How will Trump shape the Supreme Court?; Big foreign policy challenges face new administration

This is a rush transcript from "Journal Editorial Report," November 26, 2016. This copy may not be in its final form and may be updated.

DAVID ASMAN, GUEST HOST: Welcome to the "Journal Editorial Report." I'm David Asman, in for Paul Gigot.

This week, we're looking ahead at the first days of the Trump presidency, the challenges facing his administration at home and abroad, and the policies that are likely to top his agenda.

We begin with the Supreme Court where the president-elect is set to make his mark almost immediately when he chooses the successor to late Justice Antonin Scalia.

Senate Minority Leader Chuck Schumer already threatening a fight, telling Fox's Chris Wallace Democrats will oppose any nominee that isn't, quote, "mainstream."


SEN. CHUCK SCHUMER, D-N.Y., SENATE MINORITY LEADER: I would hope, first and foremost, that President Trump nominates a mainstream nominee capable of getting bipartisan support. If he does, then we'll give it just a very, very thorough vetting, but we won't, ipso facto, say no. If it's out of the mainstream, yeah, we're going to fight that nominee tooth and nail.


ASMAN: Joining the panel this week, Wall Street Journal columnist and deputy editor, Dan Henninger; columnist, Bill McGurn; editorial board member, Mary Kissel; and "Best of the Web" columnist, James Taranto.

So, Dan, Trump's got a list of 21 potential nominees. I don't think anybody, any presidential candidate has ever put together a list like this.  Do any of these names, any of the 21 names, fit Schumer's definition of mainstream?

DAN HENNINGER, COLUMNIST & DEPUTY EDITOR: Well, David, I think we can make this simple. Would Chuck Schumer regard Justice Antonin Scalia as mainstream?

ASMAN: No, absolutely not.

HENNINGER: Well, let me tell you something, one of the things Donald Trump mentioned towards the end of this campaign that simply thrilled him was the fact that Antonin Scalia's widow, Maureen, plopped a "Trump for president" sign in her front yard in northern Virginia.


ASMAN: I don't think Schumer would like that.

HENNINGER: You know what it tells me is that I think Trump's nominee is going to be a clone of Antonin Scalia. And Chuck Schumer is going to have to come to grips with that. But he also has to come to grips with the fact that he has to defend a lot of Senate seats two years from now. In Chuck Schumer's world, defending his place in the Senate, the number of Democrats he has in the Senate, I think takes a precedence over the mainstream Supreme Court nominee.

ASMAN: Bill, defending his place in the spotlight, nobody loves the spotlight as much as Senator Charles Schumer does.


How far, if it becomes a political liability, is resistant to any nominee, how far is he going to take the fight?

BILL MCGURN, COLUMNIST: He has to make a lot of noise. The Supreme Court is the Democrat's preferred legislative branch for getting things done and shooting down things Republicans do. It's a big thing for their base as well as for the Republican base. And they're going to make a lot of noise.  Whether they actually vote the way they sound is another question. We have these seats coming up they have to defend. They don't have a majority.  Therein -- the Democrats are in the weakest position they've ever been. If they try to filibuster because we changed rules -- Republicans can change rules. Republicans have the Senate majority and they also have a -- Trump can claim a mandate. He released these names. As long as he uses one of the names on the list, he released those names beforehand, I mean, he's in a better position on the Supreme Court, than any Republican before.

ASMAN: Can he -- Mary, all the exit polls show the Supreme Court, the decisions made by the next president, played a big part in their decision to vote. It could be argued that had he not come out with the names, the public would not have given him the presidency.

MARY KISSEL, EDITORIAL BOARD MEMBER: That's true. There are a number of the base that voted for Trump because of the court. Take, for example, the religious wing of the party. They want the court to defend their religious freedom. Take constitutional conservatives, the Tea Party base, they voted for Trump in large part so the court can defend their freedoms.

I think Bill is right. Trump does have a mandate here because he released the names. And I think he should do it quickly. I think voters want action. They see Trump as an agent of change. I think he has a great opportunity here.

ASMAN: James, you focus in on what cases the Supreme Court will be looking at. Mary just named some. What are some of the key SCOTUS decisions that the next full court of nine justices will decide on?

JAMES TARANTO, "BEST OF THE WEB" COLUMNIST: There is one religious case involving a Missouri church that was applying for a state grant to renovate a playground. This a non-profit. The governor of Missouri said, no, we can't grant to churches under state law. So, the court will determine whether this is discriminatory or not.


ASMAN: Now, a lot of people will look at that and what does that have to do with anything, but it does have a lot to do with -


TARANTO: Well, the liberals on the court tend to be more hostile to religious claims, at least ones made by Christians and Jews. We had a case that was not decided in this past term involving Little Sisters of the Poor. The Obama administration wanted to force them to pay for contraception and abortion drugs or to sign a letter acknowledging that they were making other arrangements for these drugs. They said this is against our conscience. The Court punted on this, ordered the parties to enter settlement talks. I think with a fifth justice I think that would be settled.

ASMAN: And, Dan, you wonder how many of these cases will be null and void because there won't be any Obamacare any more.


I mean, some of the decisions that Trump makes in some areas of tearing up some of the executive orders and everything, as the president, might make null and void a lot of these Supreme Court decisions.

HENNINGER: Yeah, some of the cases involving, say, the Environmental Protection Agency, what Trump does there would be challenged in court. So, those kinds of cases, during the core of regulatory authority, would go back into the court system.

I want to make one more political point here, David. Donald Trump has promised to do a victory tour after Thanksgiving to all those states that voted for him. Can you imagine what it will be like if, after he nominates one of these justices and gets push pack from some of these moderate Senators, he goes out to Montana, Missouri, North Dakota and West Virginia and holds rallies on behalf of his nominee? Do you think any of those Senators want Donald Trump coming back to their state --

ASMAN: No way.

HENNINGER: -- to rile up the population?

ASMAN: No, not going to happen.

What about, Bill, the big issue that everybody is thinking about with the Supreme Court, which is abortion, so far with eight justice, they have been kind of avoiding the big case that would involve abortion. When they get nine justice -- undoubtedly, they will soon -- what happens to that issue?

MCGURN: We don't know. Abortion has been one of the most dishonestly decided cases in the nation starting with Roe. They had a chance --

ASMAN: Roe v Wade, that was a big decision.

MCGURN: They had a chance to change that in Planned Parenthood versus Casey and they didn't. My own preferred solution is I would like it to go back to the states, as Donald Trump intimated when he -- he talked about --

ASMAN: He pretty much said it a couple of times.

MCGURN: He talked about appointing pro-life justices. On pro-life, I want justices who are constitutional, who don't discover rights that aren't in the Constitution. I think that would be messy. Some states would ban abortion entirely, some would not, a lot would be in the middle. But I think that's the way we resolve our issues and avoid these national culture wars.

ASMAN: Very quickly, James.

TARANTO: The court decided a big abortion case in this past term. It was a very liberal decision with Justice Kennedy in the majority. So, that's not going to change until Trump gets another nomination.

ASMAN: Last word on this.

Coming up next, from the growing ISIS threat to the potential for a Russian reset -- yes, another one -- General Jack Keane taking us through the global challenges facing the Trump administration in the months ahead.


ASMAN: Turning now to the world stage where some big challenges face the Trump administration in its early days, including the deteriorating situation in Syria, Russia's growing influence in the Middle East, and the continuing threat from Islamic terrorism.

Retired four-star Army General Jack Keane is the chair of the Institute for the Study of War and a FOX News military analyst.

General, first of all, let's look at the big picture. What are the main challenges the new president faces?

GEN. JACK KEANE, FOX NEWS MILITARY ANALYST: Listen, the global security challenge is that President-elect Trump is facing, we haven't seen these challenges I don't believe since the end of World War II with the rise of the Soviet Union. We've got radical Islam -- ISIS is certainly a part of that, al Qaeda a part of that -- morphing into a global jihad, no strategy, no global alliance to deal with. We have three revisionist powers, Russia, Iran, China, seeking some form of regional domination and all having some success. Cyberespionage and cyberattack is exploding from our adversaries inside our country. We don't seem capable of stopping it.

What makes these challenges so serious, in my judgment, David -- because we've had challenges before -- is that we are failing so miserably at it.  And as a result of it, you know, our friends have lost faith in us. They don't trust us. They don't think we're reliable and our adversaries are down-right emboldened. What we need is strong leadership here.

ASMAN: You mentioned Islamic terrorism. That's a phrase President Obama wasn't willing to say. At least now we have a president that who isn't afraid to say it. That's an improvement. Isn't it?

KEANE: Is it ever. We not only say it. We have to define it so the American people understand it. We have to explain it. We have to inform and educate so the American people are conversant with what this belief system is. They don't have to read any of the theology and philosophy behind it but they should know what the speech is, how people dress that are a part of this, how people are acting, what their behavior is, so when they rise up in our communities that there are friends and family members and co-workers that can identify it as such and do something about it.

ASMAN: Now, the main focus of Islamic terrorism in a world is ISIS. And fighting ISIS, Donald Trump is going to be his number-one priority. How's the fight going? Are we winning or losing?

KEANE: Well, we're winning, because we're taking territory back, and that's a good thing, in Iraq, principally. We do not have an effective plan to take the territory back in Syria. The President-elect will have to deal with that.

But here's the other part of it. ISIS has expanded it to 35 countries. We have no strategy and no alliances formed to deal with the reality of that.  It doesn't mean the United States has to be involved in all of that, but we certainly could help organize and shape it and provide resources with shared intelligence. We're not doing anything of that.

ASMAN: Mosul is in Iraq. We're going after them. It seems like a tough slog. We're still fighting there. But you mentioned Syria. The Russians are working with the Assad government, which the United States said they want to get rid of -- or at least President Obama did. Trump says he can work with Russia to destroy ISIS. What do you think of that?

KEANE: I think in dealing with Russia we have to come at it two ways.  First of all, I think Putin took advantage of two presidents, President Bush and President Obama. and had different levels of success with them.  Certainly, this president will be tested by Putin, to be sure. This is a guy that uses aggression and force, in Georgia, in Crimea, in eastern Ukraine, and now in Syria, to achieve his geopolitical goals, put Russia back on a world stage. He is also very interested in eastern Europe and particularly the Baltics. So, he is on the move. He has to understand, clearly, that the United States is not going to tolerate this kind of aggressive and assertive behavior at the expense of our interests and the expense of our allies. We have got to lay that marker down clearly for him. Rebuilding the military is something Putin will pay attention to.  Because capabilities make a difference. If we have the intent to use the military only when needed, then that also becomes, then, therefore, a credible deterrent. I don't believe that has been the case with President Obama. I think Putin believes that, no matter what escalation Putin would do, that this country would not respond. I think he has been inside President Obama's head for some time.


KEANE: So Trump has a huge opportunity here to reset this thing to our favor, to our national interests.

ASMAN: But I'm just wondering, can we work with Russia in going after ISIS and against Russia with their expanding interests in eastern Europe?

KEANE: I have lots of concerns at working with Russia going against ISIS until we have agreements in terms of what Russia's behavior is going to be.  I think what Putin wants certainly is us to work with him against ISIS.  He's not in Syria because of ISIS. He is in Syria for one reason only, to prop up the Assad regime, which he has been able to do successfully. Now every single day, his bombers are bombing innocent people on the battlefield, along with the Syria bombers, to include his penetrating bombs have gone in and destroyed hospitals that are buried underneath the ground.  He has committed war crimes. It's part of the overall genocide campaign.  We can't saddle up next to a guy like that and go after ISIS with him as a partner until his behavior changes.

ASMAN: Interesting.

General Keane, great to talk to you as always. Happy Thanksgiving, sir.  Good to see you.

KEANE: Happy Thanksgiving to you, too. Take care.

ASMAN: When we come back, he's vowed to dismantle President Obama's nuclear agreement with Iran. But is the outgoing administration making it more difficult for President Trump to deliver on that promise?



PRESIDENT BARACK OBAMA: To unravel a deal that's working and preventing Iran from pursuing a nuclear weapon would be hard to explain, particularly if the alternative were to have them freed from any obligations and go ahead and pursue a weapon.


ASMAN: That was President Obama warning the incoming Trump administration against its plan to dismantle his nuclear agreement with Iran. The president reportedly trying to make a move more difficult for his successor with the Obama White House considering new measures in its final months to strengthen the deal, including lifting additional U.S. sanctions and providing licenses for more American businesses to enter the Iranian market.

We are back with Dan Henninger, Mary Kissel, Bill McGurn, and Wall Street Journalist columnist, Mary Anastasia O'Grady.

Bill, first of all, there's new news that the folks in Iran -- Khamenei is saying - the spiritual leader of Iran -- the current U.S. government has breached the nuclear deal in many occasions. Now it takes gall for the Iranians to say it is us that's breaching the deal.

MCGURN: Yeah, my view is, in two months, that will be John Kerry's line, once -


MCGURN: Look, the Iran deal is a great litmus test for people's views on the Middle East. If you think this is going to tame Iran and bring peace to the Middle East, you are on one side, and if you are on the other side, you see it as a catastrophe, both in the substance of just delaying the time for Iran to get the deal, and the process, which butchered our Constitution and so forth. It is a corrupt bargain, you know, the essence of that thing.

But Mary O'Grady, what President Obama is doing is kind of -- depending on which side are you on -- smart or devious. He's trying to lure American businesses, actually international businesses, as a whole, into Iran to make it more difficult for Trump to unpack. Will it work?

MARY ANATASIA O'GRADY, COLUMNIST: Well, he's certainly trying to do that.  And last week, they said the most important thing that should be done with the nuclear deal in the next few months is showing that it's working. And, number one, it's not working. But, number two, the most important thing for the Obama administration is to tie U.S. business to Iran in such a way that Donald Trump will be very unpopular if he tries to undo that. And that's what they're doing. That's why they've issued these licenses to Airbus and they're trying -- and then that's what the Iranians are complaining about, there is not enough investment coming in. So, that's where they will put their focus in the next two months.

ASMAN: But, Mary Kissel, I can't see a deterring Trump. Trump seems to have -- that's another one of his perceived mandates is tearing up this deal.

KISSEL: Yeah, I don't think it's a good idea to tear up the deal immediately. I think you can vigorously enforce the deal. And you can start to educate the American public about how Iran violated the deal under the Obama administration.

We should list this out. The American people should know they busted through caps on uranium. They have violated heavy water taps twice. Even though they were warned by the United Nations they were about to violate it the second time, they did it anyway. They violated -- we think -- this is new news -- advanced centrifuge R&D restrictions. They're taking Americans hostage. They're still funding terrorism across the Middle East. You have to start to lay the ground work here so that if they do go too far, then President Trump would have a mandate to take action. But, you know, that is the first step, start vigorously enforcing the deal.

ASMAN: Dan, I don't think you have to go than further in showing that video of the way they treated the Navy guys that they took hostage and they have been taking other people. Plus, they have been bragging about how they are going to do much more than they have been doing in terms of trying to disrupt our democratic systems.

HENNINGER: That's right. I don't think iron has too many friends inside the United States.

But we have to understand something about the nature of the deal, David.  Donald Trump says he would like to rip it up and start over. That's not really going to be possible. Because what we had before the deal was an international coalition that had imposed sanctions on the Iranian government. That is gone. That is the damage that Barack Obama did. You no longer have the participation of the United Kingdom, France, Germany, Russia and China. They are not going to rip up the deal. So, it would be unilateral on our part. I think Donald Trump is aware of that.

I would second Mary Kissel's point, that what we need -- barrack Obama has sugar coated these violations. Donald Trump should hit, quote, "scouring powder" on that deal. And report on it every single week because there have been violations. They have been testing ballistic missiles. That's the great danger that you can fasten a nuclear warhead onto one of those ballistic missiles --

ASMAN: Sure.

HENNINGER: -- then there is no turning back. We should expose them every single week.

ASMAN: Then we have a nuclear threat.

Mary, quickly.

KISSEL: Here's something else the Trump administration can do on day one, make secret documents public, provide it to the public, provide them to Congress, provide them the ransom documents, provide them the documents that were given to the joint commission. Let's see exactly what this deal was.

ASMAN: I'm just wondering, Bill, if Obama -- if this thing is ripped up, if we take Donald Trump at his word that that's what he is going to do, will President Obama have any legacy in the international sphere at all?

MCGURN: No, and I think he shouldn't. Look, there's different ways of going about eviscerating this deal. One is to say you are ripping it up.  Another is to put new sanctions in and kind of work all around it to undermine it. Let's be clear, all the violations Mary mentions that people know about --

ASMAN: Right.

MCGURN: -- the fixes the Obama administration put in, they're not fixing the enforcement. What they're doing is to try to create a lobbying group that has a vested interest in Iran.

ASMAN: Right.

MCGURN: They're trying to move the swamp to Tehran, all these lobbyists.


ASMAN: Drain the swamp, whether here or in Iran.

MCGURN: Put it in Iran, and then we'll support the deal.

ASMAN: Thanks, folks.

Still ahead, Republican leaders look ahead to a Trump presidency and a historic opportunity. Is the time finally right for a real genuine tax overhaul? We will ask Economist Art Laffer, from the Laffer Curve, coming next.



ASMAN: It's been called a golden opportunity. House Republican leaders looking ahead to a Trump presidency have already have begun to map out a very ambitious agenda, kind of a blue print for early next year. At the top of their to-do list is a complete overhaul of the U.S. tax system, all 75,000 pages. This is something the GOP has been advocating and planning for decades.

Art Laffer has been doing that. He is a former Reagan economic adviser and Trump supporter.

You know, Art, for the first time in decades, really, the stars are in alignment for real meaningful change. I'd just like to know, is there anything that can stop it now? We have the Republicans controlling the House, the Senate, of course, the White House. They've said this will be tops in their agenda? Is there anything Democrats can do to stop it?

ART LAFFER, ECONOMIST: I don't think so the governorship the state legislature, shortly, the Supreme Court and. shortly, the Ged. You know, this is the grand conjunction, this is the moment in time and space when we can really do something and the House has already with Brady and Ryan has already gone huge distances in preparing the groundwork and working out the details. You got Ted Cruz in the Senate who has worked out a lot as well.  This is our moment, and I think we will really shine.

ASMAN: I mentioned the 75,000 pages. We could show the piles of page after page. Most Americans, of course, don't have to deal with that much.  But they do have to deal with more than they think is necessary. Are average Americans going to see a simplification out of this process? Are they going to finally be able to get rid of their accountants and do taxes themselves?

LAFFER: Yeah. I think they have to be patient. First it takes time for tax bills to get through all the committees, get through all the stuff and then be signed. Then they implement it over time. So, it takes time in the first bill. But the real killer comes, the real bit, in '86, we did the final bill, with is the great one. We reduced the number of brackets from 14 to 2, 28 and 15 percent with the two tax rates. We got rid of the deductions, exemptions, exclusions, loopholes. It led to the greatest prosperity ever. That's the one. It's a long process. It's a marathon.  Please don't make it a sprint. It's not a sprint. But the House has done a great job in preparing the ground work for all of this.

ASMAN: It sounds like a lot of people want to make it a sprint, Art, including Paul Ryan and Donald Trump. This is one thing those guys agree on. Is it conceivable that by the time most Americans do tear taxes in April, 2017, they will have a much simpler, much lower tax rate to deal with?

LAFFER: I think it will be very difficult to do that for the year 2016.


ASMAN: 2017.

LAFFER: Yeah, but that's when they file your tax year 2016.


ASMAN: -- 2016, gotcha.

LAFFER: The tax year 2016. We have all of our tax laws already in place.  It's almost the end of the year. I don't know how they can do it retroactively. We did a little bit retroactive with Reagan. We had a 1.25 percent cut retroactively in 1981. That's very tough. It'll be even tough to do much in 2017 because this stuff takes time. Slow and steady wins the race. I'd much rather have it done carefully, deliberatively and purposefully, and have it work a thousand years than put it in, in a rush, and have it fall apart in two years.


ASMAN: You know the process. That's one reason -


ASMAN: -- you are a great asset in this.

The supply side effect of this, that's what the Laffer Curve is about.


ASMAN: The economists, most of the mainstream economists have looked at this tax plan and say it will cost a lot money because we're going to get - the government is going much fewer revenues, therefore, the deficit and debt will go up, as they cared about that over the past 10 years.

LAFFER: They never have.

ASMAN: But what happened, in the 1980s, with Ronald Reagan, tax rates, as you mentioned, came down tremendously. Didn't revenues actually double?  They got so much more revenue because there was so much more growth, right?

LAFFER: Yes, they did. And especially in the highest income brackets where we had the biggest tax cuts, those groups way increased their payment. I mean, if I remember correctly, the amount paid as a share of GDP in 1980 was about 1.5 percent of GDP by the top 1 percent. By 2006, it was 3.2 percent of GDP. And GDP had gone through the ceiling. So, it was really working on the highest income earners, which is, what you call mainstream, I call them kooks.


But where they say it doesn't work, of course, it works there, and it works there the most.

But don't forget. When you take over a company that's been run into the ground, David, it's lost its productive capacity, it's lost its good employees, it's lost its market share, you got to cut prices, which means tax rates, you got to do infrastructure rates, and then you got to get it going. So, it will take some deficit, some investment in the period, but don't believe for a moment this won't lead to 25 years of huge prosperity, just like Reagan's did.

ASMAN: A final question.

LAFFER: Yes, sir.

ASMAN: The irony of this, you have a president-elect who is a guy who is taking advantage of every single tax loophole there is --

LAFFER: Of course.

ASMAN: -- in his business. He brags about it. It proves I'm smart. I take advantage of it. It's legal.

LAFFER: That's exactly right.

ASMAN: He says he will get rid of the loopholes that helped him become a billionaire. There are a lot of businesses that depend on those loopholes that look forward to the loopholes. They will put up a lot of resistance.  Is there anything they would win on that worries you?

LAFFER: The one thing I know about Donald Trump on this is he know what is the loopholes are, he knows where they are, what to do, and he, therefore, knows how to get rid of them. He knows what types of distortions they cause, how many lawyers, accountants, deferred income specialists and favor grabbers you have to hire to take advantage of those. He knows how to make the system fair and competitive, with is just what we need, David. And he would have been a billionaire even under fair conditions. He just takes advantage of the loopholes, just like everyone else does, and should. I mean, the Supreme Court made it very clear, there's nothing wrong with using all of the advantages you can in the tax code to make money.

ASMAN: Gotcha.


LAFFER: We got to make it even.

ASMAN: We've got to leave it there.

LAFFER: Thank you, sir.

ASMAN: Art Laffer --

LAFFER: You're wonderful.

ASMAN: -- you are one optimistic man in the universe, I think, it's fair to say.

Good to see you, my friend.

Still ahead -

LAFFER: Thank you very much, David. Talk to you later.

ASMAN: -- President-elect Donald Trump promising this week to scrap the Trans-Pacific Partnership, the trade deal, on day one. But is China already taking advantage of the American trade retreat?



PRESIDENT-ELECT DONALD TRUMP: On trade, I am going to issue a notification of intent to withdraw from the Trans-Pacific Partnership, a potential disaster for our country. Instead, we will negotiate fair bilateral trade deals that bring jobs and industry back onto American shores.


ASMAN: That the president-elect in a video released by his transition team this week, promising to withdraw from the Trans-Pacific Partnership trade deal on his first day in office.

We continue now with our look ahead to the early days in the Trump administration with Dan Henninger, Mary Kissel, Bill McGurn and Mary Anastasia O'Grady.

Dan, dropping the regional trade deals like TPP, like NAFTA, and work on country-to-country deals, that sounds like what he wants to do. Does that make any sense?

HENNINGER: Well, country deals can be beneficial but not as beneficial as an overarching trade agreement. I think Donald Trump has to be a little careful in this area. The Chinese, within hours, really, of him announcing he was abandoning TPP. said they were reviving their own Trans-Asia trade pact with the countries over there. Now, bear in mind, the Asian countries, China, Japan, South Korea, Vietnam, Malaysia, it become very much free-trade oriented while Western Europe and the United States now looks to becoming more protectionist.  Trump is running the risk of allowing the sort of shifting of the economic gains from trade and the power accrues to that trade shifting to Asia and away from the United States and Western Europe. So, he's got to be very careful about that.

ASMAN: Mary Kissel, I believe the editor page has argued in the past against trade deals that focus too much on politically correct side deals, like dealing with climate change and labor laws that might stop businesses rather than encourage them. If he is just interested in stripping out these things as an impediment to growth, might that not be a good thing?

KISSEL: Yeah, that would be great. By the way, that's what President Obama did. He renegotiates three trade deals of ours --


ASMAN: To make them more --


KISSEL: -- add all this junk on there. Unfortunately, that didn't add to the benefits of those deals.

Look, there is a strategic imperative here, too, for Donald Trump. It's not just about the economic benefits. Countries like South Korea and Japan, Malaysia, the Philippines, the smaller nations like Singapore and Asia, they are naturally going to be dependent on China as a big economic power in the region. They don't want that. They've come to the Obama administration and begged them, please do this big deal, because we want to trade with you. Strategically, we want to grow and prosper with you, not the one-party state of the Communist Party of China. So, I think it's very important to remember here, it's not just about the growth. It's also about the strategic imperative in Asia.

ASMAN: Mary O'Grady, NAFTA -- of course, you cover Latin-America. NAFTA is Mexico and Canada. But then there are these deals that go further south, to the rest of Latin-America. China, as Mary Kissel says, is trying to make inroads in Latin-America right now, desperately. But they've left some really bad experiences, bad tastes in the mouth of a lot of Latin- American countries, in places like Nicaragua and everything, where they're trying to get in there. And these are deals they've gone bad, that the Chinese have either reneged on or changed the deals, as they are want to do. Don't Latin-Americans -- even though NAFTA may be gone because of Donald Trump, don't they want to make a deal just individually with the United States rather than having a deal with China?

O'GRADY: I think Mary is right that most of the Democratic countries would rather deal with the U.S. and they're begging for access to the U.S. markets. I think what Donald Trump is missing here when he talks about bilateral agreements is the importance of global supply chains. And you have -- the North American continent right now is one of the most competitive economies in the world, precisely because components are made in all three of the countries, and many things crossed the border more than once on their way to being a final product. So, if he starts doing bilaterals, you have a big complication in what they called rules of origin. So, you have a bilateral between the U.S. and country X, but that country can't source components from another country, or only up to a certain percentage. So, you take away the competitiveness of U.S. economy and the broader global economy when you start chopping it up in bilateral agreements.

ASMAN: Bill, one thing that's crossed the border are Ford cars and trucks.  Of course, Trump and Ford have gone head-to-head on this issue. At one point, it looked like Ford was going to being down and say, OK, we'll move this plant back to the U.S. from Mexico. Another point, they said we will not do it. How effective is his -- he talks about one country to one country, he is talking about one company at a time.

MCGURN: It all comes down to what does Donald Trump mean by fair? When I was in the White House, you were never allowed to say fair trade. You always had to say free and fair trade. It's a terrible word.  I think if we just reduce the impediments between you and me making a deal, that seems fair to me. The freer the trade it is, the fairer. So if people are going overseas because we have onerous regulations and too high taxes, that's one thing. If you want to improve that, that's a great thing to keep Ford here. But if we are going to discriminate against foreigners and so forth, that's a bad thing. It will make us more efficient. We don't know whether he means -- we still don't know if he means for fair trade that I'm going to negotiate a few things that I can pound my chest.  I will totally rewrite the bill or make it more free?

ASMAN: We'll find out soon enough.

MCGURN: Right.

ASMAN: Thank you very much.

When we come back, they're already reeling from their Election Day defeat, and now Democrats are facing another grim political reality, the 2018 Senate map. So could Republicans rack up a filibuster-proof majority just two years from now?


ASMAN: Well, Democrats already are reeling from their election losses.  Now they're bracing themselves for 2018 and the possibility that Republicans could rack up a filibuster-proof majority in the U.S. Senate.  While the GOP has just eight seats up in the next election, Democrats are defending a whopping 23. Adding to their worries, the fact that many of those seats are in states won by Donald Trump.

We are back with Dan Henninger, Mary Kissel, Bill McGurn and James Taranto.

Mary, how realistic is the chance of having a filibuster-proof Senate for the GOP?

KISSEL: I think we have to say two things up front. First, we have absolutely no idea what's going to happen in the next two years that could change voter's minds about the Republican Party. Secondly, Americans voters don't like unitary power. They don't like having typically one party controlling the White House and Congress.

That being said, that map you just put up, there are five states there that Trump -- that Democrats are defending, that Trump won by double digits.  There are also five swing states there that Democrats have to defend that were won by Donald Trump, states like Florida, Ohio, Pennsylvania, Wisconsin and Michigan. You know, it is going to force these Democratic Senators into some uncomfortable positions when they're asked to take votes on things like Obamacare reform or energy market liberalization.

ASMAN: Bill, the question is, where do Democrats go? They're looking at these maps, wondering how to prevent this from happening. Do they go left or right or to the middle?

MCGURN: Yeah, I think, look, in a lot of cases, some of the guys are kind of moderate, Manchin and even Joe Donnelly. in Indiana. They would like to go right. They've been pushed left by their own party. So, I don't think it is so hard for them to save themselves.

But I think the big point is Mary's. It depends what the Trump administration does. You know, a lot of the anger at the Republicans this year and the reason for Trump's nomination is that people said the Republicans have the House and Senate and they didn't do anything. I think -- I'm not a guy that believes in economy over everything, but I think unless there's some economic growth and people feel I see improvement in my life, I think my children have more opportunities, it could go the other way. It could make Republicans very unpopular.

ASMAN: But, Dan, I don't see much change. There's change around the edges, but in the Democratic Party, I mean, Pelosi looks like she is going to be the leader in the House, and you've got Schumer in the Senate. It looks like the old dinosaurs are holding on.

HENNINGER: They are holding on. But, again, we're talking about those seats that are up in 2018 and they're in places like Montana, Senator Joe Tester; Missouri, Claire McCaskill, Manchin and Joe Donnelly in Indiana.  Look, they're going to have to run in those moderate states Trump carried as either bipartisan politicians and people who can get things done. That means they have to point to legislation.

Remember, Barack Obama sucked all of the oxygen out of Congress. He didn't do business with them. So, these people would end up having to run on left-wing slogans, like income inequality or working men and women. That's not going to get them re-elected. I think they will align with mitch McConnell. But keep in mind that McConnell needs at least eight votes on legislation to break a Democratic filibuster. Some of these people could vote with the Republicans without having to bear the responsibility of these things getting passed.

ASMAN: James, let's take it out of the political equation for a second, look at what is happening on the streets of America right now. You have a lot of street fighters out there, a lot of protests, the same kind of people that President Obama brought into the White House, like Black Lives Matter and Al Sharpton, now out in the streets. If they don't get what they want from elections, if they don't get what Mary has aligned, if all of the stars are not in their alignment, will they go to the streets? Will we see more protests and street fighting in America?

TARANTO: I think we'll see a some of that. The left has a long history of street protests, going back to the '60s. The - what's fascinating about this election map is it is very different from the 2014 and 2016 election map, in that one of the underappreciated facts about this election we just had is, if you look at the Senate map, every single Senate race, all 34 of them, match the result of the presidential race in that state, assuming that the Republican wins the Louisiana run-off. It has never happened before. So, the Senate results are lining up in a partisan way with the presidential results. In 2014, there were only three deviations from the 2016 presidential results.  That's why it is so significant that 10 Trump states have Democratic Senators.

ASMAN: 20 seconds.

MCGURN: Yeah. Look, Bernie Sanders is even saying we need to rise above identity politics and put working families first.


ASMAN: The Socialist is saying this.

MCGURN: But the point is there will be a lot of splits in the Democratic Party about whether to go right, left, middle. It is not going to be uniform.

ASMAN: Not going to be easy for them.

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


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

Dan, first to you.

HENNINGER: Well, I'm going to give a hit to Bruce Springsteen's guitar, Steven van Zandt, who called out the cast of the Broadway musical "Hamilton" last week for dumping on Mike Pence while he was sitting there at the end of the play watching it. Little Steven, as he's called -- he's no Trump supporter -- said the theater should be used as a place to let art speak, not for actors to be blindsiding their audience. Kudos to Steven van Zandt for pushing back the politicization of every waking hour.

ASMAN: I like that.

Mary O'Grady?

O'GRADY: David, this is a hit for U.S. District Judge Amos Mizant III, of Sherman, Texas, who this week blocked President Obama's executive order that would have forced companies to pay overtime to employees making up to almost $48,000 a year. The judge ruled the president had overstepped and exceeded his authority.

ASMAN: Imagine that.

O'GRADY: And that this was the purview of Congress.

ASMAN: Wow. So, bureaucrats don't know as much about doing business as businesspeople, huh? That's the new way.

James, what do you have?

FREEMAN: David, I had a hit for New York Mayor Bill de Blasio, who gave a speech in which he threatened not to cooperate with the new administration in Washington on immigration enforcement and other matters. You probably wonder why it is a hit instead of a miss. Because as the "Wall Street Journal" reports, the city depends on Washington for about 10 percent of its $83 billion budget. That's $8.3 billion in federal spending Mayor de Blasio has promised to cut.



MCGURN: In the same way, I'm going to call this a hit, and it goes out to the "Yes, California" movement that wants to make California an independent nation. This week, they filed papers calling for a special election to get this on the ballot. If they're successful, it would require federal approval down the road. California would become its own nation. Now, David, some would call this a miss. I call it a hit because it is probably the one single action the state of my birth could take to guarantee the election of Republicans through the 21st century.

ASMAN: You were born in California, Bill McGurn?

MCGURN: No, I would say Camp Pendleton, so --

ASMAN: OK, that's separate.


ASMAN: That's a Marine country.

Good to see you, everybody.

If you have your own hit or miss, be sure to tweet it to us at JERonFNC.

Have a great weekend. That's it for this week's show.

Thanks to my panel and to all of you for watching. I'm David Asman. You can catch me weekdays on "After the Bell" on the Fox Business Network.  Paul is back next week. We hope to see you then. Have a great weekend.

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