• With: Joe Rago, Dan Henninger, Kim Strassel, Collin Levy, Dorothy Rabinowitz

    This is a rush transcript from "Journal Editorial Report," June 28, 2014. This copy may not be in its final form and may be updated.

    PAUL GIGOT, HOST: This week on the "Journal Editorial Report," the Supreme Court strikes down President Obama's recess appointment as Republicans announce plans to sue over executive branch abuses. Is this the beginning of the end of the imperial presidency?

    Plus, yet another twist in the IRS targeting scandal as House investigators claim Lois Lerner sought an audit of a Republican Senator.

    And Hillary Clinton once again facing charges that she's out of touch. What her and her husband's response tell us about their strategy for 2016.

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

    In a major rebuke to President Obama, the Supreme Court this week unanimously overturned his recess appointments to the National Labor Relations Board, ruling that he overstepped his authority when he declared the Senate in recess and installed his nominees in 2012. The decision came a day after House Speaker John Boehner announced he move forward he would move forward with a lawsuit against Mr. Obama for abusing his executive powers, accusing the president of, quote, "ignoring some statutes completely, selectively enforcing others, and at times creating laws of his own."

    Joining the panel this week, Wall Street Journal columnist and deputy editor, Dan Henninger; Washington columnist, Kim Strassel; and editorial board member, Joe Rago.

    Joe, let's start with this recess appointment decision. Very rare for a president to lose 9-0 on a case like this, including the liberals and including two of his own appointees. How big was this decision?

    JOE RAGO, EDITORIAL BOARD MEMBER: This was pretty big under any conceivable theory of constitutional interpretation. These recess appointments were thrown out. So in terms of vindicating the Constitution and separation of powers, this is a very important decision.

    GIGOT: It was basically saying that the president had decided unilaterally to say, I think the Senate is in session, therefore, I will appoint these, even if the Senate says itself it is not in session.

    RAGO: Right. The Senate was conducting something called pro forma sessions precisely to prevent the White House from making recess appointments. And he said, oh, no, no, this counts as a recess, I'm going to go ahead and make these appointments anyway.

    DAN HENNINGER, COLUMNIST, DEPUTY EDITOR: Quick detail, Justice Breyer even sort of arbitrarily said a break in the session should be at least 10 days. The one Obama was citing was three days. And the liberal justices simply couldn't swallow the idea that's a real recess.

    GIGOT: What's the practical implication of this for the president's power to appoint, make recess appointees, the whole point of which was to say, all right, Congress, back in the founding days, took two, three months to get to Washington, so you have to be able to fill the government. But that need has really been obviated now with mass transportation.

    RAGO: Right. The original purpose of the exception to the advice and consent power has kind of disappeared over time. It leaves the White House weaker with this decision. The case is called Noel Canning. The Senate kind of has a guide to preventing recess appointments if that's really what they want to do. These powers are sort of going to always be intentioned. The Senate is strengthened against the executive.

    GIGOT: So if the Senate is controlled by the opposite party of the president, they can basically stop now all recess appointments except for every two years when Congress finally gavels itself closed. So President Obama has weakened all of his successors.

    RAGO: And if you -- this was a 9-0 opinion, but there was a four- member concurrence by the four conservative justices. And they would have weakened the powers still further just to that between formal sessions gap that you were talking about. So the recklessness of these recess appointments really potentially could have weakened this power much more than the court actually went through with.

    GIGOT: OK, Kim, let's talk about this lawsuit by John Boehner against the president. This is extraordinary. Really, we haven't had such a thing before. He's going to get a full vote at the House to proceed. Why is John Boehner doing this?

    KIM STRASSEL, WASHINGTON COLUMNIST: Well, we've never had this before, Paul, because we haven't had to have this before. In the past, when you've had presidents overreach, step on congressional powers, Congress itself has stood up and sort of slapped presidents down. That's often served to make presidents think very hard about doing something like this. This Democratic Senate has chosen -- invited the president to do things like these recess appointment, and so the White House has felt very emboldened. So John Boehner feels this is one of the only options to doing -- trying to stop the president doing this. He's going to go ahead. And this is aimed at everything from the president unilaterally changing Obamacare, changing immigration law, creating laws or regulations that should in theory be done by Congress.

    GIGOT: And also doing something that's called suspending the laws, which means essentially refusing to enforce certain elements of a statute - -

    STRASSEL: Exactly.

    GIGOT: -- on immigration, for example, saying that the Controlled Substances Act, on Marijuana, I'm just not going to enforce it in a couple of states, that sort of thing. So they want him to obey the law?

    STRASSEL: Yes. And this is -- now, the curious question will be, of course, whether or not -- this is unprecedented. So the question is whether or not John Boehner, the House, will have standing to bring such a suit. That's a very intricate legal discussion a lot of people have been having out there. We'll see if that manages to happen.

    And this is also -- Paul, it will take a long time.

    GIGOT: Right.

    STRASSEL: What's interesting about this is that John Boehner is doing this really in the interest of future Congresses because this litigation will take a while to become ripe. And this may not even happen while President Obama is still in the White House.

    GIGOT: Dan, is it a good idea for Congress to go to the courts to seek essentially adjudication here? Or should it be asserting its own power? As Kim suggested, they have in the past, the power of the purse and --

    (CROSSTALK)

    HENNINGER: This raises the constitutional issue at the heart of this. Basically, what the president has been doing is stripping Congress of its legislative powers. And what John Boehner is going to do is cite Article 1 of the Constitution. You can't be more -- the first sentence of the Constitution reads, "We the people." The second sentence says, "Powers to legislate shall be vested in Congress." It could not be clearer. So the courts -- I think what John Boehner is saying are going to have to arbitrate this incredible tension Obama has created between the executive and the Congress.

    GIGOT: And there was another case this week, Joe, the EPA was slapped down on its carbon regulation.

    RAGO: That's right, and for kind of the same reasons. The executive branch can't make its own laws.

    And just to your earlier question to Dan, Obama has really inflamed the situation here, and this is really the last recourse left for Congress.

    GIGOT: All right. Thank you. Fascinating.

    When we come back, a new twist in the IRS scandal. With House investigators claiming Lois Lerner targeted a sitting Republican Senator, is it time for a special prosecutor?

    (COMMERCIAL BREAK)

    GIGOT: Yet another twist in the IRS scandal with congressional investigators this week saying they've uncovered emails showing Lois Lerner, the former agency official at the center of the targeting controversy, suggested an audit of Republican Senator Charles Grassley in 2011. A claim that is sure to heighten interest in Lerner's emails and the two-years' worth that the IRS says were lost in a 2011 computer crash.

    Wall Street Journal senior editorial page writer, Collin Levy, joins us with more.

    Collin, what did we learn this week -- what more did we learn this week about those lost emails and the legal jeopardy for the IRS?

    COLLIN LEVY, SENIOR EDITORIAL PAGE WRITER: Paul, starting with the Grassley point, I think what we really learned here is that Lois Lerner was willing to use your position there at the IRS for political retribution. Senator Grassley was one of the Senators who was really sort of after the IRS about what their practices were, including about gift taxes and later about conservative groups. So the fact that she was so eager to get him into exam, as she put it, really raises some questions about her motives there.

    GIGOT: Yeah, it was even too much, Dan, for the IRS itself, which said whoa, whoa, whoa, Ms. Lerner, we're not going --