• With: Kim Strassel, James Freeman, Dan Henninger, Mary Kissel

    This is a rush transcript from "Journal Editorial Report," February 16, 2013. This copy may not be in its final form and may be updated.

    PAUL GIGOT, HOST: This week on the "Journal Editorial Report," the president lays out an activist government agenda for his second term. But does he really think it's going to pass or is this just the opening bell in the 2014 congressional campaign?

    Plus, treasury nominee, Jack Lew, faces questions about his time at Citigroup, including a million dollar bonus and a Cayman Islands account. So where is the Democratic outrage?

    And the Catholic Church after Pope Benedict. What the world's 1.2 billion Catholics will be looking for in their next spiritual leader.


    PRESIDENT BARACK OBAMA: The American people don't expect government to solve every problem. They don't expect everybody in this chamber to agree on every issue. But they expect us to put the nation's interest before party.


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

    That was President Obama Tuesday night in his State of the Union address. Despite acknowledging that government can't solve all of our problems, he called for its vast expansion, laying out a second term agenda that includes more spending on public works, a Cap and Trade program for carbon emissions, a minimum wage increase, and a federal nursery school entitlement.

    So does the president think he can get any of this passed or is he counting on a Pelosi Congress in 2014?

    Let's ask Wall Street Journal columnist and deputy editor, Dan Henninger; assistant editorial page editor, James Freeman; and Washington columnist, Kim Strassel.

    So, Kim, how much does the president really think he can pass or is that what this is about?

    KIM STRASSEL, WASHINGTON COLUMNIST: No, he knows he can't pass his agenda. Very little of this would make it through the Republican House. That's, in fact, exactly the point. The goal here, which is a repeat of what he's done for the last two years, is to put out all of these measures, which are somewhat pole driven and sound generally good to the public, and he pitches them as helping the economy, and then when the Republicans don't pass them or take them up, he will call them obstructionist. He hopes that they'll have a few fights over a couple of them, like the minimum wage that will make them look united and ineffectual. And then he'll use that to try to show that they cannot lead and take back the House in 2014.

    GIGOT: And, James, what struck me was how unapologetic the endorsement of activist government was. This is eons away from the era of "big government is over" from the Bill Clinton presidency. This is an unapologetic look, and, look, government will do the following things for you, suggests to me that he thinks he has a new liberal majority in the country?

    JAMES FREEMAN, ASSISTANT EDITORIAL PAGE EDITOR: Yes. And not having to run again for reelection, having just won, the pretense is falling away that he cares a lot about debt and deficit reduction. A lot of new programs, a lot of new spending. And I think, as we said, 2014, we find out if the Congress is going to be able to stop those programs in the last two years of his term.

    DAN HENNINGER, COLUMNIST AND DEPUTY EDITOR: I think there's more going on here as well, Paul, than just the president sort of figuring out how to fight in the political trenches. He records himself as a historic figure. He has referred to himself in the same breath as --


    GIGOT: The reverse Reagan.

    HENNINGER: The reverse Reagan. He's referred to himself in the same league as LBJ and FDR and Lincoln or Mahatma Gandhi. He's looking toward the future, and he doesn't see that he has the liberal majority.

    GIGOT: OK. But if this doesn't pass, how does he go down in history? None of it passes, say, it's all blocked, how does he go down as a historic figure, or is that already baked in the first term's achievement, Obama- care.

    HENNINGER: Part is the first terms achievement and the idea he committed himself to the goals he regards as universally good, like a carbon-free world. And he thinks history in the future will look back on him and see that if they didn't achieve these things it, his aspirations made him a great man. Which the problem with that, Paul, it disconnects him from the system. In other words --


    GIGOT: From Congress.

    HENNINGER: From Congress, he's not negotiating with Congress. As soon as he did this speech, he went down to North Carolina and was talking --


    GIGOT: But people hate Congress.


    GIGOT: Maybe he's he thinking, OK, he'll batter them and beat them over the head. And if I don't get what I want, maybe they will break on one of two things in the next two years, the Republicans. If they don't, so what? I'll get a Congress led by Nancy Pelosi again in 2014 and then it's, Katy, bar the door.

    HENNINGER: Yes. There would be no question. And I think he's just appealing to the public will, and using that campaign organization that he had. They're still in place, that he e-mails the people. It's a very usual presidency.

    GIGOT: Kim, the thing most striking to me was the return of Cap and Trade --


    -- which Democratic -- a Democrat Senate couldn't pass in 2010. Remember that? And also another tax increase on natural gas and oil drilling or production, which he wants to use to fund some of his renewable energy priorities. Why? What's his thinking there, if it couldn't pass two years ago?

    STRASSEL: Two things are going on on the Cap and Trade programs. He knows it can't pass Congress. It's not going to pass Congress. And this is his excuse that he's putting out there to do what is now becoming much more common in the Obama administration, which is a robust ruse of executive power. So he said -- what it was was a challenge. He said, either pass this bill or I'm going to do this unilaterally through regulatory action. He knows that's what he's going to do anyway. But this was his excuse.

    GIGOT: Right.

    STRASSEL: On the tax part, on oil and gas, this a new way for him to continue funding his green energy projects. We've got a big natural gas and oil boom. And I think the administration has made the decision rather than necessarily fight that, since it's a big job creator, you try to siphon some of the money off it, and use it for your own ambitions, like war, Solyndras, more wind and solar powers, et cetera.

    GIGOT: This could be a play for the second two years of his second term, not the first two, but minimum wage. Republicans are saying to $9 from 7.25. All the polls show people like it, because naturally people say -- they want everybody to make more money. And the damage from it, in terms of jobs that are never created for the low skilled, you can't see. It's not tangible.

    FREEMAN: No. But economists even on the left see it. Maybe that's why it's the most appalling, despicable of the proposals. Even liberal economists know that when you raise the minimum wage, you get less employment. People will lose their jobs. That's not really debated. And of course, if $9 is great, why not raise it to $20 or $50 an hour.

    GIGOT: You know what the black teenage unemployment rate?

    FREEMAN: Over 30