• With: Paul Wolfowitz, former deputy defense secretary

    This is a rush transcript from "Journal Editorial Report," February 12, 2011. This copy may not be in its final form and may be updated.

    PAUL GIGOT, HOST: This week on the "Journal Editorial Report," jubilation in Egypt and on the Arab streets as a dictator falls. Is it a vindication of the Bush "freedom agenda"? We'll ask one of the architects, Paul Wolfowitz.

    Plus, the Tea Party wins round one of the House budget battle as GOP leaders announce a deal to slash $100 billion dollars in spending.

    And David Cameron's wake-up call. The British prime minister delivers a scorching critique on multiculturalism in Britain. We'll tell you what he said and why the U.S. should take heed.

    (BEGIN VIDEO CLIP)

    PRESIDENT OBAMA: The people in Egypt have spoken, their voices have been heard, and Egypt will never be the same.

    (END VIDEO CLIP)

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

    There was jubilation in the streets in the streets of Cairo following the resignation Friday of embattled President Hosni Mubarak after 18 days of pro-democracy protests.

    As deputy defense secretary, Paul Wolfowitz was deeply involved with George W. Bush's "freedom agenda" in the Middle East. As a State Department official, he's also been in the forefront of several democratic transitions, including one in the Philippines in the 1980s.

    Secretary Wolfowitz, welcome.

    PAUL WOLFOWITZ, FORMER DEPUTY DEFENSE SECRETARY & FORMER STATE DEPARTMENT OFFICIAL: Good to be with you.

    GIGOT: You've been saying for years that democracy was possible among the Arabs and they shouldn't be denied it, like the rest the world has fallen for the democracy wave that began sometime in the 1980s. How do you feel about the fall of Mubarak?

    WOLFOWITZ: Well, I think it's a terrific vindication for the Egyptian people. And the people who have said for years that somehow Arabs didn't care about freedom are just dead wrong. The Tunisians were out there making human shapes that could be photographed on Google maps. It was Arabic letters, the word "freedom," Forea (ph). In Egypt, they were carrying signs that this isn't about bread, it's about freedom. This wasn't a bread riot. This was a freedom demonstration. And that's a huge step forward.

    I have to say, also, that I had optimism and I retain it, that Arabs are capable of freedom, but that's the next chapter here, and it hasn't been written yet.

    GIGOT: Do you think, in the end, Mubarak acted like a patriot, leaving when he did. Because it looked -- only 24 hours earlier, that in fact he was going to make this much more difficult?

    WOLFOWITZ: Well, actually, if you read his three-page speech, he was trying to catch up, I felt, with the criticism that, the first time, around he'd expressed no sympathy for the families that lost kids and so forth. It's a confused speech. And I don't know whether he acted out of patriotism, but he did the right thing. And I think, at this point, the more credit Egyptians can give him, the more forgiveness and better it will be for the country going forward. It's not about Mubarak. It's about Egypt. But these transformations work much, much better when there's not a bloodletting or a score-settling afterward. Most famously, we have South Africa, where Nelson Mandela says, if you tell the truth, we'll reconcile. But I can give you a dozen other examples that kind of putting the past behind has been critical.

    GIGOT: So that's one of the lessons of democracy revolutions that have succeeded. But there's no Nelson Mandela figure right now, at least, that I've been able to see, emerging from the streets of Egypt.

    WOLFOWITZ: Mandela was unique. But in most of the other cases I know of, there's been someone who has taken the lead. Or in the case of Indonesia, the vice-president Suharto had installed made a number of really bold moves. I would say that's the most important thing right now for whoever thinks they're running the show, and it sounds like it's this military committee.

    GIGOT: Right.

    WOLFOWITZ: They need to, as quickly as possible, lift the emergency law. They need to release political prisoners. And they need to set about with a new constitution. And from what I've heard, the best thing they could do is to go back to the constitution that was drafted in 1954. It was so good, the military refused to adopt it. But the present constitution is just an absolute rule and thinly layered disguise.

    GIGOT: Well, what can the U.S. do now to nurture this transition and make sure it goes in the right direction?

    WOLFOWITZ: Well, for one thing, I think enthusiasm is in order.

    (LAUGHTER)

    GIGOT: Shouldn't be too restrained, in other words.

    WOLFOWITZ: There's been too -- there's really been too much handwringing. Yes, a lot of ways this thing can go wrong, but I'm reminded that when the Berlin Wall came down, someone I admire, Margaret Thatcher, and her counterpart in France, Francois Mitterrand, were wringing their hands with the specter of the rise of a German threat in Europe.

    (LAUGHTER)

    And President Bush said, look, let's celebrate what the Germans have done, lets embrace unity, and then we will have a chance to steer this in the right direction. And I wish he'd kept with that advice when he visited the Ukraine, and unfortunately, he warned the Ukrainians against voting for independents. But unfortunately, they didn't pay too much attention to him.

    Look, when the tide of freedom is sweeping, we should love it. And when it's headed in the wrong direction, then we'll have a lot more credibility to say, whoa, this isn't freedom anymore.

    GIGOT: Should we use our military aid, which is about $1.5 billion a year, to use -- as a leverage point with the Egyptian military in saying -- trying to get them to support a transition to genuine democracy and political free institutions?

    WOLFOWITZ: I think I would be careful with it. I think I would strongly urge using it if they had resorted to violence, but they didn't. We need to give them a lot of credit for the way this came out so peacefully. They did it for their own sake and in their own interests. But if they had chosen to do what the Chinese did in Tiananmen Square, we'd be talking about a very different conversation today. And I think Egypt will be much better off if the military is respected. So we shouldn't be leading a charge against the military. If they start to go off the rails, if they go back to this practice of finding every liberal Democrat they can find and throwing them in jail, that's a different matter. But I don't think we're headed backwards. I think the demand for a free media, the demand for ending this tyranny and oppression is so strong, I think we should let this tie go, unless we see a real problem.

    GIGOT: Briefly, very briefly, Paul, should the Muslim Brotherhood participate in this transition?

    WOLFOWITZ: I could offer you an opinion, but I really hesitate to do so, because I think Egyptians have to decide that. And I hope they will think about, as they make those decisions, whether a legitimate political party, a party, political party can be considered legitimate, if, for example, they don't concede equal rights to women. There are standards. They should be Egyptians there.

    GIGOT: All right. All right, Paul, thanks very much.

    When we come back, the Tea Party wins round one of the budget battle as GOP leaders announce a deal to cut $100 billion in spending. Now comes round two. Can they win the showdown with President Obama and the Democrats?

    (COMMERCIAL BREAK)

    GIGOT: After a heated internal battle over just how much to slash spending, House Republicans late this week announced what they say are the biggest cuts since World War II, a total of $100 billion from President Obama's proposed 2011 budget. House Budget Committee Chairman Paul Ryan had announced plans last week to cut government spending by about half that. But some in the GOP insisted that didn't go far enough and were pushing the leadership for far deeper spending cuts. And now comes, the real showdown with Senate Democrats and President Obama, who is set to release his 2012 budget plan on Monday.

    Joining the panel this week, Wall Street Journal columnist and deputy editor, Dan Henninger; assistant editorial page editor, James Freeman; and Washington columnist, Kim Strassel.

    Kim, you were following in internal GOP spat this week. The Tea Partiers seemed to have won. What happened?