• This is a rush transcript from "The Journal Editorial Report," September 11, 2010. This copy may not be in its final form and may be updated.

    PAUL GIGOT, FOX HOST: This week on the "Journal Editorial Report," President Obama hits the campaign trail, rolling out a new tax plan. But is it enough to change the debate heading into November?

    Plus, forget the last two years. Endangered Democrats are distancing themselves from the president, from Speaker Pelosi and even the policies. Will the strategy work?

    And nine years after the September 11 attacks, has America overreacted to the terror threat? Some seem to think so.

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

    Well, 20 months and more than a trillion dollars in so-called stimulus later, has President Obama has discovered the virtue of tax cuts. This week, the president proposed a $180 billion plan that includes a permanent research and development tax credit and a tax write-off for businesses that invest in plants and equipment before the end of 2011. Do his proposals go far enough and will they change the debate going into the midterms?

    Joining the panel this week, Wall Street Journal deputy editor and columnist, Dan Henninger; Washington columnist, Kim Strassel; and senior economics writer, Steve Moore.

    So, Steve, you've been telling me all week that you like this presidential proposal. Why is it different? How is it different than what he proposed before and how why it better?

    STEVE MOORE, SENIOR ECONOMICS WRITER: The interesting thing that I found this week, I do like some of those ideas, for example the expensing that allows businesses to write off the capital purchases they make. I think it's a good idea. What's interesting about it, Paul, is the business community, it landed with a thud. They don't want the idea and they think that the cost of the plan with all of the additional corporate tax increases that will take place makes it not worth it.

    GIGOT: Steve, I want to ask you, I want to get to the business point. But I want to ask you, why you think this is a god proposal first. Does it represent a philosophical shift for the president?

    MOORE: I like it because I think if you actually allow the businesses to write off capitol purchases, like equipment, plants and computers, you're going to get a burst on the economy. The point is, it's only a one- year tax cut. So what's going to happen is purchases that would have been made in 2012 and 2013 are going to be fast forwarded to 2011 and then the economy simply will tank in 2012.

    GIGOT: All right.

    I think this is a philosophical shift by the president, Dan of some significance. I say that, why, because before it was always the Keynesian spending to drive the consumer spending and demand. This is the first time he has come out and said, we need to do something for business inceptives, for the supply-side of the economy. That's a huge switch. And it's a tacit admission, if you ask me, that his previous policies haven't worked. Now, we can get to the politics and why business may not trust it, but isn't that a significant change?

    DAN HENNINGER, COLUMNIST & DEPUTY EDITOR: It's a significant change on its base, Paul, but I don't think that he personally believes in any of it. It's something that politics has driven him too. This whole pressure, debate the last month or so has been, are you going to extend the Bush tax breaks somehow? I think that the philosophical things that the president has said, he doesn't want to lower individual tax rates or cooperate tax rates in any way that would put money in the hands of the wealthy or the rich. He will not do that. So this was Plan B.

    GIGOT: So this is political jujitsu —

    HENNINGER: Absolutely, it's political jujitsu.

    GIGOT: — to try to stop the Democrats from stampeding to overrule him on the Bush tax rates?

    HENNINGER: And I think that's why, as Steve suggested, it lands with a thud in the business community, because they recognize the political jujitsu.

    GIGOT: Kim, is it going to stop that impact politically? Is it going to stop the Democrats, some of them who have been very vocal about it, saying we need to keep the 2003 tax rates, is this Obama proposal going to stop that?

    KIM STRASSEL, WASHINGTON COLUMNIST: No, I don't think so, and here's why. The president and those who support his latest proposals have two problems. And remember, these proposals — there are more than tax cuts. He also put forward $50 billion in new stimulus spending for infrastructure projects, he calls them. Here's the problem. One, right now, stimulus is a dirty word. People are more concerned about more spending and the deficit is huge. You have a lot of Democrats who are not eager to pass a plan like this that includes more spending.