• With: Jason Riley, Dan Henninger, Mary Anastasia O'Grady, Bret Stephens

    GIGOT: What are the states that do this well? You said Connecticut doesn't do it well. But which states do? What's the evidence that they're succeeding.

    TORREY: The states that are using assisted outpatient treatment -- New York is a good example. They're using it, not widely, but they're using it. And the studies have shown that assisted outpatient treatment decreases hospitalization, decreases arrests, and time people spent in jail. And there are studies from both North Carolina and New York showing that this kind of treatment will decrease episodes of violence as well.

    There's now a recent study from a county in California showing it's also cost effective. For every dollar you spend on this program, you save up to $2.

    GIGOT: And you can do this -- you say, the evidence is such, you can do this without abusing the civil liberties of people and incarcerating them for months or years on end, or treating them against their will for months and years on end.

    TORREY: Well, you're treating people against their will sometimes for long periods of time, although they're living in the community, if they have no awareness of their illness.

    GIGOT: Right. OK.

    TORREY: If they really think the CIA is sending those voices in their head and they have no awareness of their illness, and the CIA is telling them to do various things, these people need to be treated for a long periods of time, but they can be done so while they live in the community.

    GIGOT: OK, Dr. Torrey, thanks so much for being here. Fascinating insights.

    Still ahead, the House Republican Plan B to avoid a fiscal crisis collapses. Is there a Plan C, and is President Obama willing to make more concessions, or are we headed off the cliff? Our panel weighs in when we come back.

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    GIGOT: House Speaker John Boehner's effort to pass fallback legislation to avert a fiscal crisis collapsed Thursday night when he was forced to pull his so-called Plan B from the House floor after some conservatives balked at provisions to let tax rates rise on those making over $1 million dollars. Is there a Plan C in the offering or is America headed off cliff?

    Joining the panel this week, Wall Street Journal columnist and deputy editor, Dan Henninger; editorial board member, Mary Anastasia O'Grady; and "Political Diary" editor, Jason Riley.

    So, Jason, where do we stand right now with the collapse of Plan B?

    JASON RILEY, POLITICAL DIARY EDITOR: Well, it's no fun being John Boehner right now. He's still in a tight spot. And the concern that the Republicans have is that Obama's hand will strengthen if we go over the cliff and tax rates go up.

    But I really think the buck stops with the president here. When you go into the negotiating sessions, Paul, and you're expected to make concessions, but you're expect to get something in return. And Boehner made a major concession on rates. And the president is giving him nothing in return to take back to his caucus and say, this is what happened in the horse trading. It's an all or nothing. Obama seems determined to humiliate the opposition.

    GIGOT: Boehner made two concessions. The first was $800 billion on the table in revenue but don't raise rates. And then when the president said no, you're got to raise rates, he said, OK, I'll make a concession on rates. He made an offer first that said we'll vote for a million dollar tax increase on those making more than a million dollars, but give me something in return. Then, those negotiations went nowhere. So then John Boehner went to Plan B.

    And I mean, I think you sense, at least when I talk to Boehner's people, the enormous frustration with the president that they're not going him anything to take back to his conference members and say, you know what, this is worth violating your tax pledge. And that's the problem. So, it seems to me that, you know, he's -- the president's almost saying, you know, go over the cliff, don't care, I know I can blame you and so what?

    DAN HENNINGER, COLUMNIST & DEPUTY EDITOR: Well, the -- excuse me -- the atmosphere is so toxic at this point, Paul, that -- we've talked about the cliff as though the two sides are trying to negotiate something for the good of the economy. But the Republicans in the House, at this point, believe that a large part of the negotiation is to disadvantage them politically, and that the president has a track record of having done that.

    You remember back when Ryan's budget was introduced and you had Medicare reforms in it? That was followed by these TV commercials about literally throwing grandma off the cliff.

    Obama never turned -- shut down his political campaign. And we know now a lot of what happened the last four years was fed into the presidential campaign apparatus.

    If you're a Republican, you've got to be sitting there saying, if I make a step wrong on Medicare reform or one of these issues, it's going to be used against me in the 2014 election, and I'm not going there.

    GIGOT: Yes. That's what they just didn't want to take that step, because they figured then they'll suffer. It will be very bad vote. And so, I mean, John Boehner is in a very tough spot, as Jason said, because, ultimately, if you can't deliver the votes on the floor, you either have to turn it over to the Democrats and pass something with a handful of Republicans and Democrats, which may be what happens, or you end up going over the cliff.

    MARY ANASTASIA O'GRADY, EDITORIAL BOARD MEMBER: You know, I think the main problem for Boehner is actually not what he does, but how -- who it gets blamed on. That's what he has to work harder on, communicating to the American people there are three branches of government. You know, we didn't elect President Obama to be the dictator. We have another branch which -- where the Democrats lost.

    And people who voted for Republicans were very concerned about the size of government, Paul. I mean, they've allowed this to be a debate about tax rates, but the real problem, I think, for most Republicans and people who voted for them is that they see how the cost curve is just bending up at a rate that is just unsustainable. I mean, the country cannot survive the kinds of increases in entitlement payoffs that will occur if there's not reform.

    GIGOT: Yet, there's, at least in my reporting, the president has offered only one substantive entitlement reform and that's a change in how we calculate inflation for benefits and tax brackets. And that was agreed to last year. It's really minor in the scheme of things. Nothing else that is sustainable.

    RILEY: I think the president is overplaying his hand, Paul. He's going to need Republican votes next year to raise the debt ceiling. He'll need Republican votes if he wants other second-term agenda items, like immigration reform. And humiliating them now is not going to make that any easier next year.

    (CROSSTALK)

    HENNINGER: Well, he could certainly -- the fiscal cliff is, in some sense, artificial. The president has it in his power to extend the current tax rates for everybody into next year, say, for six months, and then get down to some serious negotiations after the Congress reconvenes.

    (CROSSTALK)

    GIGOT: But, Mary, should Republicans be willing to raise rates? Say, we lost the election. You know what, we're just going to -- we just have to do it.

    O'GRADY: Well, I think that if the president had put something that was like $1 of tax increases for every $4 that he was cutting, then there could be an argument for doing that. But he's not there.

    GIGOT: All right, Mary, thank you.

    Still ahead, four State Department officials removed from their post after a report about the U.S. consulate attack in Benghazi.

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    GIGOT: A scathing report released this week blames systemic failures in leadership and management deficiencies at the State Department for inadequate security at the U.S. consulate in Benghazi before the September 11th attack that killed Ambassador Chris Stevens and three other Americans. In testimony before Congress this week, two top advisors to Secretary of State Hillary Clinton vowed to do better and to improve security at U.S. diplomatic posts around the world. Clinton herself was scheduled to appear, but is reportedly recovering from a concussion sustained last week and has postponed her testimony until January.

    We're back with Dan Henninger and Jason Riley. And Wall Street Journal foreign affairs columnist, Bret Stephens, also joins us.

    So, Bret, what did we learn this week about the attack that's new?

    BRET STEPHENS, FOREIGN AFFAIRS COLUMNIST: Let me correct you. This was not a scathing report.

    (LAUGHTER)

    This was a report that said there were failures in middle management. It says, in its last sentence, that no disciplinary actions are warranted. Four officials did resign. It gives us a timeline of what happened, which largely corresponds with what all of us know by now happened in Benghazi. It tells us that the CIA had no information about impending attacks, even though there was a dozen CIA officers on the ground. This is not a scathing report.