What Trump's tax agenda means for the economy; How the White House is 'Twisting Title IX'

This is a rush transcript from "Journal Editorial Report," January 7, 2017. This copy may not be in its final form and may be updated.


VICE PRESIDENT-ELECT MIKE PENCE: The first order of business is to repeal and replace ObamaCare. ObamaCare has failed. And the American people have sent a decisive message to Washington, D.C., that they want ObamaCare to be repealed and replaced with health care reform that will lower the cost of health insurance without growing the size of government.


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

A showdown on Capitol Hill this week with President Obama and Vice President-elect Pence both paying a visit to congressional leaders as the battle lines harden over the fight to repeal and replace ObamaCare. Mr. Pence, as you just heard, told Republicans that it is the Trump administration's first order of business. While Mr. Obama told Democrats not to rescue the GOP by helping to pass a replacement. And as Republicans move ahead with the first part of their plan to repeal the controversial law, Democrats are gearing up for the fight and rolling out a brand-new slogan.


SEN. CHUCK SCHUMER, D-N.Y., SENATE MINORITY LEADER: The Republican plan to cut health care wouldn't make America great again. It would make America sick again.

REP. NANCY PELOSI, D-CALIF., HOUSE MINORITY LEADER: Make America sick again, is that what the Republicans want to do? I certainly hope not.


GIGOT: Joining the panel this week, Wall Street Journal columnist and deputy editor, Dan Henninger; Washington columnist, Kim Strassel; editorial board member, Joe Rago; and columnist, Bill McGurn.

So, Joe, you cover health care for us. Tell us what this strategy -- what's behind this strategy of repeal first and replace later?

JOE RAGO, EDITORIAL BOARD MEMBER: Two things. They move to really fast and they don't have 60 Senate votes for repeal. They need to use a budget measure known as Reconciliation that allows them to repeal it with straight majority.

GIGOT: 51 votes.


RAGO: They're hoping to do that by mid-February or so. Then, over the next couple of months, build a consensus around a replacement measure for the law.  

GIGOT: The repeal itself, and subsidies and other things, would be two years out, three years out, the actual end of the current subsidies and taxes?

RAGO: Right. You will have to have some kind of a phase-in, ramp-up for whatever the replacement is. But I think they really need to, in matter of months, not two or three years, come up with how they're going to put in -- substitute more market-oriented that increases affordability, and access to health coverage.

GIGOT: Democrats are already saying, look, you repeal this, what is going to happen to health insurance markets? Are people going to lose their coverage? Are insurers going to pull out even more than they already have out of the exchanges? The trends on ObamaCare have been terrible in terms of fewer choice, higher prices. But are Republicans taking ownership of this politically if they pass repeal?

RAGO: I mean, that is the big risk. The individual market right now is just so fragile. If they run into political problems and the process drags out into the fall into next year, what will happen to the health insurance markets, you will not have stability, you will not have predictability, and you could have a practical problem on your hands with people losing coverage. What we learned when the law rolled out in 2013, people do not like disruptions to their insurance.

GIGOT: Kim, why do you think the Republicans feel they need to repeal this right away? Do they feel need to honor a campaign promise and put up an early win despite the risks, which are very real, as Joe described?

KIM STRASSEL, WASHINGTON COLUMNIST: Absolutely. This has been their theme for six years in every election, elect us and we will repeal ObamaCare.  So, to come in and not make it a top priority would be political malpractice. I think they would risk losing the respect of a lot of voters that decided to trust them with Washington. So, they have to do this, and that has put them in a little bit of a rock and a hard place.

GIGOT: That rock and a hard place is Chuck Schumer on the Democratic side, Bill, who is not going to cooperate, I think, very much at all to help replace it. And maybe some people on the right, Ted Cruz, others -- Rand Paul this week said he doesn't want to help repeal ObamaCare because it might add to the budget deficit.


GIGOT: So you end up with a purist on the right saying, I'm never going to vote for tax subsidies, and Chuck Schumer, says, I will never help you Republicans at all, what happens if, six months, nine months, they can't have a replacement.

MCGURN: The Democrats are very happy in some ways they are going to get rid of ObamaCare. This was the one big answer --


GIGOT: You mean politically, politically.

MCGURN: This was one big answer, a new solution that was going to be revolutionary and change things for the better. Didn't work. They are happy. We had it for six years. They're happy to dump it off.

I'm more optimistic because there are a lot of pitfalls. We can go through them. But if they have momentum, get one part down on the replace part, it creates the conditions for further things down the road. So, I think that the main thing is that they need to show momentum. They have the repeal and show good things being done. Because our goal is not -- the problem is, ObamaCare is like closing down a nuclear plant. You know, there is all this waste.


You can't just turn it off and walk away. You have to be careful with that waste because it can kill you in the meantime. So, I think they just have to have the momentum.

GIGOT: The argument is that you hear, and I hear is, OK, we'll have this replacement deadline a couple years and that will concentrate the mind.  The political hanging will concentrate the mind. I know politicians. They think it will be the other politician that will being hung, not them.  Nobody wants to take a difficult vote. I think there will be trouble for Republicans to get this done.

DAN HENNINGER, COLUMNIST & DEPUTY EDITOR: It is going to be difficult, for sure. But, look, let's start with a fundamental here, which is that ObamaCare, the law, is not popular with the public. This isn't merely a political football. It is the health care system. While not everybody is involved with ObamaCare, those who are have had a terrible experience. I'm not sure the Democrats want to be seen out there as simply being totally obstructionist and not allowing this process to go forward. The Republicans need to be transparent. They need to show momentum. I'm a little hard put, though, to see where there's benefit for Democrats saying we won't participate in this.

GIGOT: Kim, Democrats cooperate, but Kim, you wrote a column this week saying that the Republicans should not repeat Obama's mistake, being totally partisan, they should reach out to Democrats, but is there any prospect they will get some help?

STRASSEL: It is if they do this piecemeal. That is what you see Republicans increasingly coalescing around. Rather than one great big replace measure, they will take a piece here, a piece there, issues that then appeal to specific Democrats and those that are up for re-election in two-years-time, and put a lot of pressure on them in their home states.  And try to turn this around on them as well, say, the only people who are, in fact, making America sick again are those of you who are helping us to fix the problem. So, this is going to be their strategy. I think they think if they attack this on a little bit more of a piece-by-piece basis, they have a shot.

GIGOT: They can make progress.

Thanks, Kim.

Still ahead, as the 115th Congress is sworn in, all eyes are on the Republican majority. After ObamaCare's repeal, we'll tell you what else is on the to-do list for the GOP.



REP. PAUL RYAN, R-WIS., SPEAKER OF THE HOUSE: And to the majority, especially to our returning members, I want to say this, this is a once-in- a-lifetime opportunity. The people have given us unified government. And it wasn't because they were feeling generous. It was because they want results.


GIGOT: That was Paul Ryan addressing his fellow Republicans Tuesday after he was officially sworn in as House speaker, with the GOP in control of the presidency and both houses of Congress for the first time in a decade.

We're back with a look at what they can do and what they must do in the first year.

So, Dan, let's step back a year from now, if we're looking back at that first year of Congress, what would a successful year look like? What would they have done?

HENNINGER: I think the first thing we should say, these Republicans, if you look at the to-do list, may have bitten off more than any Congress can possibly chew in a year. Certainly, they have to get the Supreme Court replacement for Antonin Scalia confirmed.


HENNINGER: That's the top of the list.

Secondly, I think they should have a tax reform bill done by the end of the year, and perhaps some financial reform.

GIGOT: Dodd-Frank, regulatory?

HENNINGER: Dodd-Frank. Look, ObamaCare was a big issue in the election.  The economy was bigger. The Republicans and President Trump have got to get the economy restarted. That means doing economic reform, getting the government off the economy's back. How they will do that simultaneously with the sort of ObamaCare process, repeal and replace that we were just discussing, that's going to be difficult.

GIGOT: Supreme Court, tax reform, regulatory relief. What else do you want to see, Bill?

MCGURN: I think regulatory relief is part of a broader reform of how the government does business. In the Obama years, we worked through the courts and federal agencies. What I am hoping is the appointment of Carl Icahn means there will be a unified approach across all agencies.

GIGOT: He's an outside advisor, the Wall Street investor.

MCGURN: Right. That is really what a lot of businesses complain about, this regulatory overreach and so forth. And the process has been corrupted as well, without the proper hearings and the time and so forth. So, I'm -- I have a lot of hope. I think, as a businessman, Donald Trump understands the problems of the regulatory burden. He's probably dealt with them personally.

GIGOT: Anything else on the list, Joe, that you think they need to get done? And what do you think they will get done? Are you optimistic as these two guys?

RAGO: I think they might end up overloading their bandwidth. I think they have to do those big things. But you heard Paul Ryan say the people elected us to get results, and they have to keep that goal in mind with every -- every bill they pass. They have got to get growth from 2 percent to 3 to 4 percent in order to get wages rising. That is what they will be held accountable for.

GIGOT: Kim, I want to read a Donald Trump tweet this week about a big ethics flap on Capitol Hill where Congress, Republicans tried to change a rule to modify an outside ethics watchdog. Trump weighed in with this: "With all that Congress has to work on, do they really have to make the weakening of the independent ethics watchdog, as unfair as it may be, their number-one act and priority? Focus on tax reform, health care, and so many other things of far greater importance."

So, thanks a lot, Mr. Trump.


You know, weighing in like Nancy Pelosi against the Republicans. And the Republicans stampeded and they caved and they changed their mind. Will that happen to Republicans every time? They will scatter like wildebeest every time Donald Trump gives a tweet?

STRASSEL: Look, I think one of the reasons they scattered is he actually was, in fact, making a pretty good point here, because the Congressional Ethics Office is a problem. But they ended up putting up a bill, they had not laid the groundwork for it. It looked bad, the press said that Democrats were able to redefine it for them. This was the not moment they should have been doing it. They just got elected. You don't run and immediately say we're going to tackle a priority that they hadn't even talked about really publicly before. So, he had a point, and they scattered.

But this is --- you make a good point, is that he has got a lot of power via 140 characters on Twitter. And I think, at times, he may use that to impose some discipline. But it could also end up spreading a lot of disarray within the Republican caucus, too.

GIGOT: Yeah. I think this is leadership issue. The leadership said, don't do this. The rank-and-file overruled them, they did it, and then they reversed themselves. They should have said, if you don't want to do this, don't do it.

HENNINGER: Yeah. It makes it clear that politicians on Capitol Hill are perfectly capable of running off the rails.

But I want to make a point in defense of Donald Trump's operating method here, the tweets and so forth. Look, he's come to Washington to change Washington. Washington doesn't move. The political process is extremely difficult. They would rather do nothing. Trump is like the proverbial taking a two-by-four to the side of the head of a donkey. That is what his job will be. He will have to do that to shake them up to get them to move.

GIGOT: OK. Now, what about paying for the wall, Bill? That story came out later in the week, there is a wall on the Mexican border. He is saying, well, we'll get Congress to pay for it.

MCGURN: Right, and be reimbursed later.

GIGOT: Not the Mexicans after all.

MCGURN: Well, he is saying the Mexicans will pay later.

GIGOT: Sure.

MCGURN: Look, we have always been dubious about this. If you're going to build the wall, it really should come through the legislative process. Let Congress do it.

GIGOT: And it is an American wall.

MCGURN: But he may pay the price.

Look, I think we should look at priorities from the opposite point of view.  What is the worst thing that can happen to Donald Trump and his presidency, except a year from now, the working people that put him in, my life hasn't improved, I don't see job prospects, I don't see this. It's kind of this side of Joe's argument, economic growth. They really need to do things and things that will get the economy moving. The stock market seems to be reacting pretty well to his things, but it has to go down to ordinary people.

GIGOT: Thank you, Bill.

When we come back, Republican leaders counting down to the Trump presidency and gearing up for an historic opportunity. Is the time for a tax overhaul finally here? We'll ask economist Art Laffer next.



PENCE: We're going to be working with the Congress over the course of the first several months to construct the kind of tax reform for businesses and individuals that will unleash the bound-up energy in the American economy.


GIGOT: Vice President-elect Mike Pence this week putting tax reform at the top of the GOP's ambitious agenda, promising to move ahead on an overhaul in the Trump administration's first month. It is something Republicans in Congress have been advocates and planning for years.

Economist Art Laffer is chairman of Laffer Associates and was an economic advisor to President Ronald Reagan. He joins me from Nashville.

Arthur, great to see you again.

ART LAFER, ECONOMIST & CHAIRMAN, LAFFER ASSOCIATES: Good to see you, Paul.  Thank you. It's fun.

GIGOT: OK. So, the stock market rally since election day has been big.  What are investors looking for, anticipating?

LAFFER: I think they're anticipating tax rate reform. I think they're anticipating a lower corporate tax, for sure. When you discount those profits coming forward, it leads to a fairly attractive stock market. I think this stock market reflects their optimism about the future.

GIGOT: Should we be concerned there is a stall in the rally last three or four weeks?

LAFFER: Not really. We had a similar situation when Reagan came into office, and the market then went way down, as you may know. In August of 1982, the market hit its trough. It was down from Reagan coming into office to August of 1982, and then, boom, it you had the biggest boom of all time.

GIGOT: Is corporate tax reform, and tax reform more broadly, is that, for you, the centerpiece of this growth agenda? Is that one thing they have to get done to ensure growth?

LAFFER: He really needs tax reform, you do, but ObamaCare is serious regulations are serious. I hope he symbolically gets rid of the death tax.  That would be a shot across the bow we'll have a major change in policy going forward. The death tax is just disgusting. You collect no money and put barriers everywhere. But the corporate tax down to 15 percent, Paul, will go a long way bringing back prosperity.

GIGOT: Trump's tax rate is 20 percent, though -- excuse me, the Republican rate is 20 percent. Trump's is 15. If they do 20 percent, can you live with that?

LAFFER: Of course.


Of course, I can. It is such a low bar.


Let me say, Paul, this administration has such a low bar, it would be an act of fearless aggression if they could worsen the economy. You just can't do that.

And not only is it a low bar for the economy, just like we had after Jimmy Carter, but they don't have any chance of losing Congress in two years, in 2018, because the tilt is way against the Democrats. So, they have four years to get this economy going. And that is the single and only thing they need to do. All these optics and all this other stuff is just nonsense. If they get the economy growing, they will win re-election in a landslide in 2020. If they don't, they won't. That's it.

GIGOT: That really does focus on tax reform.

You've been a free trader all your life, Art, I know.


GIGOT: You view it as one of the pillars of an economic growth country and an economic growth strategy. So, what do you make of this plank of the Republican House tax bill, which is the first one that will move, called Border Adjustability, which means you levy a 20 percent corporate tax rate, if that is the final rate that turns out to be, on imports but you don't levy that tax on exports? A lot --


LAFFER: Rebate it. Rebate it to exports.

GIGOT: A lot of people, retailers say it will raise prices for consumers.  It is protectionist. How do you respond to that?

LAFFER: The truth of the matter is a border tax adjustment is a nothing policy. What you're doing is a tax on imports is the same thing as tax on exports. That is Lerner's Symmetry Theorem. So, if you have a tax on exports and a subsidy on exports of the equal sides, they offset each other. This is way of pandering to people who want protectionism without having any protectionism. A border tax adjustment is not a problem, but a tariff as a stand-alone is very serious problem.

GIGOT: But the border adjustment is the first order of business. Until exchange rates adjust, it will raise prices for retailers who import their goods, Walmart and others, will it not?

LAFFER: It could. It could. You will have an adjustment globally to the new border tax adjustment. But that is exactly what they do with the VAT in Europe. So, it is a very common practice to be done. I hope it just buys off the protection its and gets them out of the way so we can focus on good things like tax reform and like freer trade.

GIGOT: Look, on the trade side, you've got a lineup of people --

LAFFER: I know.

GIGOT: -- you know, Peter Navarro in the White House, a new office of trade that we haven't had before. Bob Lighthizer, a steel protectionist lawyer and trade representatives lawyer. Wilbur Ross, another steel owner, who is at the Commerce Department. That is a quite a lineup, and a very different line up of trade people you saw in the Reagan administration or, frankly, in any administration in a long time. How much does it worry you?

LAFFER: It does worry me. It is one economic area that worries me a lot, Paul. This is the one economic area that bothers me. But in all honesty, these bills have to go through Congress. They have to go through the House and Senate and through the committees. And there will be a lot of moderation there.

And the one thing that is really is true, the trade agreements that have been done are really one-sided and they really are bad. For example, in Japan, the non-tariff barriers, it would cost you about $50,000 to retrofit a U.S. car to be able to be sold in Japan. That is protectionism in the extreme. You can see what it is doing to Japan. Their economy is really the worst ever.

GIGOT: Except we don't have a trade deal with Japan, Art. The whole point --

LAFFER: That's the point.

GIGOT: -- of the TPP was to try to get one to reduce those barriers in Japan.

LAFFER: But they aren't.

GIGOT: And Trump doesn't want to pass that.

LAFFER: But it doesn't do that. It ignores, it excludes all the non- tariff barriers and it excludes currency manipulation. You know very well that Japan devalued the yen to explicitly improve their trade balance, which is a silly idea to begin with and hurts Japan. But that's why they did it. And yet, currency manipulation has been excluded from these deals.  What I would like to see is one that includes China and all these countries and do a real trade one, like Kennedy round tariff negotiation where we dropped all tariffs by 35 percent, or something really major, rather than these awful little bills that have all these exclusions, deduct all this stuff that makes no sense to me.

GIGOT: Let's look ahead a little bit, Art. The Dow now is about a little under 20,000. Where do you see it going at end of the year? Do we see 22, 23, 25?

LAFFER: This year, 2017, I think we'll be very happy if it is just up at all for the year.

GIGOT: Really?

LAFFER: I mean, the first -- well, yeah. If you pass a tax bill, it won't really take effect, Paul, until January 1st, 2018.


LAFFER: That is when rates -- also, if you know they have tax cuts next year, what do you do this year? You defer income, your employment for a year. That's exactly what happened to us and Reagan. We passed a great tax bill that started on January 1st, 1983.

GIGOT: Right.

LAFFER: And that caused the '81-'82 deep recession. So, we'll have some of those delay effects happening here. I think the first year is just to get their feet on the ground, get bills in place. Then I think by 2018, '19, '20, you will see this economy skyrocket. Once it starts, you can't stop it. They will all join on board and it will be a race for the exit.  It will be fun.

GIGOT: Thank you, Arthur, for being here. Good to see you.

LAFFER: Thank you, Paul.

GIGOT: Still ahead, so just how will Democrats respond to Donald Trump and his agenda? We'll get our first glimpse next week as the president-elect's picks for some top cabinet posts face Senate confirmation hearings.


GIGOT: With confirmation hearings set to begin next week for President-elect Donald Trump's cabinet nominees, Senate Democrats are gearing up for a protracted fight, reportedly, planning to target eight of his choices in a move that would stretch their confirmation votes in March and up-end Republican hopes of confirming most of Trump's picks on Inauguration Day.

We're back with Dan Henninger, Kim Strassel, Joe Rago and Bill McGurn.

So, Kim, Chuck Schumer, the new Senate Democratic leader, taking the place of Harry Reid, gave his inaugural speech this week. What was the main takeaway from your part?

KIM STRASSEL, WASHINGTON COLUMNIST: Fight, fight, fight, obstruct, obstruct, obstruct. There was all this enthusiasm that Chuck Schumer might be more of a wheeler-dealer than Harry Reid but, coming out of the gate here, it appears that Democrats are going to try to take down a bunch of these nominees, if they possibly can. They're at least going to drag this process out as long as they can, try to drag some of these people through the mud and in the hopes of at least getting one or two scalped in the end.

GIGOT: Yeah. Joe, I heard Schumer say we will cooperate on trade maybe, infrastructure maybe, as long as it's public spending, not any private tax credits, and closing the corporate -- the carried interest loophole, which is a minor part of tax reform. I didn't hear a lot of willingness to cooperate on other things.

JOE RAGO, EDITORIAL BOARD MEMBER: No. What I heard was Schumer saying, as long as Donald Trump governs like a Democratic, we will be happy to cooperate with him. The big question is whether that is going to last over time. Trump is going to do things like on infrastructure and trade that -- a lot of Democrats are probably going to support. Are they going to really obstruct him on everything? I don't know.

DAN HENNINGER, COLUMNIST & DEPUTY EDITOR: I can see an argument, though, for it, Paul. Look, Donald Trump is president because he breached the Democrat's blue wall of the Electoral College, Pennsylvania, Michigan, Wisconsin, brought those voters to the Republican camp, mainly for economic reasons. If he obstructs, if he makes it difficult for them to, say, pass a tax bill or get the economy going again, the general Republic is not going to be aware of that kind of obstruction.

GIGOT: No, not in the least.

HENNINGER: And they'll simply blame Donald Trump.

GIGOT: Sure.

HENNINGER: He's the president. He owns the economy.

GIGOT: He said he would get things done and, somehow, it's just the same -


HENNINGER: He's not happening.

GIGOT: That's the advantage that Schumer has, Bill. He's got 48 Senators.  A lot -- 10 of them, I think, are up in 2010, who are red --


GIGOT: 2018, the states that Trump carried. But all he needs is 41 Democrats to have a filibuster and block -- and block --

MCGURN: My sense, though, is Chuck Schumer's bark is a lot worse than his fight. I think Harry Reid was a tougher guy. And the advantaged for some of these others guys, I am not sure will be the same. The problem he has at the national level is the same problem that the local Democratic Party has in some of these dysfunctional big cities. They have driven out a lot of the saner people in the middle, so the people that are left get hardened into policies. If he has Keith Ellison as head of DNC --

GIGOT: The Democratic National Committee.

MCGURN: national committee -- he's going to have a lot of problems.


GIGOT: He's endorsed Ellison.

MCGURN: Right.

GIGOT: Schumer has.

MCGURN: So I think he's going to have a lot of problems within the party.

And let me say, it's not just Chuck Schumer. California hired Eric Holder to represent them in fights they're anticipating. Eric Holder was impeached and didn't exactly have a great record --


GIGOT: Democrats for federalism.


MCGURN: I am not sure this is going to -- this obstruction thing is going to play well. they may get few victories but I am not sure it's going to help their party.

GIGOT: Kim, let me read the list of the eight cabinet nominees who are going to be challenged: Jeff Sessions; Betsy DeVos for Education; Andy Puzder, Labor; Rex Tillerson, State Department; Mick Mulvany at OMB, the budget office; Tom Price, HHS; Steve Mnuchin, Treasury; and Mr. Pruitt of Oklahoma at EPA.

Any of those in particular you think could be in trouble?

STRASSEL: I mean, I don't know if one or the other will be in trouble.  This is why they are demanding all of these particular hearings and questionnaires because they're looking for something that they might be able to pin on at least one of them, and then they will surround that particular one and try to bring that one down. They want to claim at least one of these nominees.

But, I mean, again, this -- what the Republicans have going for them -- Bill makes a good point -- is, in their local states, some Senators that are up for election in 2018, five of them, by the way, in states where Trump absolutely stumped Hillary Clinton, they are going to be nervous about being portrayed as people who are standing in the way of change, so you've already got guys like West Virginia Senator Joe Manchin coming out and approving some Trump nominees, publicly, and I think this is what the Republicans are going to hope for.

GIGOT: All right, it's a contrast with 2009 when Republicans really didn't do much at all to stop Democratic nominees, even Tim Geithner, who had not paid all of his taxes.

So, still ahead, another battle brewing on Capitol Hill as President-elect Trump narrows his list of potential Supreme Court nominees, and Democrats threaten to hold open the seat once held by Antonin Scalia.


SEN. MITCH MCCONNELL, R-KY., SENATOR MAJORITY LEADER: Apparently, there is, yet, a new standard now, which is to not confirm a Supreme Court nominee at all.




SCHUMER: Let's see who they nominate. If they're in the mainstream, we will give them a very careful look. If they are out of the mainstream, we will oppose them tooth and nail.


GIGOT: Senate Minority Leader Chuck Schumer this week previewing what is likely to be a bitter fight over who will replace the late Justice Antonin Scalia on the Supreme Court and promising to block any Trump pick who Democrats consider out of the mainstream. Schumer's comments come amid reports the president-elect has narrowed his list of potential nominees to about eight, down from more than 20 he had identified during the presidential campaign.

Wall Street Journal editorial board member, Colin Levy, joins us with more.

Colin, despite the warning, do you think president-elect is going to nominate somebody from his campaign list?  

COLIN LEVY, EDITORIAL BOARD MEMBER: Yeah, I think he will. He has a really good list there. There's a lot of strong conservatives. I think those were well supported during the campaign. I think they really are very interesting, to the base. Some of the great names out there, you know, Bill Pryor, Diane Sykes on the 7th circuit.

GIGOT: Right.

LEVY: Those are often discussed as two leader candidates. But, as we can discuss, there are also some other ones out there that may be personally interesting to Trump.

GIGOT: Will anybody -- I mean, Schumer defines mainstream his own way. Is everybody on that list out of the mainstream by Chuck Schumer's definition?

LEVY: By Chuck Schumer's definition, no question, anyone nominated by a Republican president is out of mainstream, right? So, either way, this is going to be an epic fight, Paul, there is no question about that.

GIGOT: Bill Pryor, a federal judge for a longtime, I think he's a favorite for a lot of people because he has real long track record as an appellate judge and he's a solid conservative. There's no doubt what you're getting.  He's not going to be David Souter. May not be Anthony Kennedy. And Republicans have been burned before so I think Pryor is maybe the favorite.  What do you think?

LEVY: Yeah. I think Pryor is the leading contender for the reasons you mentioned. They know this is going to be a big fight. They're going to have a really big fight. They might as well get someone they are sure is going to fill the shoes of Scalia.

I think, though, we should not discount Diane Sykes because she is also a very, very strong conservative, has a long track record, has great opinions on the 7th circuit on the First Amendment. She wrote the opinion in Wisconsin's right to life, you know, a very strong First Amendment opinion.

GIGOT: Right.

LEVY: She also has very good Second Amendment decisions, upholding Heller, upholding the constitutionality of firing ranges. So, she is a real favorite, too.

GIGOT: There are some other very, very solid circuit court judges. And there's Joan Larson, on the Michigan Supreme Court. She's something of a wild card because she's only been on that Supreme Court for about a year.  She did clerk for Justice Scalia, but her judicial track record isn't as well-known.


GIGOT: She's also younger, only 48.

LEVY: That's right, for sure. And she strikes me as someone who would be great second-round pick if another opening comes up. I would be surprised if she comes up this time. Her track record isn't that long. There's also Tom Hardeman, out of Pennsylvania, a guy sort of a working- class guy, someone who might just appeal to Trump on gut level. Neil Gorsuch (ph) is also a guy very well-liked by conservatives because he has a very strong writing style and he is just considered to be sort of a high-wattage, super-smart jurist.


LEVY: So he's someone that also might be in the mix.

GIGOT: Kim, what about this idea that this seat is stolen? Democrats are saying, look, the Republicans stole the set because they never gave a vote to Merrick Garland, President Obama nominee, since Scalia died in February.  Is this going to -- this is going to raise the temperature on the Democratic opposition, isn't it?

STRASSEL: It is. I mean, this is going to be their mantra all the way through, that, and justification for everything that they use to oppose the Republican nominee. It will partly be the ideology, as Chuck Schumer said, out of mainstream, but it will partly be, hey, you never had the right to fill this seat because you took it from us.

Now, again, whether or not that washes, whether or not the pressure on some of these red-state Democrats grows to not obstruct what is, by any measure.  Look, too -- this is important, Paul -- this is a seat that was already held by a very conservative jurist.

GIGOT: Right.

STRASSEL: And Republicans will make that point, that they are simply replacing one and it's not changing the balance of the court. So, some Democrats might be wary of opposing on that.

GIGOT: Will Mitch McConnell, Dan, have to break a filibuster by Democrats for the first time in history for a Supreme Court nominee?

HENNINGER: If the Democrats try to filibuster, say, Bill Pryor or Diane Sykes, the filibuster is gone. There is just no way he can allow that to happen.

GIGOT: Will Republicans have the votes for that? There are some senior Republicans, John McCain --


HENNINGER: I think they are more concerned about the legislative filibuster, which is the reason for being a Senator, but they will not be able to oppose it on the Supreme Court.

GIGOT: Thank you all.

When we come back, we will go from Capitol Hill to the college campus where critics say the Obama Education Department has twisted the law known as Title IX to stifle free speech and deny due process in campus rape cases.  Could changes be coming with a new administration?


GIGOT: Turning from Capitol Hill to the college campus, where my next guest says outgoing Obama administration has used the federal anti- discrimination law known as Title IX, to stifle free speech and deny due process in campus sexual assault cases.

Robert Shibley is the executive director of the Foundation for Individual Rights in Education and author of the book, "Twisting Title IX".

So, Mr. Shibley, welcome.


GIGOT: You wrote for us, recently, that there are kangaroo courts on campus in dealing with these kinds of sexual assault accusations. What do you mean by that?

SHIBLEY: Well, campus courts, even though many times, they are trying to determine the same facts, whether or not a sexual assault or harassment occurred on campus, they have very, very low standards for making those determinations. And part of that low standard is driven by activity and mandates from the Department of Education in Washington, D.C.

GIGOT: All right, so as I gather, they only require a preponderance-of- evidence standard, which basically means, if it's a kind of 50-50 case, as long as you get to 51 percent, it is OK. A very different standard than you would get in a general criminal court, for example. Is that -- is that the issue? Is that where it comes down to?

SHIBLEY: Yeah, I think I think that is a big part of the problem. one of the -- the higher standard of evidence than preponderance is one of the very few due-process protections that students at some colleges were able to count on before this 2011 "Dear Colleague" letter that came out with this mandate, we think, and we are actually involved in a lawsuit saying it violated the Administrative Procedure Act, putting that mandate in place.  And so, what has happened is now colleges can be far, far less certain of whether or not an assault occurred or even whether they have the right person --

GIGOT: Right.

SHIBLEY: -- for the assault and still punish them.

GIGOT: They have to do that because they live in fear that, if they don't do that, the administration, the Obama administration will crack down on them and have -- and punish them in some way by denying them federal money, for example, they get a big controversial case the government doesn't like.

SHIBLEY: That is right. The punishment is actually the withdrawal of all federal funds, the punishment that would be a death penalty for most campus, public and private. Almost every university in America, public and private, get a lot of federal funds, particularly from Pell Grants and Stafford loans. And this punishment is so severe and so scary that it has never been implemented before. Colleges are worried that if they don't follow these dictates, that is what's going to happen to them.

GIGOT: You would agree, I assume, that sexual assault is a problem on some campuses. I mean, you are talking about young people here, young men, in particular, some of them not very mature. How do you -- and I think the administration would say, look, we need this tough standard to be able to stop what is the rampant problem on college campuses. What is your response to that?

SHIBLEY: My response is that if sexual assault is happening on campus, that is really a matter for law enforcement. These are series crimes.  They deserve serious investigation by people with the tools to actually conduct those investigations in a competent way. And we're seeing, by last count, more than 130 lawsuits from students who feel like they have been unfairly found responsible for sexual assaults on campus, the vast majority of whom were never prosecuted by police or outside law enforcement, who ought to be investigating.

GIGOT: Your organization is helping with some of those lawsuits. How are they proceeding in court? Are you winning those or is it too early to tell?

SHIBLEY: Well, it's too early to tell. There has been a lot of motions back-and-forth, so we will see how that goes forward. But we are involved in one case, in particularly, really targeting that preponderance mandate from the Department of Education.

GIGOT: If you were -- so you are Betsy DeVos, the new education secretary.  Let's say you're confirmed. You come in. What do you do to -- to stop this? Do you -- how do you send a signal that this is going to stop and you are changing and going back to the pre-Obama standard?

SHIBLEY: Well, because they didn't actually go through the proper procedure to get these written -- as official regulations, it's actually as simply as sending out a new "Dear Colleague" letter saying we withdraw the preponderance mandate and other aspects of the 2011 "Dear Colleague" letter. They also need to revise the way they are defining sexual assault harassment. Right now, they are defining sexual harassment so broadly that overhearing a single dirty joke is technically sexual harassment on a college campus.


SHIBLEY: There is no way that can be sustained under the Constitution.  They know that. And they ought to stop promulgating that definition immediately.

GIGOT: But you don't have to -- she doesn't have to do a formal rulemaking in that case. All she needs to do is essentially send alternative guidance saying that -- what you got -- that letter you got in 2011 and the standards that the previous administration had been enforcing no longer apply.

SHIBLEY: That's right. And it is -- you know, while -- while it is sort of simple, it's not going to be easy. I think there will be a lot of political pressure on them not to do that. But it's the right thing to do.  And, you know, it is -- it will send a signal that colleges ought to be able to come up with their own standards and figure out how to do it best on their campuses with law enforcement.

GIGOT: Thank you, Robert Shibley. Good to have you here.

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


GIGOT: Time now for out "Hits & Misses" of the week.

Kim, start us off.

STRASSEL: Paul, this is a miss to Chicago, which ended 2016 with a stunning 762 homicides, a 57 percent increase, and more death than L.A. and New York combined. This is also the city that began 2017 with the abduction of a white special needs man by four black Chicagoans who took him and beat him and were emboldened enough to show this torture on Facebook Live. This is a testament that the war on cops is working. The police are backing off after all these politicized attacks and the leaders in cities increasingly deserve to give an explanation to residents that you are living in war-torn ghetto zones.

GIGIT: Thanks, Kim.


MCGURN: A hit to all the former presidents. You know, for a while, it looked like none of the presidents were going to attend the inaugural. We learned this week they will all attend, except George H.W. Bush, who is not well enough to come. These are important moments, when you have a ceremony, and we should be grateful for all for all of them for this gracious note.

GIGOT: And bravo to Hillary Clinton for saying she will attend.

MCGURN: Right.

GIGOT: Colin?

LEVY: Paul, good news in Ohio this week. Governor John Kasich signed a law so that citizens can't have their property confiscated without first being convicted of a crime. These civil forfeiture laws have become a favorite tool of police, who like to use them to shore up budgets. But that money has come at the expense of due process and justice. So, kudos to Governor Kasich for getting rid of it.

GIGOT: Thanks,


HENNIKNGER: Paul, I am getting a hit to 10 Senate Democrats, which I admit is a little bit like a solar eclipse. But, nonetheless, these 10 voted for a Senate measure repudiating the Obama administration's abstention from the U.N. Security Council resolution condemning Israel's settlements. This was good on its own merits but, Paul, it also suggests, the 10 Democratic votes, that Obama's legacy could be in peril on other things, like if they revisit the Iran nuclear deal.

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 am Paul Gigot. Hope to see you right here next week.

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