This is a rush transcript from "The Journal Editorial Report," February 2, 2008.

PAUL GIGOT, FOX HOST: Up next on the "Journal Editorial Report," the amazing 2008 race for president. As voters in Virginia, Maryland and D.C. get set to go to the polls, Hillary Clinton and Barack Obama are battling for every delegate. But can some emerging Democratic divides be healed before November?

And with Mitt Romney out, John McCain continues his march toward the Republican nomination. But can he close the deal with conservatives.

Newt Gingrich is here.

Plus, our weekly "Hits and Misses," but first, these headlines.

(NEWSBREAK)

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

Tuesday's so-called Potomac primary now takes center stage in the race for the Democratic presidential nomination, with Barack Obama and Hillary Clinton battling it out for each of the 168 delegates at stake in Maryland, Virginia and Washington, D.C. This, as Republican John McCain fights an ongoing battle of his own for the hearts and minds of conservatives.

Here to help make sense of it all is former House Speaker Newt Gingrich, author of the New York Times bestseller "Real Change."

Newt Gingrich, welcome. Good to have you here.

NEWT GINGRICH, FORMER HOUSE SPEAKER & AUTHOR OF "REAL CHANGE": Good to be with you.

GIGOT: One of the striking things about this primary season is how turnout has been so much greater on the Democratic side, almost two to one. That's a real enthusiasm gap. Should Republicans be worried?

GINGRICH: Yes. I think Republicans need to be taking seriously the fact that there is a huge difference between the energy and the enthusiasm and the money in the Democratic race and the lack of all three in the Republican race. And I think Senator McCain has to design his campaign for the fall breaking out of the normal Republican patterns and finding a way to communicate to the country that arouses a level of enthusiasm comparable to Senator Obama. I think it's a very real, very difficult challenge.

GIGOT: How does Senator McCain do that because, as you know, some of the conservatives really are unhappy with him and unenthusiastic. Does he have to map out a certain set of policy issues or is this about personality?

GINGRICH: Well, no. Look, I think that -- first of all, I think there's a very real possibility that Senator Obama is going to be nominee. And he has an usually charismatic ability to reach out to young people, in particular, and has drawn dramatic new crowds to the Democratic Party.

I think, to be able to match that -- and I describe this in "Real Change" in some detail -- I think Senator McCain ought to go to the heart of failures in America. He ought to go to the middle of Detroit, to downtown Baltimore, to Philadelphia, which has had 3,000 murders since 1988. He ought to outline policies and proposals that are real change and that offer a fundamentally better future and should challenge Senator Obama to meet him on developing real proposals.

And then, frankly, the Republicans in the Senate ought to challenge Senator Obama and Senator Clinton to help them actually pass real change and force them to go from slogans into practicalities. And I think will be -- there's got to be some kind of connection to reality. The people can look up and understand what all this means.

GIGOT: But if you look at Senator McCain so far -- indeed, the whole campaign has been fascinating to the degree to which it has not been, so far, a debate of ideas or policies. So much has been based on personality or biography or what your past resume was. And that's been true of Senator McCain's campaign as well. You're saying that he has to shift -- if I hear you correctly -- into a thematic campaign that looks at certain ideas and says I can solve these problems with these ideas.

GINGRICH: Well, I was very encouraged by his speech to CPAC this week because there he said this campaign will not be about small differences. This campaign will be about two fundamentally different visions of America. And he went through a series of examples.

I think if he could turn that into a vivid alternative, if he could communicate with people the potential for a dynamic entrepreneurial science and technology-based America that reformed its taxes, reformed its regulations, reformed its litigation, that went out and took head-on the things that aren't working -- as my book said -- from the world that fails to the world that works, I think he could suddenly galvanize a whole new interest in what is this race all about. And if he can make it real in the lives of people, I think he has a change of generating the excitement and the intensity that would allow him to match either Senator Clinton or Senator Obama.

GIGOT: And would that be enough to get some of the cultural conservatives on the right, such as the Christian broadcaster, James Dobson, who has said this week he will not vote for John McCain? Is there any special device you have for getting that faction of the GOP on board? Or is that impossible?

GINGRICH: I think all Senator McCain has to do over and over again is remind people that four years or eight years of Senator Clinton or Senator Obama means a left-wing secular court that is wrong on driving God out of public life. It is wrong on the meaning of the Constitution. It is wrong on virtually everything that social conservatives believe in. And that eight years of John McCain would continue the direction that we've seen recently in appointing the kind of judges that represent a strict constitutional interpretation.

I can't imagine a serious citizen, looking at the difference the Supreme Court, between those two choices, deciding that they were not going to, in fact, favor McCain if they're conservative philosophically.

GIGOT: You know, a lot of intellectuals are asking is maybe the Republican Party, not withstanding your book, has run out of big ideas. I mean, they tried -- in Congress, in 2005, 2006 did nothing on health care. President Bush tried on entitlements and Social Security -- didn't get anywhere. He has a tax reform commission -- didn't go anywhere. He had a tax reform commission -- didn't go anywhere.

What makes you think that suddenly Republicans are going to be galvanized around some big ideas?

GINGRICH: First of all, I think it's helpful to have big ideas if you're going to be galvanized by them. And part of the purpose of writing "Real Change" and of outlining at the back of the book a platform of the American people was to develop a set of ideas that people could actually campaign on and could use in an effective way -- both Democrat and Republican. The platform of the American people is supported by Democrats, Independents and Republicans, all three.

Second, as I go around -- I was in Capital Hill this week, talking to both House and Senate members. I think there's a realization that the message of 2006 and the messages you point out of the difference of enthusiasm, energy and resources is that Republicans had better find a new generation of solutions.

And I think what Congressman John Boehner's done on earmarks and on beginning to reform the process and what the president did on issuing an executive order saying that the executive branch wasn't going to fulfill the committee report earmarks that the appropriators wanted is a step towards the right kind of big fights.

My hope is you're going to see the center Republicans, in particular, where you've got Senator Clinton and Senator Obama -- you're going to see them offering a series of big ideas and challenging the Democrats to actually enact real change this spring, not just talk about it.

GIGOT: All right, Newt Gingrich, thanks so much for being here.

GINGRICH: Thank you.

GIGOT: We'll be following it. Thanks.

Still ahead, black versus Hispanic, young versus old, men versus women, our panel takes a look at the emerging rifts among Democratic voters and who benefits most in the upcoming primaries.

(COMMERCIAL BREAK)

GIGOT: As Senators Barack Obama and Hillary Clinton continue their delegate-by-delegate battle for the nomination, some clear divides are emerging among Democratic voters.

Here to examine them, "Wall Street Journal" columnist and deputy editor Dan Henninger, editorial board member Jason Riley, Washington columnist Kim Strassel, and opinionjournal.com columnist John Fund.

Kim Strassel, the divides are interesting. They break down by gender, with Hillary Clinton doing better among women, losing among men. They break down by ethnicity, with Obama doing much better among African- Americans; Hillary Clinton with Hispanic Americans. And they break down by class, with Clinton doing much better among lower-income voters. How serious are these divisions?

KIM STRASSEL, WASHINGTON COLUMNIST: They are serious. Look, both of these candidates have made some forays into the other's territories but, in many cases, these divides are getting bigger. And that was one of the big things that you saw from Super Tuesday. Obama won an average of 80 percent of African-American voters in the Super Tuesday contest, while Clinton got two out of every three Hispanic voters.

I think the thing probably concerning for some Democratic Party leaders is that what is driving a lot of these divides are fights within the party that this race has been about personality, about race, about gender. Those tend to cause a lot of emotions and drive people to one side or the other. The question is, can they reunite them after they have a nominee.

GIGOT: Dan, I've always thought the worst divisions within a party were about ideas and policies, like abortion, for example, because they drive some of the largest divisions and they're difficult to heal. Kim's making a point about identify politics being more divisive. Do you agree with that?

DAN HENNINGER, COLUMNIST AND DEPUTY EDITOR: It is more divisive. But I'm going to dissent a little bit from this line of analysis. I don't think people -- even Democrats out there say, because I'm a women, I vote for X; because I'm a blue-collar worker, I vote for Y.

There are three issues in front of the Democratic Party right now -- the economy, health care and Iraq. If you look at those issues, Hillary won on the economy in California by 16 points. She own in New Jersey by 10 points. She was ahead, by and large, on health care. On Iraq, they go back and forth.

So to the extent voters do have to vote for something and look at the issues, Hillary is ahead on the issues that matter to Democrats. If she can make it to Ohio and Texas, I think she can marginally stay ahead of Barack. I'm not guaranteeing that, but I think on the issues, she's winning.

JASON RILEY, EDITORIAL BOARD MEMBER: And the media likes the identify politics story, so I would caution -- take that with something of a grain of salt, playing up some of these divisions.

I mean, obviously with the black division, I don't think that's something Hillary can make up in time. The Hispanic story is another ballgame, I think. A, Barack Obama has been closing that gap slightly. But over time, he may be able to close it some more.

There's a bit of history of Hispanics supporting black candidates in - - particularly in mayoral races are held, both Washington and Chicago, Tom Bradley in L.A., for example. So it can be done.

And the appeal of Hispanics to Hillary isn't some sort of ethnic fealty here. She's not Hispanic. It's name I.D. And that's something Obama can work on over time.

GIGOT: John Fund, I spoke to a Democrat on Capital Hill this week who said the problem he was worried about what that these divisions are showing potential weaknesses in the fall, particularly with Obama not doing well with non-college, educated voters. Those are voters Democrats really need. And Clinton not doing very well among men and Independents and those are voters she would need if she became the nominee. Is that what's really concerning some Democrats that you've talked to?

JOHN FUND, OPINIONJOURNAL.COM COLUMNIST: Well, there would be an enthusiasm problem perhaps. If this contest goes on another two or three months, there's obviously going to be some bitterness. It makes it harder to unite the party enthusiastically behind a candidate. And we've seen, whether it's Hubert Humphrey in 1968 or Gerald Ford in 1976, it's not that Democrats aren't necessarily going to vote Republican, although I think Hillary Clinton would lose some votes to a John McCain, it's the level of enthusiasm. If you're not completely behind your nominee, you don't do as much volunteer work, you don't get as much people out in the streets.

GIGOT: Let me read you a quote from Howard Dean this week, the chairman of the Democratic Party. He said, "I think we will have a nominee something in the middle of March or April. But if we don't, then we're going to have to get the candidates together and make some kind of an arrangement."

John Fund, what does that mean? Can you really have, in this day and age of freelance entrepreneurial politics, an arrangement of party elders coming together and forcing a deal?

FUND: Well, I think that would look very bad to Independent voters, who are the decisive force in the fall.

If this nomination, Paul, is decided by politician delegates, the super delegates, the elected officials of the party, or if Howard Dean knocks heads together, that will basically say to all of the millions of voters in the Democratic primaries, you know, you really don't count; we're going to settle this in the back room. That's old style politics.

In the age of the Internet, I think it would go over very badly. And I don't think Howard Dean necessarily has the most credibility to pull that off.

GIGOT: Yeah, I don't think he can pull it off. OK, John, thanks.

Still ahead, courting conservatives. Can John McCain appeal to the right without alienating the Independents he needs to win in November? Our panel weighs in after this short break.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

JOHN MCCAIN, PRESIDENTIAL CANDIDATE: I know I have a responsibility if I am, as I hope to be, the Republican nominee for president, to unite the party and to prepare for the great contest in November. And I am acutely aware that I cannot succeed in that endeavor, not can our party prevail over the challenge we will face either from Senator Clinton or Senator Obama without the support of dedicated conservatives, whose convictions, creativity and energy have been indispensable to the success of our party that it has had over the last quarter century.

(END VIDEO CLIP)

GIGOT: That was the presumptive Republican presidential nominee, Senator John McCain, speaking Thursday before one tough crowd, the 2008 meeting of the Conservative Political Action Conference in Washington, D.C.

John Fund, you were among that group. Did he win them over?

FUND: Did better than expected. He ended up with a standing ovation which, as you say, comes from one tough crowd.

I think John McCain made no secret of the fact that he's had disagreements with conservatives in the past. But he said, look, I respect you; I will listen to you and look at all these issues in which we agree. And he emphasized, again, the fact that he can restore a lot of the Republican name brand of fiscal conservatism. He said I will veto any bill with earmarks.

I think Republicans in Congress, Paul, should flock to that like a life preserver and say he's going to save us from ourselves.

GIGOT: One thing I thought was interesting, Kim, I thought he approached that crowd with modesty, which I think they probably like. And he also said, look, you may disagree with me on some things, but I'm a man of my word and I make these certain commitments to you and I won't break those commitments. That has a certain resonance with conservatives who don't like presidents who promise not to raise taxes, say, and then do.

STRASSEL: It was the best line that John McCain could take. Look, you've got all these conservatives out there right now calling on John McCain to repudiate his views on immigration and campaign finance and all these things. He can't really do that because, if he does, he loses a lot of the Independents and moderates who appreciate him because he does have a bit of a maverick past. Instead, he's going to come out and say there are some things we can't agree on. He's going to tone down some issues during his campaign.

And he's going to have to make a big question of tone. He's going to have to go out there and say I know -- and have a little bit of humility when he talks to conservatives. And that's what he started doing yesterday.

RILEY: It was an important speech to make and I think he pulled off what he needed to pull off. These will be two very different races depending on whether Obama or Clinton wins. If Clinton wins, I think the folks that -- if Hillary Clinton wins the nomination, I think the folks that John McCain was speaking to come out. I mean, they're anti-Hillary...

GIGOT: With enthusiasm, yeah.

RILEY: Their anti-Hillary enthusiasm brings them out. They come out and vote.

If Barack Obama, however, is the nominee, then McCain has to be able to pull in Independents. He still needs this crowd, which is why I'm glad he went and gave this speech. But it will be more important for him to bring people over from the other side.

GIGOT: Jason, the one issue where he got booed yesterday was on immigration. And that's where a lot of the radio talk show hosts, in particular, think he's just not on board where he needs to be. Does McCain need to move in a more restrictionist direction, do you think, for the general election?

RILEY: I think he's -- I don't. I think he needs to be very wary of doing that, in fact, given some of the swing states that Republicans need.

And let's remember, despite Rush Limbaugh and Sean Hannity and Laura Ingraham, McCain, the candidate with the closest affiliation of comprehensive immigration reform, is now the nominee.

And he may never win those guys over. But he does seem to be making progress with their listeners.

HENNINGER: You know, Jason, if that's the case, I think Newt Gingrich put his finger on the most important line in that speech, which is when McCain said we are arguing about hugely consequential things. It would be a good thing if McCain came up with some hugely consequential things that could compete with immigration, because the Republican -- I don't know about the activists, but the politicians -- Tom Coburn, George Allen, Dick Armey -- are now coming around McCain. Those are the guys who have to run with him.

This is going to be a big and unusual election. There's going to big turnout. And people are going to want to vote for something. McCain has to give it to them.

GIGOT: John Fund, if immigration had been the decisive issue, Mitt Romney probably would be the nominee because he ran very hard on that. Now, Mitt Romney withdrew yesterday in very gracious fashion.

What about Mike Huckabee? He's in here. He's still in the race. He's still running, says he's not going to drop out. What is he running for?

FUND: Well, I don't know because in the campaign, so far, he's barely disagreed with John McCain on anything. In fact, they basically almost agreed to beat up on Mitt Romney together.

I think Mike Huckabee is in this race to continue his name branding as the candidate of the evangelical movement. I think he's going to be a continued presence in the Republican Party. And I think he's want attention. And he's getting all of that...

GIGOT: But does he want to be -- does he want to be vice president, John? Is that what this is really all about?

FUND: Yes. It's a job application for vice president. But I think John McCain would divide the conservative movement if he picked Mike Huckabee. I think he would be better off picking somebody, like Governor Mark Sanford or Governor Tim Pawlenty, or a distinguished senator, like former Senator Phil Gramm.

GIGOT: But, Kim, Christian broadcaster James Dobson endorsed Huckabee now. Isn't Huckabee's staying in complicating John McCain's ability to unite the Republican Party at this juncture?

STRASSEL: I'm not necessarily sure the McCain campaign is that bothered. You know, their hope is they go out and actually beat him in a few races and beat him well, and that might actually help them look as they are really the nominees, the winners.

GIGOT: All right, thanks, Kim.

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, some good news on the economy in Iraq -- Dan?

HENNINGER: Yeah, that's right, Paul. You know, the success of the Petraeus counterinsurgency has been great news. But there's more. The Iraq economy is coming back to life as a result.

You know, people forget that for the first year after the invasion, Baghdad was actually alive with commercial life. Then the al Qaeda terror started and the economy collapsed.

Well, now, it's coming back. Iraq's merchants have been opening businesses all across the country. About 100,000 micro loans have been let. Electrical production is up, inflation is down from 65 to 5 percent. The currency has been strengthening.

You know, one can agree still, or disagree, on whether the war was a good idea, and that's going to be debated during the presidential election, but I think Americans can take some solace in seeing that a proper military strategy is allowing this country to fulfill its promises in Iraq.

GIGOT: All right, Dan, thanks.

Jason, a hit to Wikipedia?

RILEY: Yes, yes, yes. Wikipedia, the on-line encyclopedia web site, has a long history of getting a lot of things wrong, so I wanted to give a hit for getting something right here. Wikipedia has a long thoughtful entry on the Prophet Mohammed that includes a handful of images taken from medieval texts, 500 year old, lovely images.

And this has set off a fire storm, the inclusion of these images. There's been a petition drive, some say more than 100,000 people have signed it. We're not so sure about the number because you can sign it anonymously. So we're not sure if a few people have been signing it a bunch of times.

But Wikipedia has refused to take it down. And good for them. A few religious fanatics should not be allowed to limit our free speech.

GIGOT: All right, thanks, Jason.

Finally, a myth for the Berkeley, California, city council from long suffering Bay-area native John Fund -- John?

FUND: Paul, Berkeley has done it again. Their city council passed a resolution saying the United States Marine Corps recruiting center in Berkeley were unwelcome intruders. And they gave a free parking pass and sound permits so Code Pink, an anti-war group, could disrupt their activities.

Well, this was too much for some senators. They basically said, look, Berkeley gets about $2 million in earmarks for various projects. If they don't want to be part of the United States, maybe we shouldn't send them money.

Well, it turns out Berkeley has backed down. Now, the mayor of Berkeley, Tom Bates, has apologized. And Berkeley is once again temporarily in the United States.

GIGOT: All right, thanks, John.

That's it for this week edition of the "Journal Editorial Report." Send your emails to jer@foxnews.com. And visit us on the web at www.foxnews.com/journal.

Thanks to my panel and to all of you for watching.

I'm Paul Gigot. We hope to see your right here next week.

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