Behind the Headlines - Dec. 14, 2012

Uploaded by WKNOPBS on 17.12.2012

>> female announcer: This is a
production of WKNO, Memphis.
Production funding for "Behind
the Headlines" is made possible
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>> Barnes: Governor Haslam
rejects an insurance exchange
and more negotiation over the
future of the schools.
Those stories and more coming up
on "Behind the Headlines."
>> (instrumental music)
>> Barnes: I'm Eric Barnes,
publisher of The Memphis Daily
Thanks for joining us.
Tonight, a look at the week's
biggest stories with a couple of
We've got Bill Dries from
Memphis Daily News.
Andy Meek, also from the Memphis
Daily News.
And Eleanor Boudreau from WKNO-
Thanks for being here.
We start with, Bill, the
governor deciding up against a
deadline to reject forming a
state-run insurance exchange,
one of the big, major components
of the Obama Care-Affordable
Care Act.
Why did Governor Haslam reject
it and what are people saying
about it?
>> Dries: Well, Governor Haslam
said that he could not really
get the answers he wanted from
the federal government, despite
800 pages of regulations that
he's been sifting through since
after the November 6 elections.
He was pretty harsh on the Obama
administration on this one
saying that from looking at the
rules, he believed that they
were, in his words, making it up
as they went, in terms of the
regulations that states would
have to abide by in order to not
only from, but also run their
insurance exchanges.
So, he decided that after it
initially looked like the state
might want to give it a shot,
Governor Haslam said basically,
we don't feel like we could run
it effectively so the ball's in
their court.
>> Barnes: And this doesn't
mean-I think there were
protestors of the Tea Party, you
know, movement was very much
opposed to this as protests
throughout the country that
state's shouldn't participate.
There's some confusion to people
who feel like this is a victory
that well now, Tennessee won't
That's not the case.
There will be an insurance
exchange for Tennessee for
people to buy individual
insurance coverages laid out in
the Obama Care bill.
It's just that it will be run by
the federal government, not
>> Dries: Right, there was
always going to be an insurance
The only issue to be decided
here by the Governor was whether
the state would run it or
whether the federal government
would run it.
>> Meek: It's interesting you
didn't hear Bill say anything
about costs.
Correct me if I'm wrong but I
believe the Governor has said on
a few occasions that what he's
looked at, it wouldn't be much
different, cost-wise, federal
government verses the state-run
So a lot of people were
surprised by the decision
saying-well if that's the case,
why would you give up the
I talked with an attorney this
week who was pretty surprised
who handles employee benefits
and this kind of thing.
The other thing is he wouldn't
be the only governor of a red
state who opted for a state plan
The kind of the philosophy has
been-well, the federal
governments going to be making
us do this and by God, we're
going to control it.
So that's kind of the other
>> Barnes: And some of the
politics-I mean, you've seen it
in the other states, too.
Chris Christies been in the news
because of Hurricane Sandy
saying the same thing that
Haslam did.
We don't have enough details.
We don't really know what we're
But there's a lot of people
saying that these people are
only bowing to political
pressure, that the Tea Party-
they don't want, you know.
Haslam is known as a moderate
Republican, a kind of pro-
business Republican, doesn't
want the ultra right wing to be
attacking him or his folks in
the Republican Party down the
And that even if it was smarter
for Tennessee to run it, even if
they could do it more cost-
effectively, just being
associated with Obama Care is
>> Meek: He tipped a nod to that
in his statements.
And it's not politics.
If it was, I would have made the
decision a long time ago.
Not minutes after his decision
came out, Cohen comes out with a
"It's so politics," he said.
>> Barnes: Right, right-Eleanor?
>> Boudreau: Yeah, well, this is
the first big decision that
Haslam has to make related to
the Affordable Care Act.
But the next one down the road
is whether or not to expand
Medicaid, which is in Tennessee,
is TennCare.
So, you know, and that's almost
a bigger decision because if the
Governor chooses not to expand
TennCare, then the federal
government isn't going to do it
for him.
It simply isn't going to get
And with that case if he chooses
to expand TennCare, it will
cover more than 200,000
uninsured Tennesseans.
And the federal government will
foot the entire bill for that
for three years.
And after three years, the
federal government will foot 90
percent of the bill.
But if Haslam chooses not to go
for that, then it simply won't
get done.
>> Barnes: And this goes back to
the ruling and, forgive my
supreme court knowledge here,
but the US Supreme Court, when
they ruled in the summer that
Obama Care was legal, this was
one, I guess you would say, loss
for the Obama administration
where they said that the federal
government couldn't force the
states to do this.
So it became an option, correct?
>> Boudreau: It left the states
with two big decisions.
And the insurance exchange, you
know, an online place where
uninsured people can shop and
compare health insurance, that
was the first one.
But in that case, you now, if
that states like Tennessee
choose not to do it, the federal
government will just do it for
The expansion of TennCare is, I
think, a much more significant
And Haslam said that they're not
You know, when he made the
announcement about the insurance
exchange to the Downtown Rotary
Club in Nashville, he said these
two decisions aren't related.
I haven't made up my mind about
TennCare yet.
And there's no deadline on that
one so it's harder to tell when
he's going to actually decide.
>> Barnes: I don't understand
that whole idea that there's no
But I've read that everywhere,
that there is no deadline.
But it basically goes in to
affect in a year.
Isn't that correct?
That this expansion of Medicaid,
TennCare, that he's got to
decide at some point, I assume.
>> Boudreau: Yeah, he does.
I think the deadline was more
associated with if he doesn't,
then the federal government has
to do something.
>> Barnes: Yeah, okay.
Also the politics on that, I
think, if I'm not mistaken, a
bill has been introduced or
that's been talked about in the
state house on the upcoming
legislature to prevent the state
from taking it.
And it's one of those bills that
probably won't go anywhere.
And again, the politics of this,
Andy, are Tea Party-right wing
people don't want to touch Obama
Care in any way.
And even if it is a big
reimbursement rate, even if we
can run the exchange better, we
don't want to touch it.
>> Meek: No, you're exactly
That's the simple fact of the
>> Barnes: Okay, well we move on
from there to a discussion of
the schools.
There were some updates this
And we'll start with you,
There's always a new bit of
Last week when we talked, we
were on the show.
We had Jim Kyle on, state
senator who proposed Kevin
Huffman, the department of
education director, to step in
and mediate.
That seemed sort of promising a
week ago but as the days went
by, that's not going to happen,
it seems.
>> Boudreau: Yeah, in this
instance, we're just talking
about municipal schools.
And it's really hard to see
where the common ground is on
that because the suburbs want,
you know, municipal school
districts as soon as possible.
And the sort of Shelby County
Commission stance on that is
that they don't want them.
They're illegal.
They won the judge's decision on
municipal schools, although he
still has things to decide so
it's not over.
But his initial decision was
much more favorable to the
Shelby County Commission than
the suburbs.
So it's really hard to see how
they could talk this one out.
>> Barnes: Bill, your take on
I mean, they're meeting today,
the various parties.
Today, as we tape this on
Friday, lawyers from the Shelby
County Commission, lawyers from
the municipalities, to talk.
Is something going to happen or
are we just going to go up to
the next stage of the court
>> Dries: The interesting thing
about this discussion is how
it's been framed.
It's a discussion about should
we have further discussions on
Is there any thing here that
would serve as a framework for
some kind of settlement or
agreement down the road?
One of the more vital parties in
all of this is also not at the
The county-wide school board got
an invitation from the attorneys
for the suburban mayors to the
meeting and Billy Orgel, the
chairman of the school board,
told his school board members
about it earlier in the week and
said basically we're going to go
ahead and let them meet and work
out whatever they want to work
out and may be we'll be involved
We're certainly open to talking
but we're not going to be at the
We should also point out that
the county-wide school board
technically is not a party to
the lawsuit that's under
discussion but certainly, if
you're going to have an
agreement, you have to include
the county-wide school board in
the discussions.
They're planning the school
system that the suburban mayors
are going to be part of for at
least one year.
>> Barnes: And I want to come
back to this, where we are with
the planning, because there is a
lot going on, in terms, and some
would say not a lot going on in
terms of that whole transition.
But the next steps in the court
We talk about this but I want to
keep track of it.
There's the challenge to the
segregation issue, the racial
That comes up next most likely.
>> Dries: Well, what comes up
next is the second part of Judge
Mayes's ruling on the issues
involving the Tennessee
Constitution and the municipal
school districts laws.
>> Barnes: And were those framed
solely to target Shelby County
and just the constitutionality
of that.
And that's where Eleanor was
saying, I think, you hear that
the County Commission is feeling
stronger, that if Hardy Mayes on
the first point said-you crafted
this bill, state legislature, to
target Shelby County.
Don't try to fool me.
You did that.
But it would seem there's a
better chance he's going to do
that on this next one, that,
again, you targeted Shelby
County so we're going to throw
out the rule.
So that's what you're saying is
coming up.
Then there's the whole challenge
on the federal level of
segregation and racial
>> Dries: Racial resegregation
at the County Commission alleges
would be the case if you allow
municipal school districts.
That trial on that was supposed
to start on January 3.
That date has now been pushed
back indefinitely.
If the Judge throws out the
other two laws involving
municipal school districts, you
don't have a trial on the
federal constitutional claims
because it's a moot point.
The laws are no longer on the
So the federal constitution
questions are still out there
but they're pushed back further
in to 2013.
>> Barnes: And so, meanwhile as
you said, the joint school
board, the unified school board
is meeting, trying to work
through the issues of combining
these school districts.
Let's take the question about
the ASD and the closing of
schools first.
So the Achievement School
District, which is the state-rum
school district that came in, I
guess, a year ago, a year ago
plus, to take over failing
schools state-wide, many of them
in Memphis.
They are going to take over nine
schools this year.
>> Dries: Right, they will
announce nine news schools that
will be part of the Achievement
School District for the school
year that starts in August which
is also the first year of the
schools merger.
Some of those schools will be
run directly by the Achievement
School District.
Others will be run by charter
organizations under contract
with the Achievement School
It's not part of the school
system's merger but it's
definitely impacting the merger.
And there are a number of things
that are outside of the strict
boundaries of the merger process
and the decisions to be made
that will impact what parents
and what students see on the
very first day of that merger.
>> Barnes: Well, because you
also get, and he said it on this
show, Martavious Jones, member
of the school board, former city
school board member, who said-
Getting in to school closings so
everyone stay with me here.
But that the TPC recommended 21
school closings because there
are under-utilized schools
throughout the Memphis City's
school system.
Martavious said-we'll, you've
already got nine or ten of them
closing because they're going
over to the achievement school
So we only have to close
another, I think, seven are on
the table at this point.
I think some people debate his
math on whether you count those
ten Achievement School District
schools as coming out of the
But on the seven that they've
said that they are going to talk
about closing, where does that
>> Dries: Well, it's now down to
six actually.
Kriner Cash, the superintendant
of the Memphis City School
system, had envisioned that the
Achievement School District
would go ahead and take Gordon
Elementary where there's already
an ASD charter school operating
separately within that
conventional school.
Well, the ASD said no, they're
not on our list.
They're not in the bottom five
percent of under-performing
schools in the state in terms of
student achievement.
So they're not on our list.
So that's not going to happen.
So Cash came back to the board
this past week and said-well,
Gordons probably off the list at
least temporarily.
So they're only going to be six.
And he's changing Humes Middle
School to basically an optional
school which is involved in some
of the back and forth with the
>> Barnes: And we're in, you
know, the weeds of the decisions
they're making right now.
But this is kind of the heart of
some of the criticisms that
people on the outside have and
the uncertainty about the
And another point of
uncertainty, Eleanor, is the
optional program.
For some people, the Memphis
City Schools' optional program,
White Station, you know, highly
ranked nation-wide, is a public
high school.
They've expanded the number of
optional programs within
But it's unclear at this point
whether those optional programs
will continue next year.
>> Boudreau: Yeah, well the
optional programs are.
Optional schools are some of the
best performing schools within
the Memphis City School's
district and the state.
And they're extremely popular.
But critics of the optional
program say that they're not 100
percent equitable because of the
way that parents get it, you
know, have to stand in line to
get in.
And, you know, the district.
So that's the criticism.
So the school board has to make
a decision on the Transition
Planning Commission recommended
that the optional program stay
in place because they're very
But we'll see what the school
board says.
>> Barnes: I mean, you've got to
I mean, if they don't move
forward with those optional
programs, it's a new level of
screaming about this because
whatever you think about the
fairness and certain about the
option programs and the way
people spending the night in
tents to get them.
The fact that people are
spending the night in tents out
on the street corner to get in
these optional programs speak
that there is an avid core of
parents who if this thing goes
on too long and that isn't
settled, where the optional
programs are going to be,
they're going to go ballistic.
>> Boudreau: Well, the
Transition Planning Commission
actually recommended that
optional programs basically be
expanded so you get more
optional programs.
You know, but there's a school
of philosophy that says all the
schools should be great schools.
So basically, why don't we aim
to make all the schools optional
schools right away?
>> Barnes: We'll leave that
there and, again, more to come,
obviously, every week on the
And we move now to buyouts from
one of the biggest corporate
entities in town, FedEx.
Huge presence in Memphis, Bill,
and they had announced some
months ago that there would be
some restructuring, there would
be some cutbacks.
But basically, it's people being
bought out to leave the company.
Tell us what we know now about
the shape of those buyouts
because it's a huge impact
potentially on the company and
the city.
>> Dries: Right, FedEx
executives have told analysts
and investors that they are
going to achieve $1.7 billion in
profitability annually as a
solution to their problems
primarily with FedEx Express
which is the oldest and largest
division of the company.
That's basically their air fleet
that they had.
And it's been the hallmark of
the company.
They still have not announced
how many buyouts they're looking
for, what the dollar amount is
that they hope to achieve in
terms of towards the
profitability on this.
But they have recently announced
that they're going to start
The packets go out to employees
in February.
It's going to be employees with
five years of continuous service
in the company who will get the
choice among other criteria for
And that it's going to take
about a year.
They're going to do it in three
At the same time that they're
basically not just reacting to
the problems with FedEx Express,
they're also trying to find a
new way of doing things because
their customers have shifted.
As a result of the recession, as
a result of better technology
and some other sectors, folks
who are shipping packages are
moving away from doing it by
They've been doing that over
several years now.
So FedEx is having to adjust to
that long-term, as well.
>> Barnes: Yeah, and I think
also some of the slow down in
I mean, China was a big market
for them.
That has slowed down, air
freight all the way around the
To the buyouts particularly,
specifically, no one knows
exactly how many there will be.
I think that's correct.
But it estimates somewhere
between three and five thousand
I mean, is that that will
ultimately take them?
>> Boudreau: The company has
said thousands.
They're going to offer full
weeks of pay for each year of
continuous service capped at two
years of base pay.
And it's very generous.
So they are expecting, you know,
employees to want this.
>> Barnes: Right but not all in
There are 150,000 employees in
So we think of FedEx as our own,
as a civic point of pride.
But these layouts come all over
the place.
Is that correct?
>> Dries: Across the US.
>> Boudreau: Within the US.
I mean, I think that's the
important part.
>> Barnes: Alright, we move on
to another company in Memphis.
A story that, to some degree, is
no more which is Morgan Keegan,
now Raymond James bought by
Raymond James from Regions bank.
What?-within the last year,
But a kind of startling headline
that came out this week that the
SEC had filed charges against
some big names and Morgan
>> Meek: Morgan Keegan has
gotten a lot of heat over some
bond funds that they used to
have at their firm.
These would be investments that,
you know, the elderly and people
looking to preserve their
capital and their golden years.
They're supposed to be safe, not
a lot of volatility.
It's a whole other story but
those funds blew up.
The SEC filed charges, a lot of
regulatory stuff, against the
firm over that about a year or
so ago.
And I don't care what anybody
says, that's one of the reasons
Regions was looking to get rid
of Morgan Keegan, get a lot of
that off of, give it to Raymond
That takes us up to now.
The charges this week that the
SEC filed were against several
directors at Morgan Keegan who
supposedly, according to the
SEC, didn't exercise enough
oversight of these funds, didn't
know what was going on.
And they were supposed to,
according to federal law.
The SEC is a civil agency so it
brings civil charges.
So monetary is going to be the
>> Barnes: Not criminal, not
>> Meek: not criminal, not jail
You know, a lot of these
participants in these funds were
looking for as sure a bet as you
can find in the investment
I'll give you a sure bet.
What's going to happen here is
settlement and no ambition of
wrong-doing by the people who
were a part of this.
It's just the way all these
things go.
>> Barnes: Well I mean, HSBC the
big British-English bank that
settles-I mean, they were
laundering money for the
Iranians, they're accused of.
I mean, all of these nefarious
No one goes to jail.
No one gets indicted.
They pay a big, big fine and
that seems to be the model.
>> Meek: And another quick point
about this is I think used this
as an opportunity to say-this is
exhibit A for why we need to
bring back the glassed eagle
act, the old federal act that
used to separate regular banks
from investment banks.
So you didn't have people, you
know, inappropriately selling
the other because they just want
to enrich the other side of the
The focus was on what's best for
the customer.
>> Barnes: Right and the other
thing that kind of struck me
about it was the timing because
I just thought-well, this was a
long time ago.
Now that doesn't mean that those
people who lost money, we should
just forget about them.
I don't mean it in an
insensitive way but it seemed
like there would be a stature of
limitations or something that
why didn't they do this years
Why are they only getting to it
>> Meek: The only thing I've got
for you at the moment is the
SECs a pretty slow agency when
it comes to this.
I remember talking to lots of
state regulators who are
following this from the get-go
and kind of were holding back,
waiting to see what the SEC
They were just chomping at the
bit, ready to go.
I don't know what those guys are
But the slowness factor, I
think, is part of it.
>> Barnes: Okay, we'll leave
that there and move in to a
quick side bar of just quick
touches on a number of small
stories that are going on that
will be developing.
And you mentioned the SEC which
reminds me in my strange way of
thinking about things of the
other SEC which then reminds me
of the Big East.
And you followed this some, I
think, Andy.
I mean, the whole story that the
Tigers after many years,
University of Memphis was going
to join one of the elite, big
conferences-the Big East.
It was going to be great.
And now it looks like there is
no Big East, at least as we know
>> Meek: I mean, you've said it.
That's pretty much the issue.
There is some good basketball
The Grizzlies keep, you know,
exciting people.
We were going to mention just, I
think, yesterday.
The Grizzlies new owner-I've
totally hi-jacked your thing.
The Grizzlies new owner has
hired an ESPN writer who's a big
analytics guy to sort of beef-up
that side of the Grizzlies
department, bring a lot of
Moneyball-type stuff to player
evaluations and things like
A lot of people are really
excited about it.
And in fact, the Grizzlies owner
never tweets hardly.
But last night, he made a big
point of welcoming ESPN's John
Hollinger to the team.
>> Barnes: Yeah, that was a big
It was a big deal.
Any thoughts?
The Grizzlies thing is in
positive news and they're doing
really well and all that on the
basketball sports, sports'
business front.
The Tigers-anyone?
Any thoughts?
I mean, what happens next?
I mean to some people will say-
Well, it shouldn't matter.
It's just a sports story.
But on the other hand, there's
big money and there's big, you
There's a lot of community
investment in this sort of
It's more than just a sports
>> Dries: Well, I think it's
interesting to watch how the two
teams, the two franchises, if
you will, have kind of shifted
When the Grizzlies were not
doing well, when they were just
treading water, their games were
the games that people really
weren't too excited about.
You know, and the Tigers
meanwhile were filing up FedEx
Forum during the Calipari era.
Sorry to use the C word.
But now we've seen just the
A lot of people are going
downtown to see these games at
the FedEx Forum when the
Grizzlies are in town.
And a lot of the folks here are
>> Barnes: Right, another quick
story to touch on from this week
past is International Paper.
There was noise.
Andy, I think you followed it
for us.
But they wanted a pilot.
They wanted tax incentives to
stay in the city of Memphis.
They've got a number of big
corporate headquarters in East
Memphis, Germantown area.
They were talk they're going to
move down to Desoto County.
It's kind of a story we've heard
before and in the end, they get
their tax deal.
They're probably going to build
a new building, etcetera.
>> Meek: But this one was a bit
more dramatic because early on,
they had floated the process of
wanting just an extraordinarily
long tax freeze to the point
that the body that grants those
would have to get approval from
the city and county legislative
I think the state, as well.
And it just brought up this
whole discussion.
We've talked about this before-
the dark side of economic
development, giving all of this
money for not a guaranteed
They can get the money, move
tomorrow, next year.
But there's a lot of noise about
They ultimately decided sort of
to go up to the limit of what's
palatable now to 15 years tax
Presumably, they will get that
and stay here.
And we'll see what happens.
>> Barnes: The other part of it
is, I mean, I guess the good
side is, they're going to build
a new building.
They're going to connect if you
drive down Poplar and Poplar and
Kirby, they're going to connect
There's a big investment.
And they're moving how many
people in to town?
International Paper bought
Temple-Inland earlier this year.
And they're moving I don't know-
hundreds, thousands of people.
So I mean, that's the good side.
Those people come.
They spend money.
They buy houses.
They put their kids in school,
etcetera, etcetera, etcetera.
But again, the critics are going
to say these are giveaways, that
these companies should be paying
more taxes.
>> Meek: Yeah, I mean, the
bottom line is the dynamic is
the government is not trying to
give a dollar more than they
have to to win these companies.
The companies have no incentive
to just ask for what they need.
>> Barnes: Right, right.
Other stories from the week that
anyone had?
I was going to go ahead and say
and preview a show that comes up
next week, Bill, when we sit
down with a number of people
from Green Organizations, as I
like to say-Overton Park, Shelby
Farms, the Green Line.
Thoughts on that real quick
As we go in to the holiday
season, it's a show that, again,
we should preview it for next
>> Dries: Well, we'll be talking
primarily about the Overton Park
Conservancy and the Shelby Farms
Park Conservancy and the Memphis
Area Green Line which is kind of
the connection between those two
very different institutions in
our city that have something in
In fact, they're both expanding.
They're both opening their
access to the public.
And we'll see more of that in
the year to come.
So we thought that was kind of a
good way to move toward the end
of the year.
>> Barnes: And we wanted to
have, you know, the bike lane
We just couldn't get everybody
But that's another thing you
see, you know, these bike lanes
connecting all these places that
people like.
Diane Ream, who's the head of
the Memphis Greenline, is
incredibly enthusiastic a person
about the future.
So it was a good conversation.
Thank you all.
Thank you for being here.
Appreciate it.
Appreciate your time.
Thank you for joining us.
Join us again next week.