Transcript: 'The Journal Editorial Report,' February 3, 2007

This is a rush transcript from "The Journal Editorial Report," February 3, 2007.

PAUL GIGOT, HOST: This week on the "Journal Editorial Report."

(BEGIN VIDEO CLIP)

SEN. RUSS FEINGOLD, D-WISC.: Congress has the power to stop the war, if it wants to.

(END VIDEO CLIP)

GIGOT: What Congress can and can't do to block the president's plans in Iraq.

Plus, week two of the Scooter Libby trial puts journalist's memories to the test. Did they pass?

And new economic numbers put fear into the slow down to rest. What's behind the boom? And how can we keep it going?

Our panel weighs in, after these headlines.

(NEWSBREAK)

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

Opponents of President Bush's troop buildup in Iraq began laying the groundwork this week for an effort to place new limits on the conduct of the war, with members of both parties questioning the commander in chief's constitutional authority.

(BEGIN VIDEO CLIP)

SEN. ARLEN SPECTOR, R-PA.: The president repeatedly makes reference to the fact that he is the decider. I would suggest, and suggest respectfully to the president that he is not the sole decider.

Attorney David Rivkin served in the Justice Department under Ronald Reagan and George H.W. Bush. He joins me now from Washington.

David, welcome to the program.

DAVID RIVKIN, FORMER JUSTICE DEPARTMENT ATTORNEY: Good to be with you.

GIGOT: Does Congress have the power, the constitutional power to stop the president's new strategy in Iraq?

RIVKIN: No, Congress does not have a power to stop the president's new strategy, Paul. Congress has the power to bring an end to the entire U.S. military engagement in Iraq by cutting off all the funds for military operations in Iraq.

GIGOT: So it can, through the power of the purse, which it has under the constitution, it can cut off funds for the entire operation of Iraq? You agree with that?

RIVKIN: That is correct. But let's stipulate that this is a decision that would be very costly politically. And frankly, that's a decision that I don't see any evidence they'll willing to make.

But that's what framers had in mind. Congress could stop the president from pursuing a particular course of action. But only by paying a very high price.

What Congress cannot do it micromanage the way the president carries out this war, which is the path they've embarked on now.

GIGOT: Well, but the power of the purse would be allowed to break down into specific operations, right? I mean, Congress, in the past, has tried to limit what the president could spend money on.

For example, during the 1980s, with the Nicaraguan contras, it said through the Bolen Amendment, that the U.S. could not support the Contras. That was fought by the Reagan administration. But there was a big fight over that.

Why do you think Congress doesn't have that authority to block specific military operations in Iraq?

RIVKIN: You are absolutely right. The Bolen Amendment represented an instance where Congress micromanaged the conduct of American intelligence operations and foreign aid.

When it comes to the conduct of the war, because the president's plenary powers of commander in chief, congressional appropriations power is constrained.

Put it differently, in peace time, Congress, as you all know, can appropriate funds for the military, all sorts of caveats. Tell the president what tanks to buy; what airplanes to buy; what helicopters to buy; what not to buy.

In wartime, Congress cannot tell the president, using the appropriation power, use armor, but do not use this mounted infantry; use artillery, but do not use air power; engage in operations in Anbar against the jihadis, but not in Baghdad.

And it is very interesting. Briefly, if you'll look at the resolution that's going through, they specifically encourage the president to pursue operations in Anbar? Why? Because politically, it is quite untenable for them to stay you should engage al-Qaeda everywhere, but not in Anbar.

So they're all in favor of fighting in Anbar, but, God forbid, not in Mosul, not in Baghdad.

(LAUGHTER)

That's absurd.

GIGOT: Well, do you have any doubt that next week's resolution, which looks like it's going to pass the Senate, has any force of law and will tie the president's hands at all? Because it's called non-binding. Can the president ignore that resolution if he wants to?

RIVKIN: Yes, of course. And nobody seriously suggests that it is binding. But to me, Paul, the features of this resolution both relative to the reference to the 21,500 troops, as well as Anbar and various other things, presage what Congress unfortunately may be moving down with appropriation riders.

In a way, they are putting themselves in the slippery slope. To emphasize, Congress, if it acts in a responsible accountable fashion, if they believe in their heart of hearts, let me say that this is a wrong war, they should stop it.

It is hard. It is difficult. But Constitution — this is not the "American Idol." They are not supposed to be judges sort of saying, next, we don't like this particular act. Let's try the next one.

They are supposed to act in a way that's very dramatic, very accountable, but not micromanage the president's commander in chief power. Because the key point is this. If they start micromanaging it, there is absolutely no limiting point. The President becomes a cipher of Congress. His powers are totally vitiated. And people often say framers did not mean to create the king. That's true.

But let me tell you. They did not mean to create an all-powerful Congress that wields all of the legislative and all of the executive power, particularly in this area.

GIGOT: But let's say, if Congress does go down this direction — I agree with you. It's going to — and starts to put limits on the number of troops of where those troops can fight in Iraq, what would be your advice to the administration on how to respond?

RIFKIN: My advice would be to speak very clearly once Congress demonstrates that they are doing it. Say very clearly that this — restriction that are unconstitutional. I wouldn't even try to veto them. Because if you try to veto them and your veto is overridden, you put yourself in a more difficult position.

You basically say, in a very bold and resolute manner, we are not going to do that. And it sets up unfortunately a constitutional confrontation with consequences that are difficult to predict.

But in my view, if a president speaks clearly, at the outset, I really believe that Congress may well blink from going down this path. Especially, Paul, because we have a lot of Democrats, including Hillary Clinton, including Barack Obama, maybe even Biden, who want to be president, who I hope, in their heart of hearts, aside from this war, would not want to damage the institution of the presidency.

GIGOT: All right, David Rivkin, thank you. Very interesting advice. And we'll be watching. Thanks for joining us.

When we come back, inside this trial of Scooter Libby. How did the prosecution's key witnesses holed-up under cross examination this week? And can Patrick Fitzgerald establish a motive?

Plus, the Rodney Dangerfield economy. The expansion that gets no respect continues to cruise along. What's behind the boom? And will the new Congress mess it up?

Our panel weighs in when the "Journal Editorial Report" continues.

(COMMERCIAL BREAK)

GIGOT: What began over three years ago as an investigation over who leaked the name of a CIA official, came down this week to the spotty recollections of two journalists on the stand in the Scooter Libby trial.

Former "New York Times" reporter, Judy Miller, and "Time" magazine's Matt Cooper, were grilled by defense lawyers about faulty memories and sloppy note taking.

Though Prosecutor Patrick Fitzgerald discovered early on that Libby was not the leaker, he kept the inquiry open for nearly two more years, ultimately indicting the vice president's former chief of staff for perjury and obstruction of justice.

Joining the panel this week are Editorial Board Members Dorothy Rabinowitz and Brian Carney, and opinionjournal.com editor James Taranto.

James, if Scooter Libby wasn't the leaker — and everyone now concedes that's not the case — why is this case really still going ahead?

JAMES TARANTO, EDITOR, OPINIONJOURNAL.COM: Because I think Patrick Fitzgerald probably felt like he had to indict someone for something.

GIGOT: Why? Because he is a special counsel and that's what special counsels do?

TARANTO: Because prosecutors get overzealous sometimes. He bought into this whole conspiracy theory of Joe Wilson, that his wife had been, quote, unquote, "outed," even though it clearly wasn't the case. She was not a covert agent, in fact, as he had alleged.

And that's why you have this — the case is — basically, it comes down, as you said, the spotty recollections of these journalist.

Libby's defense is that he didn't quite remember. And that if he told the grand jury things that weren't true, it was because his memory was faulty. That's perfectly believable when you think about this.

There is no cover up because there is no crime to cover up. When people were talking about this back in 2003, they weren't paying attention to this because there was no significance to it.

GIGOT: Wait a minute. But a lot of people would say, Dorothy, perjury and obstruction are serious charges. They are, as matters of law. How successful do you think Patrick Fitzgerald is being in this case?

DOROTHY RABINOWTIZ, WSJ EDITORIAL BOARD MEMBER: Not successful. Let's think about the public out there listening to this day after day, so far, of people not remembering what day it was, and swearing to the day they said it was, saying what does all in this mean? Something meaningful.

Something meaningful is that you have this prosecutor who has shown his hand in the fact that he went forward with this prosecution. He has shown it, let's say, in one instance where Andrea Mitchell appears on television.

GIGOT: NBC reporter.

RABINOWTWIZ: NBC reporter. And she says, oh, we all knew about Valerie Plame. All of us knew it.

After the indictment of Scooter Libby, she says I misspoke. The next daytime, Tim Russert is asked something. And he says, well, Andrea Mitchell was incorrect. I don't want to talk about this.

GIGOT: At the time, Tim Russert was the Andrea Mitchell's bureau chief at NBC.

RABINOWITZ: Andrea Mitchell's boss. So he knew. Everyone knew.

The point is not that these two major reporters are lying deliberately, it is just that the prosecutor had no interest, much like Mr. Nifong in Duke University, I am afraid I have to say, no interest in pursuing anything that contradicted his theory.

These people were never questioned about this. They were never called. Does this tell you something about the nature of a prosecution?

GIGOT: On that point, this prosecutor is bringing in all kinds of witnesses, including former White House Press Secretary Ari Fleischer, to say that he told — Scooter Libby told them about Valerie Plame sometime before. He forgot telling that to the grand jury? What is...

BRIAN CARNEY, WSJ EDITORIAL BOARD MEMBER: This is the most confusing thing about Fitzgerald's theory of the case is that he brought in a whole train of witnesses in the first week to say, I had a fleeting conversation with Scooter Libby in which Valerie Plame, or her status as Joe Wilson's wife, may or may not have come up. Or I think it did. Or I am pretty sure it did.

These conversations tended to last about 30 seconds. And Fitzgerald seems to be trying to establish that Libby knew that Wilson had a wife and that she worked at the CIA prior to his conversations with Tim Russert and Matt Cooper and Judith miller.

But Libby himself testified both to the FBI and to the grand jury that he learned about Valerie Plame from Dick Cheney a month before all of this happened.

GIGOT: James, how credible is the press turning out to be in this? Are we looking pretty good or bad?

TARANTO: Well, what do you mean we?

(LAUGHTER)

I would say some members of the press, especially the "New York Times," really must be hanging their heads in shame over this. The "New York Times" beat the drum on this for purely partisan reasons. And found themselves with a reporter in jail, with the whatever slender reed of protection — legal protection journalism enjoyed for protecting their sources pretty much stripped away. And, you know, with reporters being forced to go and testify about their news gathering operations.

I think this has been a disaster for the press.

GIGOT: Dorothy, we don't have much time. But if Scooter Libby does happen to be convicted — and I gather you don't think he will — but if he is, should President Bush pardon him?

RABINOWITZ: Yes. I think President Bush should pardon him because this is one of those classic — one of the most extreme cases of crimeless prosecutions ever, and in the most obvious way.

And can you blame the American public for scratching their heads saying why am I hearing about this at all?

GIGOT: All right, Dorothy, thank you.

Coming up, the economy keeps on trucking with new numbers putting fears of an economic slow down to rest. What is behind the boom?

That, and our "Hits and Misses" of the week when the "journal Editorial report" continues.

(COMMERCIAL BREAK)

GIGOT: The economy grew at a stronger than expected 3.5 percent annual rate in the last quarter of 2006, the Commerce Department reported this week, boosted in large part by robust consumer spending and soaring exports.

Well, Brian, we had the housing slump and rising interest rates and $70 oil, in Detroit the auto industry's a mess. We were supposed to be in recession by now. Why is the economy doing so well?

CARNEY: I think the short answer is people are still working, companies are still making lots of profits. We had record profit numbers from Exxon this week. That usually occasions a round of bemoaning about corporate profits being too high and so on.

But the fact is that money gets reinvested. It gets invested in workers, new jobs. It gets invested in equipment and new projects. And all of that makes the economy keep turning.

The supply side is healthy. Consumers are still spending, as you noted. And, you know, the American economy is showing its dynamism.

GIGOT: But one of the really interesting things about this report is exports are soaring. They were up in China 30 percent last year, overall 10 percent, when we keep hearing all this moaning about the trade deficit, and the fact that we are over consuming.

It turns out American manufacturing is exporting to the rest of the world, which is finally starting to grow fast.

I mean, even Europe is growing. Even France is growing and, of course, Japan and China. China is booming.

What else is going on here, James?

TARANTO: Well, I think we have to give some credit to the Bush tax cuts of 2001, 2003, particularly cuts in the rates on dividends and capital gains, which help spur investment.

One interesting thing to note about that is those tax cuts expire in 2010. They are probably not going to be renewed by the Democrats who control Congress. So we may see President Hillary Clinton with a recession on her hands.

GIGOT: Are you saying that she's going to win this election in 2008, James? There is a little thing called an election in 2008, between now and 2010. So the voters get a little say on this.

TARANTO: Paul, I said may.

GIGOT: Well, that raises an important point, which is what are the threats to this continued expansion?

CARNEY: I can bet the biggest threats are the political threats. We not only have the threat of tax cuts expiring, as James points out. But we have Democrats in Congress who are talking about CEO pay being too high; talking about re-regulation, raising taxes on oil companies and other businesses and raising the minimum wage, which raises the cost of business for small businesses.

And we have got a number of threats that have mostly to do with politicians stepping in and mucking up an economy that's been doing quite well, thank you very much.

GIGOT: Dorothy?

RABINOWITZ: I just wanted to know whether all of the recent threats of recession, which have never panned out, have contributed to this exuberant rational exuberance on the part of our consumers. And that's why the economy is doing well.

GIGOT: You mean, if they read it in the papers, they don't believe it. RABINOWITZ: They don't believe it. And they spend, yes.

(LAUGHTER)

GIGOT: They want to — and they want to keep doing it. I think there might be something to that. Well, who do you believe, as Grouch Marx said, me or your own eyes — your own eyes.

TARANTO: Your own eyes.

GIGOT: Yes, exactly.

Is the year of tax cuts over, Brian? Is that what you're saying, that we really are now in an era where the risk is on the tax increase side?

CARNEY: I think we have to say, for the moment, that tax increases are much more likely than tax cuts. We face long-term deficits in Social Security and Medicare. And we have got Democrats who are talking about how the rich did much better under Bush than the middle class.

GIGOT: But not just Democrats. We had the president of the United States come to New York this week and talk about inequality is increasing and executives better get their pay under control.

Isn't that — are we entering a new populist era where instead of — greed is not — and animal spirits are not the animating impulse, but envy is. And that leads to an era of tax increases? Is that what you're saying?

CARNEY: I don't think that's true. I think Americans still — they look at the people who are doing better than them and say I want to be that guy. They don't say, you know, I want to have that guy's boat.

GIGOT: OK. All right, Brian, thanks.

We have to take one more break. When we come back, our "Hits and Misses" of the week.

(COMMERCIAL BREAK)

GIGOT: Winners and losers, picks and pans, "Hits and Misses," it's our way of calling attention to the best and the worst of the week.

Item one, the "New York Times" takes one of its reporters to task. Why, Dorothy?

RABINOWITZ: Let me ask, if anybody had told you that an American reporter, who ventured forth to say that he hoped that American policy could succeed, it would be a good thing if it succeeded, that if we won it would be helpful, that this same person could be charged by his paper with stepping over a line and an aberration, would you believe this?

But this is exactly what happened to the Chief Military Correspondent Michael Gordon for the "Times."

Now, this was pointed out in a thing called the public editor of the - - the public editor is the guy at the newspaper who up holds standards of fairness. And he held forth about how this is a bad thing to do.

Now, I venture to say — and also the Washington bureau chief agreed with him.

Then I venture to say that this is an aberration all right. It is an aberration for a "New York Times" correspondent to say he wished the nation well in its enterprise. That's the only reason that this has offended the "Times" management.

GIGOT: All right, Dorothy, thanks.

Next, Brian Carney comes to Joe Biden's defense — Brian?

CARNEY: That's right, Paul. Joe Biden announced he was running for president this week. And that got drowned out over a controversy about his remarks about Barack Obama.

In a way, though, that's a shame. Because in the course of his announcement, he also took the opportunity to disparage the cynicism and opportunism of the rest of the democratic candidates on the subject of Iraq.

He said that their proposals amounted to nothing more than so much fluffernutter, and claimed that none of them had thought seriously about the problem of Iraq before announcing that they were running for president.

About John Edwards, he said, I don't think he knows what the heck he is talking about. For this, Joe gets a hit in my book.

(LAUGHTER)

GIGOT: For telling the truth, Brian? OK.

CARNEY: That's right.

GIGOT: Finally, the Union of Concerned Scientists wasn't so concerned with science, it turns out, in a recent survey — James?

TARANTO: The Union of Concerned Scientists surveyed a group of government climate scientists and purported to find that 60 percent of them felt intimidated or pressured to hide the truth about global warming.

There are a lot of problems with this survey. But the biggest one is the basic methodology. They sent the survey to 1,630 scientists; 279 responded, which meant 83 percent didn't respond at all.

That's what is called a selection bias. In plain terms, this was an unscientific survey. If these guys can't be rigorous when they're doing social science, how can we trust them with the hard stuff?

GIGOT: All right, James, thank you.

That's it for this week's edition of the "Journal Editorial Report."

Thanks Dorothy Rabinowitz, Brian Carney and James Taranto.

I'm Paul Gigot. Thanks to all of you for watching. We hope to see you right here next week.

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