• With: Jason Riley, Dan Henninger, James Freeman

    HENNINGER: Yes, you have to give him some credit for doing that. I think he is trying to get this problem off the Republicans' back because it is damaging them in these elections. There is no question about it. Some on the right say, well, Hispanic voters will never voted entirely for the Republican Party. They need them all voting for the Republican Party. They need them back above 40 percent, which was the number George W. Bush got, not down to 25 percent.

    GIGOT: Jason, where could this break down? The two sides are moving together but there's still a long way to go.

    RILEY: I think Marco Rubio and the bipartisan plan out of the Senate gave a lot of ground with the guest worker program and in terms of -- I'm sorry, I should say the legalization --

    GIGOT: The path to citizenship.

    RILEY: The path to citizenship. They gave a lot of ground because, under the bipartisan plan, these folks will get probationary status right away. The whole disagreement is how they get from there to a green card.

    GIGOT: How long that would take --

    (CROSSTALK)

    RILEY: And how long that would take.

    (CROSSTALK)

    GIGOT: Democrats want it almost immediately, the path to citizenship. Rubio --

    RILEY: That's right. And Republicans want a longer path.

    GIGOT: And Rubio says you've got to the back of the line from the people who waiting for green cards.

    And then the other problem is potential guest worker program. Because AFL-CIO and Big Labor doesn't want that kind of guest worker? Why? Because they wouldn't be union workers.

    RILEY: That is the key to making this work going forward, getting in place a legal system for people to come so they don't come illegally. That works in tandem with securing the border. There is less pressure on the border if people are coming legally.

    GIGOT: That is part of the border security solution.

    All right, Jason, thank you.

    Still ahead, remember those fat cat bankers President Obama blamed for the financial meltdown? One of them is about to be treasury secretary. When we come back, we'll take a closer look at Jack Lew's time at Citibank. The details might surprise you.

    (COMMERCIAL BREAK)

    (BEGIN VIDEO CLIP)

    OBAMA: The American people will not excuse or tolerate such arrogance and greed. The road to recovery demands that we all act responsibly, from Main Street to Washington to Wall Street.

    -- but yet, some people on Wall Street who took these unbelievable risks with other people's money.

    It's also imperative that those in Wall Street board rooms and on trading floors be held accountable for the decisions that they make.

    (END VIDEO CLIP)

    GIGOT: President Obama, criticizing what those he famously called fat-cat bank cats on Wall Street, the very same people he blamed for the financial crisis. Now it appears one of them will likely be our next treasury secretary. The president's nominee for that post is none other than Jack Lew, the current White House chief of staff and former executive at Citibank, perhaps the most trouble of too-big-to-fail banks and recipient of a $45 billion taxpayer bailout.

    Wall Street Journal assistant editorial page editor, James Freeman, has been looking into Mr. Lew's time at Citibank.

    First, let's put this into context. Citibank was a particularly big player in the financial crisis.

    FREEMAN: Yes, that is right. One of the banks of the center of the mortgage meltdown. In 2007, Citi was one of the first to have difficulties when they had been managing these off-balance sheet vehicles to invest in mortgages. Those started to go south. They ended up at the end of that year having to take them in-house again and stand behind them, which put a lot of financial pressure on the firm. But I think this is going to be a test, this nomination, about whether Americans are still outraged about the bailout.

    GIGOT: They had a $45 billion taxpayer capital injection --

    FREEMAN: That's right.

    GIGOT: -- as well as a guarantee, a federal guarantee of more than $300 billion in bad loans. There is no question in your mind Citibank would have failed without federal intervention?

    FREEMAN: The question -- I think it would have. The question in my mind is whether they should have let it fail and --

    (CROSSTALK)

    GIGOT: -- do so. And Sheila Bair, the FDIC chair at the time did as well. But she was opposed by other people in the administration.

    So let's get to Jack Lew and his role at Citibank? What was his job?

    FREEMAN: Maybe the most interesting one is, in early 2008, he takes the helm at what's called Citigroup Alternative Investments, that ran hedge funds and exotic off-balance sheet vehicles, had just taken them in house when he came on board. It was basically a unit that, if it wasn't the inspiration for the Volcker Rule that wanted to stop big banks --

    (CROSSTALK)

    FREEMAN: -- gambling with taxpayer's money, it easily could have been. It was a disaster. The losses were enormous.

    (CROSSTALK)

    GIGOT: But the defense of him would be, he came on in 2008 and all the bad decisions had already been made. You can't blame Jack Lew for things that other bankers at Citigroup did?

    FREEMAN: OK, but he is now setting himself up. He is now the --