WH says corporate tax rate proposal is non-negotiable
Former Senate Banking Committee Chair Phil Gramm reacts to plan's reduction from 35 percent to 20 percent.
This is a rush transcript from "Journal Editorial Report," September 30, 2017. This copy may not be in its final form and may be updated.
(BEGIN VIDEO CLIP)
PRESIDENT DONALD TRUMP: I've been waiting for this for a long time. We are going to cut taxes for the middle class, make the tax code simpler and more fair for everyday Americans. And we are going to bring back the jobs and wealth that have left our country and most people thought left our country for good.
(END VIDEO CLIP)
PAUL GIGOT, HOST: Welcome to the "Journal Editorial Report." I'm Paul Gigot.
That was President Trump this week in Indianapolis touting the Republican's long-awaited blueprint for overhauling the U.S. tax code. Details of the plan released Wednesday include reducing individual tax brackets, from seven to three, doubling the standard deduction for individuals and married couples, and eliminating the so-called debt tax. But the lynchpin is a reduction of the corporate tax rate from 35 to 20 percent, a provision the president has called nonnegotiable.
Former Texas Senator Phil Gramm was chair of the Senate Banking Committee. He's now a visiting scholar at the American Enterprise Institute.
Welcome, Senator. Great to have you here.
PHIL GRAMM, VISITING SCHOLAR, AMERICAN ENTERPRISE INSTITUTE & FORMER SENATOR: Thank you, Paul.
GIGOT: So as you look at this plan, how good is it, do you think, in terms of helping the economy?
GRAMM: I think it's very good in terms of helping the economy. I think with what we are doing legislatively through rule-making, through executive order in lessening regulatory burden, that the adoption of this plan would guaranty that we would return to 3 percent-plus growth, which would mean more jobs, better jobs, higher-paying jobs. And, of course, the government would get $2.2 trillion in new revenue.
Economically, I think the plan is right.
And I think, politically, it's very strong because it's exactly what Republicans promised in the campaign they would do. And voters don't like to be surprised. They don't like it when you say, I'm going to do something and then you turn around and do something else. So I'm very pleased with the outline.
GIGOT: All right, from an economic growth point of view, the big changes seem to be cut in the corporate tax rate, from 35 to 20, the cut the business tax rate for pass-throughs, some Chapter S companies, that goes down to 25. Are those the key provisions in your view?
GRAMM: There are very important. But there are two other provisions that could be even more important, territorial treatment for foreign earnings, which means American companies can be competitive abroad.
GIGOT: Right.
GRAMM: And it means that they are going to bring back vast amounts of money to the United States that can be invested here.
I think repealing the death tax is a big issue, economically. You've got a lot of people that have small businesses, they -- they are tired of running the business, but they are afraid to sell it because they'll have to pay a big capital gains tax. And when they dye, they have to pay a death tax. So you have all these assets frozen. You will open those up if bill becomes law. And the economic growth impact of that is grossly underestimated.
GIGOT: That's interesting, because the rap on the death tax is, well, the only people who pay that -- 2 percent of estates pay that so it only goes to the wealthiest people. You're saying that, in fact, I guess this is true if you look at the evidence, the wealthy, Warren Buffet, they will create their own foundations and never pay the tax. It's the rancher, the small business person, the person who builds up a more modest portfolio who ends up paying for it.
GRAMM: Yes, what happens is people build up assets, they build up a successful farm, a successful business, and then they get to the age where they don't want to run it, they are not doing a terribly good job at it, but they can't afford to sell it. And so you get assets that are misused, misused. It affects economic growth. And if you let them sell it, they pay capital gain's taxes on it. So you're going to gain revenues immediately. But, more importantly, you are going to get businesses in the hands of people who want to run them. And, look, nobody except a very small group of redistributionists is in favor of the death tax. People work all their lives, build up assets and business, and then you come and tax them again when they die? I would say that 80 percent of the American people are not for that tax.
GIGOT: All right, let's talk about the individual tax rate, particularly at the top, because as you know, they say in the outline they are going to reduce it from 39.6 to 35. But behind the scenes they are really talking about no cut in the rate at all. Is that a mistake and will that hurt?
GRAMM: Yes, I think it's a mistake. Yes, I think it hurts growth. I have a hard time differentiating the rate people ought to pay, based on how they earn their income myself, and so did Reagan. But, look, we are talking about trying to do this so that we don't change the distribution of the tax burden. But Obama changed the distribution of the tax burden. He imposed income tax only on high-income individuals.
GIGOT: Right.
GRAMM: And he raised the capital gains tax, the dividend tax 59 percent. If we are going to be neutral in effect on distribution of the tax burden, it ought to be pre-Obama, not post Obama
GIGOT: Yes --
GRAMM: -- or do we have to enshrine what Obama did in the tax code until Jesus comes back? I don't think so.
GIGOT: I'm with you on that one, Senator, and just about everything else.
But I want to ask you about the deficit charge because a lot of people are saying, hey, this is going to increase the deficit. There's no plan right now in the details to pay for this, to finance the rate cuts. You're a spending hawk. You've been a deficit hawk all of your career. What do you make of that charge?
GRAMM: Well, first of all, where in the hell were these people when Obama doubled the debt of the country in eight years? Where were they then? Secondly, the Reagan tax cut actually raised revenue by 19 percent by the time Reagan left office, even though it broke the back of inflation and indexed the tax code inflation. So I think that this can, and I believe, it will work. And secondly, we can never deal with the deficit with a weak economy. If we are going to have a European economy, we are going to have European debt and we are going to have European taxes. And also, remember, Obama raised taxes on high-income individuals. He was going to get $690 billion over 10 years. Well, what happened? What happened is we ended up with slow growth.
GIGOT: Slow growth.
GRAMM: And so we lost $3.2 trillion in revenues.
GIGOT: And with faster, from 2 percent to 3 percent, we will get a lot more of that back.
Thank you, Senator, for being here.
GRAMM: Oh, thank you, Paul.
GIGOT: Still ahead, as the GOP gears up for the coming tax fight on Capitol Hill, can the parties stick together and get a bill to the president's desk before the end of the year?
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(BEGIN VIDEO CLIP)
REP. PAUL RYAN, R-WIS., SPEAKER OF THE HOUSE: This is a now-or-never moment. We come to the talking heads on TV and special interests who want to maintain the status quo or we can work together to seize this moment and do what the American people sent us here to do.
(END VIDEO CLIP)
GIGOT: That was House Speaker Paul Ryan Wednesday calling the GOP push to overhaul the tax code a now-or-never moment. But for vulnerable Republicans facing reelection in 2018, it could be a do-or-die moment as well, as they look for a legislative achievement to run on. So can Congress deliver a bill to President Trump's desk by year's end?
Let's ask "Wall Street Journal" columnist and deputy editor, Dan Henninger, editorial page writer, Kate Bachelder Odell, and columnists James Freeman and Mary Anastasia O'Grady.
Kate, you've been digging into this for the last couple of weeks. Do you share Senator Graham's enthusiasm?
KATE BACHELDEDR ODELL, EDITORIAL PAGE WRITER: I do, but I'll add one caveat, which is Republicans have come up with consensus document but it means they can't afford to give in to this or that interest group, and already we are seeing pushback from realtors, from the redistributionists of the right that wants bigger credits. And the different factions of the party are going to have to hang tough and hang together.
GIGOT: You're saying, with the rates where they are, cuts in the rates where they are, is a good plan. The danger is that will erode as the political process goes ahead?
BACHELDER ODELL: That's true. Most of the growth element is on the business side, as we discussed earlier.
GIGOT: Right.
BACHELDER ODELL: Basically, on the personal side, they want to keep the tax code as least as progressive as it is. They say that explicitly. That's a disappointment.
(CROSSTALK)
GIGOT: Right. That means it's basically enshrining the prolificity of Barack Obama.
BACHELDER ODELL: That's right. And the tax code has gotten so much more progressive since the 1986 reform. Even as rates have gone up at the top, bigger refundable tax credits at the bottom have made the code a lot more progressive.
GIGOT: Mary, when Reagan, in '86, got reform done, the top rate was 88. Right now it's about 44, if you include bells and whistles and surcharges. If it only goes down to 39.6, not great.
(LAUGHTER)
MARY ANATASTIA O'GRADY, COLUMNIST: Right. Don't tell Democrats that. They are making it an issue of class warfare. That's a big talking point of Chuck Schumer.
(crosstalk)
GIGOT: Even some right-wing intellectuals are doing that.
O'GRADY: Yes. On the Republican side, what I fear is that you have a lot of Republicans in high-taxed states that are also going to push back against this, people like Peter King, Dan Donman, in New York. You know, in Manhattan, on the island of Manhattan alone, something -- the average of claims is like $25,000. And people won't give that up easily and ask state representatives to fight for it.
GIGOT: James, that's worth 1.25 trillion or so over 10 years, state and local tax deduction, to finance lower rates. You take that out, you don't get lower rates.
JAMES FREEMAN, COLUMNIST & ASSITANT EDITORIAL PAGE EDITOR: It's a good reform. Even though it's going to hurt people like us temporarily, what it does is it creates a big incentive for the high-taxed, poorly run states, like we live in, to reform.
(LAUGHTER)
You look at the big picture, this is about growing the economy, getting out of the sort of Obama-era slump that we are still bumping along. The second quarter was good but we have to sustain it. I think that is what they need to focus on, how do you grow jobs.
GIGOT: Dan, where do you see the political vulnerabilities to getting this through Congress? You have class-war issue, special interest issue. Any others?
DAN HENNINGER, COLUMNIST & DEPUTY EDITOR: Yes, the egocentricity of the United States Senate is a big problem.
(LAUGHTER)
GIGOT: Who are you talking about when you're talking about egos or is it all 52 Republicans?
HENNINGER: We will get to that in a second.
But with the health care bill, it began to get into trouble in the House when the Freedom Caucus began to raise objections. I talked to the chairman of the House Freedom Caucus, Mark Meadows, in Washington this week, and he said he thought they were going to be OK and get it done. I don't see the big problem coming out of the House this time.
But you go over into the Senate, what happened with the health care bill with Senators McCain and Rand Paul, Lisa Murkowski and Susan Collins, there's something about the Senators who just don't feel like they can -- they want to win, that they have to express themselves more for reasons of their own egos, than actually getting a bill done. Now you've got Senator Marco Rubio and Mike Lee already proposing to double the child tax credit, which could really through a spanner in the bill, because it completely disrupts the calculations they've made to make the bill work out all right. So I would say that's just the beginning in the Senate and it's going to be a real test for the Republicans to see if they can get the Senators to pass tax legislation.
GIGOT: Kate, what's wrong with this child tax credit proposal?
BACHELDER ODELL: Well, we don't know much about it yet, but the current tax credit is a thousand dollars and it is refundable and --
(CROSSTALK)
GIGOT: Which means?
BACHELDER ODELL: Basically, if you have no tax liability, you get a check.
GIGOT: You get a check from the Feds.
BACHELDER ODELL: It's spending in the tax code. That's what it will be whenever we are done with this political exercise, more spending through the tax code.
GIGOT: It's also very expensive, as you're talking, a trillion dollars again in payout to people who have children, it's a form of redistribution throw the tax code.
BACHELDER ODELL: Right, it's a straight subsidy. It prevents you from deeper rate cut that produce the economic growth that parents and families want.
O'GRADY: And the problem, as Kate has laid out, is that politically it will be the Democrats will be spinning this as corporations are getting this big --
GIGOT: Tax cut.
O'GRADY: -- subsidy from the government and so, therefore people, with children should get it. That's how it's going to be told.
GIGOT: But if you look at the economic evidence, Mary, and you know this because you look at it a lot, the benefits of a rate cut flow to workers.
O'GRADY: That's why --
GIGOT: Shareholders get some, but it flows to workers in higher salaries.
O'GRADY: That's why it's important for the president and the Republicans to talk about this in terms of growth, in terms of more investment and more jobs for people, because that's in fact, what the goal is. It has nothing to do with, you know, the redistribution.
FREEMAN: The president said that it's not going higher than 20. That is crucial that they don't buckle on that. When you throw in state taxes, we are still going to be above the average in Europe. We are still going to be above the average in Asia. I think we will be competitive enough. This is good news. If they let that corporate go higher than 20, you start wondering, is this going to be the big break --
(CROSSTALK)
GIGOT: Because the average state corporate tax is about 4 percent.
FREEMAN: Right.
GIGOT: That's 24.
OK, thank you all.
When we come back, as HHS Secretary Tom Price resigns, a look at what his ouster means for future efforts to repeal and replace Obamacare?
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TRUMP: Long before the November election, we are going to have a vote and we are going to be able to get that through.
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GIGOT: Health and Human Services Secretary Tom Price resigned Friday amid the media frenzy over his use of private jets for government travel. This, as the Republican promise to repeal Obamacare suffers another setback with Republican leaders abandoning a plan by Senators Lindsey Graham and Bill Cassidy this week that would have allowed them to pass legislation with just 51 votes.
We are back with Dan Henninger and James freeman.
First, Tom Price, Dan, he's out. What's behind this?
HENNINGER: Well, what's behind it, nominally, is he was using private jets for both official use and private use. And it isn't just Tom Price who has done this. There's been members of the cabinets of both this administration, perhaps, and Obama's administration who have done it as well. In 2013, Charles Grassley, Senator Grassley, released a government accountability report that noted that Eric Holder, then the attorney general, and, of all people, Robert Mueller, former FBI director, now special prosecutor, himself engaged in this sort of practice, reimbursing the government at some sort of set rate. So that is basically what Tom Price did.
(CROSSTALK)
GIGOT: But now it sounds like this is a new standard. These other people weren't disqualified from doing that, so why Tom Price?
HENNINGER: Well, because Tom Price is Donald Trump's HHS secretary, and Trump promised to drain the swamp, and, in some sense, this is part of the swamp. The question is whether Trump threw him over the side too quickly, because Trump puts distance between any member of government and him that causes him any problem. And do remember even the past week there's been story that Trump is now trying to push Attorney General Jeff Sessions out. He's still angry at him for not recusing over the Russian probe, so there's a kind of tense relationship between Donald Trump and his own cabinet.
GIGOT: Yes, look, I don't think he should have made himself a target by taking these trips, on the other hand, I'm told that he had council from inside HHS, people telling him, look, this is OK. You know, and what do you think?
FREEMAN: Yes, doing anything in government, including dialing up a private jet, they are going to be a lot of people involved, probably ethics opinions, probably a lot of paperwork, and this is -- this is a common practice. A lot of people might wish if they were going to make an example of someone, it would have been -- you mentioned Eric Holder after he took family up to the Belmont Stakes in New York. Lovely horse race, I'm sure. They end up reimbursing a fraction of what it actually costs to fly everyone up there.
But as you say, I think if you're in the Trump cabinet, you have to understand both that the media is at war with Donald Trump, so it's going to be a bigger deal than it is going to be with the Obama administration. But also you have to understand that there is a tendency of people in these positions not to last very long. He has trigger --
(CROSSTALK)
GIGOT: You want to know something? I don't think this is the reason. The reason that he fired him, he didn't -- Price and him never meshed on a personal basis. That's important to this guy. He blames him for the failure of Obamacare. Price came from the House. People said, Mr. President, he can help you sell to the House and the Senate, and he didn't get it done. And Trump didn't say it's my fault, sorry. No. He says, your fault, you're out.
HENNINGER: and James made a good point. This story originated in "Politico," the press, the Beltway press is at war with Donald Trump, as are the Democrats. And this is going to be used, this argument, as another wedge to drive between the Trump administration internally and between Donald Trump and the Republican Party and inside the Republican Party. We go back to Alabama election where you had the Republican Party divided, and this is just not helping the Trump presidency.
GIGOT: All right, what about reviving the repeal and replace, James. You have the president this week saying we can get it done next week, we have the votes. I'm not -- he doesn't have the way the way I'm counting them. Is there any chance of that?
FREEMAN: I think probably it is going to be a little tougher now. I guess if it's true that --
(CROSSTALK)
GIGOT: Tougher now?
FREEMAN: If you're correct that the president got rid of Tom Price because of this, I think it's a miscalculation. I think Price has been a positive force, both in this job and in his previous job, in terms of health policy. But in terms of looking at the votes, no, I don't think he's there yet, but he is close. And I think they knew that this week. I wouldn't rule it out that it happens. And I don't think, while it's a setback not having Price, I don't think we should assume now that it can't happen in the first few months of next year.
GIGOT: Here is key for replacement. Tom Price knows the law, the Affordable Care Act. He knows it is waiver authority that the executive has, and it's extensive. And Trump has to have somebody in that job who understands that authority, understands - otherwise, you're going to have exchange in the states deteriorate even more. So he has to have a replacement who knows the traps, work bureaucracy, otherwise he's going to be in big trouble.
HENNINGER: A replacement that's willing to take on the job. At this point you're basically repairing Obamacare. You're not repealing and replacing it. You're trying to fix the exchanges. Who is willing to come in and basically take over a fix-it job.
GIGOT: Former governor and Senator from Oklahoma, Tom Coburn. Maybe FDA chief Scott Gottlieb, Ferma (ph) from HHS? Those would be good names. We will see.
Still ahead, the fallout from the GOP's failure to repeal and replace Obamacare already taking its electoral toll. So is Roy Moore's victory in Alabama this week a warning to so-called establishment Republicans?
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(BEGIN VIDEO CLIP)
ROY MOORE, R-SENATOR-ELECT, ALABAMA & FORMER STATE SUPREME COURT JUSTICE: Together, we can make America great. We can support the president. Don't let anybody in the press think that because he supported my opponent that I do not support him and support his agenda.
(APPLAUSE)
(END VIDEO CLIP)
GIGOT: That was former State Supreme Court Justice Roy Moore following his victory Tuesday in the Republican primary runoff to fill Attorney General Jeff Sessions' Alabama Senate seat. Mr. Moore's 10- point route over Senator Luther Strange is widely seen as a warning to Republicans in Washington. Senate Majority Leader Mitch McConnell's political action committee spent heavily for Strange. And President Trump and Vice President Pence both campaigned for him in the last week of the campaign.
We are back with Dan Henninger, Jason Riley and James Freeman.
Jason, is this the defeat for so-called establishment, Washington Republicans?
JASON RILEY, COLUMNIST & SENIOR FELLOW, MANHATTAN INSTITUTE: Yes, I think that's clear, Paul. And to some extent, it's a defeat for Donald Trump. He picked the wrong horse here.
You know, there's -- I think it's also evidence that Trumpism might be bigger than Trump, in that sense. I think that the style of politician that Roy Moore is, is something that is ascendant in this country and that, too, scares the establishment Republicans, this sort of attitude that everyone is corrupted in Washington. I mean, the idea that you could run against a Luther Strange, the way Roy Moore did --
(CROSSTALK)
GIGOT: Who is conservative.
RILEY: The way he did, was quite amazing. I mean, that, to me, was one of the bigger takeaways.
GIGOT: On policies, not much different between the two, but it was an attitude thing. He's the outsider. He's -- if you ask me, James, I wonder if you agree, I think the failure of Obamacare repeal, particularly the second round, coming right ahead of the election, basically played right into Moore's argument, they can't get anything done, you need somebody else. John McCain, Susan Collins, Rand Paul, they might as well have been campaign managers for Roy Moore.
JAMES FREEMAN, ASSISTANT EDITORIAL PAGE EDITOR: Yes. If voters wanted to send a message that they are ticked off, that Republicans with control of Congress, have not been able to get anything done, anyone would say that they have a legitimate gripe here.
I'm not sure I'd read too much into this. I like Big Luther. I think he would have continued to be a good Senator, but I'm not sure he really carved out, really had to time to carve out much of an identity with voters and all that.
GIGOT: He was an appointed Senator.
FREEMAN: Yes. Roy Moore, obviously, a lot of questions about his message in terms of defying federal court orders. I think he had built an identity in the state for years as a guy standing up for traditional values, and for a lot of voters, who feel like religion has been pushed out of the public square, this is a guy who was kind of shoving it back in, and I think that did cheer a lot of people.
GIGOT: Dan, but Roy Moore, are Alabama Republicans sending -- assuming he wins the general in December 12th, are they sending somebody who could be as difficult to coral for a vote as Rand Paul?
DAN HENNINGER, COLUMNIST & DEPUTY EDITOR: Absolutely. I think Roy Moore could be a very difficult vote.
And I think something significant happened down there, Paul. I mean, President Trump, Donald Trump went to Alabama and campaigned hard for Luther Strange. But Steve Bannon, who until recently was chief political adviser in the White House, Steve Bannon went to Alabama and campaigned for Judge Moore, against Donald Trump. Sarah Palin went to Alabama and campaigned for Judge Moore. And I think what you're beginning to see is the emergence of a populist party inside the Republican Party, that's always been there but I think the Bannon activity makes it clear that this is being formalized inside the Republican Party. And they intend to challenge what they call the establishment. And if Donald Trump is standing in their way, they will campaign against him as well.
Jason had a point. Trump was being overtaken by Trumpism. The question is, what are the Republicans in Washington going to do if they have a group at their back constantly trying to call them into account.
GIGOT: Here is what I would do, I would get things done. I would pass tax reform, fulfill promises on health care, I would confirm judges.
RILEY: And having Moore might make that more difficult. He's a wild card. You don't have wiggle room. You only have 52 votes. The other people paying attention to what happened in this election are people like Jeff Flake, in Arizona, and people like Dean Heller, in Nevada.
(CROSSTALK)
GIGOT: They both have primary challengers, right?
RILEY: Primary challengers. And I think you're going to see those challenges -- more of the challengers come out of the Bannon wing of the party against the establishment. So, yes, Mitch McConnell's job might have gotten a lot harder.
GIGOT: What they are going to do with the challenges, James, they are going to force the Republican Incumbent Senators to spend the money that they could be spending, the party could be spending to defeat Democrats incumbents on these primary races. So you will have more vulnerable Republicans incumbents who have to defend their standing, and a lot fewer Democratic incumbents who will have challengers who can beat them.
FREEMAN: Some of the challengers -- I like Jeff Flake a lot but I think you have to ask why did he spend so much time writing a book attacking the president. You look at the record, so little achievement this year in the Congress, maybe their time should have been more focused --
(CROSSTALK)
GIGOT: In defense of Flake, he voted for Obamacare.
FREEMAN: Yes -
GIGOT: He's going to be great on taxes, he's good on spending. You know, the big difference he has with Trump is on immigration.
FREEMAN: That's right.
GIGOT: I mean, you know, that's going to be --
FREEMAN: One more thing. If you want to look at Alabama as a healthy sign, this is not a cult of personality for Donald Trump. Obviously, voters make up their own minds and his endorsement doesn't pull everyone in his coalition automatically behind him.
GIGOT: All right.
Still ahead, amid criticism of its response to Hurricane Maria, the Trump administration steps up its recovery efforts on storm-ravaged Puerto Rico. We will look at the challenges that lie ahead, next.
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GIGOT: Under fire for what critics say was a slow response to the crisis in Puerto Rico, the Trump administration this week stepped up its efforts to bring aid to the island, which was devastated by Hurricane Maria last week. The Pentagon has appointed Lieutenant General Jeffrey Buchanan to oversee the federal recovery efforts. And on Thursday, the White House authorized a 10-day waiver of Jones Act, a federal law that limits shipping to U.S. ports by foreign vessels. Puerto Rico's governor requested the waiver, arguing that it would expedite the shipment of much-needed supplies to storm-ravaged areas. President Trump is scheduled today visit Puerto Rico next week.
We are back with Wall Street Journal columnist, Mary Anastasia O'Grady.
Mary, how bad, how dire is the situation?
O'GRADY: Paul, it was a really forceful hurricane and it was a direct hit on Puerto Rico, and 155-mile an hour winds hitting an electricity grid that was extremely vulnerable, old and fragile, and as a result, basically, the island lost all electricity. And it also had a lot of down trees, the roads were not passable, and so forth. This was a humanitarian crisis for the first 10 days because it meant that there was no electricity for the elderly and the sick, so hospitals, and in particular, people who needed dialysis treatment, which needed to be refrigerated.
GIGOT: What about water shortages? Are those being alleviated as we speak?
O'GRADY: Again, this had to do with electricity. And 45 percent of the water -- the island that was without portable water in the first 10 days. Those people were dependent on electricity to pump the water. That was the problem. And FEMA had a plan in place in which they would use generators but they did not have a good plan in place for the getting the diesel to the trucks and getting the trucks out to deliver diesel to the generators.
GIGOT: How do you explain, other than down trees and roads and that sort of thing, how do you plan this distribution issue? We have seen containers in the ports and not being able to move products and relief goods into the island?
O'GRADY: Yes. This had to do with gasoline and diesel and truck drivers. One of the things that FEMA fouled on -- and I don't think that the president didn't pay attention to Puerto Rico, but I think FEMA's plan, whatever that was, failed. You know, the head of FEMA, local, on the island of Puerto Rico, said in the middle of last week, we don't understand why the private contractors that we've hired to deliver the diesel are not delivering diesel. If you're the Emergency Management Agency, you should be on top of the diesel getting delivered because that was essential to maintaining some kind of energy on the island.
GIGOT: Now, Trump later this week has decided to essentially put a general there and get the U.S. military involved. Is this something that you think needs to be done?
O'GRADY: Yes, it's going to help. I mean, but I still say the execution of that -- of the delivery of the diesel, doesn't matter military or locals, they had a real problem in execution. And I think they are breaking the log jam. Truck drivers are showing up.
Let's face it, the truck drivers couldn't communicate with the emergency centers because the cell towers were down. Very little cell coverage on the island, except for near San Juan and the center of the island.
GIGOT: If you compare it to Florida and Texas, a lot is essential poverty of the island. The island is much more vulnerable. The electrical grid is more vulnerable. And cell towers weren't as reinforced as they were on the mainland.
O'GRADY: Yes, I think when you have a political class like you do in Puerto Rico, that has not managed, has not done its job, basically, provide basic services and to protect people against these kinds of vulnerabilities, when you have a cat 4 hurricane hit, all of that is going to be exposed. And that's what we are seeing right now.
GIGOT: What can the United States do to help Puerto Rico so, in 15 years from now, it won't be like this?
O'GRADY: Well, I'm not so sure. It's going to have to -- it's going to require the Puerto Ricans to really decide that they want to demand more of their politicians. I mean, you know, there's a big debt over hang, a lot of that debt -- debtors will be hair-cutted and will lose money. There will have to be a social contract that says, look, we are going to get help but, in return, we are going to be more responsible in terms of our accountability.
GIGOT: Make it an enterprise zone.
Thanks, Mary.
When we come back, our panel weighs in on who wins and who loses President Trump's brawl with the National Football League.
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TRUMP: I think they are afraid of their players, if you want to know the truth, and I think it's disgraceful.
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TRUMP: The NFL cannot disrespect our country. They cannot disrespect our flag or our national anthem. And they can't have people sitting down or kneeling down during our national anthem. And guess what, most people agree with me. And the NFL is in a box. They have to do something about it.
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GIGOT: President Trump this week on Fox doubling down on his criticism of the NFL and players who sit or kneel during the national anthem. The president says NFL team owners are, quote, "Afraid of their players" and should require them to stand.
We are back with Dan Henninger and Jason Riley. He's the author of the book, "False Black Power."
Jason, who is winning the fight between Trump and the NFL?
RILEY: I think, the NFL, Paul, is winning. What started by protests by some players about how police are treating young black men in the country has sort of morphed into an anti-Trump protest that you're seeing. And I think more people are joining it. And when you see the owners kneeling with their players, as we have seen recently, I think that is evidence of who is winning this.
GIGOT: Uniting the owners and the players, which is some achievement.
(LAUGHTER)
But don't most Americans -- did Trump have a point that most Americans agree with him about honoring a flag or has this become a much larger issue?
RILEY: I think Trump supporters agree with him.
(CROSSTALK)
RILEY: Because I think that different people view these protests differently. Trump has tried to frame this as a questioning patriotism of the players. I think many, many Americans view this differently.
(CROSSTALK)
GIGOT: How do they view it?
RILEY: They feel that the players have a legitimate grief, is how they view it. And -- I think we can get into this, if you want. I question whether they do have a legitimate grief, but I don't question their patriotism.
GIGOT: Dan, what do you think about this about who is winning?
HENNINGER: Not really. I think the NFL has shot itself in the foot with this protest. Let's understand that Donald Trump didn't start it. It began with Colin Kaepernick, the backup quarterback for the San Francisco 49ers, last September, who decided to choose the national anthem, the time he would kneel down in protest, and I don't think many Americans quite understand what exactly it is he's protesting. But in the wake of that, other players started taking a knee during national anthem. If there are legitimate issues about the relationships between the police and black people in the inner city, let Colin Kaepernick or the rest of them give speeches and talk about it at length so people understand the protest. But it's been centered at the national anthem at the beginning of these games, and I think a lot of Americans were confused and upset that a symbol of unity in the United States is being divided. And Trump just surfed in on top of it.
GIGOT: Maybe, could both be losers here?
(LAUGHTER)
GIGOT: In the sense that you're right about the attacks that's become larger anti-Trump movement to some extent, but also, as I talked to a lot of Americans, whatever grief, grievances they have about -- on criminal justice and so on, the flag represents, as they say, before the event, to honor America.
RILEY: I think they could be both be losers in this sense of sports fans want to tune in and watch football and they're not looking to the president for guidance on their viewing habits.
(LAUGHTER)
In that sense, both can be losing.
I do want to make a point about the nature of the protests themselves. What we have is an increase in coverage, media coverage of police shootings in this country.
GIGOT: Right.
RILEY: We should not confuse that with an increase in actual police shootings. That's not what the data shows. The data shows police shootings, police using lethal force much, much less than in the past. Here in New York City, back in 1971, there were 314 police shootings, 93 fatally. By 2015, that was down to 23 shootings, eight of them fatally.
GIGOT: So the underlying argument of Kaepernick is not accurate?
RILEY: Exactly. That's been a decline, not only on police shootings here in New York but other large cities and nationwide. Since late '60's, the rate at which blacks are shot by police is down 70 percent, Paul. This is a false narrative. And we can't confuse the fact that social media has -- has blown -
GIGOT: Exaggerated it.
RILEY: Yes, exaggerated this.
GIGOT: Thanks, Jason.
We have to take one more break. When we come back, "Hits & Misses" of the week.
(COMMERCIAL BREAK)
GIGOT: Time now for "Hits & Misses" of the week.
Dan, start us off.
HENNINGER: I'm giving a miss to Georgetown University Law School where Jeff Sessions arrived to give a speech on the subject of free speech on campus. As he arrived, he was greeted by at least 30 Georgetown law professors taking a knee in opposition and in solidarity with the NFL players who were in a battle with Donald Trump over speech and the national anthem. Paul, we sometimes wonder where students get their sophomoric ideas, and these Georgetown law professors made it pretty clear.
GIGOT: All right, Dan.
Kate?
BACHELDER ODELL: This is a hit for Target, which announced they are going to $15 an hour in the next couple of years. But it's also a miss for --
GIGOT: Per wage.
BACHELDER ODELL: Per wage. Also a miss for the union activists who fight for 15, which have been saying we need government mandates for workers to get a raise. And yet, Target did it to compete with Walmart and other retailers in a tough environment and a tight labor market. Just more evidence that what's good for workers is competition.
GIGOT: And economic growth.
Mary?
O'GRADY: Paul, a miss for Twitter. As you know and our president knows, you can only use 140 characters when you tweet. But Twitter says now they are going to double that, they're having a trial run anyway, to 280. Some of us believe brevity is the soul of wit, which sort of explains why I didn't like Fidel Castro. And we wish that we would stick with the 140.
GIGOT: OK.
All right, Jason?
RILEY: Paul, this federal prosecution of college basketball is not only a miss, it's an air ball.
(LAUGHTER)
(CROSSTALK)
RILEY: The schools are accused of basically trying to bribe kids to come. That may be a violation of NCAA rules, but it should not be treated as crime. I think the FBI and the U.S. attorney's office have better things to worry about. Some prosecutorial discretion is in order here.
GIGOT: OK.
All right, thank you all.
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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