• This is a rush transcript from "The Journal Editorial Report," November 7, 2009. This copy may not be in its final form and may be updated.

    PAUL GIGOT, HOST: This week, on the "Journal Editorial Report," Democrats pick up a House seat long held by the GOP in an otherwise dismal election for the president and his party. Did Republican in-fighting lead to the loss, and just how deep is the split between party moderates and conservatives going into next year's midterms? And Congress extends unemployment benefits for 20 more weeks as the jobless rate hits a stunning 10.2 percent. So where are those stimulus jobs?

    (BEGIN VIDEO CLIP)

    REP. NANCY PELOSI, D-CALIF., SPEAKER OF THE HOUSE: From my perspective, we won last night. We had one race that we were engaged in that was in northern New York. It was a race where the Republicans have held the seat since the Civil War. And we won that seat.

    (END VIDEO CLIP)

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

    That was House Speaker Nancy Pelosi putting a positive spin on Tuesday's election results. Despite bruising losses in the governors races in both Virginia and New Jersey, Democrats did pull out a victory in New York's 23rd congressional district, where an intra-party showdown between GOP conservatives and moderates helped Democrat Bill Owens win a seat not held by his party since the Civil War. Conservative third-party candidate Doug Hoffman forced the Republican, Dede Scozzafava, out of the race just days before the election, with the help of high-profile supporters like Sarah Palin, Rush Limbaugh and the anti-tax Club for Growth, which spent more than $1 million on the race, only to give Nancy Pelosi one more vote.

    Earlier, I spoke to the Club's president, Chris Chocola, and asked him if it was a mistake to get involved.

    (BEGIN VIDEOTAPE)

    CHRIS CHOCOLA, CLUB FOR GROWTH: No, Paul, I don't think it was a mistake at all. From a policy standpoint, conservatives lost nothing. Both Dede Scozzafava and Bill Owens would have voted the same way if they had been elected to the House. So getting Doug Hoffman in the position where he was very competitive was worth the effort and worth the fight.

    And in the end, we had a — John Cornyn, the chairman of the NRSC, the senatorial committee, said the lesson that he learned was that competitive primaries are a good thing. That's a victory in itself, because I think when the party leaders tell the voters what the ought to like and not give them the chance to weigh in on that decision, it's always a big mistake. And so this was a lesson that was learned by the party leaders, and so I think it was a good investment.

    GIGOT: Well, there is no question that she, the Republican was nominated in the back room by New York state elites. But the ultimate outcome here is that Nancy Pelosi has one more vote for Obamacare, and when they vote on it, it's going to be a very close vote. So wasn't this counterproductive?

    CHOCOLA: Well, Paul, Dede Scozzafava was not a moderate Republican. She was left of the Democrat, more than likely going to vote for Obamacare if she had been elected. So if we had just sat on the sidelines and did nothing, that vote would have been there regardless. And so I think that we changed the landscape, we engaged in a debate and had a fight worth having, and I think it's going to have an impact on future elections coming up here in 2010.

    GIGOT: Well, a lot of the Democrats are now saying, look, this is typical of what is happening in the Republican Party. You have this civil war. These grassroots, angry conservatives, who are running against Republican moderates, even in districts where conservatives will have a hard time winning. Is that the kind of fight we are going to see going into 2010 all around the country among Republicans?

    CHOCOLA: Well, using New York 23 as an example of a civil war in the Republican Party I think is a bit of a silly argument. You know, there was no moderate Republican in this race. There was only one real Republican, and that was Doug Hoffman. If the party leaders had nominated a principled conservative from the beginning, I think that he would have won rather easily. And so I don't think it's a great example to say that there's this struggle within the Republican Party.

    I do think that the lesson about competitive primaries is important. I do think there are some examples of that possibly coming up in the future, say in Florida in the primary. But I don't think that New York 23 was a great example to come to that conclusion.

    GIGOT: What kind of criteria do you use and the Club for Growth in deciding whether to support a candidate, and how many bad votes, if you will, do you give somebody, or bad issues do you give somebody before you decide they are no longer going to be somebody that the Club supports? Let me give you an example. Mark Kirk, congressman, Republican congressman from Illinois, running for Senate in Illinois. Somebody — a lot of Republicans think he could win in Illinois. But he's got a bad vote by your lights, I suspect, on cap-and-trade, for it, for cap-and-trade. Would that disqualify him from the Club for Growth endorsement?

    CHOCOLA: That probably disqualifies Congressman Kirk for an endorsement of the Club for Growth. But you know, we have a criteria, and a very disciplined process, that we look at candidates that are viable, that can win, that can win in the districts they're running in. We like to see sometimes a distinction between candidates where we think that we need to get involved to help somebody to be able to support pro-growth policies.

    You know, we run a campaign, and economic freedom is our only candidate. We strictly support economic issues, and, you know, Paul, we think the center of the electorate really believes in limited government and is tolerant on social issues. And we don't think that things like limited government, personal responsibility, fiscal responsibility are fringe issues. We think they are broad-based issues. And so those are the kind of candidates that will stand up and unapologetically say that they support free-market solutions, that they support limited government, that they think taxpayers spend their money better than anybody else, and we again think that those are pretty broad-based issues with wide appeal in the center of the electorate.

    GIGOT: If you have a Senate race, for example, that you have got somebody who is moderately conservative versus a clear Democratic liberal, are you going to support that candidate? Because some people say in Pennsylvania, who think the Club for Growth helped to drive Arlen Specter out of the Republican Party, and now they've got only 40 Republicans in the Senate, and it's going to be hard to filibuster Obamacare or some of these other issues that I'm sure you disagree with.