• With: Dorothy Rabinowitz, Dan Henninger, Jason Riley, Kimberly Strassel

    This is a rush transcript from "Journal Editorial Report," December 26, 2011. This copy may not be in its final form and may be updated.

    PAUL GIGOT, HOST: This week on "The Journal Editorial Report," Newt Gingrich's support sinks in Iowa as his opponents pile on. With just 10 days to go can he make a comeback?

    And the payroll tax holiday fight is the latest in a series of showdowns between President Obama and House Republicans. One year into John Boehner's reign as speaker, who has the upper hand?

    All that and our panel's picks for the biggest stories of 2011.

    Welcome to "The Journal Editorial Report." I'm Paul Gigot. With just 10 days to go until the Iowa caucuses, former front runner Newt Gingrich has seen his support drop in the state amid a barrage of negative campaign ads. The latest Real Clear Politics poll average has him sinking third place behind rivals Mitt Romney and Ron Paul.

    The former House speaker acknowledged this week that the race in Iowa is, quote, "a real mess."

    So, can he come back? Let's ask The Wall Street Journal columnist and Deputy Editor Dan Henninger, Editorial Board member's Jason Riley and Dorothy Rabinowitz and Washington columnist Kim Strassel.

    What's happened to newt Gingrich in Iowa?

    KIMBERLY STRASSEL, THE WALL STREET JOURNAL: He's getting piled on, as you said. What you're going to see over the next week is a much more aggressive Newt Gingrich. You are going to see him going after his rivals the way they have him. He has promised to be a positive campaigner, but he's going to try to highlight some of their weaknesses. He went after Ron Paul this week on foreign policy. He's going to try to play to his strengths, in particular, on growth questions and tax reform policy, and he's going to try and bolster his ground organization there.

    GIGOT: Dorothy, what do you think is working against Gingrich? I mean, why is-- what, what attacks specifically are making a dent?

    DOROTHY RABINOWITZ, THE WALL STREET JOURNAL: Well, the Fannie, Freddie, and the flip-flopping. Everybody is accused of flip-flopping.

    GIGOT: On cap and trade, for example.

    RABINOWITZ: Cap and trade, and everything else.

    GIGOT: And Nancy Pelosi?

    RABINOWITZ: That's right.

    And then there is this general vague sort of thing about his background, and his family life. You know it is insinuated. But you know, he has a very positive view for Newt and for everybody else and he believes that this race, I think, he believes, that this race is going to be clarified. And then all of those voters who went to Santorum and they're going to be his. They're not going to Romney.

    GIGOT: Clarified how?

    RABINOWITZ: Well, he's going to be the Southern conservative as opposed to the Massachusetts moderate and that's what he's going to be.

    GIGOT: I see.

    JASON RILEY, THE WALL STREET JOURNAL: Kim mentioned strategy going forward. The question is, is there enough time left to implement that strategy? Newt Gingrich spent Wednesday and Thursday of this week Virginia. Why? Because he needed enough signatures to get on the ballot there; he already missed the deadline in Missouri. Almost miss it in Ohio. Newt has an organizational problem here. He thought he could fly off the debates, flashy performances, but you still need a ground. It's largely organizational at this point.

    GIGOT: You know the verities of politics. Presidential politics, money, which he doesn't have enough to respond to those ads. Negative advertising, which Mitt Romney and Ron Paul have been pounding him. Mitt Romney through the Super PAC that is not affiliated formally with Romney, but everybody knows is supporting him. If you don't have the money to respond to those ads, they work.

    RABINOWITZ: But Paul --

    DON HENNINGER, THE WALL STREET JOURNAL: They not only work, Newt's done. He's toast, OK? He's finished. These ads are intimidating and driving away potential contributors, they're just going to leave Newt Gingrich out in the desert to die now.

    Now, and I want to add this judge thing that was so controversial in the past.

    GIGOT: This was Newt's proposals for judicial reform.

    HENNINGER: Right.

    GIGOT: And taking on the judiciary and saying, the executive and the Congress, for example, Congress should subpoena judges.

    HENNINGER: Right. Why did he do that? I think he did it to raise money on the Internet. You take these red meat subjects, you throw them out there. People start sending you small contributions. Most of his support has been from small contributors. But it was a two edge sword because he ran the risk of bringing the establishment down on him and that's what happened.

    RABINOWITZ: But, Dan, I think it may be working a bit. Because there's a certain confidence in the Gingrich campaign that he's going to be, by the end of the month, having enough money to equal whatever John McCain had at this point in the race.

    GIGOT: So he'll be able to fight back on the airwaves in Iowa, or so he says.

    RABINOWITZ: That's right.

    GIGOT: And Kim, what have we learned about Mitt Romney this week? Anything in particular about his campaign? He sat back and said, Newt, if you can't take the heat get out of the race because Obama is going to be much worse than anything you're getting now.

    STRASSEL: He just keeps going and going. He's got an excellent strategy that way. As you say, all the money that he spent raising earlier in this race has now come very much in handy. It has allowed him to go after his rivals. He has also played Iowa carefully in that he didn't put too much emphasis on it. He made everyone know that New Hampshire was his big focus. And that way if he didn't do well in Iowa it wasn't necessarily a killer, like in 2008. And yet, behind the scenes been doing a lot of organization and keeping himself in Iowa and he could well do, pull out a victory.

    GIGOT: Romney, obviously, wants to win Iowa, Jason, but the second best thing would be a Ron Paul victory in Iowa for him.

    (LAUGHTER)

    And he wants to knock out Gingrich. That is, Romney wants to knock out Gingrich, who he thinks is a more serious contender. And he believes that if Paul wins in Iowa it will be a flash in the pan because he can't possibly win the nomination.

    RILEY: And they met with Romney, the editorial board of The Wall Street Journal, met with Romney earlier this week. And he was asked whether this 25 percent ceiling he seems to have is a problem. And he basically said he sees it as a floor. He says there's a lot of people still in the race and once the primary starts the field will narrow. And the fact that he's able to maintain a relatively high level of support, and albeit a limited one, is a good thing and he can only go up from there and expects to.

    RABINOWITZ: Yes, well, Jason, you remember he did not look exactly happy when they issue was raised.

    (LAUGHTER)