This is a rush transcript from "The Journal Editorial Report," June 19, 2010. This copy may not be in its final form and may be updated.

PAUL GIGOT, FOX HOST: This week on the "Journal Editorial Report," it's Obama versus BP. Under intense pressure from the president, oil executives agree to a $20 billion victim's fund and much more. Will Obama get a political boost? And will the beleaguered BP survive?

And experts speak out on the administration's deepwater drilling moratorium. Was it driven by safety concerns or politics?

Plus, the gun lobby gets in bed with Chuck Schumer? The NRA sells out on the First Amendment in a move its members may come to regret.

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

Under intense pressure from President Obama, BP announced this week it would put $20 billion into a fund to compensate victims of the Gulf oil spill, and said it would cancel shareholder dividends for the rest of the year. BP also said it would pay another $100 million to a fund to help oil rig workers sidelined by the administration's moratorium on deepwater drilling. The deal was worked out in a four-hour meeting Wednesday at the White House.

A day before, BP CEO Tony Hayward faced a contentious grilling on Capitol Hill.

(BEGIN VIDEO CLIP)

TONY HAYWARD, CEO, BP: Since I became CEO, we've made progress. We have made it very clear to everyone in the company that —

REP. HENRY WAXMAN, D-CALIF.: Have you met that commitment that you made and —

HAYWARD: And we made major changes. We made major changes to our —

(CROSSTALK)

WAXMAN: You made major changes but now we see this disaster in the Gulf. Is that indicating that you didn't keep that commitment?

HAYWARD: And one of the reasons that I am so distraught—

WAXMAN: Could you answer yes or no?

HAYWARD: — is that—

WAXMAN: I don't want to know whether you're distraught. I want to know whether you think you've kept your commitment.

(END VIDEO CLIP)

GIGOT: Joining the panel this week, Wall Street Journal Business World columnist Holman Jenkins; opinionjournal.com columnist John fund; and Washington columnist Kim Strassel.

So, Holman, did BP have a choice whether or not to agree to the $20 billion?

HOLMAN JENKINS, BUSINESS WORLD COLUMNIST: I think the share price was under such pressure that it wanted some change of tenor in the relationship to the Obama administration. So they probably felt they had no choice. Whether it pays off will be determined by whether their stock price turns around in the coming weeks. The one thing we don't know is what they got in return. They must have, at a minimum, that assurance that Obama is going to stop beating up on them.

GIGOT: Obama came out and said, we want BP to survive. But he didn't put a cap on liability and, in fact, said this may be just the beginning.

JENKINS: No, in fact, it may turn out that whatever the ultimate liability is, that makes it $20 billion more. It may have made the situation worse.

JOHN FUND, OPINIONJOURNAL.COM COLUMNIST: It's almost as if we have different models of how you nationalize a company. There's the original model with General Motors and Chrysler. And now there's a new model, which is, if you get into trouble, the next Toyota, for example, you're going to face such liability that the federal government is effectively going to own your future.

GIGOT: Does this mean — is this setting a precedent that means, in any future large-scale industrial accident, that this kind of public trust fund, where a company has obliged to put money into the fund, and the government will decide who gets paid and when, is that what we're going to see from now on?

FUND: That's a danger. And remember, one of the reasons so many investors overseas has contributed to the American economy so long is we have a rule of law here. It's due process. What this effectively says to foreign investors is forget the rule of law.

Joe Barton basically came out against this $20 billion deal —

GIGOT: He called it a shakedown.

FUND: A shakedown.

GIGOT: Is that what it is? Is it a shakedown?

FUND: You better believe it's a shakedown. This goes around the legal process.

The message this sends to foreign investors is, be careful here because the United States can resemble a banana republic overnight with the wrong president in charge.

JENKINS: And it teaches them how vulnerable they are if the politicians decide to target the stock price, which they can do.

GIGOT: And this doesn't mean, Kim, that anybody is saying that BP has no liability here and that BP would not, in fact, be on the hook. And leave the trust fund aside, they were on the hook for billions and billions of dollars anyway under any normal process.

KIM STRASSEL, WASHINGTON COLUMNIST: This is nothing to do with BP culpability or its obligations on this. We have laws dealing with that. And BP has been following the laws and, in fact, exceeding them. We have courts to work out the questions of responsibility. This — this is instead — this is about — I mean, I kind of — I have no doubt the share price had something to do with this. But let's not also forget that we had the attorney general of the United States publicly announce that he was criminally investing this company. If that wasn't a prod for BP, a pressure on BP to basically stand up and do whatever the president told them to do, I'm not sure what is.

GIGOT: But, Kim, Joe Barton, who's the Republican ranking member on the Energy Committee, said, in his statement on the Hayward hearing, that BP was owed an apology for this shakedown. And he was taken to the wood shed by his fellow Republicans who said he could lose his committee ranking member position if he didn't turn around and apologize, which he did.

So the politics here would seem to be against this kind of view that it is a shakedown.

STRASSEL: Yes, well, it's appalling. Joe Barton said the only thing that's probably been true out of Congress's lips since this circus started.

FUND: If he hadn't used the word —

GIGOT: Go ahead, Kim.

STRASSEL: You had the experience of the past week of watching a bunch of preening congressmen mugging for the cameras. He says this, and the GOP is so nervous on the issue, the first thing they do is go and lose all their principles and make Mr. Barton stand up and apologize for defending the rule of law. He wasn't defending BP, but the rule of law.

GIGOT: John, you were going to say?

FUND: If he hadn't used the word "apology," I think we would have an entirely different discussion because that's what got the headlines and it was the substance of what he said that was largely ignored.

GIGOT: Holman —

(CROSSTALK)

JENKINS: — a chance to put the genie back in the bottle.

It didn't work. So the genie is out for good.

GIGOT: And let — Holman, usually, when there's an airline crash, the rest of the industry doesn't attack or distance itself from the airline that had the accident. In this case, you see the rest of the oil industry distancing itself from BP and saying we wouldn't have drilled that well in the same way.

HOLMAN: Because they don't have the long experience that the airline industry has of everybody suffers in a crash. I think the real problem is they have the problem that BP did. They rely on the blowout preventers the way that some people rely on their air bags as the magical guarantee of safety that's going to save them from any stupid thing they do.

GIGOT: But is there — so —

HOLMAN: The blowout preventer completely failed. And they all have to go back and look at all the processes now because this thing that always protected them in the past, apparently doesn't always work.

GIGOT: Is there anything on the public record so far that you've seen that suggests that BP was negligent here?

JENKINS: There's a lot of e-mails. There's a lot of chatter between BP people about whether they're doing things right. That's an always the tell-tale sign.

GIGOT: All right, Holman, thanks.

When we come back, crude politics. The experts are speaking out about Obama's deepwater moratorium. The administration says the scientists backed their decision to stop drilling, but the scientists are telling a different story.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

PRESIDENT BARACK OBAMA: Already, I've issued a six-month moratorium on drilling. I know it creates difficulty for the people who work on the rigs. But for the sake of their safety and for the sake for the entire region, we need to know the facts before we allow the deepwater drilling to continue.

(END VIDEO CLIP)

GIGOT: That was President Obama in his Oval Office speech this week, reiterating his commitment to a six-month deepwater drilling moratorium. The administration claims the moratorium was part of an Interior Department report of new safety recommendations, and that those recommendations were signed off on by a panel of experts. But now eight of the experts are speaking out, claiming they never supported a moratorium on deepwater drilling, and arguing that the move could devastate the Gulf Coast economically and make us less safe environmentally.

So, Kim, you talked to some of these experts this week. What were they telling you about how this all went down?

STRASSEL: Well, what they're really unhappy about is that this moratorium was added after they had signed off on the report. Now, think about that. If this happened in the Bush administration, it would be a huge uproar. What they're saying was that this issue of a deepwater drilling moratorium was never even brought up with them.

GIGOT: Really?

STRASSEL: One of them said the reason why was because, if anyone had brought it up, they would have told them it was pure craziness. We've also found out that of the recommendations there were a couple of dozen in the secretary's report about the bulk of them could be done in 30 days or less. There really was no reason to have the six-month pause. Rather, they argue there are long-term safety implications.

GIGOT: Well, that's what I want to ask you about. Because the president argues that we need the moratorium because we had this accident and now we need to find out what's safe. Why are they arguing that it would actually make us less safe?

STRASSEL: There are plenty of reasons. One of them is, they point out, when these rigs sit out there, they're going to be contracted to go do other jobs. It's going to be the newest, most modern, most safe ones that are going to leave first. And it's going to be the ones who leave last and come back soonest that are less safe and do less. Also, we're going to have a whole bunch of experienced crew members in the gulf, who are going to look at the six months and they're going to decide that they're not going to be in the business anymore. So when things get restarted you're going to have less experienced people working on the rigs. And finally, and this is a big one, it is inherently risky to close down a well in mid operation and then go back and start it up again. And you're just adding more risk by putting this moratorium in place.

GIGOT: So you think they're going to have to list it?

STRASSEL: I think they're going to have to think about it, especially because there's enormous — first of all, there's no scientific basis for this. And there's enormous pressure right now on them because this is doing terrible economic damage to a gulf that's already reeling under this spill.

GIGOT: Is it going to stick, Holman, do you think?

JENKINS: They'll lift it progressively. They can't climb down.

(CROSSTALK)

JENKINS: — the 200 feet is safe, or satisfied that 400 feet is safe. They'll pull it back.

(CROSSTALK)

GIGOT: All right, John, let's turn to the president's speech this week. I understand why some conservatives would be unhappy, but what I don't — or would dislike it. But what I don't understand is why the left turned so harshly against the speech, and said it didn't match their ambitions to move forward with a climate agenda. But the president said he wanted to move ahead on a climate agenda. What's the problem with the left?

FUND: This is the nightmare of health care reform. The president said —

GIGOT: But that passed, John.

FUND: Not the way they wanted it do. Remember, he originally wanted a public option but he wouldn't push for it. And eventually, he had to drop the public option. What they worried, because of Obama's lack of specificity in speeches, they want cap-and-trade, but Obama didn't push hard enough for that. Congress may end up doing nothing as a result of Obama's indecisiveness.

GIGOT: So do you think the climate agenda is going to go forward and has a chance to pass this year?

JENKINS: No, there's no support in the country and there's no support among Democrats. But the left is angry because a crisis is a terrible thing to waste, and he's wasted a bunch of it.

GIGOT: How is it wasting it? It did pass health care.

JENKINS: He didn't get into public option, and he hasn't delivered labor union preeminence over American business. He's not — he didn't mention carbon taxes or cap-and-trade in his speech, so he's not pushing that.

GIGOT: So you think the failure to mention cap-and-trade is a signal that, look, we're dropping this. And I just want to sound like I'm pushing it, but I really don't want to?

JENKINS: Yes, because he's just setting himself up for a defeat.

GIGOT: But it passed in the House. The bill passed. Cap-and-trade passed in the House last year. There are some people who think that maybe that if the Senate passes anything close to that, maybe it doesn't include that cap-and-tax provision, but they could get together in conference and put it in the bill in a lame-duck session, even if the Democrats lose Congress or lose the House in November, put it in later and say, tough, it's law.

JENKINS: I think the Democratic strategy is they know they're going to lose big in November. They know their majorities are going to vanish. Therefore, pass as much as you possibly can. Put it into law, because Obama's veto will prevent the Republicans, if they take over one or both houses of Congress, from changing it.

GIGOT: Kim, do you buy the lame-duck strategy as a possibility here?

STRASSEL: I think anything is possible with this Congress and presidency. And America should be on guard for that.

But right now, they want an energy victory. And cap-and-trade makes it harder for them to do that energy victory and claim that they've done something about an oil crisis. So it's more likely, they let that go for the moment.

GIGOT: What about the ability, Holman, to link the Republicans to big oil and BP? That's clearly part of the strategy. Harry Reid is pushing it hard in his race and some other Senate races.

JENKINS: I don't think it's going to work. The classic question is right track, wrong track, and nobody looking at this BP situation doesn't think the country is on the wrong track. And that's means the incumbents are in trouble.

GIGOT: All right, thank you.

When we come back, guns and free speech. The NRA sells out to Democrats on the First Amendment, a move its members may soon come to regret.

(COMMERCIAL BREAK)

GIGOT: Chuck Schumer and the NRA? They say politics makes strange allies, but this is one for the books. The gun lobby cut a deal with the Senate's leading gun control advocate in an attempt to exempt itself from a campaign finance bill now working its way through Congress. The bill, known as the Disclose Act, is a Democratic response to the Supreme Court's January ruling in Citizens United v. FEC, which lifted limits on spending by corporations, unions, and nonprofit groups in political campaigns. At the time, the NRA's Wayne LaPerriere called Citizens United a "defeat for arrogant elitists who wanted to carve out free speech as a privilege for themselves and deny it to the rest of us," end quote. How times have changed.

Senior editorial page writer, Colin Levy, joins us with more.

So, Colin, briefly, what does the Disclose Act do?

COLIN LEVY, SENIOR EDITORIAL PAGE WRITER: The Disclose Act is really geared towards tamping back the free speech that businesses and corporations got with the Citizens United decision in January, and ostensibly it just targets particular sorts of government contractors, businesses that have received TARP funds, and those that had some level of foreign ownership. But what is really at play here is an effort to create sort of mass confusion in the business community in a way that will discourage businesses that like to speak out against Democrats.

GIGOT: All right. So the NRA said it opposed this in late May. Why would suddenly the Democratic leadership, no friend to the NRA, decide they need to carve out an exemption for the gun lobby?

LEVY: Again, here, what happened, when you think about it, the NRA actually isn't nearly as much of a threat as businesses are? In most districts where gun rights are important to citizens, Democrats send to run fairly gun-friendly candidates and the NRA has a history of endorsing some Democrats as well.

GIGOT: Ah.

LEVY: So it's not just a right-leaning business there. The biggest threat is local business groups that want to speak out Democrats, and that's what the Democrats are more afraid of in this upcoming election.

GIGOT: So they want to neutralize the NRA on this particular question for this election and particularly exempt, make some of the Blue Dog Democrats, who are going to have very tough races, not to have to run, in addition, against business, against the NRA?

LEVY: Right.

GIGOT: OK. But here is the question, Kim. Why would the NRA want to cut this deal? Because if, in fact, the Democrats felt they needed to — they needed to do something with the NRA to get this passed, it might have failed on its own.

STRASSEL: Well, look, the NRA has always been exceptionally private about its donors, and it has a right to be. There is a right out there to anonymity in organizations. They went to Blue Dogs and they basically made it known that they really didn't want this to pass and they didn't want these restrictions put on it. That's one of the reasons that Chuck Schumer cut this deal, because he couldn't get votes from Blue Dogs unless something happened. But the NRA was just simply worried that this bill would pass, whether not it opposed it or not. Democrats are good at twisting arms. So in the end, it says, well, better to cut a deal than end up under these restrictions with nothing at all.

GIGOT: So they were willing to sell out on the First Amendment to get — to protect themselves, they thought, in the main job, which is to protect the Second Amendment, and not have to disclose their donors. So that's the logic?

STRASSEL: That's part of it, yes.

GIGOT: All right, John, so does this help the bill pass or not?

FUND: It confused the situations. Senator Diane Feinstein, a California Democrat, said she's not going to vote for this now, because the NRA has been carved out.

GIGOT: She's no friend of the NRA.

FUND: Exactly. I think the bill is going down. But I think, in the long run, the NRA is going to hurt its standing in the conservative movement, because this was done with — I mean, it's one thing, you can't consult with too many NRA members on a deal like this.

GIGOT: Right.

FUND: But the 76-member board was also not consulted.

GIGOT: Really?

FUND: Barely. A few members were clued in. Otherwise, this was an inside deal inside the NRA bureaucracy.

GIGOT: So, Colin, in order to — after this passed, it was an uproar against it. And now that Congress is saying, we're going to expand the exemption, not just to the NRA and maybe AARP, which also qualified under the previous group, but now they've broadened to include the Sierra Club and some other organizations. What's the thinking there?

LEVY: Right, so the very, very uber exclusive club has gotten just a little bit less exclusive. They're getting all kinds of blow back from liberal groups as well now, who say, gosh, this really isn't fair, that this is just a carve-out for the NRA, and we want in on this, too.

FUND: BMA, NAACP.

LEVY: But, you know, the whole game here is about creating two different tiers of political free speech, and that's the problem that Democrats are having.

GIGOT: And you, John, you mentioned that the NAACP still wouldn't apply in the second iteration of this. And now they want to get into this, too.

FUND: They may have to take the exemption down to the level of a lemonade stand to actually get this thing passed.

GIGOT: Kim, you follow the politics of this. John says he thinks it's going down. Democrats are still insisting it's going to pass. Briefly, what do you think?

STRASSEL: They've created a mess for themselves. They were supposed to have a vote this past week and it's been delayed. And this is what happens when you start cutting special deals with everyone, because everyone wants in on it. But, look, if they can pass this bill, just bear in mind, this is about emancipating the unions to continue using free speech and to stop the corporations. These special interest groups are sort of a side issue.

GIGOT: OK, thanks, Kim.

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

(COMMERCIAL BREAK)

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

Kim, first to you.

STRASSEL: A miss to Joe Biden. The vice president is point man for flapping the president's stimulus, that 800 billion of taxpayer dollars that was supposed to have created 3.5 million new jobs by the end of the year, rather than losing 2.2 million. Yet, there was Joe, again this week, talking about the summer of recovery, about the progress — and a new tour to go out and see shovel-ready projects. It really is going to work this time. I think he'd be better off giving the half of the stimulus money that hasn't been spent back to the American people.

GIGOT: All right.

John?

FUND: There's a good-old-boy establishment of Republicans in South Carolina, Paul, that does not like Nikki Haley, who is poised to become the Republican candidate for governor in her primary runoff next week. They are attacking her. Her opponent is calling her the Mark Sanford candidate, trying to link her indirectly to Mark Sanford's affairs. And the Chamber of Commerce in the state, Paul, is saying, if she wins, we may endorse the Democratic candidate. She says she's going to run a reform conservative administration. They don't like that idea.

GIGOT: All right.

Colin?

LEVY: I'm going to give a hit to Elton John for doing two very politically brave things recently. First, he performed at Rush Limbaugh's wedding. And then this week, he put on a concert in Israel, where a lot of other musicians have been declining to play. So, you know, he's been getting criticism for sort of selling out for the money. But the rocker came back at his critics and said, we don't cherry-pick our consciences. That should be music to our ears.

GIGOT: All right, Colin, thanks so much.

And remember, if you have your own "Hit or Miss," please send it to us at jer@FoxNews.com.

That's it for this week's edition of the "Journal Editorial Report." Thanks to my panel and especially to all of you for watching.

I'm Paul Gigot. Hope to see you here next week.

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