A look at the first days of the Trump transition

This is a rush transcript from "Journal Editorial Report," November 19, 2016. This copy may not be in its final form and may be updated.

PAUL GIGOT, HOST: Welcome to the "Journal Editorial Report." I'm Paul Gigot.

A busy first full week for President-elect Donald Trump as his team pushes back against claims of chaos inside the transition. Vice President-elect Mike Pence formally took the reins on Tuesday, replacing New Jersey Governor Chris Christie as officials insist the 10-week effort to build the administration is on schedule. Trump spent the week meeting with his foreign leader, Japan's prime minister, Shinzo Abe, as well as vetting candidates for top administration jobs, with Lieutenant General Mike Flynn, Alabama Senator Jeff Sessions and Kansas Congressman Mike Pompeo all among the picks.

Here with a look at the first days of the Trump transition are Wall Street Journal columnist and deputy editor, Dan Henninger; columnist and Manhattan Institute senior fellow, Jason Riley; editorial board member, Mary Kissel; and assistant editorial page editor, James Freeman.

So, James, let's start with Pence. A little bit of night of the long knives --

(LAUGHTER)

-- in transition with Chris Christie getting the knife in the back, I guess, and being pushed out. Mike Pence taking charge. What do you think of that?

JAMES FREEMAN, ASSITANT EDITORIAL PAGE EDITOR: I think it's an upgrade.  When I look at this Trump transition, most of all, I'm surprised at how conventional it is, really. You have -- all these names coming out are people who have a lot of experience in government. You might have thought given his unconventional campaign, we'd see Ronde Rousey or Dana White as secretary of Defense.

(LAUGHTER)

((CROSSTALK)

GIGOT: Why is Pence an upgrade from Christie?

FREEMAN: I think from a limited-government perspective, Mike Pence is really the person who reassured a lot of conservatives during the campaign, persuaded a lot of Republicans to come home to Trump. I think you really have more hopeful output here.

GIGOT: On that point, Jason, there are a lot of people -- the Never Trumpers said Mike Pence is betraying his principles by accepting the job.  I'm glad he did now that Trump has won.

JASON RILEY, COLUMNIST & SENIOR FELLOW, MANHATTAN INSTITUTE: Yeah, but even some of those people said he knows his way around Washington and Donald Trump will need someone like that.

You have complaints that the transition has been so chaotic. Donald Trump ran a seat by his pants campaign. Some of those same people were saying, oh, his campaign is always on the verge of collapse. And we're seeing -

(CROSSTALK)_

GIGOT: Well, it was sometimes.

(LAUGHTER)

RILEY: But the reality is, I believe, even David Axelrod, of all people, came out and said this is being a little unfair to the Trump campaign.

GIGOT: Former Obama adviser.

RILEY: He said at this point we didn't have all our ducks in a row yet.  And I agree with James. I think you're seeing names floated, his friends and his frenemies. He's talking to Mitt Romney, Ted Cruz, Henry Kissinger.  He's learning.

GIGOT: Let's talk about some of the names that have been picked, Mary.  You have Mike Flynn, the former lieutenant general, national security adviser. How comfortable are you with that choice?

MARY KISSEL, EDITIRAL BOARD MEMBER: It wouldn't have been my choice. I'm not sure he has a grand vision of foreign policy. I would have preferred somebody like Ambassador John Bolton in a role like that. It's not a terrible pick. Mike Pompeo, West Point grad, Harvard Law School, served in the Army, was on the House Benghazi committee -

GIGOT: House Intelligence Committee.

KISSEL: House Intelligence Committee, rather, for CIA. I think that's a solid pick. Jeff Sessions, for attorney general, I think he might get some push back in the confirmation hearings. We'll see how that goes.

But I have to say, on the night of the long knives, I was sad to see Mike Rogers kicked out. He was a terrific House Intelligence chairman, and I think a really solid guy. Great experience there. That was a bit of a shame.

GIGOT: I'm a little concerned, Dan, about General Flynn's ties to Russia.  He has written for "RT," the kremlin's propaganda site. There was a famous dinner that he sat next to Vladimir Putin on. I'm a little concerned about that. Although he does have great military experience, combat veteran.  And Barry McCaffrey says he's the foremost intelligence officer of his generation.

DAN HENNINGER, COLUMNIT & DEPUTY EDITOR: That was his specialty throughout his career was intelligence, as was with Mike Pompeo.

Incidentally, I might point out, he went to West Point, graduated number one in his class. Pompeo is not a Trump insider. Mike Flynn, remember, what regarded as possibly the vice presidential running mate. Jeff Sessions was the first Senator to endorse Donald Trump. Sot on the one hand, he's rewarding his loyalists. On the other hand, he's reaching out.  And I was struck by how some of the visitors to Trump Tower included Tom Price, head of the House Budget Committee, or Jeff Hensarling, out of the House, head of the House Financial Services Committee. These are strong, impeccable people. I have to tell you, Paul, if he was having representatives from the Alt-Right coming, it would be across the top of "The New York Times" front page. He's not meeting with those people. He's meeting some of the most solid Republican people that exist down there in Washington. So, I think the early days are encouraging.

GIGOT: On this point, the idea he's meeting with Mitt Romney this weekend is just fascinating because Romney was one of his most vociferous critics as he was seeking the nomination. I don't think he even necessarily voted for him.

But this point about reaching out, broadening the coalition, broadening his reach of people, broadening the voices he gets is utterly crucial. I understand you need to award the loyalists. That's why Sessions is getting the job. That's why Flynn is getting the job. You've got to reach out and have these alternative voices of debate in your administration. And Romney would be, in my view, a really fascinating and very good pick for secretary of state if that's, indeed, what happens.

FREEMAN: Very competent executive. If you give him the agenda -- forming the agenda might be a challenge for him. But if you give him the agenda, no doubt, he'd carry it out in a professional way. It blows away the image a lot of people have of Trump, that he is so thin-skinned and unforgiving.  He's done and tweeted a lot to give people that impression. It really would go against the grain.

You look to Dan's point, people go through Trump Tower, all very impressive, except for maybe Kissinger.

GIGOT: No. That's cheap shot and I think that's wrong.

(LAUGHTER)

FREEMAN: OK.

GIGOT: He could stand to listen to Henry Kissinger.

(CROSSTALK)

(LAUGHTER)

GIGOT: Steve Bannon, the controversial Breitbart News guy - we only have a little time, Jason -- being called an Alt-Right representative. Is that fair?

RILEY: I don't know enough about Steve Bannon to say if it's fair. I'm disturbed by a lot of what Breitbart has published. But I'd say the idea that we're going to give Trump grief for talking to Steve Bannon or bringing him into his early circle but not give Obama grief for bringing people like Al Sharpton into his inner circle, I think, is completely hypocritical.

GIGOT: All right, Jason.

Still ahead, it's being called the Trump bump. What's behind the market's reaction to the presidential election? We'll ask Trump economic adviser, Steve Moore, next.

(COMMERCIAL BREAK)

GIGOT: It's being called the Trump bump. Despite an initial plummet on election night, the Dow soared after President-elect Donald Trump's upset victory, with finance and energy stocks leading the way. Massachusetts Senator Elizabeth Warren, not too happy with the rally, tweeting on Thursday, quote, "Why is Wall Street celebrating Donald Trump? Because his administration looks like an investment banker's dream."

Steve Moore is the senior fellow at the Heritage Foundation and economic adviser to President-elect Donald Trump.

Welcome, Steve. Good to see you.

STEVE MOORE, SENOR FELLOW, THE HERITAGE FOUNDATON & TRUMP ECONOMIC ADVISOR:  Hi, Paul.

GIGOT: Some economists, particularly Keynesians, are attributing the increase in the stock market to the prospect of more deficit spending, bigger deficit. How do you see the rally?

MOORE: I think what happened was originally Wall Street and investors around the country were afraid of the kind of change that Donald Trump was going to bring, the kind of risk of anything that's new. I think when Wall Street and companies started looking at the real agenda of cutting taxes, pro America energy policy, getting rid of a lot of regulation, they said hey, this is going to be good for investment.

Incidentally, it's not only the reason, Paul, that the stock mark has risen. But I would make the case that the increase in interest rates, not significant, but the rise since election day are the result of the fact that there's going to be more demand for investment capital. When companies want to invest more, they go out and borrow, and that raises interest rates. It's one of the few times when you actually -- a rise in interest rates is a good thing. I think it's bullish.

GIGOT: They've been historically low anyway. Even in this rise, it's not likely to tank the economy.

What are the two big priorities here? What are the first priorities? I think everybody says tax reform right at the top of the list, maybe an exchange for infrastructure spending, and repealing and replacing the Affordable Care Act. Is that how you see it.

MOORE: Those two obviously are legislatively right out of the gate. Don't forget, I think Donald Trump has a good chance in literally his first day in office when he enters the Oval Office, he is going to sign executive orders to repeal a lot of Obama's executive orders, a lot of things you all have written about day after day on The Journal editorial page, things like the Clean Power Plant Bill, some of the labor regulations that have been passed under Obama.

I think Obama -- the Democrats are going to learn that, if you live by executive order, you die by them. Remember, Ronald Reagan's first act as president was to rescind by executive order all of the natural gas price controls. That led to a boom in the energy sector. Regulation is going to be a big factor.

Then you go to the tax and ObamaCare issues. I haven't worked too much on the ObamaCare issues, so I'll leave that to someone else. But I'll say on the tax bill --

GIGOT: Yeah, let's focus on that.

MOORE: -- I think we can pass something in the first 150 days. The potential is possibly -- this is being discussed, not certain -- that you do a kind of jobs bill right out of the gate, that has the business tax cuts, which is really the heart of the plan, getting that rate down to 15 percent. We think we can get that through the House in 30 days because it's so similar to what Paul Ryan wants to do. Then you take it over to the Senate.

As you said, maybe add infrastructure spending in that package to get some Democratic votes. Then I think you could get something with perhaps 65 votes in the Senate. You may not need the so-called reconciliation process.

GIGOT: Steve, I talked to Kevin Brady, chairman of House Ways and Means Committee. He said he doesn't want to split corporate tax reform from individual tax reform because he believes that you have to do the two together to make the kind of efficient allocation of capital, number one.  And, number two, politically, if you do corporate tax reform first, as you describe, you may never be able to cut individual rates.

MOORE: That's a good point. I met with the chairman as well. He made the same point to me. That's why this is being debated. Chairman Brady wants to go for the big bang, get everything done. I would love to see that happen. The individual rates, we bring that top individual rate down to 33 percent, eliminate deductions. The only thing I would say about that, Paul, and I've been an advocate of this for 30 years, it's tricky. It's thorny. You have to take on a lot of the special interest groups in Washington, the housing lobby, charitable groups, municipal people. And they are powerful special interest groups -

GIGOT: But, Steve --

MOORE: -- that will try to block it.

GIGOT: -- if you don't that in the first 100 or 150 days, you never do it.  You've got to use that political capital right out of the blocks, don't you agree?

MOORE: Definitely. Look, when I've talked to the Trump folks about this, they believe, and we believe, this has to get done right away. When you've got disarray -- in the Democratic Party, that's when you move quickly.

By the way, Barack Obama did that fairly effectively himself.

GIGOT: Yes.

MOORE: -- in his first 100. The only difference is that I believe the mistake that Barack Obama made that I think he will regret for the rest of his life is that he never reached really across the aisle to try to get Republicans on board. That means Republicans have no buy-in.

Donald Trump could in the first year of his office almost entirely repeal the entire legacy of Barack Obama's presidency when he talks about taxes and ObamaCare and so on.

GIGOT: All right, I take your point, certainly, and I agree with it on reaching out to Democrats. But here is the issue. They're going to ask for a price, and their price is going to be a fair amount of spending.  They're going to take some of that money from tax reform and push it into public works or other things. If he wants Senate votes to get to 60, he's going to have to agree with that. Here is the rub. You're going to have a very big deficit if you do that. What's your response to that?

MOORE: My response is our number-one priority from day one is get the economic growth rate up, Paul, from 1.5 percent to 4 percent. You can't make any progress on the deficit or the debt until you get that growth rate up. Jobs was the number-one issue for the American people. That's going to be our number one priority.

GIGOT: Thanks very much, Steve Moore, for being here.

MOORE: Thank you.

GIGOT: When we come back, President Obama's rule by regulation. He famously promised to use a pen and a phone to push his agenda through. As his presidency comes to an end, just how easy will it be for the Trump administration to dismantle that legacy?

(BEGIN VIDEO CLIP)

PRESIDENT BARACK OBAMA: I've got a pen and I've got a phone, and I can use that pen to sign executive orders.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: We are not just going to be waiting for legislation in order to make sure we're providing Americans the kind of help they need. I've got a ben and a phone, and I can use the pen to sign executive orders and take executive actions and administrative actions that move the ball forward.

(END VIDEO CLIP)

GIGOT: President Obama in 2014 famously promising to use a pen and a phone in his last two years in office to enact his agenda through executive orders and new regulations, something President-elect Donald Trump has vowed to reverse, promising to cancel, quote, "every unconstitutional executive action, memorandum, and order issued by President Obama." Just how easy will it be to dismantle his predecessor's policy legacy?

We're back with Dan Henninger, Mary Kissel and James Freeman. And Wall Street Journal editorial board member, Kate Bachelder O'Dell, also joins the panel.

Mary, if you don't put it in legislation, you don't need legislation to repeal it. The biggest boomerang in history?

KISSEL: Yeah. I think it could be. You reap what you sow. President Obama didn't want to deal with Congress, so he issued all forms of executive order, and his agencies went out and made up the law in some cases. Now I think President Trump has a great opportunity.

GIGOT: James, what's the magnitude here? Let's take the executive orders first. How many are we talking about?

FREEMAN: Hundreds. More than 200 executive orders, more than 200 executive memoranda, essentially the same thing. It's the pen and the phone, the president saying on his own policies that he wants. Those can all be reversed -

(CROSSTALK)

GIGOT: But some of these are routine, sort of making the government work.  They won't all be repealed.

FREEMAN: Right. But executive orders, and also administrative guidance.  What was new about this administration is how significant these policies were, how much they tried to do with the pen and the phone. This is why you have the opportunity, without having to go to Congress, even without having to fight about cost of tax cuts, to basically provide a stimulus to the economy on day one.

GIGOT: Then we have something, Kate, called the Midnight Regulatory Rush which this administration is pushing through, a lot of rules here, trying to, in the last couple months. They anticipated it would be President Clinton who would be there and would essentially sanctify all this. Now it looks like those are in jeopardy.

KATE BACHELDER O'DELL, EDITORIAL BOARD MEMBER: Yes. Friday's Federal Register broke a record for 2016 at more than 1400 pages.

(CROSSTTALK)

GIGOT: One day.

BACHELDER O'DELL: Indeed, exactly, one issue.

GIGOT: You can't say they're not getting their salaries done here, although none of it will end up being real.

BACHELDER O'DELL: Under the Congressional Review Act, Congress has 60 days to pass a vote repealing regulation.

GIGOT: Repealing regulations.

BACHELDER O'DELL: Yes. So, they will have plenty of time in January and that can reach back to May with how many days Congress is going to be in session.

GIGOT: This is 60 legislative days.

BACHELDER O'DELL: Legislative days.

GIGOT: So that makes it all the way back into the spring.

BACHELDER O'DELL: Indeed. And then -

GIGOT: They can bring the rules to the Hill, and with majority vote, go -- gone.

(LAUGHTER)

BACHELDER O'DELL: That's what we're going to see happening a lot. And what's coming out, especially of the EPA, towards the end of the year.

GIGOT: Mary, they did that with four rules, Congress did, this year, but the president didn't sign them.

KISSEL: Yeah.

GIGOT: President Trump will sign them.

KISSEL: That's right.

I also think it's important to emphasize that everything these federal agencies do has an influence on business. Take, for example, the Equal Employment Opportunity Commission, something we've written a lot about on the editorial page, just when they issue guidance, for instance, they want to dissuade companies from using criminal background checks. That wasn't a law, wasn't a regulation. That was a paper they put out that said we don't want you to do this anymore. What are companies supposed to do? They stopped using criminal background checks because they don't want to be investigated by the federal government, don't want to spend that money.

One would hope President Trump would put into place people at the top of these agencies that refocus the agencies on what their jobs are supposed to be.

Dan, we've been covering this for years. This is one of the areas of economic management, which is not as well understood. Everybody talked about taxes and spending, which is a little easier to grasp. But regulation is so widespread across the economy that when we talk to business folks, they come in and say this is the thing that's really holding us back. This could be an economic stimulus from President Trump without passing any laws.

HENNINGER: That's exactly right, Paul. We have to make clear that Donald Trump is not saying he's going to rescind or turn over this stuff out of spite of Barack Obama. It's being done because the Democrats don't understand if they put out a torrent of regulation like this, especially with the Environmental Protection Agency and the Clean Waters, the United States directive, or the Clean Power Act, it has no real effect on the economy. Indeed, there's a reason why the economy has been growing at less than 2 percent. This is a large part of it.

There's one more issue there, Paul. Also, there's the cultural side of this. Take the Title IX guidance that was put out by the Education Department. It was called guidance. It wasn't even a directive from the government. Every institution of higher learning in the United States set up panels to review sexual abuse charges, essentially reversing due process on campuses. Donald Trump can, with the wave of his hand, reverse those guidance orders put out, and transform higher education. That's the sort of thing I think that had people notice because there was so much coverage of the Title IV sexual abuse cases on campus.

GIGOT: They will breathe a sigh of relief on campus over that.

Still ahead, dismantling ObamaCare would be the biggest blow to the Obama legacy. Could Republicans' promise to repeal and replace actually become repeal and delay?

(COMMERCIAL BREAK)

GIGOT: Repeal and replace ObamaCare -- it's a top priority of President-elect Donald Trump and Republicans in Congress. But reports this week say a new strategy is gaining steam on Capitol Hill that would quickly repeal most of President Obama's Affordable Care Act but delay the effects for up to two years. The plan would allow Republicans to deliver on their promise to repeal the unpopular law in the next Congress while buying them time to come up with a replacement.

Scott Gottlieb is a physician and resident fellow at the American Enterprise Institute. He's also a frequent contributor to the Wall Street Journal editorial page.

Welcome, Scott. Good to see you.

DR. SCOTT GOTTLIEB, RESIDENT FELLOW, AMERICAN ENTERPRISE INSTITUTE & CONTRIBUTOR, WALL STREET JOUNRAL: Thank you.

GIGOT: So, what do you make of this emerging strategy that says -- the way I hear it, the Senate wants to go ahead and say let's repeal it first, give us a couple years to replace it. The House says let's wait a year to repeal and do it -- repeal and replace at the same time. What do you make of that?

GOTTLIEB: What I'm hearing is they're more likely to go with repealing the whole thing through reconciliation but leaving in place the parts they can't repeal with 50 votes. So, the insurance market reforms, such as the laws that say an insurer has to issue a plan to anyone who wants one and can't charge people more if they have pre-existing health conditions.

GIGOT: Right.

GOTTLIEB: Those will stay in place. But then what they would do is they'd allow the subsidies to continue to flow into the exchanges for about two years to give themselves time to put in a replacement plan.

Now, people who supported ObamaCare have been crying into their keyboards arguing if you do that, it'll destabilize the exchanges and the plans will pull out anyway.

GIGOT: Right. Right.

GOTTLIEB: That's simply not true. That's not true.

GIGOT: You think that's not true?

GOTTLIEB: Well --

GIGOT: Here is the problem -- the risk, I would say, is politically, if you repeal something and say, all right, two years from now we will replace it, you really are taking a big risk because what happens if something happens, the president becomes less popular, you change Congress in 2018 and then you're not able to replace with what you want.

GOTTLIEB: You can replace it in a piecemeal fashion. You don't have to replace it in one grand measure like they tried to do with ObamaCare. You can replace it with target or reforms to the markets.

The Medicaid HMOs, the backbones of the exchanges right now, are really signaling to Wall Street that they'll stay in the exchanges through 2018 if they repeal the bill but let the subsidies continue to flow.

GIGOT: OK.

GOTTLIEB: The blues will stay in as well.

(CROSSTALK)

GIGOT: Blue Cross and Blue Shield.

GOTTLIEB: Right. The Blue Cross, Blue Shield firms will stay. Those are most of the plans in the exchanges anyway.

Remember, there's a lot of things the incoming administration can do to provide regulatory relief to the plans to keep them in those markets. I don't think the exchanges fall apart. They start to narrow but don't fall apart. They've been narrowing anyway.

GIGOT: Right. They've been narrowing with fewer choices and higher prices. Is that going to get worse? Even if the exchanges don't fall apart, could you see fewer choices or plans in a lot of states and could you see higher prices? This would be on the Republican watch because they're now in charge.

GOTTLIEB: I think you will see some choices get out of the market. I think it's going to fall back to the Medicaid HMOs and the Blues. There are a lot of things you can do with regulation. You can change the essential health benefits, the mandates on what the plans have to provide.  You can provide more flexibility on the actuarial values they offer. You can have really defined enrollment periods. The Obama administration did a lot of things through regulation to try to goose the enrollment numbers at the expense of a functional market. You can unwind all that.

GIGOT: Do you like this idea of repeal and delay or would you like to do it at one time?

GOTTLIEB: I would like to get rid of it now, and come and replace it. And if it has to be multiple measures to replace it, then so be it. I don't think you can understand how bad ObamaCare was until you repeal it, to borrow a phrase from Nancy Pelosi.

GIGOT: You think, once you repeal it, is there a chance you'll see more choice emerge because people will say we know that's gone, in anticipation of what's coming, might be better?

GOTTLIEB: There's a chance if they reform the insurance market through regulation, start providing more flexibility back to insurance plans, you might see more choice enter the individual market outside the exchanges.  You might see that market start to grow.

I still think the people in the exchanges will be able to find coverage in the exchanges. They probably will face fewer choices because some plans will get out of the market, but enough will stay in that you'll have a choice of plans and have the subsidies to buy those plans.

Really people -- the only people really entering those markets right now are the people who qualify for the very rich subsidies, the cost sharing subsidies.

GIGOT: Let's deal with the issue of pre-existing conditions. That's if you have, say, breast cancer and an insurer wants to insure you, they can't deny you coverage based on that condition. A lot of the architects of ObamaCare are saying, you can't keep that provision and still -- and repeal ObamaCare because the insurers will work around that, still find a way to deny coverage. How can you solve that problem, which Donald Trump says he wants, a pre-existing condition, and give insurers the freedom to price their products so they can make some money?

GOTTLIEB: Well, assuming you do get rid of those provisions, those insurance market reforms in the long run -- and I'm not so sure you can, I'm not so sure you can get 60 votes in the Senate to repeal those provisions because they are popular -- you can provide the same incentive for people -- you can provide effectively the same guarantee for people by giving them an incentive to get into the insurance market and stay in the insurance market. You can say, if you get into the insurance market and don't drop your coverage, you can't be dropped from coverage and you can't be rerated if you get sick, much like people have protections if they move from employer to employer. They don't get dropped or rerated because they're moving from insurance pool to insurance pool. You can extend those same kinds of protections to people in the individual market. You use carrots instead of sticks to get them into the insurance market and keep them in the market.

Now, that said, some people will need to be subsidized to get in the market and some will need subsidies to stay in that market. That's a manageable challenge.

GIGOT: The key thing is for Republicans, you're going to have to subsidize, you'll have to still continue with some tax credits for people to subsidize their coverage. That's not going to be repealable.

GOTTLIEB: In the long run, if you come in with a replacement plan, certain people will need tax credits to help them buy coverage. People get tax subsidies in the employer market.

GIGOT: Sure, sure.

GOTTLIEB: They use pre-tax dollars to buy coverage. So, you provide some kind of tax assistance in the individual market as well.

GIGOT: All right. Good.

Thank you, Dr. Scott Gottlieb. Great to see you again.

GOTTLIEB: Thanks.

GIGOT: Still ahead, as Democrats deal with the fallout from their election loss, could Congresswoman Nancy Pelosi be the first victim of the struggle to reshape the party?

(BEGIN VIDEO CLIP)

REP. TIM RYAN, D-OHIO: It's time for a new direction, a new way of doing business, a new Democratic Party.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. CHUCK SCHUMER, D-N.Y.: There's a debate going on about whether we should be the party of the diverse Obama coalition or the blue collar American in the heartland. Some think we need to make a choice and spend all of our energy focused on one group of Americans or another. I believe that there does not have to be a division. In fact, there must not be a division.

(END VIDEO CLIP)

GIGOT: That was New York Senator Chuck Schumer Wednesday urging unity in the Democratic Party following their election defeat. Schumer was chosen to lead Senate Democrats Wednesday, replacing retiring minority leader, Harry Reid. His election a somewhat easier path than the one facing Nancy Pelosi, with Ohio Congressman Tim Ryan announcing Thursday he'll challenge her for the top Democratic post in the House.

We're back with Dan Henninger, Jason Riley, Mary Kissel and James Freeman.

Dan, you've known Chuck Schumer for a while. What kind of a politician is he?

DAN HENNINGER, COLUMNIST & DEPUTY EDITOR: He's a politician that loves to do politics, Paul.

(LAUGHTER)

And I will say, the one thing that's going to happen in Washington is that the long eight-year political desert under Barack Obama is about to end.  Obama's problem, in large part, was he just didn't do retail politics. He didn't like to mix it up with people. Donald Trump is going to be on that phone all day long I think with both Republicans and Democrats. And one of his main correspondents will be Chuck Schumer. Whether anything comes of that is a good question. Schumer is being pushed by his left. You saw Bernie Sanders in the back of the photograph and by Elizabeth Warren, and especially the Democratic caucus in the House, which is dominated by people on the left. The question is whether Donald Trump's intention to do things to grow the economy like cutting, say, corporate taxes, is going to get support on the Democratic side.

GIGOT: So that's the key, Jason, is that he's going to have the running room, Schumer, to negotiate with the president.

JASON RILEY, COLUMNIST & SENIOR FELLOW, MANHATTAN INSTITUTE: I agree.  There are deals to be had between Chuck Schumer and a Trump administration.

GIGOT: Tax reform --

RILEY: Tax reform, the carried interest issue. Chuck Schumer, Wall Street, he understands that issue. I think they can deal that.  Infrastructure spending. Chuck Schumer likes to spend money.

(LAUGHTER)

RILEY: Donald Trump may give him some spending money.

GIGOT: But how much freedom will he have inside his own caucus?

RILEY: Chuck Schumer?

GIGOT: Yes.

RILEY: That is the $100,000 question. There is a serious division. You have the Democratic leader of the Senate, from New York, right now the Democratic leader of the House, a coastal elite from California. What you see are challenges coming from people in the interior. Tim Ryan of Ohio, who said that he is interested in challenging Pelosi, comes from Ohio. Not just anywhere in Ohio, he's in charge of a district that includes a place like Youngstown, an industrial city that Obama won easily but was basically a draw this time around. He's saying our party needs to pay more attention to these working class white Americans that Trump flipped.

GIGOT: Mary?

MARY KISSEL, EDITORIAL BOARD MEMBER: I think Chuck Schumer has a good argument within the caucus because they have to look towards the next set of Senate elections which will be much more difficult for Democrats than Republicans. Democrats are going to have to defend some 25 seats here.

GIGOT: Ten of which are in states that Trump won.

KISSEL: Exactly. So, Chuck Schumer needs to give Democratic Senators something to run on, some achievement. He can do that by doing a deal with the Republicans.

GIGOT: What about this issue, James -- our colleague, Kim Strassel, wrote that Democrats seem to think that the way to react here to get white voters back is more income redistribution, more taxes, more spending. Is that the answer?

JAMES FREEMAN, ASSITANT EDITORIAL PAGE EDITOR: It's not the answer. Part of the problem is they're focused on white voters and thinking that this has been some statement on race in this election. You also saw Trump do better among blacks and Hispanics than Romney did. The problem is the economic one. The Obama plan on the economy failed on its own terms.  That's what they have to come to grips with.

GIGOT: Let me ask you about the point of identity politics. There are a lot of Democrats who think this policy of slicing and dicing the electorate by race, gender and age has been a mistake because it didn't allow you to focus on some of the larger themes that Donald Trump was able to focus on.

FREEMAN: Absolutely. This is a slow-growth economy. All the Trump message was, basically, making America great again, whether you thought it was already great or whatever. The point is we weren't delivering what basically people want in terms of rising incomes, new opportunities, new job creation. Until they decide they're going to start focusing on that, I think they'll have a problem. Just to underline the problem, in 2018, it's not just 10 seats, Democrats are running for re-election in Trump territory, five of them he won with 60 percent or more.

(CROSSTALK)

FREEMAN: He's got to move to the middle.

GIGOT: Schumer is going to get a lot of those folks and let them vote with Trump, and then he'll use the majority left wing of his party to still filibuster a lot of what Donald Trump wants.

Dan, let me talk about Nancy Pelosi. Jason raised it? Is it time for her to ride off into the San Francisco sunset?

(LAUGHTER)

HENNINGER: It is time for her to do that, Paul. She and her two deputies, Steny Hoyer and Jim Clyburn, are both over 70 years old. It's time to turn it over to the next generation. The question is whether it would be a generation of moderates or from the left. Most of the members of the caucus are left-wing Democrats.

But there’s one other issue here. Nancy Pelosi, since she became minority leader, has raised over $500 million for the Democrats.

GIGOT: Right.

HENNINGER: A half billion dollars. One of the parties to this debate will be those wealthy donors who, incidentally, Bernie Sanders is denouncing.  Nonetheless, I think those donors, like Tom Steier from Silicon Valley, whose issue is the environment, they're the ones. They're smart people.  They're successful in their own businesses. They've got to decide whether this party will do something to grow the economy or simply stick with these issues, like gender relationships and identity and that sort of thing.

GIGOT: All right.

HENNINGER: I think they're going to have a big role in deciding which way the party goes.

GIGOT: All right, Dan, thank you.

When we come back, Electoral College outrage. As Hillary Clinton's lead in the popular vote grows, so do calls to eliminate the system that sent Donald Trump to the White House.

(COMMERCIAL BREAK)

GIGOT: As Hillary Clinton's lead in the popular vote surpasses one million, calls are growing for some Democrats to abolish the system that sent Donald Trump to the White House. With California Senator Barbara Boxer and New York Congressman Charlie Rangel both introducing legislation to eliminate the Electoral College and decide future presidential elections by the outcome of the popular vote.

We're back with Dan Henninger, Jason Riley, James Freeman and Kate Bachelder O'Dell.

Kate, does it undermine the legitimacy of President-elect Trump that he lost the popular vote?

KATE BACHELDER O'DELL, EDITORIAL BOARD MEMBER: I would argue it adds to his legitimacy. Here is why. Precisely as we're hearing there's a new unique threat to Democratic institutions, the left has built a campaign to destroy something that is a great check on executive power because it forces a candidate to build a consensus that's broad, endurable and not a parochial majority.

GIGOT: So, if -- both candidates knew the winner would be whoever won 270 electoral votes. If it had been a campaign based on the popular vote, they would have campaigned differently, correct?

BACHELDER O'DELL: Right. If football were about getting the most field goals, it would have been played differently. Basically, Donald Trump would have camped out in Texas and Hillary Clinton would have tried to win more in California and New York.

GIGOT: Trump would have campaigned in parts of California, too, just to reduce the margin. No?

BACHELDER O'DELL: Absolutely. You would just have a different system with trade-offs, and I would argue you'd have a lot more tradeoffs.

GIGOT: What do you think, Jason, about this idea. Republicans have lost six of the last seven elections in the popular vote, but they've only lost four times.

(LAUGHTER)

RILEY: You're right. I think some people have a problem with that. But the founders did not want direct democracy. They were quite clear about that. They wanted people campaigning all over the country. They wanted all the states to have a say in who became the next president. That's why we have the system we have.

I think this legislation is fine --

(CROSSTALK)

GIGOT: Not going anywhere?

RILEY: Congress, you'd need 38 of 50 states to ratify it, to change it.

By the way, in 2012 Donald Trump tweeted, "The Electoral College is a disaster for our democracy."

(LAUGHTER)

GIGOT: I think he's changed his mind now.

RILEY: I think so, too.

(LAUGHTER)

GIGOT: But we'll consistent. We've always liked the Electoral College, James.

There are some people who say, look, the Electoral College actually is bad because it enhances the role of the large states, gives a state like California, with 55 electoral votes, more power than Wyoming and North Dakota, South Dakota, all these states which you can ignore?

FREEMAN: In a close election, obviously, they're all important. It didn't happen this time. You could have seen New Hampshire being decisive. You could have seen Nevada being important right at the end there.

Short-term, I think this is probably good for Republicans to the extent that Democrats waste their time saying it was the Electoral College --

(LAUGHTER)

-- and James Comey, fake news, racism, sexism. To the extent they don't look at the real problem, that's probably good. Long term, I think this is corrosive because what this will do --

GIGOT: What's corrosive? The --

(CROSSTALK)

FREEMAN: This attack on the Electoral College and the constitutional system, which has worked well for two centuries.

One thing this will do is make very partisan public school teachers start teaching their children about still another flaw in our Constitution. I think it is an irresponsible and long-term corrosive impact to blame the Electoral College. But, short term, to the extent Democrats ignore the real problems, probably a benefit for Republicans.

GIGOT: Republicans now, Dan, do they have an advantage in the Electoral College? Leading up, for the last eight years, we've heard Democrats have this blue wall, this structural advantage in the Electoral College.  Suddenly, it blew away in one election. I've always thought this idea of the so-called structural advantage of the Electoral College is false because if you actually get really close elections, you can win the Electoral College even if you lose the popular vote.

HENNINGER: Yeah. Think three states Paul, Pennsylvania, Wisconsin and Michigan. They were not supposed to be broken out of the blue wall.  Donald Trump figured out a way to bring them to the Republican side and it transformed the Electoral College. That is why she lost. It was just simple smart politics.

GIGOT: Thank you very much.

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

(COMMERCIAL BREAK)

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

Jason, start us off.

RILEY: Paul, this is a miss for the University of Virginia where students and faculty are outraged that the president of the university quoted Thomas Jefferson in a letter to students. Of course, Jefferson founded the University of Virginia. But of course, he was a slave owner, so they don't want him quoted in material or quoted by the president of the school.

GIGOT: Should we close down the university?

RILEY: The absurdity here, it's hard to tell whether - this is stupidity of hypocrisy. Apparently, students don't mind attending the school that was founded by a slave owner --

(LAUGHTER)

RILEY: -- don't mind working for one, so long as the man is never quoted.

(LAUGHTER)

GIGOT: All right.

Kate?

BACHELDER O'DELL: This is a hit for Nebraska Senator Ben Sasse who, this week, moonlighted as an Uber driver as a way to work alongside and meet some of his constituents. The best part is he did not promote the gig and the press only discovered it after a rider tweeted a photo with his five- star rating --

(LAUGHTER)

-- saying he was three minutes away from pick up. So, a hit for him. He donated the money to charity. Way to be a happy Warrior.

GIGOT: All right.

James?

FREEMAN: This is a hit to America's turkey farmers who have been so productive that this year's Thanksgiving dinner will cost less than last year. In fact, in inflation-adjusted terms, Mark Ferry, at the American Enterprise Institute, finds the turkey dinners are cheaper than they were 30 years ago. This is great because, even if I hurt myself next week trying to fry it, it least it won't cost a lot of money.

GIGOT: And how big a turkey at the Freeman household? I bet it's pretty big.

FREEMAN: Well, 15-pound fryer.

(LAUGHTER)

We might do another one in the oven.

(LAUGHTER)

GIGOT: All right.

Dan?

HENNINGER: Well, I'm going to give a miss to President Barack Obama, who went to Greece and Germany this past week. While in Germany, he announced the process of globalization needed what he called a course correction. It needed a course correction because the benefits aren't being spread broadly enough. You have to ask, where has he been the last eight years while the world was being globalized? He sounds like some guy who was sitting in a rocking chair at the White House watching the world pass by. He's the president of the United States. If the benefits aren't spread broadly enough, presumably he has something to do with it.

GIGOT: That's right. And he gave advice to Donald Trump not to be too soft of Vladimir Putin, yet it was President Obama who did the reset when he took office.

HENNIGER: That's right. Then he said he would help Angela Merkel carry the load, if he were still around. Well, he's responsible for a lot of the load she's carrying.

GIGOT: All right.

And remember, if you have your own hit or miss, be sure to tweet it to us, @JERonFNC.

That's it for this week's show. Thanks to my panel. Thanks to all of you for watching. I'm Paul Gigot. Hope to see you right here next week.

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