This is a rush transcript from "The Journal Editorial Report," October 9, 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," the politics of lying. Do some tall tales make you unfit for public office? A new ad in the Connecticut Senate race is raising that question. And we're looking at some of the greatest political whoppers of all time.

Plus, the Supreme Court hears a case that tests the limits of the First Amendment. How far is too far when it comes to free speech. We'll debate.

Plus, will the new documentary "Waiting for Superman" do for education reform what "An Inconvenient Truth" did for global warming? We'll ask the director of both those films, next.

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

First up this week, the politics of lying. Lots of politicians do it, but when is a lie so over the line that it should disqualify the teller from holding office. Linda McMahon, the Republican candidate for Senate in Connecticut, released a new ad this week that raises that question. McMahon is running against that state's attorney general, Richard Blumenthal, who was outed by The New York Times this spring for lying about serving in Vietnam. Take a look.

(BEGIN VIDEO CLIP)

AD NARRATOR: Would you lie about serving in a war?

SENATE CANDIDATE RICHARD BLUMENTHAL, D-CONN.: We have learned something very important since the days. I've served in Vietnam.

AD NARRATOR: Dick Blumenthal did, again and again.

BLUMENTHAL: When we returned, we saw nothing of this gratitude.

AD NARRATOR: He covered one lie with another.

BLUMENTHAL: And since the days that I served in Vietnam.

AD NARRATOR: He lied about Vietnam. What else is he lying about?

(END VIDEO CLIP)

GIGOT: Joining the panel this week, Wall Street Journal columnist and deputy editor, Dan Henninger; editorial board member, Dorothy Rabinowitz and opinionjournal.com editor, James Taranto.

Dorothy, all politicians lie or at least their opponents accuse them of lying. Is this ad fair?

DOROTHY RABINOWITZ, EDITORIAL BOARD MEMBER: Well, you mean fair being truthful? Yes, it's fair. Is it kind? No. It's a really perfect example — and he's a perfect expression of political lying at its worst, which reveals character in a very fundamental way. You cannot say, as often as he does in that, in that ad, "in Vietnam, when we came back." Can anybody be so absentminded and gotten the details of the military career, such as he did not serve in the war? And what really happened is that, this is an exposure after he was outed.

GIGOT: He was in the Marine Reserves.

RABINOWITZ: He was in the Marines, stateside at all times. But the point is that the amount of bluster that went into defending this lie was telling, because it told you something about his attitude toward the electorate. You have perfectly clear expressions of what he did.

GIGOT: Let's get his response. We have his response when the story first broke last May. Let's hear that.

(BEGIN VIDEO CLIP)

BLUMENTHAL: On a few occasions I have misspoke been my service and I regret that and I take full responsibility. But I will not allow —

(APPLAUSE)

BLUMENTHAL: I will not allow anyone to take a few misplaced words and impugn my record of service to our country.

(END VIDEO CLIP)

GIGOT: OK, now, we have another response. This one from the debate in response to Linda McMahon.

(BEGIN VIDEO CLIP)

BLUMENTHAL: I described it inaccurately and I regret it. I take full responsibility for it, it was not intentional, but that is no excuse.

(END VIDEO CLIP)

GIGOT: So, Dan, were those responses — different in tone, certainly, the second one a little more remorseful —

HENNINGER: Right.

GIGOT: — than the first. Were those adequate?

HENNINGER: I think you'd need a PhD in linguistics to figure out exactly what he's saying there. I was listening to that and wondering, they say all the time, I misspoke. Did the word misspoke exist before it started?

(LAUGHTER)

It doesn't mean —

GIGOT: Before the era started, you mean.

HENNINGER: Basically, you didn't tell the truth, what you said was false rather than true. But they always have to operate in this sort of gray area in between because they don't want to have to admit they weren't telling the truth and I think it's in large part because a lot of these politicians really don't think it matters. Close enough to the truth is close enough. It's like, you know, they can say whatever they want. They can spend whatever they want. And I think they've sort of lost sight of what's the truth.

GIGOT: James, is there something uniquely awful about lying about your military service, particularly in a way in which other Americans died?

JAMES TARANTO, EDITOR, OPINIONJOURNAL.COM: I think there is, and also I think there is something particular about Vietnam and Democrats at a certain age. You remember, John Kerry came to public prominence in 1971 by testifying before the Senate as a young anti-war leader about all these fanciful stories of war crimes. Then, he had his story about going to Cambodia in 1968 which did not — you know, he was fighting Nixon's war. Well, Nixon wasn't president then.

GIGOT: OK, I understand about that. Then a case of Mark Kirk, a Republican who is running for Senate in Illinois, who, at a minimum, exaggerated his service in the military overseas.

TARANTO: He had two very clear misstatements. He said that he'd won something called the intelligence officer of the year award, which currently doesn't exist —

GIGOT: Right.

TARANTO: Or at least if it does exist, he never won it. And on his web site there was a statement that he had served in Operation Iraqi freedom. In fact, he had served — this was the same excuse Blumenthal had —

GIGOT: Stateside.

TARANTO: — During Operation Iraqi Freedom, stateside, so that was — that was —

GIGOT: What's the difference between Kirk and Blumenthal?

TARANTO: Well, I think there's a difference of degree. Saying I served in Vietnam, saying when we came back, and repeatedly saying it is a more serious lie, but it's a fair cop on Kirk, too.

GIGOT: Dorothy, is there a distinction you would draw.

RABINOWITZ: Yes, the same one James would. But the same truth holds for both, which is that it is apparently inconceivable today for a politician to say, I did this because I felt in my heart a profound envy of the heroics and the enterprise these great men undertook, and I wished in my heart to be part of it and I am profoundly apologetic to those who lived and died and bled there, and you should know this about me and I hope you'll forgive me. This is incapable. This is total denial of the fact they lied.

GIGOT: Is this different, Dan, than famous lies by a president saying, I did not have sex with that woman or lying to a grand jury. Or Richard Nixon, I knew nothing about the Watergate break in.

HENNINGER: Or Nancy Pelosi saying they'd never been briefed on the enhanced interrogations which in fact she had been in 2002. I think in some level it is not. People wonder why there's a Tea Party, right? Well, this is one of the reasons. People feel that the politicians simply aren't leveling with them on anything. And it's — you know, it is a reflection of what I think Dorothy said earlier, the level of character in politics today. For some reason, it's fallen.

RABINOWITZ: And still.

GIGOT: And still falling.

All right, when we come back, are there limits to the First Amendment? The Supreme Court hears arguments in what is shaping up to be one of the most controversial cases of the new term. Should even the most outrageous speech be protected? There's a debate ahead.

(COMMERCIAL BREAK)

GIGOT: The Supreme Court heard oral arguments this week in what is shaping up to be one of the most controversial cases of the new term. It involves a Kansas-based Westboro Baptist Church and Pastor Fred Phelps, whose congregation travels the country protesting at the funerals of fall service members, carrying signs and slogans, such as, "Thank God for dead soldiers" and "God hates fags." Phelps and his followers believe that U.S. deaths in Afghanistan and Iraq are God's punishment for America's tolerance of homosexuality.

In 2006, the church members protested at the Maryland funeral of Lance Corporal Matthew Snyder who was killed in Iraq. Matthew's father sued, claiming the church violated the family's privacy and inflicted severe emotional distress. The jury awarded him millions but a federal appeals court reversed that decision, saying they were protected by First Amendment.

Dorothy, I think we can agree that the protesters are despicable. But why isn't their speech protected by the First Amendment?

RABINOWITZ: Well, that is the question and I don't think it is, but we are now in a position — this is about the fifth blatant case of this sort in memory, and we won't go into all of them, but we're faced with an increasing proof that we're shackled by blind obedience, by purist in defense of the First Amendment in which we are constantly confronted with. But here is the slippery slope. If we disallow this kind of free speech, where will it take us? The First Amendment is not intended to shackle us to the most extreme and bizarre positions in the interest of free speech. So now we're facing the rights of terrorists to use the First Amendment for all of the most nefarious causes. We have the Supreme Court allowing crush porn videos where small animals are butchered before our very eyes in the interest of free expression.

GIGOT: There have always been limits the Supreme Court has allowed on free speech. The Fighting Words Doctrine, you can't libel somebody or defame that, although it's hard to prove either of those, but nonetheless, you have that in law. Why is this case in particular something that you think we should be — that the kind of speech that should be banned?

RABINOWITZ: Well, in particular because it's the most targeted speech, targeted hate speech of this kind. Targeted, victimization is one of the exceptions. But we don't know how this is going to play out in the Supreme Court.

GIGOT: We sure don't. It's very uncertain based on the oral argument which way it's going to go.

RABINOWITZ: We do know the great weight of this force of the entire range of fervent extreme First Amendment purists which have been driving us. Look at the separation of church and state. Look what's happened to the clause.

GIGOT: Do I hear a First Amendment defender here?

(LAUGHTER)

TARANTO: Yes. I would like to defend the First Amendment. It's true that a lot of the landmark cases involving First Amendment that go for the supreme court above really loathsome characters, Nazis, pornographers, communists and these guys.

(LAUGHTER)

And the reason for that is because in this country we don't sensor speech that isn't terribly offensive. If you get countries like Canada and many countries in Europe that don't have the robust free speech protections that we have, you see people like Mark Stein, a commentator, who has written for our page brought up on crazy charges before a Canadian human rights committee.

GIGOT: For essentially uttering an opinion, saying things that were true.

TARANTO: Right, yes. Yes, about Islam and then being called up on anti-Islamic hate speech. So the fact that these extremists are the ones that fight the battle means that free speech is secure for all of us.

HENNINGER: By the same token, some of us defended the right of publications that print the image of Muhammad being ridiculed, the average Muslim says, I find that offensive, but we think they ought be able to do that.

Let me try to help out the Supreme Court here and give them a solution to this problem. That example that we were talking about was people protesting at this soldier's funeral. Look, if people want to stand out in front of this building and say it's good when soldiers die, they should be able to do that. But if you're going to stand 500 feet from a prominent —

GIGOT: A thousand yards, I believe.

HENNINGER: And let's say even a prominent public figure's daughter is being married and they want hold up signs saying Mary Jones is a slut, I think —

GIGOT: But they weren't saying that Mr. Matthew Snyder. This was about the war —

HENNINGER: Right.

GIGOT: This was about homosexuality. This was not about anything about these —

HENNINGER: Yes. I don't think you should be able to intrude on private events by private individuals like this.

GIGOT: But they were regulated outside of a thousand feet. They couldn't come up to their face. I mean, they did have some limitation.

HENNINGER: A thousand feet.

GIGOT: Well —

HENNINGER: You should not be able to assault a private event like a funeral or a wedding being held by a private individual.

GIGOT: Because it's a captive audience.

TARANATO: But this man, the plaintiff, did not actually encounter them at the funeral. He saw them later on television.

GIGOT: You mean, the father.

TARANTO: Mr. Snyder, yes.

GIGOT: Albert Snyder.

There you go, Dan. What do you do?

HENNINGER: And to pick up Dorothy's point, because of the web, because of television, these adults are seen by everybody. And I think we're putting a really impossible burden on the First Amendment to protect all of this kind of behavior unless a line is drawn somewhere.

GIGOT: But do you want judges drawing that line, Dan?

HENNINGER: I would like to see the Supreme Court try to draw that line, not your average judge.

RABINOWITZ: Yes, if you cannot have in this thriving, bustling, contentious democracy any faith in the individual sense of decency of what may not be allowed — we are not after all Canada. We are not these other countries. We are the United States of America, and if you cannot believe in the — then we are in trouble.

TARANTO: The reason we're the United States of America is because we have the First Amendment.

RABINOWITZ: I don't think that's entirely the case. I think we have a sense of bustling democracy. And the First Amendment is one of the shackles for the purists.

GIGOT: All, Dorothy, we've got to go.

RABINOWITZ: All right.

GIGOT: Speaking as one of purists, when we come back, the school reform movement gets a big boost from the left. David Guggenheim is best known for directing Al Gore's global warming movie "An Inconvenient Truth." But in this latest film, "Waiting for Superman," he's setting his sights on education film. He joins us next.

(COMMERCIAL BREAK)

GIGOT: Well, the school reform movement is getting a big boost from a self-described life-long liberal. David Guggenheim, the Academy Award- winning director behind Al Gore's global warming documentary, "An Inconvenient Truth," is turning his lens these days on the nation's troubled public schools. His latest film, "Waiting for Superman," takes a devastating look inside a system that's failed generations of children.

(BEGIN VIDEO CLIP)

MOVIE NARRATOR: Think about 60,000 people have gone to the school, 40,000 didn't graduate. This is the damage this school has done to this neighborhood.

A child that doesn't finish high school will learn less and be eight times more likely to go prison.

UNIDENTIFIED BOY: I want to go to school.

MOVIE NARRATOR: For these kids, their only chance of going to a great school depends on whether their number is picked in a lottery.

UNIDENTIFIED MALE (on camera): So if Francisco (ph) doesn't get in, is there another chance.

UNIDENTIFIED FEMALE: No.

(END VIDEO CLIP)

GIGOT: David Guggenheim joins me now.

Welcome.

DAVID GUGGENHEIM, FILM DIRECTOR: Nice to be here.

GIGOT: I have to say I found your film heart breaking and infuriating at the same time. What's the main message you're trying to leave with your audience.

GUGGENHEIM: The reason why it's selling out here in New York and L.A., it's actually moving. And the people who see the movie are inspired by the parents. We followed a mother in Harlem, but also —

GIGOT: Five children and their parents.

GUGGENHEIM: Also, a white middle-class family in northern California and every parent is fighting to get their kid a great education. It's the classic American story that everyone can attach themselves too.

The problem is to find a great school, they have to submit themselves to a lottery and so there are winners and losers, and that seems to be the thing people are responding to. It's just un-American.

GIGOT: What got you into the film? Because this problem has not — is not new. We had — 26 years ago, we had the report, A Nation at Risk, that said the schools, public schools were failing. We've had battles over school choice everywhere. Why are you getting into this now?

GUGGENHEIM: Well, you know, a participant media who funded the movie asked me to make a film about public education. And I said I don't think you can do it. It's too difficult. It's like the story telling quagmire. And the next morning I'm packing my kids up in my minivan and taking them to the great private school and I start to count the public schools.

GIGOT: This is in Los Angeles.

GUGGENHEIM: This is in Los Angeles. And the schools in my neighborhood aren't doing everything they can for the kids in my neighborhood. I was like, we have to get past that mentality of taking care of your own kids. We have the mentality of taking care of every kid because it actually affects the price of your home, how safe your neighborhood is, and the economy. If these kids aren't skilled laborers, if not innovators, our economy is basically screwed. Bill Gates talks about it eloquently in the movie.

GIGOT: You talk about the teachers unions in the movie and features Randi Weingarten. If there's a villain in the film, I think she's it. Here's what her reaction is. She's the head of the American Federation of Teachers. She said, "There are lots of incredibly good public schools around this country and there are incredibly great teachers and there are more and more really interesting solution-driven contracts, and I think that the fact that none of this is represented in the film is a problem with the film. I don't have a problem with it myself, but I have a problem with that." What's your response?

GUGGENHEIM: I'm actually a fan of Randi, and we met after she saw the film. I asked her to write a chapter in our book. I said, look, tell us where we got it wrong. I don't think we'll agree with everything in the movie, but I want everybody to get to the table. I want all the adults. The system works for a lot of adults, for the unions.

GIGOT: For the teachers unions.

GUGGENHEIM: The political parties, taking a lot of money, for people like me, who take our kids to private school. It kind of works, but people stick their heads in the sand and say, I'm OK. But millions of kids are failing. And it cuts across both political parties. And I think that Randi deserves actually a lot of credit. She has actually pushed her union further than it would normally go in contracts in Baltimore, New Haven, D.C. I want to push her further, but I want to push all the adults. I don't think it's just about her. I'm a member of a great union, I believe in unions.

GIGOT: Do you think the movie is unfair to all teachers? Does it brand all teachers as somehow at fault?

GUGGENHEIM: No, Jonathan Alter — in fact, some of the people that say extreme things haven't seen the movie or they don't want you to see it. The movie is ecumenical. It really is.

GIGOT: I would agree, I think it is. You make that distinction.

GUGGENHEIM: And it's for everybody. It's pro anything. It's pro these kids, you just want Daisy, who wants to be a doctor, to win. You want Anthony, who wants it make his grandmother proud, to win. And I think this is an issue that's actually going to push past the midterms, because it's something that everyone can agree on, like we're not doing enough for these kids.

GIGOT: One of the things — points you make, which makes it interesting, you go beyond the inner cities and talk about suburban schools. Suburban schools work for the top-performing kids.

GUGGENHEIM: That's right.

GIGOT: But they also let down the middle and poorest performing kids. And the schools still look like they're doing well because the test scores average out.

GUGGENHEIM: That's the big reveal in the movie, the idea that you can move to a suburb, buy a million-dollar home — the family we followed, the average home is a million dollars. And the school is one of the top-rated in Newsweek. What you learn is that the top 10 or 15 percent are served through tracking and those kids will do pretty well and get the best teachers. But the bottom 75 percent, you know, they are not going to be prepared to go — even if they get into a four-year college, they're not going to be ready. They have to be remediated. And the idea that we can sort of take care of our own is over now. It's a problem that's eroding into other schools.

GIGOT: But do you think that the unions are the central problem here that has to be overcome? What, is that the main problem?

GUGGENHEIM: I would say — I would spread the blame and I do in the movie. The union piece is a thing that people like to report about, but I start by blaming all the adults. I start with myself. I say I take my kids to a private school, betraying the ideals I live by. I talk about the Democratic Party, how it takes a ton of money too. And the Democratic Party should have been taking care of the little guy. The Republican Party and state legislators is also —

GIGOT: Is also complicit with — yes.

GUGGENHEIM: Very complicit, and the unions, and these huge centralized bureaucracy. So we have to sort of smash all that down and we have to rededicate ourselves to like thinking about all the Daisys. For every Daisy, there are like a million girls out there who need a great school and, Anthony, the same thing. We have to rededicate ourselves, who is at the table negotiating for the kids.

GIGOT: All right, David Guggenheim, thanks for coming in.

GUGGENHEIM: My pleasure.

GIGOT: 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 — Dorothy?

RABINOWITZ: Yes, while an abridging speech —

(LAUGHTER)

— Faisal Shahzad was sentenced to life in prison —

GIGOT: The would-be Times Square bomber.

RABINOWITZ: The Times Square Bomber — and sentenced to life in prison, but not before getting a vicious opportunity to speak of his murderous intentions. And this is exactly reason that people like Faisal Shahzad and Mohammed — and the 9/11 —

GIGOT: KSM.

RABINOWITZ: — KSM should not be given federal criminal trials in court. The judge is forced to allow them to speak. What he should have been done is say, yes, I understand the sentence, given shackles and marched away to dream of mass murder.

GIGOT: All right.

James?

TARANTO: A miss to 1010, a British environmental group that put out a film showing a teacher pushing a button and blowing up students who didn't care about reducing their carbon emissions. They say it's comedy. It's not funny. It's horrible. It's a depraved fantasy of totalitarian violence.

GIGOT: All right.

Dan?

HENNINGER: A miss to reporter Bob Woodward, the latest to float the idea that Hillary Clinton should replace Joe Biden on the 2012 ticket. This, of course, was denied all around. Why would Hillary Clinton jump on to the deck of a sinking ship? But I, for one, would really miss Joe Biden. I think the Obama presidency has gotten kind of grim. It would be unbearably grim if Joe Biden weren't around saying he'd like to strangle Republicans. Say it ain't so, Joe.

GIGOT: Yes, I don't think — Hillary Clinton might want to leave the administration before she would take that job or maybe secretary of defense, Bob Gates, but the V.P., I don't see that happening.

HENNINGER: No way.

RABINOWITZ: I could live through it.

(LAUGHTER)

GIGOT: All right.

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 to all of you for watching.

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

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