• This is a rush transcript from "Journal Editorial Report," December 3, 2011. This copy may not be in its final form and may be updated.

    PAUL GIGOT, FOX HOST: This week on the "Journal, Editorial Report," as Newt Gingrich continues to surge, does Mitt Romney's play-it-safe strategy need some rethinking?

    Plus, Barney's rubble. The Congressman from Fannie Mae is retiring. We'll take a look at his legacy.

    And accusations of insider trading have members of Congress on the defensive, but how big a scandal is it really?

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

    With fewer than five weeks to go for Iowa caucuses, Newt Gingrich continues his surge, pulling ahead by a wide margin in a new national poll that has the former House speaker with the support 38 percent support of likely primary voters. And he is leading in polls in the early states Iowa, South Carolina and Florida. Gingrich has been capitalizing on the momentum this week, pitching himself as the conservative alternative to Mitt Romney.

    (BEGIN VIDEO CLIP)

    NEWT GINGRICH, R - PRESIDENTIAL CANDIDATE: I'm clearly the more conservative candidate by any rational standard. I had a 90 percent American Conservative standing for 20 years. I helped Ronald Reagan and Jack Kemp develop the supply-side of economics. I helped lead the effort to defeat communism. I helped the speaker of the House balance the federal budget for four straight years, reform welfare as an entitlement, the first tax cuts in 16 years. And take whatever your list of conservatism is, there's places where I have done that stuff.

    (END VIDEO CLIP)

    GIGOT: Joining the panel, Wall Street Journal columnist, Mary Anastasia O'Grady; columnist and deputy editor, Dan Henninger; and assistant editorial page editor, James Freeman.

    Dan, what is behind the Gingrich surge?

    DAN HENNINGER, COLUMNIST & DEPUTY EDITOR: One of the things that is behind it, Paul, I think is that there was always structural weaknesses in the Romney campaign. He was running a campaign that was going to put one foot in the center because I think he understood that, in the general election, he needed to win Independent voters. Part of his appeal has been for them. The other foot has been in the conservative camp. The problem is he had to run in early primary, Iowa, New Hampshire, South Carolina and Florida. These are conservative-based Republican voters. He has been lucky so far, in that most of his opponents were basically pretty weak. I think what we have going on here now is the parable of the tortoise and the hare. Romney has been the hare, racing out in front, the guy with all the experience. Gingrich has been plodding along, slowly making his case, and finally the conservative problem for Romney caught up with him.

    GIGOT: What you are saying, the Gingrich surge is not about Gingrich, it's about Romney. It's about Romney's weaknesses, is that what you are saying?

    HENNINGER: Yes, I think so.

    (CROSSTALK)

    GIGOT: It's a lot less to do with Gingrich's appeal. Remember, we've had the flavor of the month here.

    HENNINGER: Yes.

    GIGOT: They all popped up and Newt is the latest?

    JAMES FREEMAN, ASSISTANT EDITORIAL PAGE EDITOR: Yes, and I think you have to give Newt some credit. He's good at debating. This has been a primary process that is focused on debates. It's clear, in this race, if you are just looking at Gingrich versus Romney, Gingrich is the conservative. He is the one that is giving a very aggressive defense of free markets, saying cut taxes dramatically, get rid of regulation, repeal Dodd-Frank and repeal Obama-care, Sarbanes-Oxley. So what you're --

    (CROSSTALK)

    GIGOT: He is for cap and trade for a while. He was for the individual mandate. He was --

    (CROSSTALK)

    FREEMAN: OK, we'll get into his history. But look --

    (CROSSTALK)

    FREEMAN: But, look, if you are saying who is giving the conservative message, it is Gingrich. Now, the history is going to be a problem.

    GIGOT: OK.

    MARY ANASTASIA O'GRADY, COLUMNIST: I think Romney has two problems. One is he was out in front. He saw these weak players around him and he thought, I can just hold the ball, even though it's only the second quarter, I will just run out the clock. He is going to have to take the fight to Newt.

    GIGOT: How so? How so, Mary? What should --

    (CROSSTALK)

    O'GRADY: The problem that he is facing against Gingrich is what George H. Walker Bush might have called the vision thing. Gingrich is better at communicating a vision, a kind of an exciting change. Whereas, Romney is a technocrat. Data, data, data.

    GIGOT: Right.

    O'GRADY: He says, with a very disciplined approach, change everything and sort of rearrange it and make it work. I think people are more excited about the vision sense.

    GIGOT: OK, but does that mean that Romney has to take -- has to offer a vision of his own, or are you saying that Romney needs to attack Gingrich and find a way to knock him down and say, no, no, no, he is not the real conservative?

    O'GRADY: I don't think he should make it about attacking Gingrich. I think that would be very bad. But I think he has to come up with his own version of the vision thing, something that would get people excited. The neat hair and the controlled disciplined campaign, it has just left a lot of people flat. They both have big-government baggage that they will not be able to shed. He shouldn't be afraid of that with Newt. Newt has enough of that on his own.

    HENNINGER: I think, in any event, it's a healthy development. Mitt Romney needs better sparring partners than he's had if he's going to run for the presidency. Recall, in the 2008 Democratic primaries, it was Barack Obama versus Hillary Clinton. That was a heavyweight fight. They slugged it out through the entire primary season. If it's going to be Newt Gingrich and Mitt Romney, I think they'll both be better candidates if they have to sharpen their positions. If Newt has to defend himself against the baggage. And Romney has to clarify who he is in the front before he faces voters.

    GIGOT: Is there a vision thing that Romney can offer? His political persona is, I think -- I agree with Mary -- is as the technocrat. That's who he presents himself.

    (CROSSTALK)

    His critique of Obama is practical one. He's not been able to create jobs because he's a man of the public sector. I know how to do it because I'm a man of the private sector. But it's a tactical technocratic argument. Gingrich's critique is Obama is radical. He's outside the American mainstream and he offers a philosophical alternative.

    FREEMAN: The question for Romney, at this point, would be, is it too late to recast himself and his message? A lot of people coming into the campaign were saying you have to repudiate your Massachusetts health care disaster. You have to say, sorry, I learned from it. Whether he could now at this late day say, OK, I'm going to be a conservative, I'm going to argue as a conservative, run as a conservative, I don't know. He may get to that if he keeps seeing poll numbers like we saw in Rasmussen.