appropriator, spending, and he's got quite a fierce challenge coming from this competitor. But this is going to be an interesting race, though, Paul, because unlike some of these other races -- look, one of the things like, for instance, in the McConnell-Bevin race, is that there wasn't necessarily huge amounts of differences between the candidates. And that's one of the reasons --

GIGOT: On policy. On policy.

STRASSEL: On policy. On policy. And that's why some of these challenges have fallen flat. I think what's interesting about the Mississippi race is you have a little bit more of a contrast there in terms of, for instance, like spending policy and stuff like that, which is why that has proven to be a little bit more competitive of a race.

GIGOT: You still picking Cochran, though, right?

STRASSEL: I think he's still got the built-in advantage.


All right, thank you, Kim.

When we come back, four years after Haiti's devastating earthquake, outrage is growing over the failed reconstruction effort and the role played by the Clintons.


GIGOT: It's been more than four years since a magnitude 7.0 earthquake devastated Haiti. And outrage there is growing over the largely failed reconstruction effort, despite the hundreds of millions of dollars in aid that has been collected and spent by the IHRC, the Interim Haiti Recovery Commission. Now two prominent lawyers have petitioned a Haitian court, demanding an audit of the commission and its manager, former President Bill Clinton.

"Wall Street Journal" columnist, Mary Anastasia O'Grady, has been following this story and has the details.

So why are Haitians so unhappy?

MARY ANASTASIA O'GRADY, COLUMNIST: Well, the earthquake was in January, 2010, so we're four years into this process. They were promised a lot. And they also know that a heck of a lot of money was spent.

GIGOT: How much? What are we talking about?

O'GRADY: Well, the Inter-American Development Bank claims that over four years, a total of $3 billion has dispersed, to be managed by the Interim Haitians Recovery Commission.

GIGOT: What do they have to show for it?

O'GRADY: Almost nothing.

GIGOT: Really?

O'GRADY: It's really a disaster.


O'GRADY: There were two components that were important. One was they were supposed to build housing. OK? And that was primarily handled by USAID. USAID, after several years of hiring consultants and contractors, reported that they had to increase their budget by 65 percent and decrease the number of houses that they promised by 85 percent. That's how far off they were in their studies. They also built supposedly an industrial park in the north of the country --

GIGOT: Right.

O'GRADY: -- a very important industrial park, because part of what's supposed to be going on here is that Haiti would get up on its own two feet and stop being --


GIGOT: And not just be a recipient of aid, yeah, exactly.

O'GRADY: And so what do you need when you say I'm going to open an industrial park? You need roads. You need buildings. You need --


GIGOT: You need water. You need electricity.

O'GRADY: You need --


O'GRADY: This is all in chaos right now. They do have a couple of buildings, reportedly. They're very shoddy construction. The roads are not there. The port, which they spent, you know, several years thinking about, now has been completely cancelled. They can't do a port there, they found out.

GIGOT: All right, what role has the State Department, and obviously run at the time for four years by Secretary of State Hillary Clinton, played in this?

O'GRADY: The State Department was the major --


GIGOT: Government agency.

O'GRADY: -- government agency in charge of overseeing all of this. And in 2009, remember that Bill Clinton was named the U.N. special envoy to Haiti.

GIGOT: Sure.

O'GRADY: And from that time on, when you call the State Department and you had interest in either investment or some kind of business, you were referred to the Clinton Foundation. And subsequently, after the earthquake, basically, the State Department took over everything, and Bill Clinton was the go-to guy for all of the transactions.

GIGOT: And you reported a fascinating detail about Hillary Clinton's chief of staff at the State Department, and former White House lawyer in the Clinton years, Cheryl Mills.

O'GRADY: Yes, well, that's the talk of Haiti, because everybody knows that Cheryl Mills went to Haiti more than 30 times in four years, which is a heck of a lot to go to one country when you're the chief of staff for the secretary of state.

GIGOT: What --


GIGOT: Go ahead.

O'GRADY: Well, and she was basically put in charge of the industrial park in the north of the country, which is the colossal failure.

GIGOT: What response did you get from the Clinton Foundation and Bill Clinton when you called?

O'GRADY: Well, they did not comment. They did not come back. But since then, we've gotten a lot of support for the Clintons. All of the letters are written in a very similar way, saying that the Clintons are really not to blame here, that there were lots of problems, but Bill Clinton, what did he have to do with it? And that, I find very strange, because he was the point person in Haiti for the last four years.

GIGOT: All right. This is fascinating stuff, Dan. Big picture, quickly. What -- how much will this affect Hillary Clinton's campaign if she runs?

HENNINGER: It's a perfect example of the sorts of problems Hillary will have, because the Clintons together are just -- questions of conflicts of interest get raised constantly. This does not mean they are doing things illegal or wrong. But they are political problems. And I think it's going to be endless land mines for Hillary the whole time she is trying to run for president, with her husband.

GIGOT: Their governing record ought to be fair game.

When we come back, our "Hits and Misses" of the week.


GIGOT: Time now for "Hits and Misses" of the week -- Kim?

STRASSEL: A miss to Harry Reid and Nancy Pelosi, who, this week, defying warnings, screened a hit-piece documentary about conservative activists, Charles and David Koch, at the Capitol Visitors' Center, despite the fact that there are very clear rules saying that that taxpayer-funded facility is not to be used for partisan activities. I know the Democrats are desperate to distract from their election-year woes by waging a public campaign against the Kochs, but that does not entitle them to co-opt every square inch of Washington for their purposes.

GIGOT: All right.


RAGO: Paul, a miss for Oregon and its dysfunctional ObamaCare exchange. Worse than the nation rollout, enrolled zero people.

GIGOT: Zero?

RAGO: Zero!


Governor John Kitzhaber claimed to fire the guy responsible but it turns out he is still on payroll, drawing a salary of $15,000 a month. It was a fake resignation. The Oregon exchange is now under investigation for fraud. And if anybody is held accountable, I'll resign.


GIGOT: All right.


O'GRADY: This is a miss for Iranian state security, which this week arrested seven Iranian students for making a video where they danced to Pharrell Williams' song called "Happy." And the state security says this is a warning to all people in Iran that the government will find you if you are happy and they will catch up with you.

GIGOT: Too much happiness is a crime --


-- all over the world.

Thanks, Mary.

And remember, if you have your own hit or miss, please send it to us at And be sure to follow us on Twitter, @JERonFNC

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

Content and Programming Copyright 2014 Fox News Network, LLC. ALL RIGHTS RESERVED. Copyright 2014 CQ-Roll Call, Inc. All materials herein are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of CQ-Roll Call. You may not alter or remove any trademark, copyright or other notice from copies of the content.