This is a partial transcript from "The Journal Editorial Report," February 4, 2006, that was edited for clarity.

PAUL GIGOT, HOST: House Republicans choose a successor to Tom DeLay. Ohio Congressman John Boehner was elected majority leader this week under the looming shadow of the Abramoff ethics scandal.

John, usually these House leadership races are inside baseball, and nobody really cares outside of the Congress itself. But this one got a lot of attention. And I sense it may be because people think the Republican majority is in jeopardy in November.

Is John Boehner going to make a difference?

JOHN FUND, COLUMNIST, OPINIONJOURNAL.COM: Yes, for three reasons. One, he is a fresh face, not tied to the mistakes of the previous Republican leadership. He never voted for a highway bill. He never voted for the pork barrel earmarks that got Republicans into trouble the last few weeks.

In addition, he has some good working relationships with Democrats. At least, they can talk to each other. He raises money for Catholic schools with Ted Kennedy every year in the annual fundraiser.

And the other thing is, John Boehner understands that what has really kept this government afloat has been the supply-side tax cuts of 2003, 22 percent revenue increase the last two years. He knows making those cuts permanent or extending them this year is going to keep this economy afloat.

And if they fail to do that, they're in real in trouble.

JASON RILEY, EDITORIAL BOARD MEMBER, WALL STREET JOURNAL: But the Republicans did not go with the real reform candidate in this race, which was John Shadegg of Arizona.

FUND: Who entered late though and didn't have much of a chance because of that.

RILEY: True.

GIGOT: So you're saying...

RILEY: Shadegg is the guy that would have taken on the real problems.

Republicans can talk all they want about reducing the increase in spending. But the fact of the matter is that this president has not vetoed a spending bill. The budget is 40 percent higher than when Bush took office.

And the best the Republicans can say is that, oh, Democrats would have been worse, which isn't much consolation to Republican voters who thought they were electing fiscal conservatives.

GIGOT: Are you saying that the Republicans, therefore -- not enough of them anyway -- understand how much trouble they really are in? Because Paul Ryan of Wisconsin, when he nominated -- gave a nominating speech for John Shadegg, stood up and told them that he thinks they're in a lot worse trouble than they recognize.

RILEY: I agree. I mean, this was an attempt by Republicans to sort of reform from within. And we wanted to see how they would do. I think they're going to need -- it's hard to reform from within, very hard.

DAN HENNINGER, DEPUTY EDITOR, WALL STREET JOURNAL: Well, let's not forget there are actually two parties that run for office in this country. And, yes, the Republicans have been in trouble. I think John Boehner's going to -- he's the new guy on the block. He's going to show that he has to do something.

What do the Democrats show to the American people right now? They show total 24 opposition to absolutely everything George Bush does. And I think they're beginning to look like a party that has forgotten how to govern. There is no positive vision whatsoever coming from them.

And if the Republicans can go on the offense, I think they can switch it and put the Democrats on defense.

FUND: But, if both parties are viewed cynically, I will tell you who will be hurt worse, the Republicans.

Their base has to be inspired to turn out. Democrats will often just turn out because they want to support bigger government. So the Republicans are in trouble if they just have a tie with the Democrats in terms of uselessness in the eyes of the public.

GIGOT: Just to re-enforce that point, the Club for Growth, which is the lobbying group that cares a lot about economics, did a poll in the 25 districts of the most vulnerable Republicans. You know what the two issues most identified with Republicans in those districts? Iraq and corruption.

Neither of those are big winners right now.

So I mean that's -- what do the Republicans have to do, Kim, in order to kind of change the subject and get their own voters fired up for November?

KIM STRASSEL, EDITORIAL BOARD MEMBER, WALL STREET JOURNAL: Well, first of all, they're actually just going to have to do the things that were a part of the aspect of this race. Spending is one thing. I mean, people have become -- to start to think that the Republicans are the party of the incumbency. That they spend, spend, spend, spend, spend.

So, I mean, they're going to have to -- one of the discussions was earmark reforms. This is going to be important. As John said, they're going to have tax reform, make sure about getting money back to Americans. Those are going to have to be two of the top priorities.

GIGOT: Yes, if they just decide that they're going to raise a bigger war chest, and that's the way they can get out of this, then I think they're wrong. They have to pass on some things.

RILEY: But what's going to be tough is that Bush doesn't seem to have a very ambitious domestic agenda to help them out with. So it's going to be tough for them to make moves on that front.

GIGOT: All right, Jason.

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