What would a tax overhaul mean for economic growth, wages?

This is a rush transcript from "Journal Editorial Report," November 18, 2017. This copy may not be in its final form and may be updated.


REP. PAUL RYAN, R-WIS., SPEAKER OF THE HOUSE: This country has not rewritten its tax code since 1986. The powers of the status quo in this town are so strong, yet, 227 men and women of this Congress broke through that today. That is powerful.


PAUL GIGOT, HOST: Welcome to the "Journal Editorial Report." I'm Paul Gigot. A major step forward Thursday in Republican push to overhaul the tax code with the House passing its Tax Cuts and Jobs Act by a 227-205 vote. All eyes now on the Senate, where the fate of the reform is less certain, with Republican Ron Johnson, of Wisconsin, declaring his opposition Wednesday to the plan as it now stands.

Joining the panel this week, Wall Street Journal columnist and deputy editor, Dan Henninger, columnist, Kim Strassel, and editorial page writer, Kate Bachelder Odell, who, for her sins, is covering the tax bill.


So you saw it pass the House. I was -- the thing that surprised me is how relatively little drama there was in the sense that they didn't have to break people's arms. They got -- only 13 Republican defections.

KATE BACHELDER ODELL, EDITORIAL PAGE WRITER: That's right. And they had votes to spare. We're see an entirely different story than we did on health care reform earlier this year.

GIGOT: Why? Why do you think that is?

ODELL: One reason is because health care reform failed, and so Republicans understand their very political lives depend on tax reform. So I think we're picking up the pace here. And the Senate really wants to get this done before the Alabama special election, when they might lose another Republican seat and have a thinner majority.

GIGOT: But the defections, 13 detectors, 12 were from high-tax states -- California, New Jersey, New York, in particular. And that's because of the state and local tax deduction, right?

ODELL: Right. So basically, the House did a carveout for property taxes up to a certain amount and eliminated the state and local deduction, which subsidizes blue states with high tax rates.

GIGOT: So they're saying that will hurt my constituents. I have to tell you, Kate, I never thought they would pull this off. It's a huge tax deduction that they're eliminating. It's enormous. Reagan tried it in the '80s. He couldn't pull it off.

ODELL: Right. It was taken out of the 1986 act, which was the last major reform. It looks like this deduction is headed for death row. They don't even have an accommodation for property taxes. They get rid of it.

GIGOT: I think they will restore that --

ODELL: Sure.

GIGOT: -- when it goes to conference, assuming this passes this --

DAN HENNINGER, COLUMNIST & DEPUTY EDITOR: It's the day of reckoning for those three states. After all these years, New York, California and New Jersey have been raising taxes on the public and they benefit the most from that deduction. It was extraordinary that it was only House members from those states that voted against the tax bill and that everyone else supported this thing. And I think, if I were a congressman from one of those states, I would say, look, I voted against this provision, and I would turn to the people in my state and say, we have to lower taxes in these states because this is what they've done to us. The whole country has turned against those three states.

GIGOT: Kim, I think this is the price that Democrats are paying for opposition to this bill. In contrast to the '86 act, when Democrats decided to negotiate and able to get some things they wanted as part of a bipartisan reform, here they're sitting it all out, so Republicans have little incentive to accommodate them to get some votes.

KIM STRASSEL, WASHINGTON COLUMNIST: Absolutely. If Chuck Schumer had stepped up to the negotiating plate, you can bet there would have been an accommodation for New York and New Jersey and California. Instead, you see them furious over this issue. Suddenly, Democrats have decided that, you know, not being able to deduct things from your property taxes is a terrible idea and they want to lower taxes. So Jerry Brown out in California saying, you can't do this, you have to take care of it.

GIGOT: What do you think Ron Johnson wants, Kim, in the Senate? He announced this week -- he's a pro-growth guy. We know him. I don't think he wants to kill the bill, but I do think he wants concessions. What does he want?

STRASSEL: Ron Johnson has been saying all along that he's concerned about smaller businesses that file their taxes as S corporations. When you look at the bills, they're not given as good a treatment as corporations. So corporations, for instance, they've come down to 20 percent rate, but pass- throughs, they get a deduction, and by the time they pay surcharges, it's more like 35. So he wants better treatment for them. The question now is, how can you do that. And some of the ideas out there for equalizing would, in fact, be good.

GIGOT: Yes, Kate?

ODELL: You can lower the tax rate to 35 percent from 38.5 percent, which would make the deduction more valuable against a lower rate. That would be one --


ODELL: I think that Ron Johnson's case is a little thin because corporations are double taxed on dividends as well and much more disadvantage disadvantages. We see is C corps wanting to become the pass- throughs, not the other way around. But I don't think that you kill a bill over this. I think they will come to accommodation.

GIGOT: Dan, how do you see this playing out? You have John McCain and other Senators. You never know how they will go.

HENNINGER: That's true. The mood here is so different than it was with the health care bill, where you have the fractiousness, which, indeed, started in the House. Here, the passage by the House, the way the Republicans holding together, has really created a mood and a momentum behind this bill. Add to that the fact that the Republicans really need to get something done. And in addition to Alabama, I would mention the Virginia gubernatorial race, huge setback. I think it focused the Republicans. So John McCain, Susan Collins, I kind of -- I hate to say you think they will vote for it because I was burned the last time, but I think that the momentum is behind the bill.

GIGOT: All right, thank you all.

Still ahead, as the Senate scrambles for the votes needed to pass its tax reform, what would the overhaul mean for economic growth and wages? We'll ask former DBO Director Doug Holtz-Eakin, next.


GIGOT: With the House passing its tax reform this week and the Senate scrambling for the votes to pass its version after Thanksgiving, we're back with a look at what the overhaul would mean for economic growth, jobs and wages in the U.S.

Economist Douglas Holtz-Eakin is the president of the American Action Forum, and former director of the Congressional Budget Office.

Doug, welcome back to the program.

Let's look at the bill.


GIGOT: Let's look at the House and Senate versions in toto. What do you think, overall, will be the economic impact if something close to these bills pass?

HOLTZ-EAKIN: The important common elements are corporate tax reform that gets the rate down to 20 percent. We're well out of line of competitive rates in the developed world. Moves us away from a worldwide tax system to one that only taxes firms on the basis of what they earn in the U.S. Again, that gets us in line of worldwide norms. Makes us competitive. There are good investment centers. Up-front expensing for the first five years. It's a message that said, you should invest, innovate and do it in the United States.

GIGOT: Right.

HOLTZ-EAKIN: If that happens, we get the capital accumulation and the capitol deepening that is associated with better productivity growth. That's been the missing element in the U.S. equation. With productivity growth and higher wages, and that's the missing part of the labor market, getting a higher standard of living. Both bills have that in common. It's an important element. On the pass-through side, which more of this income is taxes, they will have to settle some differences in the bills. The basic message, get rates down, get capitol accumulation incentives in place is something they can accomplish. Those are the most important pro-growth elements of these bills.

GIGOT: And you think they would have a significant pro-growth impact on the American economy starting immediately?

HOLTZ-EAKIN: I think that's absolutely right. You have a built-in test as well. Both bills have a deemed repatriation. There are trillions of dollars of U.S. earnings parked offshore. In these bills, on a date, uncertain, they will be redeemed, repatriated, no tax liability on them. Then comes the test. Do they bring the money back? If there's a good reform, U.S. corporations say, we'll put the money in the U.S. and we'll see big impacts right away. If they don't do a good job on growth incentives, we'll know quickly.

GIGOT: Any concern on your part on the delay of the Senate bill of one year in getting to 20 percent rate? Expensing starts immediately in the Senate and the House bills.


GIGOT: But the delay in the Senate, some economists say, you know what, corporations will delay for a year taking profits and that's going to delay the investment. Do you agree?

HOLTZ-EAKIN: I don't. I think they will run the numbers and understand that it's way better to deduct costs against the 35 percent rate and have earnings taxed at the 20 percent rate. That one year delay I think is a modest investment to frontload things. I don't think it will impact the long-run implications of the bill and I'm comfortable with it.

GIGOT: I look at the individual side of this reform, frankly, and I think it's not nearly as good in my view as the corporate side. It's a hash, right? I mean there's a -

HOLTZ-EAKIN: I think that's right.


GIGOT: I mean, so no cut in the top rate except a minor one in the Senate. I know, and I know you know in your economic research, you talk about great cuts especially at the higher levels, really give you the economic bang for the buck. There is little of that here.

HOLTZ-EAKIN: Indeed, the House bill goes the wrong way in many ways. There's a phaseout in the 12 percent bracket that gives an effective 45 percent marginal rate. That's going the wrong direction. The Senate goes the right direction but not very far. Estate tax is a mish mash in both bills. So the individual side turns out to be a wash, at best. As I mentioned, the core elements are the business tax reforms. Those get the United States back into the 21st century. Let's to that on the individual side.

GIGOT: OK, on the corporate side, and growth impact, you get a wide range of views of how much it would help the economy. The Tax Foundation said it would increase growth by 0.3 percent a year in GDP. Larry Lindsey, who you and I both know, say it could be 0.9 percent a year on average. That would take us above 3 percent for the next four years of economic growth. Where does that fall in the estimates, and why the variation?

HOLTZ-EAKIN: I'm close to the long-run impact of the Tax Foundation, but the real issue is the speed at which the adjustment takes place. If it gets heavily frontloaded, if you get something that looks like a boom that takes you above trend growth and a quick adjustment of trend growth, you get closer to Larry Lindsey's number. I don't think it would get that high. If the adjustment takes a long time, it will get something like .2 or .3.

GIGOT: OK. If that happens, will it flow through to wages? As you know, as -- we have a very tight labor market right now in much of the country.


GIGOT: I have to assume if you get a big capital investment, some of it will good to productivity and a lot of it will flow through to wages.

HOLTZ-EAKIN: That's in the data. Historically, if you get productivity growth the closer to real wages, it flows through to real wages. That hasn't been happening in the U.S. because we haven't had the productivity growth. Right now, we can have a tight labor market, produce higher nominal wages, but it will get passed through in prices. You need the productivity piece to make people better off.

GIGOT: What about the deficit concerns? It's going to, according to the budget structuring, add $1 trillion to the deficit over 10 years. I assume some of that, a good portion of it, will be made up with and faster growth because the growth estimates out of Congress are so low at 1.9 percent on average.

HOLTZ-EAKIN: Right. I don't think anyone should be happy at the prospect of another $1 trillion, $1.5 trillion of deficits. We're in a fiscal mess. I will not belabor that. The question is, what do you get for it. If you get good growth and focus on the pro-growth elements, it will be worthwhile. If you put out the individual side, which is a mash, it wouldn't be worth it. So this is a proof-is-in-the-pudding moment.

GIGOT: OK, Thank you, Doug. Appreciate your being here.

HOLTZ-EAKIN: Thank you.

GIGOT: When we come back, sexual misconduct scandals roil the Senate as Al Franken faces groping allegations and Republican Candidate Roy Moore refuses to exit the Alabama Senate race despite pressure from Republican leaders and a growing list of accusers.




-- and the Republicans --


-- in fighting against me, because they don't want me there.




MOORE: Media, you have recognized that this is an effort by Mitch McConnell and his cronies to steal this election from the people of Alabama and they will not stand for it.

They got a call and said, asked me to step down from the campaign. Let me tell you who needs to step down -- that's Mitch McConnell.


GIGOT: Defiant Roy Moore Thursday refusing to bow out of the Alabama Senate race even as accusations of sexual misconduct continue to mount. A Fox News poll released Thursday shows Moore losing support amid the allegations. He trails Democrat Doug Jones 50-42 percent with 9 percent undecided.

We're back with Dan Henninger, Kim Strassel, and Wall Street Journal columnist and Manhattan Institute senior fellow, Jason Riley.

Kim, we heard Roy Moore. He seems to suggest that somehow Mitch McConnell gathered these women to come and make their arguments against him. Where does this stand in Alabama now and what do you think of the accusations?

STRASSEL: We're up to at least nine women who have come out and alleged some form of sexual misconduct against him. You've also had some important local reporting that quoted residents in that area saying it was well known way back when that Roy Moore had a predilection for young women. None of this has been proven. But it's out there and there's no escaping it at this point. You would think that if Roy Moore believed in the cause of the Republican Senate and he understood, he would step aside and let somebody else run. He's defiant that he's not doing that. He's defiant that these accusations are false. And what he's doing is now turning this into a battle between Roy Moore, the upstart Republican, and the establishment in Washington, D.C., much of a Trump move, as it were.

GIGOT: It looks like it will cost him the seat, Jason.

JASON RILEY, COLUMNIST & SENIOR FELLOW, MANHATTAN INSTITUTE: It very well could. It's a deep red state it. This race should not be this close. I don't think that Alabama has had a Republican Senator since 1990s or '92. This is shocking.

If people are wondering why people are sticking by Roy Moore to the extent that they are, it has to do with how the people feel they're perceived by the main stream media, coastal elites. These are the people who cling to their guns and religion, as Obama said. These "Deplorables" as Hillary described them. And Roy Moore pushes back again them.


RILEY: And he fights.

GIGOT: The polls, Dan, show he's losing.

HENNINGER: Yes. Fox released a poll Thursday night and he's down to Doug Jones, the Democrat, 50-42 percent. Among women, down 58 percent. So you have a lot of write-ins since October 18. Doug Jones is a pro-abortion absolutist. I think it's hard to handicap what's going on down there.

Look, if Roy Moore pulls out, the Republicans will lose this race. This is a problem. There's two races going on here. Doug Jones and Roy Moore and Steve Bannon versus Mitch McConnell.

GIGOT: Kim, I want to ask you about Steve Bannon, the former White House aide, that wants to get rid of Mitch McConnell. He's running -- he says he going to run all these challengers to Republican incumbents. Roy Moore was his poster child. The first he got behind here in the cycle. And yet, it turns out that it looks like he could be a loser. What does this due to the Bannon insurgency?

STRASSEL: I think that's why you see Roy Moore, probably based on advice from Bannonite wing of the party, trying to make it into a Bannon-versus- McConnell race and deflect from these allegations that are going on. They have a big stake in this, the Bannon crowd. If he goes down, as you said, first big trial balloon on this. Paul, this has never been an enormous wing of the party anyway. I think it would puncture that balloon if he were to lose.

GIGOT: "Bannon is for losers," I think, would be the signature line.


Let's talk about Al Franken, because it's complicated the bonfire of sexual harassment allegations that we've seen across the country. Now there's one against Franken, including a photo of him attempting to grope a woman while she was asleep, or he said it was a joke and there was no groping involved, but it looks pretty ugly.

What do you make -- now there will be an ethics investigation. And Franken said that he will cooperate and welcomes it. Does it jeopardize the Senate seat?

RILEY: I'm not sure, Paul. I think Al Franken may try to fight through this. I think it's too early to tell.

But it does demonstrate that this despicable behavior is not limited to one party or one ideology. It's a much more widespread problem. And we have been focusing on the entertainment industry of late, but I think it's just getting started in the political world. I don't think that we're anywhere near the end of seeing this sort of behavior.

GIGOT: And, miracle of miracles, Dan, Democrats saying, you know what, way back when, Bill Clinton should have resigned. Kristen Gillibrand, the Senator from New York, saying that Clinton should have resigned. It's very convenient 25 years later.

HENNINGER: The broader point here, Paul, is that virtually all of this behavior that we've been reading about is nonconsensual. And the bottom line is some men are pigs with women, and the world would be better off without those pigs abusing women.

GIGOT: Kim, what do you think? Where does this go with Franken? It's a delicate one for the Democrats?

STRASSEL: Yes, you can tell that Franken himself was certainly worried that this is where it might go. He initially put out a non-apology, and then put out a very contrite statement in which he fully apologized and called, himself, for an ethics investigation. So he's trying to do anything he can to make sure he forestalls any calls for resignation.

GIGOT: Do you think that he should resign?

STRASSEL: There's a good case for it if we're going to hold everybody to the same accountable standard.

GIGOT: Kim, thank you.

Still ahead, some fellow Republicans in Congress turning up the heat on Attorney General Jeff Sessions to appoint a special counsel to investigate Hillary Clinton. But is it a good idea? Our panel weighs in, next.



REP. JIM JORDAN, R-OHIO: What's it going to take to actually get a special counsel?

JEFF SESSIONS, ATTORNEY GENERAL: It would take a factual basis --

JORDASN: Let me ask it this way.


SESSIONS: And we would use the proper standards.


JORDAN: What's it going to take to actually get a special counsel?

SESSIONS: It would take a factual basis --

JORDASN: Let me ask it this way.


SESSIONS: And we would use the proper standards. And that's all I can tell you, Mr. Jordan.

JORDAN: Well, I appreciate --


SESSIONS: -- your idea, but sometimes we have to study what the facts are and to evaluate whether it meets the standard required --


SESSION: -- a special counsel.


GIGOT: Republican Congress Jim Jordan Tuesday pressing Attorney General Jeff Sessions to appoint a special counsel to investigate former secretary of state and 2016 Democratic nominee, Hillary Clinton. Thought the attorney general pushed back in that hearing, he is reportedly considering the move and has directed senior federal prosecutors to look into a host of concerns raised by Republicans, including alleged wrongdoing by the Clinton Foundation and the controversial sale of a uranium company to Russia.

Mrs. Clinton weighed in this week telling "Mother Jones" magazine that the appointment of a special prosecutor would constitute an abuse of power.


HILLARY CLINTON, FORMER SECRETARY OF STATE & FORMER PRESIDENTIAL CANDIDATE: This appears to be the politicization of the Justice Department and our justice system. This Uranium One story has been debunked countless times by members of the press, by independent experts. It's nothing but a false charge.

This is such an abuse of power and it goes right at the rule of law.


GIGOT: Dan --


GIGOT: A lot of our viewers would say, she deserves a special counsel investigation.

You wrote a column this week saying, not a good idea. Why?

DAN HENNINGER, COLUMNIST & DEPUTY EDITOR: I call it the bonfire of the prosecutors. I think it's a bad idea because, fundamentally, what is going on, Paul, is a political war between Republicans and Democrats, between Democrats and Donald Trump, and even the Beltway press. And you have --


GIGOT: Versus Donald Trump.

HENNINGER: Versus Donald Trump. It's not primarily a legal thing that you should have prosecutors pursuing. We're getting to the point where people are developing -- they think that Hillary Clinton will be put on trial and sent to a federal prison. That's never going to happen. And the --


GIGOT: Why not? Why do you say that?

HENNINGER: Because I don't think that you will get the people lower down in the campaign, like George Papadopoulos has pleaded over in the Trump campaign, won't rise to that point. You are in danger of putting in motion inconsolable, unappeasable resentments in the public on the left and the right, and you're putting pressure on the system. So interesting to see Jeff Sessions there, as the attorney general, trying to argue on behavior of the facts, trying to defend the Justice Department. Those institutions, like Justice, FBI and intelligence agencies, are already on the bubble with the American people, and I don't think we should push them through it.

GIGOT: Jason, one other element, Donald Trump, president of the United States, to whom the Justice Department reports, has been saying publicly, why don't they go after and investigate Hillary Clinton. That doesn't make life easy for Jeff Sessions.

JASON RILEY, COLUMNIST & SENIOR FELLOW, MANHATTAN INSTITUTE: It doesn't. And we have to remember that Republicans won't have control of the Justice Department. What will happen when the next Democratic administration gets in office and starts investigating their Republican colleagues? That, too, is the problem with going down this road.

People hear uranium and they think nuclear. It's more about a corruption story than a national security story. This is whether the State Department was being used to help enrich the Clinton Foundation. And so people need to keep that in perspective, what's going on here.

GIGOT: But, Kim, I think there are some viewers that would say, wait a minute here. There are two sides, for example, to the Russian meddling story. there's the Trump campaign and its ties and looking into that. There's also the question of just what role the Democrats played in hiring and paying Fusion GPS, which paid Christopher Steele, of British intelligence, to collect that nasty dossier on Donald Trump and the Russians. And who's going to investigate that? Maybe we do need a special counsel for that? So I'm playing devil's advocate here. Where should that be investigated?

KIM STRASSEL, WASHINGTON COLUMNIST: Absolutely all of this should be investigated, because these allegations are very serious, and they go to the highest levels of government.

Here's the problem, though, Paul. Why does no one trust the Justice Department to do this? Why are there calls for a special counsel? As Dan alluded to, people have no faith in the Justice Department or the FBI anymore. They see Loretta Lynch meeting with Bill Clinton on the tarmac. They see Jim Comey going outside the chain of command and absolving Hillary Clinton and not conducting his investigation the way it normally would work. So there is a place, though, that this can get done, and it's called Congress, and they've been doing a very good job in terms of the legwork for investigations on this.

The problem is, in fact, that the FBI and Justice Department will not submit to the oversight that, under the Constitution, they're bound by and not turning over the documents and making things available.

And by the way, it's the special counsel, Mueller, that's getting in the waive that because they keep saying, we can't interfere with his investigation.

GIGOT: That's where Sessions and Rod Rosenstein, the deputy A.G., could really step in and force that kind of cooperation.

Because, ultimately, Dan, we don't want this. Prosecutions, OK, you get a few people in jail. So what? Big deal. The country needs to know what happened. That's what I want to know. I want to know what happened in the election.

HENNINGER: Exactly. And that's not the job of prosecutors. They don't issue reports on what happened. They indict people. Kim's right. We need Congress to pursue this to tell us what happened in these instances.

GIGOT: And what about the political fallout if there's a special counsel named?

HENNINGER: Paul, I think you are almost guaranteeing the possibility of the impeachment of Donald Trump if the Democrats take control of the House in 2018. The impulse to payback for the appointment of this special counsel would be overwhelming.

GIGOT: All right.

Still ahead, President Trump takes a victory lap, touting the success of his 12-day trip to Asia. But critics say he's ceding leadership to China.


PRESIDENT DONALD TRUMP: My fellow citizens, America is back, and the future has never looked brighter.




TRUMP: The momentum from our trip will launch us on our continued effort to accomplish the three core objectives I outlined, to unite the world against North Korea's nuclear threat, to promote a free and open Indo- Pacific region, and to advance fair and reciprocal economic relations with our trading partners and allies in the region.


GIGOT: That was President Trump Wednesday in his first comments since returning from Asia, touting his 12-day trip to the region as a major foreign policy success. But critics are less enthused, claiming that instead of bolstering the United States' status among our allies, he's actually ceding power in the Pacific to China.

Cliff May, is president of the Foundation for Defense of Democracies.

Good to see you, Cliff.

Let's see if you can find out some truth here between Trump saying it's a tremendous success and all the critics saying it's a catastrophe, it's a debacle. Where do you see it?

CLIFF MAY, PRESIDENT, FOUNDATION FOR DEFENSE OF DEMOCRACIES: I think we're see a pattern that's sort of concerning that applies elsewhere in the world as well. The Trump administration and the president himself, they're articulating good, solid policies. The implementation of those policies is, at best, lagging a lot. While you have the Chinese establishing facts on the ground and establishing new ground, creating islands, militarizing them, and saying, over time, we will change the South China Sea into a Chinese lake, we'll turn international waters into territory waters. President Trump is saying, not in China, but elsewhere, that we're not going to let that happen, but steps to prevent that are not being taken.

You also have other equities involved here. One of the reasons that China has found North Korea to be an asset rather than reliability, it distracts the U.S. and gives China a bargaining chip. Look, we can help you in North Korea, but we want concessions in the South China Sea. We're going to be the hegemonic power in Asia and we expect you to accept that.

GIGOT: I thought the president's words about the South China Sea in Vietnam and the Philippines were pretty firm. He spoke up on behalf of freedom of navigation and territorial rights, and these cannot be demanded, dictated by any single country. And the pattern of the islands, building those islands, that started under President Obama. So, you know, it's good to have -- I agree with you on the point of follow-through, but in terms of setting principles, issuing a warning to China, I thought he did well.

MAY: I think that's exactly right. And it precisely means good articulation of policy and a vision ahead, and now you need implementation and people in place to implement those policies. You have criticism from former Obama people, but they did nothing about China's attempts to take over international waterways and establish hegemony, nothing whatsoever about North Korea's strategic patience, not doing anything. Really, all the problems that have matured over the last eight years, now President Trump inherits, and it's a huge mass of problems, very difficult to solve, and difficult to solve quickly. But you would like to see the people in place and implementation beginning to move.

GIGOT: Any signs from this trip on progress against North Korea? China, after the trip, for example, sent an envoy to Pyongyang for the first time. We don't know if that will happen. Any other evidence that maybe there is some coalition building to stop North Korea?

MAY: Maybe. I believe it will require a lot more pressure, not just on North Korea, but also on China. That will mean the threat of sanctions, even sanctions on all of those corporations and those entities in China that continue to facilitate the survival of the Pyongyang regime. It's got to become clear to China that North Korea is a liability. China has to understand this is your pit bull, pet pit bull, you need to stop it from biting the neighbors.

GIGOT: What about this deal that the president and Rex Tillerson, secretary of state, struck with Vladimir Putin about Syria, the so-called deconfliction deal, that is supposed make the civil war be reduced in tensions, save lives, and the president said many, many thousands of lives. What do you make of that?

MAY: Same concern, Paul, exactly. You had in October the president articulating a good policy in terms of containing Iran. And now you have the real risk that we will dispossess the Islamic State in Syria and have the Islamic Republic of Iran reap the benefits. That would be a huge problem. Iran's strategy here and goals are very clear, they want to take over the northern tier. They want to establish a corridor, a land bridge - -


GIGOT: Right.

MAY: -- from Tehran, all the way to the Mediterranean. They want to threaten their neighbors. They want to, over time, have nuclear weapons. They want to be the hegemon, a new empire of the Middle East. It's very important that we have the ability, and it will take some determination and resources, to prevent Iran from achieving its aims. Otherwise, we're the expeditionary force for Iran in Syria. That's not a good idea.

As for Russia, I would say this. Look, Putin is not a Communist, but he's a Soviet. What that means is that he sees the diminishment of American power or aggrandizement of the Russian power as the same arithmetic at the end of the day. He wants to diminish the United States. You can negotiate with him, but you have to understand that's who he is and what he wants.

GIGOT: It seems to me this deal more or less accommodates Russian demands. They're making some promises to help. They're saying, oh, yes, foreign actors need to leave. And then Iran turns around and says, we're not leaving, you're leaving. And Russia says, yes, that's fine with us.

MAY: Yes, Russia says, yes, that's legitimate. I would be very careful because Putin is a good negotiator. He will get his way. He's not going to see something like this as a win-win proposition. He's still empowering Iran. He's still empowering the Assad regime. He has equities there. I don't think we're in a good place right now. We're in a risky place. If the president articulates a strong strategy, vis a vis, Iran in October, and let's it falter in November, that's not a good thing.

GIGOT: All right, thank you, Cliff May. Appreciate it.

When we come back, the left is on the attack against President Trump's judicial nominees. But will charges that they're unqualified slow down the president's push to reshape the federal courts?



SEN. PATRICK LEAHY, D-VT.: I think this rush to rubber stamp President Trump's nominees is extreme. Some are objectively unqualified. It diminishes the constitutional duty.


GIGOT: Democratic Senator Patrick Leahy this week assailing the qualifications of President Trump's judicial nominees as confirmation hearings were held for six more of his picks. The left understandably frustrated with Republican efforts to reshape the judiciary and the rapid pace of confirmations. President Trump has had eight of his nominees to the federal appeals court confirmed in the first 10 months in office, compared to just three for President Obama in the entire first year.

We're back with Dan Henninger, Jason Riley and Kate Bachelder Odell.

So, Jason, one of the controversies is the American Bar Association has a standing committee that assesses judicial nominees, and rates them. They've been rating, I think, four so far, not qualified. That's what Leahy is referring to.

Here's my question: Who elected the American Bar Association?

RILEY: Nobody, Paul. It's a liberal activist group that pretends to rate judges objectively. And all they're really doing is giving cover to Democrats in the Senate that want an excuse to vote against the nominees. They hold conservative nominees to a different standard than liberal nominees. They're been doing this for years. It's no secret. The Senate Republicans should ignore what they're saying.

GIGOT: They did that against Clarence Thomas when he was up, and they sandbagged Robert Borke, way back, calling him unqualified, which was a scandal, because he was obviously the most qualified jurist in the world.


RILEY: -- full of lawyers, needs the crew to make this determination for them, to advise them on this. I think it's ridiculous.

GIGOT: Kate, the larger picture here is that Republicans are confirming a lot of judges very fast.

KATE BACHELDER ODELL, EDITORIAL PAGE WRITER: They are. The number you just quoted doesn't even include the handful of district judges they're moving through. Trump is lining them up like planes at O'Hare, getting a lot of judges through.

And on Jason's point, on how intensely personal these attacks from the ABA have become. We saw this week, from the Eighth Circuit, that all of the innuendo about his temperament and calling him in an interview, "you people," which is not my preferred pronoun, and asking where his children went to school.

GIGOT: And Ben Sass, the Republican Senator from Nebraska, hitting back very hard, saying, look, this distorts his record, distorts his manner and temperament, and, quite effectively, making the case he will be confirmed.

ODELL: Right. All kinds of groups have score cards, rating their favorite legislators of the year and all the rest of it. ABA is free to that. They should not be the special imperator.


HENNINGER: This is one of the reasons presidential elections become so intense, Paul. It's because you have these court appointments at being contested, not just the Supreme Court, but right down to the district courts, and the Republicans won. So they're now following through on making these appointments.

And we should point out that a lot of them are being recommended by the Federalist Society, which is not a conservative-leaning group, but, more of less, plays it straighter in its normal conferences. They bring people from the liberal side, the Republican side, the conservative side. They have displaced the ABA in this process.

GIGOT: And we should mention here, Jason, that the Democrats would have a stronger case for comity in the Senate and bipartisan advice and consent if they didn't unilaterally change the rules --


GIGOT: -- when they ran the Senate to get rid of the 60-vote filibuster rule for nominees and for lower-court judges. They did that to pack the D.C. circuit with Obama nominees. In fact, now the Republicans are saying, fine, we'll take that, and we're going to confirm that with 51 votes ourselves.

RILEY: Yes, and confirm as many of them and as quickly as possible, which they are wise to do. Because if the Democrats take control of the Senate, there will be no more confirmations.

# No more confirmations?

RILEY: None.

GIGOT: None? Really?

RILEY: I'm serious. I would not put it past them.

GIGOT: You guys agree with that?

ODELL: I agree with that, too. That's why I think the GOP should move now to limit debates further on nominees and get this process sped up.

GIGOT: They're holding every nominee to 30 hours when -- even if they're noncontroversial.

ODELL: Even if Democrats voted for them.

GIGOT: And Chuck Grassley moved this week to initiate a policy called the blue slip against two nominees and move them, which is, again, something that Democrats are responsible for themselves.

OK. We have to go.

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


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

Kim, start us off.

STRASSEL: Paul, we had another shooting this week in Rancho Tehama in California, another example of shooter who had a long history with crime and with mental illness and who should have never have had a firearm. This is a hit to Tehama district attorney, Greg Cohen, who put his finger on it. He said these shooting are not the result of one thing, but rather our culture has got a toxic mix these days of mental health, drugs, alcohol, poverty and firearms. He's right. And that's the way we should be looking at this problem.



RILEY: Paul, this is a miss for the three college basketball players from UCLA who got caught shoplifting in China recently. They embarrassed themselves, their team and the country. And it's a hit for President Trump, who intervened on their behalf. He did so less than graciously but it was the right thing to do.


GIGOT: Are they going to thank me or not?




ODELL: This is a hit for Republicans in Congress who this week, without fanfare, finished a Defense Authorization Bill for about $700 billion that's heading to the president's desk. It includes some good features like a 2.4 percent pay increase for service members that the Obama administration sort of famously skimped on to save money. I grant, this is not the start of major defense bill, but it's at least something.

GIGOT: OK, Kate.


HENNINGER: I'm giving a hit to Leonardo de Vinci, whose painting, "Salvador Mundi" sold at auction this week for $450.3 million. Incredible. After 500 years, Leonardo has still got it. That is staying power.

One more point through --


GIGOT: Are you sure that's Leonardo?


HENNINGER: The painting itself, "Salvador Mundi," "Savior of the World," most expensive paintings ever, it has to be of Jesus. I think this is one of the better developments in a long time.

GIGOT: It does say something about the economy that there's that much money floating around --


HENNINGER: In the world.

GIGOT: -- in the world to be able to buy a painting for that much money. Even a Leonardo.

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 you for watching. I'm Paul Gigot. We hope to see you right here next week.

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