• With: Jason Riley, James Freeman, Kim Strassel, Mary Anastasia O'Grady, Matt Kaminski

    This is a rush transcript from "Journal Editorial Report," January 11, 2014. This copy may not be in its final form and may be updated.

    PAUL GIGOT, HOST: This week on the "Journal Editorial Report," 50 years after Lyndon Johnson declared war on poverty, President Obama says poverty is still winning, and he's pushing forward with more government solutions. But is there a better way? Some prominent conservatives are weighing in.

    Plus, former Defense Secretary Robert Gates making some waves with his new memoir. What it tells us about the president and his foreign policy.

    And New Jersey Governor Chris Christie at the center of a political scandal. Are his 2016 presidential ambitions at risk?

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

    President Obama marked the 50th anniversary of Lyndon Johnson's war on poverty this week declaring that there's more work to be done, and using the occasion to push a domestic agenda that includes an extension of long- term jobless benefits, a minimum wage increase and a new government initiative to create economic promise zones. But some prominent conservatives are coming out with antipoverty plans of their own and pushing back on the president's government approach.


    SEN. MARCO RUBIO, R- FLA: The current government programs that are designed to address poverty, they help alleviate some of the pain of poverty, but they do not help people emerge from it. They do not help people rise above it. We have got to deal and with that and with opportunity and equality, not just income inequality. The president's got the wrong focus.


    GIGOT: Joining the panel this week Wall Street Journal Political Diary editor, Jason Riley; assistant editorial page editor, James Freeman; and Washington columnist, Kim Strassel.

    Jason, let's first talk about the Democratic agenda and their focus on income inequality. They're people driving this right now as part of their election year campaign theme. Why now?

    JASON RILEY, POLITICAL DIARY EDITOR: I think a couple reasons, Paul. Obviously, the ObamaCare rollout has been such a disaster. It's what everyone's talking about. It's been driving down the president's approval rating so they want to change the subject. But secondly, this is sort of an evergreen for the left, income inequality, class warfare issues. They think it works for them. This is an effort to get back to something they're comfortable discussing in an election year. They think it will resonate with people in this economy. And that's another reasons they're doing it.

    GIGOT: But here's one of the down sides, I would assume anyway, they've been in charge for five years.


    RILEY: Yeah.

    GIGOT: OK? Real median family income, household income, is down since the recovery began.

    RILEY: Uh-huh.

    GIGOT: Doesn't this bring attention to those --


    RILEY: Yes, it does bring attention to an issue they haven't done a particularly good job of covering, but I also think there are some land mines, frankly, in here for Republicans wading into -- playing on a Democrat's turf on this issue. Traditionally, Republicans have focused on growth and economic opportunity. This would have them talking -- we heard Rubio talking about his own plan, antipoverty plan. Paul Ryan, another congressman, has been out there talking about antipoverty. I think Republicans and conservatives should be wary of playing this game on the left's terms. To the extent that it gets them off message, off that message of economic growth and spreading opportunity for people, I think it could do some harm to their prospect.

    GIGOT: What about a critique of the 50 years of war on poverty. $20 trillion we have spent. The poverty rate now is roughly the same as it was, a little bit better, 15 percent.



    GIGOT: 15 percent, not much better.

    FREEMAN: Obviously, the definition of poverty has come up a bit but, yeah, basically the $21 trillion investment hasn't really moved the needle on poverty rate. And I think the problem for Republicans right now is they understand that the answer here is growth economics. The answer here is creating more jobs as opposed to government handouts. But when it gets into the details, they seem to have trouble right now advocating a real free-market agenda. We heard Marco Rubio give a sort of speech about free- market principles, but then he concluded by suggesting a bunch of tweaks to existing federal programs. So I think along with lauding the free market, they have to say how are we going to get more of it.

    GIGOT: Kim, let me see if you agree with our two skeptics here --



    GIGOT: -- about whether or not the Republicans ought to be trading on this turf. Do you think they're doing the right thing?

    STRASSEL: They absolutely have to tread on this turf. Yeah, they want to talk about ObamaCare and they will talk about ObamaCare, but President Obama is forcing this debate. He wants this year to be about his inequality agenda. We know what happens when Republicans do not have an answer for that. Look at Mitt Romney in 2012.

    So it is good news that you have a newer and younger generation of Republicans who are coming out. And I disagree. I think these aren't conservative ideas. What you're seeing is Republicans acknowledging, yes, we need a safety net for some of these programs. But some of the ideas are great. Returning to the state's control over how you administer a lot of these programs allowing for a lot more innovation, getting rid of some terrible things in the pass code like the earned income tax credit. These are not tweaks. These are important changes. And they're overdue coming from the Republican Party.

    GIGOT: When, and I would say economic -- excuse me, education reform as a tool of economic upward mobility is crucial. So take on Kim's argument.

    RILEY: Sure. I'm all for that. And I'm all for Republicans and conservatives discussing that. The problem with debating income inequality with the left is their definition of equality, Paul. They're talking about outcomes. And they're talking about quotas and set asides and numerical outcomes and proportionate number of women and blacks and others in certain positions rising to certain levels. That is not about equality. When Republicans talk about equality, they talk about equal opportunity.

    GIGOT: And what's wrong with that? Isn't that the way to counter the argument?

    STRASSEL: Absolutely.

    GIGOT: By focusing on equal opportunity and upward mobility?


    GIGOT: The opportunity to move up, to stay up.

    FREEMAN: How do you get that? It's not by turning the earned income tax credit into another type of federal benefit. It's not by taking the restraints off welfare reform and continuing to dole the money out. It's by having lower taxes and less regulations. Republicans feel like that's an old message for them so they need something new.