• With: Dan Henninger, James Freeman, Joe Rago, Mary Anastasia O'Grady

    This is a rush transcript from "Journal Editorial Report," January 3, 2015. This copy may not be in its final form and may be updated.

    PAUL GIGOT, HOST: This week on the "Journal Editorial Report," from Washington to Wall Street and around the world, the stories to watch in 2015. As the presidential field begins to take shape, will Hillary Clinton see a challenge from the left? Will a front-runner emerge from the Republican stump? Will President Obama cut a nuclear deal with Iran? And will Vladimir Putin strike back at the West as the pressure builds from home. And is this a breakout year for the American economy or will new regulations keep the boom at bay?

    Welcome to the "Journal Editorial Report" as we look at the stories to watch in 2015. I'm Paul Gigot.

    And joining our first panel of the New Year is Wall Street Journal columnist and deputy editor, Dan Henninger; assistant editorial page editor, James Freeman; and editorial board member, Joe Rago.

    Let's start here at home where the New Year means new speculation about the 2016 presidential field and who might knock Hillary Clinton from her perch as the Democratic front-runner.

    So, Dan, I know this is one story you're following.

    DAN HENNINGER, COLUMNIST & DEPUTY EDITOR: Yeah. Well, sure, the big story for 2015, the 2016 presidential race. People will want to jump into it.

    The Hillary Clinton -- the thing to watch, I think Hillary will get into like this two scorpions in a bottle with the Democratic left. They own that party. They hate Bill and Hillary Clinton but they really have nowhere else to go.

    GIGOT: Right.

    HENNINGER: I think Hillary will spend 2015 signing a blood oath to follow the Democrats agenda. And I don't think Elizabeth Warren will challenge her. I have a real dark horse who's going to lean in eventually, California Governor Jerry Brown.

    GIGOT: He ran against Bill Clinton, believe it or not, in 1992, but I don't think anybody can beat her for the nomination, unless she stumbles more than I think she will, other than Elizabeth Warren.

    JAMES FREEMAN, ASSISTANT EDITORIAL PAGE EDITOR: Yeah, I think the she's the threat. And I kind of opportunity will be too much for her to pass up. These windows don't come along very often. I've been thinking for a while that, given how Barack Obama has moved that party to the left, particularly the activists who vote in primaries, I think that's more an Elizabeth Warren than a Hillary Clinton party. You've seen --

    GIGOT: Wait a minute. So, Hillary Clinton then has to adopt the policies of Elizabeth Warren, and you think she will? I think that's --


    FREEMAN: We've already seen her trying to do that, awkwardly, disastrously, is when she suggested that businesses don't create any jobs. I think this is going to be a tough challenge for her trying to claim the benefits of the Clinton '90s but define herself with the new party.

    GIGOT: Let's turn to Republicans briefly. And we'll talk about this during the course of the year, no question about it, Joe. The question in my mind, can anyone break up from the pack. There's no clear front-runner, unlike the Democrats, on the Republican side right now.

    JOE RAGO, EDITORIAL BOARD MEMBER: I don't think there is. The person who will break out will be the one that lays out an agenda, has a message and addresses the problem of falling middle class incomes. We've seen them go down during the Obama years. I think that's the main problem in U.S. politics right now. And I think the candidate that will resonate is the one that has a response to generate that growth again.

    GIGOT: And George Bush -- not George Bush -- Jeb Bush -- Freudian slip -- Jeb Bush, the former governor of Florida, can he -- how many people will he clear out of the field? Probably Mitt Romney doesn't run if Jeb does and then maybe Marco Rubio, Senator from Florida, also stays out?

    HENNINGER: I think the big question, Paul, is something we're not going to really be able to see. And that is the big donors. You need about a billion dollars to run for president. If Jeb gets in, I think a lot of money will flow his way. There's a lot of new money in politics now and some of them I think will support Scott Walker and John Kasich. The question is whether Jeb will ultimately start drawing all the money into his campaign, making it difficult to compete.

    GIGOT: All right, the other big story, the new Republican Congress, James. What do you expect out of them? What should we be watching for?

    FREEMAN: This really is a kind of "put up or shut up" moment. They asked the American people to give them control of the legislature. That's now happened. Now President Obama is still in the White House so they won't be able to repeal ObamaCare, but I think they have to show, in the first six months of next year, a serious effort to put out a reasonable budget, to start to turn the ship as much as they can away from this $18 trillion debt spending cycle, and also, say no to corporate welfare. That's another test that's going to come early in the year to shut down the Export/Import Bank.

    GIGOT: First thing, they have to work with Democrats --

    FREEMAN: Right.

    GIGOT: -- and get together on things like the Keystone Pipeline and other things, put discreet bills on the president's desk that are bipartisan and the president will have a hard time vetoing. Then they've got to put their own budget together, stay unified enough to put their own budget together, which is no guarantee that some of these impulses that they have that we want to say oppose everything, and some of the folks who are running for president will play to primaries. That could undermine the Republicans.

    FREEMAN: Right. I think they need a coherent message and an appealing message that carries into 2016. But I think they also need to show some progress, forcing Barack Obama to accept a little smaller government than he would like.

    GIGOT: All right.

    And, finally, Joe, we're going to have, on the domestic front, a big Supreme Court decision on Obamacare, another one, that will challenge the federal -- the subsidies for ObamaCare delivered through the federal exchanges not the state exchanges. What are you looking for there?

    RAGO: This is King versus Burwell. It is going to be heard this March, decided by June. So just to James' point, we're potentially heading into a big period of health care policy change. This decision might reopen the law. I think the justices on the court are increasingly assertive about vindicating the rule of law. So you might --


    GIGOT: As opposed to executive overreach?


    RAGO: Exactly. And so what they might do is they might toss this into Congress, saying here's this problem you created, you passed a bad law, now the political branches can fix it. It's going to be up to the Republicans, I think, incumbent on the Republicans to offer a pragmatic alternative to try to increase confidence that this won't be too disruptive.

    GIGOT: They need that agenda, to lay that out what's going to happen before the Supreme Court decides on this case.

    All right, much more ahead as we preview the stories to watch in 2015. We'll turn our attention to challenges across the globe when we come back.


    GIGOT: Welcome back to the "Journal Editorial Report" as we look ahead to the stories to watch in 2015.

    We're back with Dan Henninger and Joe Rago. And Wall Street Journal columnist, Mary Anastasia O'Grady, also joins us.

    Let's turn to events around the world. And certainly one of the big questions this year will be whether President Obama cuts a nuclear deal with Iran -- Dan?

    HENNINGER: Certainly, he will, Paul. It's in his head, therefore, he'll do it. As he said, this is the right thing --