The U.S. government was in trouble both at home and abroad this week. Endless lists of complaints have been filling in the last few weeks about the new health care site, prompting the government to hire a contractor to fix HealthCare.Gov before a Dec. 15 deadline. But abroad, things look even less sure as reports have come out indicating that the NSA has been spying on the country’s European allies, particularly on Germany’s Angela Merkel. Banking giant JPMorgan Chase has also been through a rough week, as the bank faces a potential $13 billion settlement for its misinformed actions that helped spur the 2008 housing bubble burst.
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‘General Contractor’ Hired to Fix HealthCare.Gov by Next Month
After three weeks of bugs and site malfunctions, the Obama administration named a “general contractor” to fix the glitch-filled HealthCare.Gov site by the end of November.
Despite claims from the administration that the site is very easy to use, reports reveal that more than a fair share of confusion and frustration resulted from the site’s application process. A few low-income applicants were denied access to available plans on false grounds that they were ineligible for health insurance, while many other users reported inaccurate information about federal tax credits or the health plan in general. People shopping for alternatives to their workplace health plans have also reported obstacles to doing so, as the system refuses to process their applications.
Former budget official Jeffrey Zients said that software bugs were responsible for HealthCare.Gov’s malfunctions. A previous explanation claimed that the glitches arose because the site traffic was too high.
The new site will be up two weeks before the Dec. 15 deadline for people to sign up for health insurance that takes effect on Jan. 1. The open enrollment period will continue until March 31, after which uninsured citizens can face tax penalties.
E.U. Leaders Enraged by U.S. Spying Operations
The EU may be one of America’s closest allies, but this week relations took a sour turn when allegations surfaced that the U.S. was spying on its European allies.
France and Germany united on Friday and insisted that the U.S. sign a “code of conduct” to prevent them from spying on European countries. Britain was “forced” to sign the statement as well following immense E.U. pressure.
Germany’s Angela Merkel publicly declared that her country’s relations with the U.S. needed rebuilding. The National Security Administration (NSA) had bugged the German Chancellor’s personal mobile phone from an American listening post in Berlin.
“We need trust,” said Merkel. “Spying among friends is never acceptable.”
Spain and Italy are two other E.U. countries who have expressed concern over the allegations. As of Saturday morning Germany has announced its intention to send a top group of spy chiefs “on relatively short notice” to Washington for an investigation. France and Germany also want to set up a new intelligence pact with the U.S. to prevent any intrusive spying on their citizens.
JPMorgan, U.S. Government in Tentative $13 Billion Settlement
Following several months of investigations, corporate banking giant JPMorgan Chase could pay up to $13 billion in legal settlements for its destructive sales in 2008’s mortgage bubble and other trading debacles over the years.
The bank is under investigation by at least seven federal agencies, several state regulators and two foreign countries. JPMorgan sold subprime mortgage securities to mortgage giants Fannie Mae and Freddie Mac that ultimately led to the housing bubble’s burst, leaving thousands of Americans unable to pay their home mortgages. While JPMorgan has attributed the troubled mortgage sales to investment banks Bear Stearns and Washington Mutual, both bought by JPMorgan in 2008, the government has largely pinned responsibility on the bank.
Along with the federal allegations, JPMorgan is also facing legal challenges related to risky trades coming from states like California. Abroad, the bank is being sought for its role in what has come to be known as the London Whale trade, when JPMorgan posted a $6 billion loss after one of its traders aggressively entered the credit default swap market.
The bank reached a settlement of $5.1 billion with the Federal Housing Finance Agency (FHFA) on Saturday to pay off its misleading of Fannie Mae and Freddie Mac. An official settlement with the Department of Justice is pending.