This is a rush transcript from "The Journal Editorial Report," December 4, 2010. This copy may not be in its final form and may be updated.
PAUL GIGOT, HOST: This week on the "Journal Editorial Report" —
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SEN. TOM COBURN, R-OKLA.: It is time for us to get our act together. We're really on three fronts now, Iraq, Afghanistan and the financial tsunami.
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GIGOT: Well, that financial tsunami takes center stage as Congress debates tax cuts for most Americans and the Debt Commission's controversial plan to slash $14 trillion in debt. It's garnering surprising supporters.
And could there be a new culture of spending in Congress? Find out why we believe there just might be, and who should lead that charge.
Plus, a proposal that gives citizenship to the children of illegal aliens, is it amnesty or altruism?
Welcome to the "Journal Editorial Report." I'm Paul Gigot.
The House votes to extend the Bush tax cuts to Americans earning less than $250,000 a year, a bill that was all but certain to be dead on arrival when it goes to the Senate.
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REP. JOHN BOEHNER, R-OHIO, HOUSE SPEAKER-ELECT: I'm trying to catch my breath so I don't refer to this maneuver going on today as — as chicken crap, all right? But this is nonsense, all right?
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GIGOT: Presumptive House Speaker John Boehner, not the only one with ruffled feathers. Senate Republicans filing this week to force Democrats to focus only on matters of money before taking up anything else. And how will President Obama respond? That's the trillion dollar question.
Mr. Obama appointing Treasury Secretary Tim Geithner and budget director, Jack Lew, to work with representatives of both parties to help break the stalemate.
We'll start with the politics of the tax cut debate. Is the middle class caught in the cross fire?
Joining the panel this week, Wall Street Journal columnist and deputy editor, Dan Henninger; editorial board member, Matt Kaminski; and from the nation's capitol, Washington columnist, Kim Strassel.
Dan, is the sound of gridlock breaking we heard on taxes?
DAN HENNINGER, COLUNMIST & DEPUTY EDITOR: I think maybe it's thin ice breaking beneath all of these politicians. If you're talking with gridlock breaking and you're suggesting they're getting close to a deal, the overwhelming logic of this situation, which is to say, all of these tax breaks expiring and rates going up.
GIGOT: Huge, huge tax increases, almost $4 trillion over 10 years.
HENNINGER: Yes. The estate tax going back to a million dollars, 50 percent. That's the logic of it. But I think that political logic has been more or less extinct in Washington for the last two years and it's just become almost a wholly politicized environment.
GIGOT: You're still skeptical. Sounds like you're still skeptical.
HENNINGER: I'm still skeptical because I think that both parties, but especially the Democrats, are maneuvering to put the Republicans in a bad light, saying that they're favoring the rich at the expense of middle class. And they're going to take this down to the wire until they can force the Republicans to look like they are the party of the rich.
GIGOT: But, Kim, I think — Dan makes a point, I think a good point about what the Democrats are up to. But that strikes me as MSNBC theater. They're trying to play to their base and trying to say, look, we're trying so hard, we're trying so hard not to give those tax cuts for the millionaires and billionaires and gazillionaires, but in the end, they know they're going to cave in because the president knows he's — How do you see this?
KIM STRASSEL, WASHINGTON COLUMNIST: It's posturing, a last minute attempt to provide some cover for liberal members. I think what we actually saw this week was the White House, which has given no quarter on this issue until finally this last week, they've now appointed the small team to negotiate with Republican lawmakers on some sort of a deal. And you've seen the press secretary Robert Gibbs come out and outline where the president won't go, but none of that would actually keep a deal from happening that would extend all of the tax rates, at least temporarily for people and you now even have the White House coming out to lay down what it would like to get in return for extending those tax cuts.
GIGOT: That's a key point.
Because, Matt, what do you think, the White House is saying look, we want to extend unemployment benefits and with the jobless rising to 9.8 percent in November, there's leverage there, if that's what you want to call it.
The leverage of a bad economy, gives them more clout in negotiations.
MATT KAMINSKI, EDITORIAL BOARD MEMBER: Absolutely. I mean, they really have no leverage here, because the alternative is to push it through January, with the real speaker, John Boehner, and I think they realize that. This is a moment where, will this White House grow up and abandon Nancy Pelosi and really do make a move to step forward? They do realize that the economy is not doing well. They said last year they didn't try to push a very fragile recovery that killed them in the elections. In return, obviously the unemployment extension. I think they might want to push the DREAM Act, integration —
GIGOT: Which we'll talk about later in the show.
Let's take the unemployment benefits, Dan. The price of that isn't cheap. It's $55 billion to extend that. And I think arguably a lot of economic research would say, if you extend those benefits even further now, you're going to keep — give incentive to keep the unemployment right higher over time. Is that a price that Republicans should pay to get these tax cuts extended?
HENNINGER: I might be almost inclined to take the deal, just to get the rates extended. The problem with the Democrat's argument, there's a real paradox in the middle of it. They also want to — the White House is talking about extending the making-work-pay tax credit for middle class families. That's $60 billion. Obama also wants to extend the tuition tax credits and the child tax credits.
HENNINGER: You know, it's all about helping the middle class. None of that stuff is going to raise the economy. None of those elements are about resuming economic growth. So there's no real growth element in what the Democrats are trying to do here.
I think the game is to say, we have embraced the middle class. We're the party of the middle class, and this proves it. You are the party of the rich.
GIGOT: And, Kim, briefly would you take that deal if that spending that the White House wants to do is paid for with other spending cuts?
STRASSEL: They're demanding that it not be. I think that the Republicans would probably be willing to do an unemployment insurance extension, not paid for possibly, just to get this tax deal done because it's so big. But all of this other stuff they're demanding, the stimulus extensions, that's probably going to be probably a bridge too far for most people and they risk blowing this up again.
GIGOT: OK, Kim, thanks.
When we come back, changing the way the federal government spends money and changing the way Americans live. The bipartisan Debt Commission proposals towards dealing with the deficit.
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COBURN: I think we're in a day of reckoning. And it doesn't matter what your political party is, or what your philosophical bent is, this is a starting point and that's all it is, it's a starting point. More will have to be done. There will not be one American that is not called on to sacrifice.
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GIGOT: Congressional Republicans will soon be choosing committee chairmen as they get set to take over the House. The Appropriations Committee is arguably one of the most important committees in Congress because those members control federal spending, your tax dollars. And one man who wants that job is Georgia Republican Jack Kingston. He says he wants to, quote, "destroy the infrastructure of spending." But will he get the job?
We're back with our panel.
So, Kim, the old line is that there are three branches of Congress, the House and the Senate and the Appropriations Committee —
The bipartisan spending crowd, who protect each other's interests. Are the Republicans going to blow up that culture of spending?
STRASSEL: Well, it doesn't look as positive on the Appropriations Committee part. You've got Jack Kingston making a bid to run the committee but right now it still looks like it's going to Hal Rogers. He's an old appropriator.
GIGOT: From Kentucky.
STRASSEL: From Kentucky, not on sort of reformed spending guy, but it appears that John Boehner, the leader, doesn't necessarily want to upset the spending apple cart, the seniority spending cart in the House. And so —
GIGOT: But you would have to do it. You would go down — Jack Kingston is fifth in line in seniority.
GIGOT: And that's — they doesn't like to do that because it upsets people who have been in that body forever. But, look, if you're not going to do it this year, Kim, with the message the voters sent and something like 80 new members of Congress, when are you going to do it?
STRASSEL: No, that's an excellent point. What they seem to be doing instead is Hal Rogers appears to be in a position to get the committee. You see the parallel track going on, with John Boehner and also Greg Walden, who is an Oregon Republican, running the Transition Committee. They seem to be coming out with another set of new internal GOP spending rules, which they hope will sort of blow up the whole spending culture and impose them on the Appropriations Committee as well. And so that those things are moving in parallel.
GIGOT: So what does Kingston mean when he says destroy the infrastructure of spending, what would that mean specifically?
KAMINSKI: It would mean, first of all, no earmarking in the way that it was done, and spending more of what we have rather than rather than you just writing these blank checks that Congress has done. And Republicans know how to this well since that's what they did in the whole Tom Delay era. They are the biggest earmarkers here so —
GIGOT: They really exploded the numbers of earmarks. But they're also talking about doing away with emergency spending bills, which have become catch-all bills, where you dump everything in. They're talking about restoring rules for automatic across-the-board cuts like they had in the 1980s, if you have — if the Congress exceeds certain spending levels that they set at the beginning of the Congress. It sounds, to me, like a pretty good idea.
HENNINGER: It's a great idea if you can follow through on it. And Washington's spending is like a volcano. It's like a dormant volcano. And you wake up, you suppress it, it stopped. And you go, oh, my god, that lava is coming back. It's like this inexorable force. The problem with spending, it can also come back up.
GIGOT: That's right but that's why you have processes in place, so it's harder to do it. That's what I mean by the infrastructure.
HENNINGER: Well, in my mind, with the Republicans, one of the things they've proposed, which I'm extremely interested in, is they want to put in place mechanisms that will kill agencies or consolidate them. That's where the source of the spending is, this entire bureaucratic federal albatross. If they can start eliminating agencies, which was talked about going back to the Grace Commission —
GIGOT: In the 1980s.
HENNINGER: — then you are actually making the government smaller and reducing spending.
GIGOT: What about putting, Kim, people like Jeff Flake, from Arizona, who has campaigned against earmarkers and — against earmarks, and is hated by the appropriators, putting him on the committee where he can be a watch dog.
STRASSEL: It sound as though that's not just — he is going to be put on the committee, but he will have —
GIGOT: Do you think he is?
STRASSEL: I think he is. I think it's going to be him. and I think there's going to be three or four other kind of young rebels, who have very militant views about cutting back spending, who will be put on their sort of a balance to some of the old bulls, and to bring enthusiasm for some of these, as I said, alternate ideas that you guys have been talking about, about changing the culture there.
GIGOT: All right. We've got another issue on spending this week, Matt, that's the Deficit Commission, President Obama's Deficit Commission, coming out with its report. Will not have the votes that they said to — they hoped to be a real consensus. But they're throwing ideas out there. Is this going to go anywhere on Capitol Hill?
KAMINSKI: I think this has done better than we would hope. This is a real serious start.
GIGOT: The fear, I think.
KAMINSKI: The fear, yes, yes.
It is a start to the conversation about how to get, you know, this huge deficit, get your hands around it. I think clearing up the tax code is a good idea obviously —
KAMINSKI: Lowering the — we have the highest corporate tax rates in the world, in the developed world, bringing those down. I mean, we — what's striking here is, when you — this is sort of partly motivated by what's going on in Europe, you know, these —
GIGOT: The Greek crisis.
KAMINSKI: The Greek, now Spain, Portugal, Ireland. We are not — the debates over there are much more — they're much more radical than we are here. I was struck that they want to say that the U.S. Postal Service should only deliver five days a week. Why not privatize the thing and that's what Germany and Japan did.
GIGOT: Good luck with that.
Six hundred thousand federal employees all in the union, if I'm not mistaken.
HENNINGER: Well, the one aspect of the commission I'm attracted to, Paul — and I wish someone, Erskine Bowles, would elevate it more, is it's not just the deficit and reducing spending. It is that. But Bowles talks a lot about making the United States competitive with the rest of the world.
GIGOT: That's where tax reform comes in.
HENNINGER: That's where the tax reform and getting the rates down is all about. And he's going to need a lot of support because these members of Congress will disappear into this green eye shade, you know, tax cutting — spending and deficit reduction.
GIGOT: I wish it was a tax cut.
It's about making America competitive again, against China, India, and the competition we'll face in the —
GIGOT: I agree with you on tax reform. That's something Republicans could pick up and the president could pick up too, if he wanted to. Although, I just don't see him cutting —
HENNINGER: I don't either.
GIGOT: — marginal tax rates.
All right, when we come back, children brought into this country illegally by their parents haven't had much choice in their situation. But a bill coming before Congress may change that.
GIGOT: The DREAM Act would create a pathway to citizenship for illegal immigrant children who attend college or serve in the United States military. Critics charge it will give illegal immigrants even more reasons to enter the U.S. while proponents of the bill say it would protect children from the mistakes of their parents. Senate Majority Leader Harry Reid wants to take up the DREAM Act in the lame-duck session. But Republicans are opposed.
Dan and I are now joined by Wall Street Journal editorial board members, Jason Riley and Dorothy Rabinowitz.
So, Jason, let's stipulate that Harry Reid has behaved rather cynically with this bill, bringing it up in a rush before the election to try to help his reelection campaign. Let's put that aside and deal with the merits. Why do you support the bill?
JASON RILEY, EDITORIAL BOARD MEMBER: Well, all illegal immigrants aren't the same. As you said in the introduction, some people willfully entered the country illegally, usually in search of jobs. But I can't think of a group of individuals more blameless than the folks that would be targeted with this bill. These are the children of people who came here illegally. They had no say in the matter. And this bill would give them a way to legalize their status, earned a legal status, through military service or college attendance, activities we, as a society, should encourage and I think it's the humane thing to do.
GIGOT: The alternative would be deportation if they're found? Would that be —
RILEY: It could be one alternative, spending them back to their home countries. But many of them, since they came as children, probably have no memory of that country, maybe don't speak the language, in some cases. And in some cases, you'd be taking them from the country, the only country they know, to a foreign country.
GIGOT: To a foreign country.
OK, Dorothy, so let's take Jason's point. Isn't this rewarding good behavior? Don't we want to do that?
DOROTHY RABINOWITZ, EDITORIAL BOARD MEMBER: Well, I think that you have to look at it this way. There are many victims in this whole issue, but one of the questions to raise is, we call this DREAM Act, it really is a dream. It's a DREAM, meaning that it has very little chance of reality. Who is going to enforce it? Remember, the DREAM Act means you get the opportunity to earn citizenship by serving in the Army and going to college. Who is going to enforce these views? But the second thing is —
GIGOT: What do you mean who is going to enforce it?
RABINOWITZ: Who's going to — people don't write an oath that the government is going to enforce in case you don't go —
GIGOT: No, people know who they're — if you serve two years in the military, say, then that's documentable, is it not?
RABINOWITZ: No, it's going to college and going — you have to promise to do this in order to get this privilege. And we're talking about simple justice. We are rewarding one group of immigrants, who have had this river to cross, and the opportunity to enter here illegally. I'm not worried about the signal that we're sending about the increase and the encouragement to illegal immigration. I'm worried about the simple justice of this quest, which is, it is a step to amnesty. It's a large step. It's an encouragement.
GIGOT: What about the point, Dorothy — Jason's point, these are people who — children who came here with their parents. They didn't choose — they didn't break the law themselves, they were brought by their parents. And so, why should we punish them?
RABINOWITZ: I don't think it's a punishment. Who deported these people?
GIGOT: Well, the implication is they could be deported if they're discovered to be here illegally. Granted, a lot of them will never be discovered, but if they are, why should they be deported?
RILEY: Well, I think that there's a larger part. I mean, I take Dorothy's point that the law has to be enforced and there will be opportunities for fraud, people who came as adults and came as children and so forth. And that's a logistical issue and we'll have to make sure that the law is enforced and not abused.
But I think there's a larger point here, Paul. The DREAM Act is not going to solve American immigration problems. The real problem is that the parents had to come here illegally because there aren't enough legal ways for them to enter the country. And I think ultimately the solution to our illegal immigration program is expanding legal channels for entry so things like the DREAM Act aren't necessary.
But I think, politically, this is an issue that Republicans should take advantage of. And going into the 2012 election, if the Republicans are going to make Obama a one-term president, if they want to, they're going to have to perform in certain parts of the country that have fast growing Hispanic populations.
GIGOT: And you're saying this is good politically.
But on the merits, Dorothy?
RABINOWITZ: OK, and that's exactly what's wrong with this. This should not be a political issue one way or another. I mean, let's go back to the essentials, which is that, all across the universe, people are desperate to come to the United States of America. They are desperate for access to become citizens. We have selected a group of people on this extraordinarily humane and also sentimental illusion, oh, they're here, let's not — let's not —
GIGOT: You're worried about chain immigration, Dorothy?
RABINOWITZ: Indeed. And not only that —
GIGOT: You're worried — and once they're here, once you're a citizen, then under the current laws you have the right to bring in parents.
RABINOWITZ: Exactly, but—
GIGOT: — and other relatives. And you're worried, instead of just these people the bill is trying to target, you're going to bring in millions more.
What about — that's — that point is —
RABINOWITZ: It's family unification and there's nothing to prevent —
GIGOT: Jason, your response to that?
RILEY: Well, there are several responses. One is, what is the concern here, over population of the U.S.? Is the country full? Are we worried that too many people are trying to come? Are you worried that they're going to take jobs away from Americans. I mean, I think — I think neither one of those are legitimate concerns. I don't think there's a fixed number of jobs in the U.S. and that these folks are stealing jobs. And I don't think there's an overpopulation issue as well.
GIGOT: All right, folks, this is going to have to be continued.
We have to take one more break. When we come back, our "Hits and Misses" of the week.
GIGOT: Time now for "Hits and Misses" of the week.
Kim, first to you?
STRASSEL: This is a hit for the House, which did this week censure New York Democrat Charlie Rangel for ethics violations, mostly to do with personal finances and abuse of power in his office. He is only the 23rd House member ever censured. It is a huge humiliation. You have to stand before your colleagues before the charges are read. He has protested this has been too harsh a punishment. But I think you could make the case, if you consider what would happen to most Americans caught doing the same thing, this was the least Congress was obliged to do.
GIGOT: All right.
RABINOWITZ: This is a miss to some of Time magazine's readers who, this week, weighed in with their choice — they haven't made a decision yet — of Time Man of the Year. And guess who 90,000 of them picked? Julian Assange, no less. You may have heard the name. What —
RABINOWITZ: WikiLeaker. And what we have learned from this is much more about Time magazine's chunk of readers than we ever did from Mr. Assange's revelations and, of course, what we've learned, much to my surprise, is that there are still 90,000 readers left.
KAMINSKI: Here is a miss to the fraternity of former secretary of state and defense and other grandees —
— otherwise known as the foreign policy establishment in this country, who for some bizarre reason have really come on board President Obama's push to try and ram through the new START treaty, the nuclear deal, through Congress. They might not like it, but the Constitution still gives the Senate the final say.
GIGOT: All right.
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 right here next week.
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