This is a rush transcript from "The Journal Editorial Report," October 16, 2010. This copy may not be in its final form and may be updated.
PAUL GIGOT, HOST OF "JOURNAL EDITORIAL REPORT": This week on the "Journal Editorial Report," a setback for school reform as the movements most visible and controversial figure resigns. Washington, D.C.'s, School Chancellor Michelle Rhee is here to tell us why she's leaving and what's next.
Plus, with just over two weeks to go until Election Day, Wall Street Journal writers are hitting the campaign trail. We'll have their reports from the field.
And Democrats step up their attack on corporate America, declaring war on the Chamber of Commerce and other groups that dare to oppose them. What liberals really mean when they call for campaign disclosure, next.
Welcome to the "Journal Editorial Report." I'm Paul Gigot.
Well, the school reform movement suffered a setback this week when it’s most visible and perhaps more controversial champion resigned. Michelle Rhee served as Washington, D.C., school’s chancellor for three and a half years. During her tenure, student test scores improved and drop-out rates declined in the city. She closed failing schools, fired bad instructors, supported school vouchers for low-income families and opened charter schools. She also negotiated a contract with the teachers union that includes, among other things, merit pay. It has become a model for urban school districts across the country.
And Michelle Rhee joins me now from Washington.
MICHELLE RHEE, FORMER WASHINGTON D.C. PUBLIC SCHOOL CHANCELLOR: Thank you.
GIGOT: So you said, when you resigned this week, for reform to continue, the reformer had to leave. With respect, that seems contradictory. Why did you feel you had to go?
RHEE: Well, the new presumptive mayor-elect in Washington D.C., Vincent Gray, and I decided that the best thing for me to do for the city would be for me to step aside, because we really want to make sure that the entire city now can embrace the reform efforts. And certainly for some members of the community to have me continue to be associated with the reforms was not going to allow them to do that. I asked my deputy chancellor to step in, in my place. I asked my entire management team to stay in place through the end of the school year. And, to be honest, those folks are the brains and the talent behind the reforms and so I feel like, by doing this, it would allow the reforms to continue on and they could do it in a way where the entire city could get behind it.
GIGOT: OK, when you came to see us a few months ago, you had said that one of the secrets of your success was the support you had from Mayor Adrian Fenty, that when you got into trouble, he always backed you up. Do you think the new mayor is going to back up your successor?
RHEE: Well, I think he has to. His commitment is not to roll back the clock and to continue the reforms as aggressively as we've been doing in the last three and a half years. And in order to do that, you’re going have to give your unequivocal support. My deputy has been working with me since day one. She knows what the political support looks like to get this work accomplished, and I don't think she's going to settle for anything else.
GIGOT: OK, what's the single most important piece of advice you're going to give your successor to keep these reforms moving?
RHEE: You know, I think it's the same advice that I would give to any other superintendent out there, which is you'll have to make sure that you don't fall into the trap of beginning to think about adults and all of the adults sort of feelings and egos and that sort of thing. It's easy to fall into that. But at the end of the day, you have to make all of your decisions based on what is in the best interest of the children, even if it causes the adults a lot of consternation.
GIGOT: And that means, I think, from what I've heard you say in the past, the teacher measurement is absolutely crucial. That's what you built into the new teacher’s contract in Washington. But that's the thing that the teachers unions tended to resist most ferociously. Do you think those are now are locked in, those kinds of changes in D.C., and can't really be ruled back, at least for the terms of this current contract?
RHEE: At least for the terms of the current contract that we negotiated, those things are pretty safe. And you are absolutely right. I think one of the biggest problems in the public education system today is that we hesitate to differentiate. And I think that's the biggest mistakes that we're making because. To be quite frank, there are -- there are thousands and thousands of great teachers here in Washington, D.C., who are doing heroic things for children every day. But we also have some ineffective teachers. And we have to be able to differentiate between our highest performers and we need to recognize and reward those folks. But then, we also need to be able to identify the lowest performing teachers and either professionally develop them or quickly move them out of the system.
GIGOT: Right. I was looking at the Baltimore teachers in the school system this week. They rejected a contract with some of the same elements that had been in your Washington -- new Washington, D.C., contract. How do you overcome that resistance from rank-and-file teachers and their unions that somehow rating is going to work against them?
RHEE: Well, I think the key -- and we've learned this lesson here in D.C. -- is that you've got to be communicating with your most effective teachers and you have to be telling them why it's so important to begin to differentiate. And I'll tell you what, you know, there is -- there's no one who wants to see an ineffective teacher leave the system more than an effective teacher, because effective teachers -- and they tell me this all the time -- they are the recipients of the kids from the ineffective teacher next door, not doing their job for an entire year, and it puts them at a disadvantage. You know, it doesn't allow us to recognize and reward them and compensate them accordingly, if everyone's getting paid the same, you know, just -- just according how much seniority you have.
RHEE: The most effective teachers are not compelled and inspired by that kind of a system. So you have to really identify those people and communicate to them effectively what you're trying to do and why it's important for that differentiation to happen.
GIGOT: OK. You battled the teachers unions for pretty much the whole tenure during your time there. Have they made any progress, do you think, in supporting reform or is it the same old group of opponents?
RHEE: Well, I mean, I think it's important to differentiate between teachers, classroom teachers, and the teachers union, because the teacher’s union leadership, you know, I think they have a vested interest in maintaining the status quo. But what we saw specifically with our contract vote here in D.C., where, you know, those teacher union leadership was saying, well, we're not going to get it past the rank and file, but at the end of the day, the rank and file passed this, 80 percent to 20 percent.
It's really about knowing that everyday teachers in the classroom, they actually are not afraid of accountability. They just want a fair and transparent process. They want to make sure that they're going to be treated as professionals. But as long as those things are in place, they actually don't have a problem being held accountable. It's the teacher’s union leadership that's sending a different message.
GIGOT: All right, we are going to follow what happens in D.C. after you're gone. Is there another job in your future in teaching?
RHEE: I'm definitely going to stay in education and education reform.
GIGOT: OK. We hope so.
Thank you so much for being here.
RHEE: Thank you.
GIGOT: When we come back, with just over two weeks to go until the midterm elections, our reporters are hitting the campaign trail. Which liberal barons are facing tough reelection fights? Are Democrats are losing a once-tight grip on the northeast. Which campaign themes are working and which aren't? We'll have reports from the field, next.
GIGOT: With Election Day now over two weeks away, Wall Street Journal writers have been hitting the campaign trail, covering the big races as well as some sleepers, and sussing out the themes likely to drive voters to the polls come November.
Here with their reports from the field, Wall Street Journal"Washington columnist, Kim Strassel; editorial board member, Matt Kaminski; and opinionjournal.com editor, James Taranto.
So, Kim, you've been in Florida, the panhandle, I gather, and as well as in Virginia, looking at a couple of the blue dog Democrats, those so-called moderate or conservative Democrats. What are you finding?
KIM STRASSEL, WASHINGTON COLUMNIST: Well, I was down in the second congressional district. This is where Alan Boyd, a blue dog Democrat, is running for reelection. I was in an area of the county -- in Dixie County, which is full of conservative Democrats, guys who voted for Mr. Boyd because he’s a blue dog, but also tend to vote for Republicans that at a federal level, like the presidential race. These guys are furious Mr. Boyd voted for health care, he voted for stimulus, he voted for cap-and-trade. You could not find a Boyd sign anywhere you looked. And this is a county that gave him 67 percent of the vote last time around.
GIGOT: So you mentioned the trifecta. Some people are calling it the ‘killer trifecta’, the stimulus vote, for health care and for cap-and-trade. Are those the big three the Republicans are using?
STRASSEL: Those are the big three. And they really get to the heart of the anger among these conservative Democratic voters, who believed the blue dogs when they said they wanted fiscal responsibility and that really seems to blow a hole in it.
GIGOT: OK, so, what is Boyd doing to fight back?
STRASSEL: Well, he's mostly -- he's trying to localize the race. He likes to talk about the things he's been bringing to the district. He's been talking about education, about veterans benefits. But that's just not what the race is about. His big problem right now are people who want to get him out of office because they're angry with him. And this is helping a great deal his Republican candidate. It has given him a lot of openings. But this is Boyd and anger at him.
GIGOT: So pork is the main defense but not as good a defense, but it's not as it often is in elections?
STRASSEL: No, in fact, his best defense would have been to say I voted against some of these Obama priorities.
About the -- so much spending.
GIGOT: Hard to do though if you're on record as having voted for them.
All right, Matt, you were in Pennsylvania. The Philadelphia suburbs, long -- the last two election cycles, everybody said they're done for Republicans and they've moved firmly into the Democratic camp. And a lot of those seats, they did lose, around the collar counties in Philadelphia. Is it different this year?
MATT KAMINSKI, EDOTIRIAL BOARD MEMBER: Absolutely. Two years ago, we thought these were moving firmly blue because the Independent voters and moderate Republicans had turned against Republicans over social issues.
GIGOT: And the war?
KAMINSKI: And the war, of course. But this year, social issues don't even register anywhere in the polls. It is jobs, more than the majority say they care about jobs. And then far down is health care. Stem cell research, abortion rights, not there at all.
GIGOT: But are Democrats trying to run on some of those cultural issues?
KAMINSKI: Absolutely. They're trying to. I was in the 8th district where Patrick Murphy, the incumbent, two-term incumbent, is facing off against Mike Fitzpatrick, a former congressman.
GIGOT: That's in Bucks County.
KAMINSKI: That's in Bucks County, sort of north of Philadelphia.
KAMINSKI: He's been trying to push back, saying, even though Mike Fitzpatrick sounds reasonable, he's tied to Christine O'Donnell, who is in the Philly media market.
GIGOT: Oh, that's right.
KAMINSKI: To Michelle Bachmann.
KAMINSKI: That these are still the scary Republicans of the past. He is not getting much traction on that argument yet. But for him, it's very personal for Murphy, because he's not trying to run on the issues because he can't really defend his 100 percent Obama/Democrat voting record in this cycle.
GIGOT: He's trying to run on guilt-by-association, you know, you're one of those crazy Tea Party people.
KAMINSKI: Absolutely. That's really the main way back because they can't -- they're not running on health care. They're not even trying to defend health care. They're not even trying to defend the stimulus.
OK, now, James, here's another theme we've seen this year, the endangered long-time Democratic incumbent baron. You went up and covered, looked at the Barney Frank race in Massachusetts of all places. And Barney Frank actually has a competitive race.
JAMES TARANTO, OPINIONJOURNAL.COM EDITOR: Yes, that's right. Nobody thinks that Barney Frank is likely to lose. The poll that made news had him up by 10 percent over his challenger, Sean Bielat.
GIGOT: But that -- 10 percent --
TARANTO: But that -- yes.
GIGOT: He hasn't had a close race since 1980.
TARANTO: Since 1982. And Bielat is a serious guy. He's a Marine, he's worked in the private sector, he's a Harvard graduate, a very impressive guy. And he's raised a lot of money and gotten national attention. And Barney Frank is very much on the defensive. He brought Bill Clinton to the district to campaign for him.
TARANTO: Which you would not think that Bill Clinton -- there are plenty of more competitive races where you would think he would go.
I was with Sean Bielat when Barney Frank's first radio ad of the campaign ran and it was all about -- it was supposed to be touting Frank for his role in the so-called financial reform bill. Instead, it ended up being an attack on Bielat for not supporting it. Bielat kind of laughed and said, “I'm glad he's increasing my name recognition. “
GIGOT: So is Barney doing -- I'm told -- I saw in The Boston Globe, he's even doing a little bit, a quasi-mea culpa on the Fannie Mae and Freddie Mac and his role there?
TARANTO: It's a very strange explanation. He's saying that he resisted reform of Fannie and Freddie because he thought the Republicans' motives were bad for wanting to reform.
They wanted to kill affordable housing. And he also, by the way, has followed his opponent in saying he wants to repeal a provision of Obamacare. This is the provision, the 1099 provision --
TARANTO: -- that would massively increase paperwork burden on small businesses.
GIGOT: Let's talk -- Matt, I want to ask you about the race in Pennsylvania for Senate, Joe Sestak, the Democrat who beat Arlen Specter in the primary, and Pat Toomey, the Republican. Toomey has been leading, but Democrats have been saying that Sestak is catching up on some of these class war themes, blaming Wall Street and so on, running against the rich. Any traction there?
KAMINSKI: Well, I was at a dinner the other night where Sestak spoke to a group of Democratic donors and he claimed that in his internal polls, he's up by 3 percent. No other poll shows him anywhere near 5 percent. I mean, the fact of the matter is, Pat Toomey sounds very reasonable to a lot of Pennsylvania voters today. He's addressing the issues they care about. And the issues that turn some of them off to him are not part of this race.
GIGOT: All right, Matt thanks.
When we come back, the Democrats' assault on corporate America. They're attacking the Chamber of Commerce and other groups that oppose them in an attempt to stop businesses from participating in politics this year. It's worked before. Will it work again?
GIGOT: Democrats stepped up their attack on corporate political donors this week, accusing the Chamber of Commerce, as well as independent groups advised by Republicans strategists Karl Rove and Ed Gillespie, of using foreign contributions to influence the election.
President Obama himself led the charge on Monday at a fundraiser in Philadelphia.
(BEGIN VIDEO CLIP)
PRESIDENT OBAMA: You don't know. It could be the oil industry, it could be the insurance industry, could even be foreign-owned corporations, you don't know because they don't have to disclose. Now, that's not just a threat to Democrats, that's a threat to our democracy.
(END VIDEO CLIP)
GIGOT: And Vice President Joe Biden got in the act the following day, telling Democratic donors, quote, "We don't know if they're coming from foreign sources. We have a pretty good idea where a lot of it's coming from: very conservative millionaires…I challenge Karl Rove to tell me that this money isn't coming from billionaires and millionaires, insurance companies, oil companies, major executives…"
And the Democratic National Committee followed it all up with this ad
(BEGIN VIDEO CLIP)
AD NARRATOR: Karl Rove, Ed Gillespie, they're Bush cronies. The U.S. Chamber of Commerce, they're shills for big business. And they're steeling our democracy, spending millions from secret donors to elect Republicans to do their bidding in Congress. It appears they've even taken secret foreign money to influence our elections.
It's incredible. Republicans benefiting from secret foreign money. Tell the Bush crowd and the Chamber of Commerce, stop stealing our democracy.
The Democratic National Committee is responsible for the content of this advertising.
(END VIDEO CLIP)
GIGOT: We're back with Kim Strassel and also joining the panel, Wall Street Journal columnist and deputy editor, Dan Henninger; and editorial board member, Dorothy Rabinowitz.
So a very subtle message there, Kim. Hard to miss --
GIGOT: -- the attack. What -- but why are they doing this? What do they hope to get from it?
STRASSEL: Two things. One, they're trying to do is change the subject. They don't want to talk about their record. They don't want to talk about the economy, so they want to talk about a subject like this.
Two, this is about intimidating companies into not spending money over the next couple of weeks.
Back in January, the Supreme Court gave companies new First Amendment rights to get involved in elections. The Democrats tried to overthrow those rights with legislation this fall. They would have shut out companies, but not the own union supporters. They failed to do it, so now they're out on the attack trying to intimidate these guys into not spending the money that they are.
GIGOT: Dorothy, without evidence of any foreign source for political donations here, they admit, what David Axelrod or the White House said, we don't have any evidence, but you, the chamber, you need to prove to us that somehow you don't.
DOROTHY RABINOWITZ, EDITORIAL BOARD MEMBER: Yes.
RABINOWITZ: This is the dividing line. This is what you mean by crossing the line. Everything else they've have done has led up to this marvelous regulatory moment that you could say, you have to give us proof that you're not guilty of what we're accusing you of. This president, who has come from Harvard Law School, and who has given us --
GIGOT: Due process being part of his DNA.
RABINOWITZ: Yes, due process, one of the essentials. You could have imagined what could have happened if the Republicans had said anything like this. They would have had meetings, led by MoveOn.org at the mall. President Obama would have gone forth to speak in golden cadences about this violation of all of our best selves as Americans.
And you know, what he's done, and this moment has proved that, beginning with the attacks on the banks, beginning with the attacks on individual people in the media, beginning with all this, it's led up to this moment where everybody in the media now says this really is the most bitterly divisive president, this very president who came to power --
GIGOT: Ok. But, Dan, I want to ask about this point about disclosure. Because the Democrats say we don't really want to stop these donations. We're not against that. You can do that. We just want you to disclose who they are. Who are these people?
So the voters can make up their own mind. What's your response to that?
DAN HENNINGER, COLUMNIST & DEPUTY EDITOR: Well, my response to that is that's the kind of an expression of bad faith. The basis for the disclosure was Senator Schumer's Disclose Act.
HENNINGER: The Disclose Act was not simply about saying who your donors are. It was more complicated than that. First of all, it did not apply to unions, incredibly.
HENNINGER: Secondly, if you had more than $50,000 in federal contracts, you were not allowed to participate. It had six different disclosure statements that had to go into your ads.
Now, beyond that, once the disclosure is made, MoveOn.org, which has already asked the Justice Department to engage in a criminal investigation with the Chamber of Commerce, meaning you can go to prison, all right?
HENNINGER: The companies, then disclosing, would expose themselves to criminal liability from lawsuits by groups like this. So it's not simply the idea that we all kind of lay our cards on the table, not in the least.
GIGOT: Kim, is this having any impact on the business community? Is it dampening donations at all?
STRASSEL: Well, and it isn't just opening itself up to criminal liability. It's to be attacked. This is why they want disclosure.
We were talking, there's an issue of target companies, which gave some money to a Republican primary candidate who is now running for governor of Minnesota, Tom Emmer. They were out there advertising because they wanted to talk about taxes and spending, which matter to companies. Instead, MoveOn.org, once they knew about this contribution, they turned this into a question of gay rights issues, because Mr. Emmer is critical of gay marriage, and urged a boycott of Target stores. So this is what happens when this disclosure happens and this is why Democrats want transparency.
GIGOT: Is this going to work, briefly, Dorothy?
RABINOWITZ: No, it's not going to work. And just keep this in mind that this is the president and the administration that has made us open to the world to embrace all of the foreign world. We are now seeing foreign as evil and nefarious.
GIGOT: OK, Dorothy, thank you.
We have to take one more break. When we come back, "Hits and Misses" of the week.
GIGOT: Time now for "Hits and Misses."
Kim, first to you.
STRASSEL: And a hit to Joe Manchin running for the West Virginia Senate. Finally, a Democrat with a smart strategy for winning.
(BEGIN VIDEO CLIP)
JOE MANCHIN, U.S. SENATE CANDIDATE D-W.VA.: I'll take on Washington and this administration to get the federal government off of our backs and out of our pockets. I'll cut federal spending and I'll repeal the bad parts of Obama-care. I'll sue the EPA and I'll take dead aim at the cap-and-trade bill because it's bad for West Virginia.
(END VIDEO CLIP)
GIGOT: All right. Ad of the year.
RABINOWITZ: Yes, well, this is a hit to Christopher Kennedy, son of the late Robert F. Kennedy, who led the way to block an honor to the endorser of Sirhan Sirhan, murderer of his father, because Mr. William Ayers dedicated part of his book to the memory of this great man. And that was the end of his effort to become a member -- professor emeritus. It's not over yet. The faculty is now supporting him.
GIGOT: All right, Dorothy.
HENNINGER: Paul, a big hit to the little Center Rock, Inc., of Berlin, Pennsylvania, the company that made the drill bit that smashed down to those miners a half mile into the earth, 28-inches wide, and only 74 employees. So I say a big hand to a little company that made it all possible.
GIGOT: Yes, fantastic. All right, Dan, thanks.
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 all of you right here next week.
Content and Programming Copyright 2010 Fox News Network, Inc. Copyright 2010 Roll Call, Inc. All materials herein are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of Roll Call. You may not alter or remove any trademark, copyright or other notice from copies of the content.