• With: Joe Rago, Collin Levy, Dan Henninger, Jason Riley, Bret Stephens, Karl Rove, Matt Kaminsky

    This is a rush transcript from "Journal Editorial Report," July 5, 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 ends its term with a political bang as the justices deal a blow to ObamaCare's birth control mandate and Democrats resurrect their war-on-women strategy just in time for the campaign season.

    Plus, President Obama's summer slump. Scandals at home and crises abroad send his poll numbers are down and raise questions about his ability to lead for the next two years.

    And as ISIS declares a new Islamic State, an alarming report says jihadist groups are making a comeback worldwide. We'll assess the threat to the U.S. homeland.

    Welcome to the "Journal Editorial Report." I am Paul Gigot.

    The Supreme Court ended its term this week with a political bang, ruling in the much-anticipated Hobby Lobby case that the arts-and-crafts chain and other closely held corporations were not required to pay for certain forms of contraception under the Affordable Care Act. The 5-4 decision was celebrated by supporters as an important but narrow victory for religious liberty, but quickly jumped on by liberals looking to resurrect the war on women election campaign.

    (BEGIN VIDEO CLIP)

    HILLARY CLINTON, FORMER SECRETARY OF STATE: That the corporations, employers can impose their religious beliefs on their employees, and, of course, denying women the right to contraception as part of their health care plan is exactly that. I find it deeply disturbing that we are going in that direction.

    (END VIDEO CLIP)

    GIGOT:  Joining the panel this week, Wall Street Journal columnist and deputy editor, Dan Henninger: senior editorial page writer, Collin Levy; and editorial board editor, Joe Rago.

    So, Joe, you followed the debate all along. How important, significant, broad was this opinion, because Justice Ginsburg, in her decent, called it a radical purpose that would create havoc?

    JOE RAGO, EDITORIAL BOARD MEMBER: That's ridiculous. This is an important vindication of the religious liberty. And Congress passed a law two decades ago called the Religious Freedom Restoration Act, which said if the government is going to interfere with the free exercise of religious, they have to use the least restrictive means as possible to do so. All the court did, the court majority here, was they said, look, this is an important public interest, but you are infringing on the rights of the owners of Hobby Lobby and you are drawing a distinction. You're giving one set of rules for for-profit corporations and another set of rules for non- profits that were less restricted, so extend that accommodation to closely held companies like Hobby Lobby, like Wood Specialties (ph).

    GIGOT: What do you make of Justice Ginsburg's dissent, Collin? Really, she said it would deny all corporations -- pretend they could basically bail out of any distinction if they just cited the religious excuse?

    COLLIN LEVY, SENIOR EDITORIAL PAGE WRITER: Justice Ginsburg's dissent was incredibly political and vitriolic. And actually, Justice Alito address that issue in particular in his opinion and said this does not apply to everything, this is a narrow decision, and we are making clear here the real issue is that religious freedom shouldn't be determined by a company's tax status. He writes that the administration had already made clear that it's going to do a carve out for nonprofits and for other religious organizations, and the fact that a group like Hobby Lobby decides to organize as a for-profit organization doesn't mean it needs to check its ethical religious obligations at the door.

    GIGOT: And this doesn't apply -- I read Alito was explicit in saying this does not apply -- this ruling does not apply to all Fortune 500 companies or very large companies, only to closely held companies, which means they have a small number --

    (CROSSTALK)

    GIGOT: -- of shareholders who can demonstrate very clear religious convictions.

    LEVY: Right. As a practical matter, if you think about it, a publicly held company with thousands or more shareholders, it's almost impossible for all of those shareholders to be of the same mind, so the fact that this would be extended to those companies is extremely far-fetched.

    DAN HENNINGER, COLUMNIST AND DEPUTY EDITOR: This is an important distinction. The government argued that Hobby Lobby's connection to the mandate was, in their words, was "attenuated."

    GIGOT: Right.

    HENNINGER: In other words, a long distance between what we're asking you to do and what your company does. The court said absolutely the opposite. What Hobby Lobby was concerned about was a core concern of this closely held company, a religious concern, and that was protected under the Religious Freedom Act. This is a big victory for religious freedom, irregardless of what Hillary Clinton is complaining about, Wal-Mart and Fortune 500 companies, which is false.

    GIGOT: What explains the furious political reaction to this, Joe?

    RAGO: I think it's partly deliberate distortion. And I think Democrats need an election theme that is not the economy or incompetent governance or the Middle East in flames.

    GIGOT: So they think this is -- even though they deplore the decision, as a political matter, they think they can use it to drive turnout in November? Is that the --

    RAGO: I think they are delighted. That's why you are seeing Hillary Clinton, President Obama coming out, all Democrats across the board in saying the Supreme Court is allowing your boss to ban contraception, which is false, any more if FOX News doesn't give you a company car, they are banning automobiles.

    GIGOT: And this ruling does not implicate -- this does not threaten Obamacare in general? It's just in very specific parts.

    RAGO: It's a very narrow, very direct part of it. The contraception mandate is still being litigated. Next term, we'll probably see some more rulings. But for now, they have resolved the larger question of whether there is a distinction between corporate forms.

    HENNINGER: The simple factual matter, 90 percent of the population already has access to birth control.

    GIGOT: Is this political strategy going to work, Dan?

    HENNINGER: I was just going to say, I do not think it's going to fly. First of all, Hobby Lobby is a fairly sympathetic player in this. It's not as though it's Walmart. Most women already have access -- 90 percent have access to birth control if they want it.

    (CROSSTALK)

    GIGOT: You mean subsidized access, yeah.

    (CROSSTALK)

    HENNINGER: Subsidized access.

    GIGOT: Everybody has access to it. You can go into a drugstore and get it.

    RAGO: $9 a month.

    HENNINGER: And as Hillary Clinton proved, you have to argue such a stretch to make the case that this is a war on women that I think if most women would step back and think about it for a little while will say, I do not understand what is going on here and, therefore, I do not think it's going to fly as a political strategy.

    GIGOT: All right. Much more on this controversial Supreme Court term after the break as the justices reign in President Obama's executive overreach and deal a potentially major blow to big labor's political power.

    (COMMERCIAL BREAK)