JOURNAL EDITORIAL REPORT

Is Mitt Romney the most electable GOP candidate?

Defeating Obama on the minds of primary voters

 

This is a rush transcript from "Journal Editorial Report," January 21, 2012. This copy may not be in its final form and may be updated.

PAUL GIGOT, FOX HOST: Up next on the "Journal Editorial Report," the first-in-the-south primary topped off the wildest week of the campaign so far.

And as Palmetto State voters head to the polls, we'll take a closer look at Newt Gingrich's surge, Mitt Romney's tax problems and the breakout moments from this week's debate.

Plus, a fresh perspective on some key questions, which of the remaining candidates can beat Barack Obama and where will evangelicals throw their support.

Welcome to this special edition of the "Journal Editorial Report." I'm Paul Gigot.

And we're live this hour as South Carolina voters head to the polls, capping off what can only be described as the wildest week of the campaign so far. The Real Clear Politics poll average began the week with Mitt Romney the clear favorite and ended with Newt Gingrich in the lead. So, what happened in between?

Let's ask Wall Street Journal editorial board member, Dorothy Rabinowitz; columnist and deputy editor, Dan Henninger; "Political Diary" editor, Jason Riley; and senior economics writer, Steve Moore.

So, by my count, the second or third comeback from oblivion by Newt Gingrich. Dorothy, how do you explain it?

DOROTHY RABINOWITZ, EDITORIAL BOARD MEMBER: There's the key. It was never oblivion.

(LAUGHTER)

The reality is that people always knew who he was. And though he was hit with the polls and he rises in the place that is friendly to them in South Carolina.

GIGOT: South Carolina. Close, right next to Georgia, his state.

RABINOWITZ: Next to Georgia. The contrast between him and Mitt Romney and the rest of the candidates is a number-one factor.

GIGOT: And that contrast in the debates you're talking about, the debate performance.

RABINOWITZ: In the debates, and in a general sense who he is, who he will represent to the world, the voice in the world. Number two, he arrives at the audience and then there's a change on the media, and he blows everything up in that debate. It's important to remember that that is the audience was prepared to explode before he even said that, yes, fully out of his mouth. They came ready for the explosion. And why? Because the moment that those words got out that Mrs. Gingrich has going to be on that --

GIGOT: His second ex-wife.

RABINOWITZ: Second ex-wife.

GIGOT: Gave the interview "ABC News."

RABINOWITZ: And they were going to put this out on the air two nights before the election. A general election of what is this? This is unfair.

GIGOT: Jason?

JASON RILEY, POLITICAL DIARY EDITOR: Dorothy, I don't know if ultimately this is going to help him. This is something he wanted to put behind him, but it was a reminder he's been married three times. And a sort of distasteful way that he'd gone from one to two to three, and that's not going to help him ultimately, I think particularly with women voters.

(CROSSTALK)

GIGOT: But, Jason, why is he rising despite that?

RILEY: I think he's been helped by the fact that Mitt Romney has had an especially bad week. First of all, Mitt Romney found out he actually lost Iowa. But he also -- by all of 34 votes

(LAUGHTER)

OK, but he's also had self-inflicted wounds. And you mentioned the tax issue in the opening. He's been very poorly prepared to answer questions he knew was coming. And I think it's hurt Mitt Romney and helped Newt Gingrich.

GIGOT: Yes, Dan?

DAN HENNINGER, COLUMNIST & DEPUTY EDITOR: Paul -- Dorothy, don't throw that legal pad at me when I say this. But I think that --

(LAUGHTER)

HENNINGER: I think Newt is the flavor of the primary, and you know --

GIGOT: This primary, this primary.

HENNINGER: This primary. That's right. Just as Santorum, we discovered won Iowa. Look, the -- this is the most volatile Republican electorate I've ever seen. And we know that since all of this progress began in the polls in June, every one of these candidates, including Michele Bachmann, has risen and fallen. And I think, mainly, a factor of how they perform from one primary to the next. Indeed, the Republican electorate is looking for someone to fight Barack Obama.

GIGOT: And Gingrich --

HENNINGER: And for the past week, Gingrich looked like --

(CROSSTALK)

GIGOT: Steve, let me get you in here. Rick Perry dropped out this week and threw his support to Newt Gingrich, calling him a conservative visionary. How much is that helping Gingrich?

STEVE MOORE, ECONOMICS WRITER: Oh, a little bit. Not a huge amount. But I agree with Dan that what turned around things for Newt was during that debate on Monday night when Juan Williams asked him those questions about the -- about black America and the welfare state, and Newt took it to both the media and to Barack Obama. Remember, he was talking about food- stamps nation and that President Obama was the food-stamp president. That was the beginning of this surge.

The other big story -- and I agree with Dan's analysis. But, Dan, the real story is this presumptive nominee that everyone in this town that I'm sitting at, Washington D.C., wants to see to be the Republican nominee, cannot seal the deal with voters. And it's a big problem for Republicans as they move into the general election.

GIGOT: Dorothy?

RABINOWITZ: Well, look, I think it underestimates the voters to say that this is flavor of the month. Look, Santorum, did so well. It did him no good. This voice has resonance everywhere. It's been up, been down.

GIGOT: We're going to show Rick Santorum going after Mitt Romney on a big part of what he's running on, health care. Let's show that.

(BEGIN VIDEO CLIP)

RICK SANTORUM, R - FORMER PENNSYLVANIA SENATOR & PRESIDENTIAL CANDIDATE: When he was governor of Massachusetts, he put forth Romneycare, which was not a bottom-up free-market system. It was a government- run health care system that was the basis of Obamacare. And it's been an abject failure. And he has stood by it, stood by the fact that it's $8 billion more expensive than under the current law.

(APPLAUSE)

(END VIDEO CLIP)

GIGOT: Jason, that's his first time in a long time that any of the competitors have raised that issue, which a lot of people thought, including me, was going one to be one of the main -- Governor Romney's main liability in the election. Did he score points with that?

RILEY: Absolutely. Rick Santorum's finest moment in the campaign so far. He went after Mitt Romney there on health care and he went after Gingrich in the same debate on character. And I think he scored direct hits there.

But, back to Dan's point whether or not Newt is the flavor of the month. When you look at the primary calendar, it certainly favors Mitt Romney going forward.

(CROSSTALK)

GIGOT: Florida is next --

(CROSSTALK)

RILEY: Well, not just with Florida, Paul, where there are a lot of Independent voters, which Romney does well with. But if you look at the caucuses coming up, Colorado, Nevada, organization matters, and Mitt Romney has it. The primaries coming up, Arizona and Michigan, a high Mormon population. A large Mormon population in Arizona. And in Michigan, Romney's home state.

GIGOT: But, Jason --

(CROSSTALK)

RILEY: Romney has an excellent February.

GIGOT: But this problem of closing the deal that both Dan and Steve has raised, it seems to be fundamental. He came out of New Hampshire, Romney did, with a lot of momentum, and the lead in South Carolina. Why can't he close the deal?

RILEY: Paul, he was never expected to win South Carolina. Come on.

(CROSSTALK)

RILEY: He hoped to do well in Iowa and he knew he'd clean up in New Hampshire and he was going to see what happened in South Carolina. So, we sort of raised some expectations here about Mitt Romney in South Carolina.

RABINOWITZ: Well, look, there was a key moment in that Thursday night debate when Santorum was racing Gingrich over this volatile personal matter and suddenly Romney took the stage and he said, you know, this is why you need an outsider from Washington, somebody in the business. And all the oxygen left the room because he resorted to that fallback, empty rhetoric of anti-Washington, instead of moving the argument forward, which he has great trouble doing. Tell us something about yourself, something new, Mr. Romney. Tell us what you think in instead of these throw lines.

GIGOT: Is that the big problem that Romney has, Dan, because he can't argue on his feet and looks inauthentic some how where --

(CROSSTALK)

GIGOT: I think Gingrich is volatile, but on the other hand, as you say, he takes it right to the opposition.

HENNINGER: Well, you know, we have that old saying in politics, Paul, fire in the belly. Romney has is in terms of wanting to win, but in terms of a stage presence, he doesn't have the fire that Newt brings to it. I must say the sleeper I thought in that debate, and this primary, Santorum. This poor guy has been standing at the end of the debates --

(LAUGHTER)

-- for months and months, unable to talk --

(CROSSTALK)

HENNINGER: -- and now we found out what he's able to do and, you know what, he's pretty good.

GIGOT: But it could be too late --

HENNINGER: Could be too late.

GIGOT: -- unless he does well in South Carolina.

All right, when we come back, primary voters in New Hampshire thought that Mitt Romney is the best man to beat Barack Obama. But is he? A new poll suggests he's got problems with Independents. We'll take a closer look at the electability issue next.

(COMMERCIAL BREAK)

GIGOT: Who can beat President Obama? It's the key issue on the minds of GOP voters. According to exit polls in New Hampshire, more than one- third of voters said their primary consideration was finding a candidate who could defeat the president. And Mitt Romney won 63 percent of their votes. Is he the most electable?

And joining me now, Republican pollster, Whit Ayres.

WHIT AYRES, REPUBLICAN POLLSTER: Hey, Paul.

GIGOT: Whit, go to see you again. Thanks for joining us.

AYERS: Good to be with you.

GIGOT: Can we know, this many months out from an election campaign, election vote, the actual voting, who is the most electable?

AYRES: It's hard to tell definitively. We're telling that the basic contours of the elections are pretty clear. The best case for Republicans is that this presidential election becomes a referendum, an up-or-down on President Obama and his leadership. As of today, he could not win that referendum. The Democrats want to put a choice between President Obama and a Republican they deem as unacceptable. So in large part the question is, which of the Republicans will be hardest for the Democrats to demonize and which of the Republicans are most likely to make it a referendum on Obama.

GIGOT: I want to get to that point. I remember 2008. The media said that John McCain was the most electable, and he lost. And I go back to 1980, everybody said that Ronald Reagan was the least electable Republican, and he won in a landslide. Can the conventional wisdom be wrong here?

AYRES: Of course, the conventional wisdom can be wrong. But as of the numbers we have today, if you're talking about electable versus somebody else, an "ABC News"/Washington Post poll last week showed Romney with a two point lead over Obama, and Obama handily defeating any of the other three alternatives, with Newt Gingrich being the worst at 12 points behind. To the extent we can tell anything from the day-to-day, it looks like Romney is the most electable.

GIGOT: What are they looking at when they look at Romney? What do Republican voters see, yes, is he the safest choice because he's the most plain vanilla and therefore, the least person that is the hardest for the president and his campaign team to demagogue?

AYRES: They're not picking him as the fieriest campaigner.

(LAUGHTER)

We understand that. And he comes across in the debate as competent, well prepared. It's really important, I think, for Republican primary voters to have someone with good temperament and good judgment. Does this person have the temperament and judgment to be a good president of the United States? And I think a lot of Republican primary voters are looking at the field, the four remaining, and thinking that probably Mitt Romney has the best temperament and the best judgment.

GIGOT; There was a poll this week, "CBS News"/New York Times poll that showed that Romney might have some potential problems with Independents. They showed net favorable with Independents of 19 percent. Unfavorable, 35 percent, and a really remarkable 46 percent, nearly and a half of the voters, saying they didn't know enough or hadn't decided. That suggests to me that Romney would be -- has to make a sale yet to Independents and that creates an opening for the president's team to define him in a way that is negative.

AYRES: Independents are those who are obviously lease rooted to either side and most malleable and volatile in their opinions, but the president, too, Paul, has serious problems among Independents. we've done a lot of polls through research and republic going back to April '09 that showed Independents put off by the president's fiscal management, by the bailouts, and then ultimately by the health care reform plan. So, if he has major problems among Independents as well. But your point is accurate. The sale has yet to be made by either the president or a Republican alternative.

GIGOT: Newt Gingrich says he's the best debater. He's the guy that can go toe to toe and make the case, make the philosophical and practical argument against the president and that's why he's the strongest candidate. How important is that in the eyes of the primary voters?

AYRES: Being a good debater is important and probably most Republicans agree that Newt Gingrich is the strongest debater. Although I have to say that Rick Santorum had a very good night on Thursday night. But there are many other factors involved. There's vision, there's record, and as I mentioned before, temperament and judgment. And it's the temperament and judgment criteria where Newt has to persuade a lot of people he's up to the job.

GIGOT: This is why the Romney campaign brings out a former colleague of Speaker Gingrich's saying he's erratic. They're trying to get at the idea he's not the most levelheaded fellow.

AYRES: They'll keep beating that drum and they have the money to keep beat that drum with for a long, long time.

GIGOT: Let's talk about Santorum. He makes -- his argument is, I'm the guy, Republican who can reach blue collar workers, Reagan Democrats, the people our party needs to be able to put together in a majority. How well is he doing so far in the campaign at getting to those voters?

AYRES: I think he's doing a good job at making the case. And I think he's done a very good job, particularly in the more recent debates. The challenge that Rick has is that he still has to get over a huge hurdle and that is that he lost his last time on the track in the critical swing state of Pennsylvania as an incumbent Senator by 18 percentage points. And it's hard to make the case that you're the guy that can win the swing states, when the last time were you on the track, you lost by 18 points.

GIGOT: Whit Ayres, fascinating stuff and we'll be watching in South Carolina. Thanks.

AYRES: Thanks, Paul. Great to be with you.

GIGOT: And our panel, of course, has their own opinions who is electable and not all of them think it's Mitt Romney. They'll weigh in when we come back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SANTORUM: Grandiosity has never been a problem with Newt Gingrich. He handles it very well.

(APPLAUSE)

SANTORUM: And that's one of the issues here, folks. A month ago, he was saying it's inevitable I'm going to win the election and I'm destined to do it. I don't want a nominee that I have to worry about going out and looking at the paper the next day and figuring out what he -- worrying about what he's going to say next.

(END VIDEO CLIP)

GIGOT: That was Rick Santorum at the Thursday night's South Carolina debate giving voice to his reservations about Newt Gingrich's electable. And to be sure, the GOP candidates bring certain strengths and weaknesses to a general campaign.

Back to discuss those are Dan Henninger, Jason Riley and Dorothy Rabinowitz. Also joining the panel, "Wall Street Journal" assistant editorial page editor, James Freeman.

So, Jason, you saw the grandiosity charge, erratic charge, this is a core attack from his core competitors against Newt Gingrich. How damaging is it?

RILEY: It's very damaging. And it's an informed opinion coming from Rick Santorum, who worked with Gingrich in Congress. Others who have worked with Gingrich have expressed similar reservations about the man's character. And this -- if you believe that this election is going to be about Independent voters, it's a serious, serious charge. Can Newt Gingrich carry the day in states that may very well determine this election, states like Florida, Pennsylvania and Ohio? Obama won 52 percent of the Independent vote in 2008. He's down to 37 percent among that group.

GIGOT: The group --

(CROSSTALK)

RILEY: He is really, really struggling. Who among the Republican candidates can grab those Independent voters?

GIGOT: Dorothy?

RABINOWITZ: Jason was saying the only person hurt in that exchange was Rick Santorum. This was right out of the political swampland despite it resonates as a fact in the world. Because if you imagine Ronald Reagan saying anything as deeply insidious as that? It's basically gossip. It feels that way. There is a reason that Rick Santorum, for all of us oncoming victories, isn't getting anywhere. He is a snarling alley fighter and people feel it.

GIGOT: All right.

(LAUGHTER)

That's an attack on Santorum, but what about the point about Newt Gingrich?

(CROSSTALK)

HENNINGER: But Gingrich said he was grandiose.

GIGOT: You don't -- he did. He said I've got the big ideas.

(LAUGHTER)

But what about the point, you wake up on September 1st and Newt Gingrich has said something and, oh, man, and this blows the race?

RABINOWITZ: But they would have said that about the actor, Ronald Reagan, wouldn't they?

(CROSSTALK)

GIGOT: He was one of the most disciplined politicians of my lifetime. Newt Gingrich is not as disciplined as Ronald Reagan.

JAMES FREEMAN, ASSISTANT EDITORIAL PAGE EDITOR: I think that cuts into the electability -- sorry, Dorothy.

(CROSSTALK)

RABINOWITZ: That's OK.

I think -- what difference does it make. These are the facts out there about Gingrich.

GIGOT: Right.

RABINOWITZ: What can you do about these psychological stories or facts? We don't know what we can do. All we know is that this is the candidate and he seems very promising. What can we --

(CROSSTALK)

FREEMAN: No, but the erratic issue, the fact that he's all over the map saying things and you're wondering what he's going to say next, it's not just a question of Independent voters taking the measure of the man. It undercuts I'm the smart guy and I'm the smart guy, I will win the debate, I'm a great debater. If you go into a debate and you've been on all sides of the issues -- health care, environmental issues, he criticized Obama for being a socialist and Mitt Romney for being a capitalist. He's been all over the place on a lot of these things. And it's difficult to sustain an argument against someone if you've been on the same side.

GIGOT: So, his behavior every day throughout the campaign is going to be crucial, because he doesn't want to fit into that stereotype they're trying to apply to him.

(CROSSTALK)

FREEMAN: And will not be disciplined. That's the one thing you can say about Newt Gingrich.

RILEY: On what basis is Gingrich this great debater? The fact that he goes out and complains about media bias and insults the moderators? Is that the way to beat Obama in the fall?

FREEMAN: It's probably less effective in the general than in the primary.

(LAUGHTER)

HENNINGER: Our subject here is electability, and this conversation is making it clear why Republican voters are going nuts with anxiety. The fact is, these three, plus Ron Paul, are the B-team. Right? They all have tremendous flaws. If you had an A-team candidate up there -- I'm afraid after the president gives his State of the Union next week and Mitch Daniels gives the response, everyone out there is going to go, why isn't this man running for president?

GIGOT: But, Dan --

HENNINGER: And he's not.

GIGOT: -- you can't sound like Bill Kristol who is also on Fox --

(LAUGHTER)

-- praying for somebody else to get in because they aren't getting --

(CROSSTALK)

(LAUGHTER)

FREEMAN: Hold on. I think as Jason wrote this week, if you looked at the four people on the stage Thursday night, and you didn't know where they were in the polls, you would say Santorum won and did a pretty good job, and maybe is more impressive candidate than people have expected. And --

(CROSSTALK)

GIGOT: What about the Whit Ayres point that he's not been able to make the sale so far. If he doesn't do well in South Carolina --

(CROSSTALK)

FREEMAN: Keep in mind, Newt Gingrich has never won a state-wide election. Mitt Romney, Ron Paul and Newt Gingrich have never won in the swing states. And Santorum won four out of five of the swing states.

RABINOWITZ: I'd like to point out that, in this very building, there are women walking around who haven't heard Rick Santorum for one minute on social issues, on abortion, on the right to life -- are raging. They can hardly stand still at the microphone.

FREEMAN: The point is, you go into the fall with the Republicans already having lost New York and California -- those are the off the map. So what he's saying, Santorum electability argument is, it's the Midwest swing states, I can win there, I'm going to appeal to voters more than Romney. I think it's a reasonable case.

GIGOT: What about a Mitt Romney's electability? It's his central selling point. Other than that, he's a business man who can get the economy going. How persuasive is that to you?

HENNINGER: It's mildly persuasive. I think he has the intelligence. He knows the issues. But the weaknesses that have shown up, especially when Santorum leaned on him in that debate on Romney care and taxes. The taxes thing was devastating. That at this point in the campaign, a major campaigner didn't have and adequate answer on what he would do with the tax returns and makes you have to worry a lot. And why? Someone with so many skills and talents, at this point, isn't deploying them is a mystery.

GIGOT: It's a little surprising, Jason, that he --

(CROSSTALK)

RILEY: Yes, he took some body blows this week and he did not handle well, which it was a little strange.

RABINOWITZ: You think it could be erratic behavior that we might worry about?

(LAUGHTER)

GIGOT: Dorothy, last word.

Still ahead, Mitt's money. Could how he handled questions this week about releasing tax returns and how much he actually pays spell trouble today in South Carolina? And down the road, in a general election campaign?

(BEGIN VIDEO CLIP)

GINGRICH: Mitt Romney pays about a 15 percent rate and we're going name our flat tax the Mitt-Romney 15-percent flat tax.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

MITT ROMNEY, R - FORMER MASSACHUSETTS GOVERNOR & PRESIDENTIAL CANDIDATE: What's the effective rate I've been paying, it's probably closer to 15 percent rate, I think, in my last 10 years -- I -- my income comes overwhelmingly from investments made in the past rather than ordinary income or rather than earned annual income. I've got a little bit of income from my book, but I gave that all away. And --and then I get speakers fees from time to time, but not very much.

(END VIDEO CLIP)

PAUL GIGOT, FOX HOST: Those words helped get Mitt Romney into a heap of trouble this week as Democrats and some of his Republican rivals jumped on his admission that he pays about 15 percent in federal taxes. That coupled with his reluctance to release his tax returns could spell bigger problems down the road. So can Mitt Romney get out in front of the tax issue?

We're back with James Freeman, Dan Henninger, Steve Moore. And also joining us, Wall Street Journal columnist Mary Anastasia O'Grady.

So, Steve, how big of a problem for Mitt Romney is the fact that he only pays 15 percent.

STEVE MOORE, ECONOMICS WRITER: The reason it's a problem is he sounded so defensive about this throughout the entire week. This is a guy who actually paid his taxes, unlike the treasury secretary --

(LAUGHTER)

-- and half of the Obama cabinet. He's got to basically make the point -- two points. One is the one we made in our editorial the other day, Paul, which is this mythology that the rich don't pay their fair share in taxes. As we showed in our editorial, the actual real tax rate, when you include the corporate taxes that are paid on rich people, like Mitt Romney and Warren Buffett, is twice as high as the tax rate paid on the middle class. The problem seems --

(CROSSTALK)

GIGOT: It's about 30 percent to 15 percent?

MOORE: That's right. That's a big differential. So it's a myth that somehow Warren Buffett and Mitt Romney are paying less than a plumber or a secretary. And, of course, as we all know, Barack Obama is going to make that class warfare issue the centerpiece of his re-election campaign. He also has to do a better job, in my opinion -- he said he wasn't going to apologize for being successful. And then he apologizes for being successful.

(LAUGHTER)

So I think that's his problem. He's on the defensive too much.

GIGOT: Why won't he -- we met with Mitt Romney, Mary.

O'GRADY: Yes.

GIGOT: He came in. We had a very good session, almost 90 minutes. Why won't he come out for a tax reform that says, I pay this because of the reason that Steve made that point? You know what, I'd like that for everybody.

MARY ANASTASIA O'GRADY, COLUMNIST: You know, I think his big problem is he wants to run as a moderate, the more -- the sort of center guy, who can get votes from the right, but also those Independents. And I think he's afraid that, you know, if he calls for tax cuts and he releases his income taxes and it shows that he's a high-income earner, they're going to start streaming at him that he wants to enrich himself. And if he calls for -- doesn't call for tax cuts, he's got a problem on the right. So he's trying to work it in the middle. And that's why he's having so much trouble.

GIGOT: It seems to me, James, that he can't dodge this fight. It doesn't matter --

(CROSSTALK)

JAMES FREEMAN, ASSISTANT EDITORIAL PAGE EDITOR: No, it's coming.

GIGOT: It doesn't matter. Now that people know he's paid 15 percent, he's basically got to fight on this issue because the President Obama campaign will take it to him anyway.

FREEMAN: In the White House, this is the campaign they're been setting up for the last year. Let's go after Mr. 1 percent guy. And here he is. And he has to just get over this self-consciousness. It's really -- and this is the problem with this whole economic program in a way, it's not about him. It's not what he made and his brilliance --

(CROSSTALK)

GIGOT: But he makes it about him.

FREEMAN: He makes it about him. And he's got to take it from the next step, from saying there's nothing wrong with making a profit to and how do we let more people make a profit, how do we get job growth, and that's lower taxes.

GIGOT: We want to show a clip of John King in the debate on CNN, asking Mitt Romney if he wants to release the tax returns for 12 years like Mitt Romney father had in 1968? Listen.

(BEGIN VIDEO CLIP)

JOHN KING, CNN DEBATE MODERATOR: When you release yours, will you follow your father's example?

ROMNEY: Maybe.

(LAUGHTER)

You know, I don't know how many years I'll release. I'll take a look at what our documents are --

(BOOING)

ROMNEY: And I'll release multiple years. I don't know how many years and -- but I'll be happy to do that.

(END VIDEO CLIP)

GIGOT: What was the problem with that answer, Dan? Or was that fine?

HENNINGER: No, that was a mess.

(LAUGHTER)

And it got a lot worse.

(LAUGHTER)

It got a lot worse.

(LAUGHTER)

He subsequently -- I think the reason came out in what he said right after that. I think he said thee times that if he does this, he knows the Democrats are going to make a big deal of his tax return.

(CROSSTALK)

GIGOT: So, they're going to make it big deal if he doesn't release it.

HENNINGER: But he's clearly obsessed with the idea that they're going to do something with it. You know what they're going to do with it. They're going to take the tax returns and make a commercial out of his first page of his tax return, where at the bottom it says, adjusted gross income, $10 million, 15 million. The guy is worth $250 million. he can't deny the fact.

(CROSSTALK)

GIGOT: Steve?

MOORE: Another problem here is I'm kind of ashamed of some of these other candidates, like Rick Santorum and Newt Gingrich, saying, gee, I pay a higher tax rate than he did. As if there's something wrong with a 15 percent tax rate on investment income.

Look, the reason they pay this lower rate is because the tax was already applied at the corporate level and the real effective rate is about 40 percent.

I think the only way out of this, Paul, is for Mitt Romney to take the offensive and to talk about the fact that he was a job creator, that he created businesses, that he created wealth, unlike the president, who is a community organizer and never worked for a business, let alone started a business.

GIGOT: Is that the way out of this thicket?

O'GRADY: It's absolutely the way out. And not only -- let's not stop with capital gains taxes. We should have a conversation about what is the purpose of taxes. Is it to try to make us all equal? Is it to take money from people who have taken risks and deferred consumption in order to save and invest and punish them because somebody else consumed and we don't have enough money to go around?

GIGOT: Dan, I think, in his heart of hearts, Mitt Romney feels a little guilty about his success. If he feels that guilty, a little guilty going into the campaign, it will show.

HENNINGER: I think it feels a little big guilty the way a lot of the rich investors feel guilty. The top corporate rate is 35 percent. They don't pay that. They're investors. They pay 15 percent. As long as you have a tax code with differentials like that, they are going to game the system and they're going to feel bad about it.

GIGOT: Last word, Dan.

When we come back, two-thirds of Republican primary voters in South Carolina call themselves evangelical or born again. Who are they likely to turn out for today? And why haven't Christian conservatives rallied around a single candidate? We'll ask a prominent leader in the evangelical movement next.

(COMMERCIAL BREAK)

GIGOT: When more than 150 social conservative leaders met last weekend in Texas, the goal was to decide, once and for all, which of the Republicans candidates to endorse. But while the majority reportedly voted to support Rick Santorum, the Gingrich campaign claimed a sizable group who also threw their support behind him.

One of the attendees at the meeting was Richard Land, the president of the Southern Baptist Convention's Ethics and Religious Liberty Commission. I spoke with him earlier and asked why evangelical conservatives haven't been able to unite around a single candidate.

(BEGIN VIDEO CLIP)

RICHARD LAND, ETHICS AND RELIGIOUS LIBERTY COMMISSION, SOUTHERN BAPTIST CONVENTION: Well, I think they felt they had when they left a previous ranch meeting in August and they thought it was going to be Governor Perry. I left that meeting -- in that meeting, I looked around and I thought, you know, if a bomb went off here, the social conservative movement with be decapitated.

(LAUGHTER)

And almost everybody was there. And they came away -- Rick Perry did a great job at that meeting and then he just imploded when he got into the race. And he'd soared to the top. I think social conservatives thought they'd found their guy and then he flopped. And so people turned in different directions. And some turned to Santorum, some turned to Romney, some turned to Gingrich, some turned to Bachmann. And so there was a real feeling, especially after the Iowa caucuses, when you look at the vote totals, if you took Perry's total and Bachmann's total and Gingrich and Santorum, they nearly doubled Romney's total. So the feeling was let's get together and see if it's possible to quite dividing our resources and dividing our loyalties and try to come behind one candidate. And we actually achieved more consensus at that meeting than I think anybody went to that meeting thinking that we could.

GIGOT: All right --

(CROSSTALK)

LAND: We achieved a strong consensus in favor of Santorum with a minority report for Gingrich.

GIGOT: All right, but if Newt Gingrich is now, as he seems to be in the polls, surging in South Carolina, and if he should do well there and maybe win, where does that leave social conservatives? Would they then change and unite behind Gingrich?

LAND: I think some of them will. Some of them will maybe later, if he continues to do well. And I think the main effect of Gingrich doing very well or winning in South Carolina will be to elongate the process. Let's remember that nearly half the people in Florida have already voted, because they have early voting. So late trends will not impact that election as much as they will in South Carolina. So I think what -- if Gingrich does very well or wins in South Carolina, that just means that Santorum and Gingrich and Romney and Paul will live to fight another day after Florida.

GIGOT: All right, well, what are the -- what do you think the impact is on cultural conservatives of the accusations now by Newt Gingrich's second wife? Those have been electric in the media. And the speaker responded to them in defiant -- responded to them in defiant terms at the debate. Is that going to have an impact on the race?

LAND: I think it will. I think that the speaker's marital history has had an impact from the beginning. Let me say a couple of things here. First of all, no one knows what goes on in a marriage. Just the people in it. And sometimes they don't know.

(LAUGHTER)

And I think that the media is being unfair in treating Republicans like Gingrich differently than they do Democrats like Edwards and Clinton when they have moral foibles. I understand there is one big difference and that is the Republicans are claiming to be the party of family values. And if you're going to be the party of family values, when you fail to live up to those values, then you need to expect to be called on them.

GIGOT: All right. Now, let me ask you about Mitt Romney and the Mormon question, because, four years ago, a lot of people thought that that hurt Mitt Romney, especially when he was running against Mike Huckabee among social conservatives. How is that playing this year? Is that as big an issue now as it was then?

LAND: I don't think it's as big an issue. It's still an issue. It's an issue for a minority of evangelicals. Ironically, part of the problem has been that Governor Romney has not been Mormon enough on the issues that matter the most to social conservatives. If Governor Romney had always had the position on the sanctity of human life and traditional marriage versus same-sex marriage that his church has had, there would be less doubt whether he's a true social conservative.

I think one of the reasons that he's doing better among evangelicals this year than he did four years ago, is that he's he had four more years of being pro-life and being pro-traditional marriage. And I thought that he, among others, that they were quite eloquent in the New Hampshire debate in explaining why they were against discrimination against gays, but were against same-sex marriage. I thought they explained it quite eloquently and better than anyone did, except Huckabee in 2008.

GIGOT: Quickly, if Mitt Romney should get the nomination, do you think that his religion would affect turnout among evangelical Christians? Would some stay home?

LAND: I doubt it. A very small number. Do not underestimate President Obama's ability to energize and unite social conservatives against -- for his opponent.

GIGOT: All right. Richard Land, thank you so much for being here.

LAND: You bet.

(END VIDEOTAPE)

GIGOT: When we come back, President Obama may not have a Republican opponent yet, but his re-election campaign is in full swing. What this week's rejection of the Keystone pipeline project does to his efforts to sell himself as the energy president.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GIGOT: Well, he may not have a Republican opponent yet, but the Obama re-election effort has kicked into high gear with this ad touting the president's energy achievements going up in battleground states, the same week that he decided to reject the Keystone oil pipeline project.

(BEGIN VIDEO CLIP)

AD NARRATOR: Secretive oil billionaires attacking President Obama with what Fact Checkers say are not tethered to the facts, while independent watch dogs call this president's record on ethics unprecedented. And America's clean energy industry 2.7 million jobs and expanding rapidly. For the first time in 13 years, our dependence on foreign oil is below 50 percent. President Obama kept his promise to toughen ethics rules and strengthen America's energy economy.

(END VIDEO CLIP)

GIGOT: So, Mary, is that an accurate reflection of his energy record?

O'GRADY: That's going to be a tough sell, I think.

(LAUGHTER)

You know, from drilling to off-shore drilling, to natural gas, to transportation, the Keystone pipeline, he doesn't want exploration, he doesn't want exploitation, and he doesn't want transportation, so he's got the perfect trifecta.

GIGOT: It's true that our energy production here has crept up above 50 percent of our use, but that's because of private-sector natural gas production and oil production using new techniques, hydraulic fracturing and horizontal drilling. Does it have anything to do with his policies?

O'GRADY: No. It's very hard to kill the U.S. economy.

(LAUGHTER)

So things keep functioning, even if you have a president that doesn't cooperate. But if you really look at the way that he views energy, politically, he is supported by people who don't want anyone more fossil fuels. And he has tried to placate them so he can get campaign contributions. And that means being anti-oil, anti-natural gas and, as they said, anti-distribution in the form of the Keystone pipeline.

GIGOT: Steve --

MOORE: You know, the president --

(CROSSTALK)

GIGOT: Let me ask you a question, Steven, and get your answer to this. The president had to choose, in the Keystone issue, between his blue collar workers and industrial unions, who supported it, and the greens who opposed it. He went with the greens. Why?

MOORE: Yes, he did. Well, this is one of the issues that pits the 99 percent versus the 1 percent, where the 1 percent are the radical environmentalists, and most Americans want the jobs. And the reason he sided with the environmentalists is because, at heart, he believes in their agenda. And the reason, Paul, the story is so important is because, remember, Barack Obama basically said he was going to have a green agenda that would create jobs. What Keystone tells us is the truth is that the green agenda is pro-unemployment and anti-jobs. This is 20,000 jobs down the drain and they are union jobs.

GIGOT: Is there anything the Republicans can do? They thought they had him in a corner where he had to decide. Instead of kind of escaped it and blamed them. Is there anything they can do about this to build this pipeline now?

HENNINGER: They could promise to build it on day one if you elect a Republican president.

(LAUGHTER)

And they will hold hearings on the job losses. I think the president is vulnerable. That ad we showed, I think is was accurate. It's an accurate reflection of what he believes. There was another element here. Just a week or so ago, Secretary of Interior Salazar put off-limits a million acres in northern Arizona to uranium mining. That's the nuclear industry, right?

GIGOT: Right.

HENNINGER: So you've got natural gas, you've got oil, and you've got the nuclear industry, which is being suppressed by the Obama administration --

MOORE: And coal.

HENNINGER: -- while they try to raise up the wind mills and solar industries that the green environmental movement wants to create. The problem is the bottom is falling out from beneath the solar industry right now.

GIGOT: So, these -- these oil sands -- the oil and oil sands of Canada is going to be produced anyway. The Canadian says to the west coast and to send to Asia if it isn't via the Keystone XL pipeline through the United States to the gulf coast. So all that would happen is that U.S. jobs are lost. Nothing about global warming or climate change, no impact.

O'GRADY: Yes. But I disagree with Steve that he really believes in the green agenda. This is a political calculation. And you know, I think he was worried about what happens in September when he gets to the convention and he gets attacked by an organization, the same type of protests that surrounded the White House in November, and forced the State Department to backtrack on essentially what it was signaling, which was that it was going to allow the Keystone pipeline to go ahead. He's afraid of that and he wants the money from that coalition.

MOORE: Yes, but he's got the politics all wrong on this, Mary. Everyone wants this pipeline built.

GIGOT: Steve, we've got to go.

(LAUGHTER)

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

(COMMERCIAL BREAK)

GIGOT: Time for "Hits and Misses" of the week -- Jason?

RILEY: This is a hit for David Rubenstein, who is donating $7.5 million to repair the Washington Monument, which was damaged in an earthquake last year. So the only question is whether Newt Gingrich will approve the donation because Mr. Rubenstein made his money in private equity at Carlisle.

GIGOT: Yes. OK.

Mary? O'GRADY: This is a miss for the Castro regime in Cuba, which has been trying to improve its image. But this week chalked up the death of another jailed dissident. Wilmer Villar Mendoza was a 31-year-old peaceful activist whose only crime is speaking against the dictatorship. And he died on a hunger strike this week.

GIGOT: OK.

James?

FREEMAN: This is a hit to Chris Christie. A lot of Republican primary voters are upset that America's governor isn't running for president.

GIGOT: New Jersey governor, Chris Christie.

FREEMAN: New Jersey Governor Chris Christie. But the good news that the reform experiment continues in New Jersey. He laid out a plan this week to cut taxes 10 percent across the board, not just for some people in some income groups, not just for people that invested in windmills, but for everybody. Good news for the state.

GIGOT: So how is he doing two years in? What is his approval rating?

FREEMAN: Approval rating, in the 50s in the public polls. He told us week, even higher in private polls. So at least politically it's working. And based on the reforms so far, you have to be optimistic.

GIGOT: Interesting, James.

That is 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. And we hope to see you here next week.

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