This is a rush transcript from "The Journal Editorial Report," September 12, 2009. This copy may not be in its final form and may be updated.

PAUL GIGOT, HOST: Coming up next, President Obama doubles down on his health care bet, paying lip service to his opponents concerns, but making few concessions. Is it enough to rally the Democrats?

Plus, the Supreme Court and free speech. Why Sonia Sotomayor's first cases of justice could spell sweeping changes for campaign finance law.

And a New Hampshire judge orders a home-schooled girl to attend public school, citing her rigid Christian faith.

"The Journal Editorial Report" starts right now.

Welcome to "The Journal Editorial Report." I'm Paul Gigot.

In a speech that may have helped salvage the Democrats' health care agenda, President Barack Obama addressed a joint session of Congress this week conceding very little to his opponents and promising his $900 billion plan will not add to the federal budget deficit.

(BEGIN VIDEO CLIP)

PRESIDENT BARACK OBAMA: I will not sign it if adds one dime to the deficit, now or in the future, period. And to prove I'm serious, there will be a provision in this plan that requires us to come forward with more spending cuts if the savings we promised don't materialize.

(APPLAUSE)

(END VIDEO CLIP)

GIGOT: Joining the panel this week,"Wall Street Journal columnist and deputy editor, Dan Henninger; senior editorial page writer, Joe Rago; and Washington columnist, Kim Strassel.

Dan, so the story now is in the polls, a bump up in support for health care. And a lot of people in Washington talking about new momentum. Did he save the day for the Democrats?

DAN HENNINGER, COLUMNIST & DEPUTY EDITOR: Look, this was a speech to a joint session of Congress. That's a big deal. And the president is doing this for a piece of legislation? This is a guy that's running from behind. We're entering the football season. This is like the Obama team's on the 20 and they're just trying to push this ball to midfield. I think he got it to midfield but mainly what he did, it seems to me, in that speech, is make clear to everyone by the bill is in trouble. It's in trouble because they're trying to put their arms around 17 percent of the economy. It was an extremely complicated speech.

GIGOT: That's for sure.

Joe, let's talk about some of the arguments the president made, particularly this one that says its $900 billion. That's the price tag which he put on it, which is smaller than the other price tags. But is this realistic to talk about not adding a dime to the deficit?

JOE RAGO, SENIOR EDITORIAL PAGE WRITER: I don't think so. No one in Congress has written a bill yet that doesn't increase the deficit. The House bill increases it by $239 billion.

GIGOT: And that's with some pretty favorable accounting.

RAGO: With some really favorable accounting.

GIGOT: And only for the first ten years.

RAGO: Right. And if you look at the second ten years, it adds about another trillion dollars to the deficit. But if you look at what President Obama basically blessed on Wednesday night, he says we will raise taxes $450 billion, we will cut Medicare $450 billion. Then he says Medicare is a sacred trust that he then says is bankrupting the country. Then he says, you know, don't worry about people saying I'm going to cut Medicare. But then I'm going to use that money to finance health care for the middle class.

GIGOT: Kim, how potent is this Medicare argument for the opponents of this? On one hand, the president says to the seniors, you are not going to lose a dime of benefits. We're going to protect all that, sacred trust. On the other hand, we will cut $500 million. Somehow that math doesn't add up.

KIM STRASSEL, WASHINGTON COLUMNSIT: It doesn't add up and that's why you have seniors the least happy in polls with some of this coming out. What's so interesting is the president talks about waste and fraud. They're going to cut things out. What people aren't talking about is what he actually will do his cut Medicare Advantage, which is this program which has double in size since 2003. Seniors love it. It gives them more choice and control. It allows them to apply their health care dollars to private insurers who can give them better coverage.

GIGOT: And about 24 percent, about one in four of all seniors have Medicare Advantage right now.

STRASSEL: That's right. These are the people in the crosshairs. The Democrats hate this plan. They don't like that it exists in the private market. They want to get rid of it. That's where the money's going to come out of and that's the community that will be least happy about this.

GIGOT: The other thing the president floated was this idea, which some people say this is reaching across the aisle, giving Republicans something they want, is medical malpractice reform. He at least acknowledged it's a problem. How serious was his proposal for reform?

HENNINGER: You could have done medical malpractice reform as a free- standing piece of legislation for four or five years.

GIGOT: Or even as part of the bill.

HENNINGER: Even as part of the bill.

GIGOT: He didn't put it as part of the bill. He didn't say this would be part of the bill. He talked about demonstration projects in the states.

HENNINGER: Yeah. I think it was mainly a rhetorical flourish. Look, there are so many moving parts to this bill, and the president is conveying the impression that you somehow to be for or against what he is doing. But that's...

GIGOT: For what he is doing or nothing.

HENNINGER: Yeah. Or you're standing in the way and you're trying to protect the status quo. This is a legitimately a piece of politics that people can legitimately oppose. I think he has not changed much of anything. We're going to roll forward into the fall. The Baucus committee will produce a piece of legislation and Republicans are going to oppose it. It'll be a purely partisan vote.

GIGOT: What about the public option, Joe? He talked about it and extolled it and said we need it. He supported it. On the other hand, he doesn't — he is not wedded to it. He's willing to throw it over the side. And already you are seeing the left begin to say, well, you know, we said we wouldn't pass this without a public option. Well, maybe not.

RAGO: The reason he is not wedded to a public option is because a lot of Democrats actually hate it, especially the ones who are up for reelection and are very — in iffy districts.

GIGOT: So-called blue dog Democrats in moderate districts and the Senator from Nebraska, Florida, places like that.

RAGO: Exactly. He will throw that over the side. But the rest of the bill still gets to the same place.

GIGOT: He can get about 70 percent of what he wants just through regulating private insurance and subsidizing care. Is that what you're...

RAGO: Exactly. And telling doctors and hospitals, you know, cover this treatment, don't cover that treatment. We will penalize you if you spend too much. But over here, you know, that's fine. And really what's going to happen is all of the health care system is going to become a subsidiary of Congress.

GIGOT: And doctors, potentially civil servants down the line.

RAGO: Down the line.

GIGOT: That's right.

Kim, do you think the president really set the stage here for a victory? Did he convince his party, reassure his party enough? We don't have much time.

STRASSEL: Watch the polls. He certainly reenergized...

(LAUGHTER)

GIGOT: He's principled (ph) people.

STRASSEL: ... the leadership. But the people he has not necessarily convinced are those who blue dogs, are those swing-state Senators. They will watch to see how the public reacts to this.

GIGOT: And if the public reacts positively, it's going to get across the finish line, would be what I hear you saying.

STRASSEL: Yes, but if what you see happening is this continued doubts, if the poll numbers keep falling, but more importantly, if the president's numbers keep falling. Then there will be less of a reason to stick with him on this. That would be the real fear that the Obama administration ought to have.

GIGOT: All right, thank you, Kim.

When we come back, the Supreme Court's second chance. The justices revisit two previous rulings on campaign finance. This time around will they strike a blow for free speech?

(COMMERCIAL BREAK)

GIGOT: The Supreme Court, joined for the first time by Justice Sonia Sotomayor, heard arguments this week in a case that could strike a historic blow for political free speech and against campaign finance restrictions. The case involves a documentary made by a conservative group last year about then-Senator and presidential candidate Hillary Clinton. Funded by a group called Citizens United, "Hillary, the Movie" was intended to be shown on cable TV during the primary season. And that it caught in the net of campaign-finance laws, such as McCain-Feingold, that control political advertising. A federal court ruled the film is a thinly veiled attack ad and thus restricted by those campaign laws.

We are back with Dan Henninger. Also joining us, opinionjournal.com editor, James Taranto; and senior editorial page writer, Colin Levy.

Colin, you listened to the oral arguments at the court this week. Are we poised for five justices overturning these precedents?

COLIN LEVY, SENIOR EDITORIAL PAGE WRITER: Yes, I think there's a good chance that could happen. This is something where we have watched in the past, a certain amount of redolence from Chief Justice John Roberts as well as Justice Samuel Alito in taking big steps to revisit some of these campaign-finance restrictions. But this is a case where, because this is a movie and it is the kind of ban that the government has also said could sort of slide into books, that we are seeing a real opportunity for the justices to take a hard look at how these sort of restrictions against spending can become restrictions on speech.

GIGOT: Right. Now the government conceded at an earlier stage that, in fact, books could be implicated here, under the FEC, the Federal Election Commission's interpretation of the statute.

LEVY: Yes, that's true, and they sort of backed off that slightly in this instance. But it is very hard to draw a bright line between why a documentary should be able to be regulated and a book can't be. So once you start regulating speech, this is something that's very iffy territory.

GIGOT: Now, James, this was not an Academy Award winner as a movie, so not a great piece of literature or art. On the other hand, this would seem to be the kind of thing weighing in on a political campaign that the Constitution expressly designed to protect.

JAMES TARANTO, OPINIONJOURNAL.COM EDITOR: Is worth putting this in a broader context. America has an extremely broad interpretation of freedom of speech. So there are very few limits. If Citizens United had made a porno movie, it would've been protected by the First Amendment. If it had made a movie advocating racial violence, it would be protected by the First Amendment under a 1969 case. This is an exception. It's an anomaly. Why did they make an exception to this? Because it might influence the outcome of the election.

GIGOT: And because it was financed by corporate money. That's the key issue under McCain-Feingold.

TARANTO: Because it was financed by corporate money but that's also because it's political, because I might affect the outcome of an election. But what do they think the First Amendment is for but to influence politics?

GIGOT: So Michael Moore's movie, "Fahrenheit 9/11," which was an attack on the Bush administration and Republicans, that could have, probably should've been banned under this kind of interpretation too.

TARANTO: Well, there's an exception for media companies. So FOX News Channel and the Wall Street Journal can do whatever we want. Miramax can put out "Fahrenheit 9/11," which was also a very similar movie, albeit with some degree of wit and production value, but so there is this exception. The New York Times editorialized this week in favor of these restrictions. The New York Times endorses candidates every year. It tells people how to vote for office. I don't know if anyone listens to them but...

GIGOT: So some corporations are more equal than others?

TARANTO: Right.

GIGOT: Corporate speech is — did that come up at the Supreme Court at all, Colin, this week, that kind of distinction?

LEVY: Yes, it did. And I think that that's the key point here, which is that this is a case where you have to decide whether the government can censor certain speakers and not others. I think what John Roberts, in particular, was listening for was the idea that the First Amendment either protects everyone or it doesn't.

HENNINGER: It strikes me, listening to this, Paul, is it almost is similar to the health care debate in the sense that our viewers watch these subjects that we discuss. You get tangled up in this incredible complexity all the time. This is about funding campaigns, right? But the arcana (ph) is so extraordinary that you end up with a Supreme Court case of this sort.

GIGOT: And that plays into the arms of the politicians who know...

HENNINGER: Of course.

GIGOT: And the public says, its process, I don't care. Meanwhile, their rights are eroded without them knowing it.

HENNINGER: Well, I think it explains a lot why we have the sort of campaigns we do. The fundamental problem with this system is that individuals are restricted from giving more than $2100 to a candidate in an election cycle, right? That's the basic limitation.

GIGOT: Right.

HENNINGER: So as a result, you have all these forces trying to find ways around that. But the affect is that we — and people complain about this all the time — our candidates either tend to be people who are professional candidates, they don't hold any office, or you have billionaires, who fund their own campaigns, making it very difficult for the average guy or woman to launch a presidential campaign.

GIGOT: James, Justice Kennedy has been developing a jurisprudence of individual liberty in a lot of cases. Do you think this plays — in this case, plays to him siding with the conservatives?

TARANTO: Yes, especially because that was the side he took. He was a dissenter. He is usually the swing vote but he was the dissenter in both of the precedents, one going back to 1990 and one going back in 2003 dealing with McCain-Feingold. So the real question is, Alito and Roberts, who probably will come out in favor of free speech, but just haven't gone that far yet.

GIGOT: Colin, what do we learn about Justice Sotomayor during the oral argument?

LEVY: I think we learned that she is going to be about what people expected. She has always been one who has wanted to stick closely to precedent, which is what people talked about. And here, the precedent is for restricting speech. So she seemed to be willing to hold onto that.

GIGOT: I'll tell you, the court's campaign-finance laws I think are one of the great offenses against the Constitution. And with any luck, we will get five to throw these precedents out.

All right, thank you.

When we come back, a New Hampshire judge orders a home-schooled girl to attend the local public school, citing the rigidity of her Christian faith. The details are next.

(COMMERCIAL BREAK)

GIGOT: A New Hampshire court ordered a home-schooled Christian girl to begin attending fifth grade at the local public school last week, citing the rigidity of her religious beliefs. The court said that 10-year-old Amanda Kurkowski needed to consider other views as she matures. Although she was found to be generally well liked and academically promising, the court noted that Amanda's, quote, "vigorous defense of her religious beliefs suggests strongly that she has not had the opportunity to seriously consider any other point of view." The judge's order goes on to say, "Amanda would be best served by exposure to different points of view at a time in her life when she must begin to critically evaluate multiple systems of belief and behavior."

Wall Street Journal columnist, William McGurn, joins the panel, along with Naomi Schaefer Riley, who edits our "Houses of Worship" column.

Bill, you followed this case and other child cases like this. How can the state take somebody out — take somebody out of being home schooled and force them into public schools if they are not a truant?

BILL MCGURN, COLUMNIST: Right, well, that's what people are asking. It grows out of a messy divorce where the parents have always been split about education.

GIGOT: The mother wants the child at home.

MCGURN: The mother had been home schooling a child for years. And the father has always disliked it. Primarily, it seems because he thinks it doesn't socialize her well and so forth.

What makes it extraordinary is the line of reasoning that both the concept of education, that you go to public school to have your faith challenged and so forth...

(LAUGHTER)

... and that a judge can make a ruling on this point. I mean, judges, I think, frequently in these cases have to choose between parents. I'm told also that in New Hampshire, the girl has been going to home school for four years, and as you say, has been doing well. That it is much harder for a court to make this kind of decision given those four years...

GIGOT: Of success.

MCGURN: Where she's done well. And the other thing that's so odd about this, there's no finding that the mother is unfit, that the girl is in danger.

GIGOT: I understand, Naomi, the state has an interest in protecting the security of a minor, the security of a minor. That doesn't seem to be at play in this case. Is there some inclination — implication, rather, of a religious bias?

NAOMI SCHAEFER RILEY, EDITOR, HOUSE OF WORSHIP COLUMN: I think you could say that. But I would just start with the point that the state has kind of been forced into this case here. You have clearly a bitter divorce, a bitter dispute between two parents who think that they have the welfare of their child in mind. There's a long history of the state getting involved in cases where someone claims that the welfare of the child is at stake.

We could dispute, I think, whether, in fact, this child is in any kind of social welfare danger. But I think that we have to consider here that it is her father who is actually asking the court to take action here.

GIGOT: But when the mother gets custody in a divorce case, typically in a divorce case, and the child is well behaved, you get custody, and that would include presumably being able to make the decision about the education of the child.

SCHAEFER RILEY: That's true. But when you consider the fact that a significant portions of Americans are in interfaith relationships, interfaith marriages, you have cases where a lot of times the people are just in disagreement about extremely fundamental religious issues. Is daddy going to hell is a question that I think you don't want your child asking.

GIGOT: But can you insist upon somebody getting out of the home because of their religious beliefs.

(CROSSTALK)

GIGOT: When does it come to that? That seems preposterous.

HENNINGER: to say it's the public school's job...

MCGURN: And also to say that you're doing it because it is the public school's job to challenge your faith because your faith needs to be attenuated by a public school, it's an odd definition of a public school. And it's an odd — I think it's a bizarre kind of reasoning. The family law people that I talked to, don't think the reasoning can be upheld. You might be able to make a decision this way, but the reasoning is very threatening.

GIGOT: All right, Henninger, product of Catholic schools. I mean has your faith been challenged sufficiently in those Catholic schools and you should have been thrown into a public school?

(LAUGHTER)

HENNINGER: Well, the judge said her faith ought to be challenged. He should have just ordered her to watch more television.

(LAUGHTER)

HENNINGER: But you know, cases like this can grow into federal cases so this is — the judge's decision basically raised the legal status of home schooling vis-a-vis the public school system. Does the public school system in this country trump everything? And I can see a case like this rising up through the judicial system, maybe all the way to the Supreme Court.

GIGOT: Bill, you followed another case involving a Muslim girl who was late teens. I think she was 17. She has asked to be protected, the state to protect her from going back to her family, because she has fled from Florida to Ohio, and she's afraid that if she is returned to her family, she will be hurt because she has converted to Christianity.

MCGURN: Right. This is a much more passionate case because the stakes are a lot higher. The girl actually fled from Ohio to Florida.

GIGOT: Oh, I'm sorry.

MCGURN: She is in Florida. She is 17. It's a little complicated because, within a year, presumably, she will be able to make her own decisions.

GIGOT: Yeah, independence, sure.

MCGURN: In some ways, it's much more passionate. It has become a holy war on the Internet. I think, in some ways, it's less about religion in that the root issue is she says the father has threatened to kill her. He said, you become a Christian, and his threatened to kill her or sent her to an asylum. He says he never made the threat, and that Christian evangelicals have put that this in her head. I think that's the issue, whether they determine that this dad made this threat.

SCHAEFER RILEY: There is a long history of precedents for the state intervening. There's a case called Prince v. Massachusetts in which a Jehovah Witness was having her daughter go peddle religious literature on the streets. And the state divided there was a compelling interest that this was not in the child's welfare interest. And there have been several more cases like that involving Christian Scientists were they denied medical care to a child and the state said, look, we have an interest in making sure that the welfare of the child is protected and we're going to intervene.

GIGOT: That would seem to argue in this case for such intervention on safety.

SCHAEFER RILEY: Right. Erring on the side of caution.

GIGOT: Safety. OK.

We will take a break. When we come back, our "Hits and Misses" of the week.

(COMMERCIAL BREAK)

GIGOT: Time for our "Hits and Misses" of the week.

Bill, first to you.

MCGURN: I would like to commend the New York Times reporter who was rescued by British commandos from the Taliban in Afghanistan. A bunch of people were killed in that raid, including reporters, an Afghan interpreter and one British commando. And now a lot of people are coming forward to second-guess the commandos and criticize the decision. In his own story, the reporter, Stephen Farrell, describes the air ride home with the bloody guys who saved him this way. He wrote, "I thank everyone who is still alive to thank. It wasn't and never will be enough." That's a graceful note from a reporter with a good perspective.

GIGOT: All right.

Naomi?

SCHAEFER RILEY: Well, I'd like to give a miss to the teachers union. I know you're shocked.

(LAUGHTER)

GIGOT: I'll second that.

SCHAEFER RILEY: This week, school started in New York and the kids arrived exactly one day after the teachers arrived. Thanks to brilliant negotiating on the part of Randi Weingarten at the American Federation of Teachers, teachers only had to come one day to prepare at the end of summer vacation. If you go to the AFT's Web site, they call themselves a union of professionals. I say if you're professionals, then you should take a little bit more time to prepare for the kids to come back.

(LAUGHTER)

GIGOT: All right.

Colin?

LEVY: Paul, I'm going to give a hit to the University of Wyoming president, Tom Buchanan, for standing up to protesters who had been objecting to the naming of an international center for Dick Cheney there on campus, because of his support for the Iraq war. And the president of the university reminded the protesters that real intellectual diversity includes and extends to people who you don't agree with. So he deserves our applause for the idea that the universities teach not indoctrinate.

All right, thank you, Colin.

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

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

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

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