Is the Pennsylvania election a wakeup call for Republicans?

This is a rush transcript from "Journal Editorial Report," March 17, 2018. This copy may not be in its final form and may be updated.

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

The White House shakeup continued this week with rumors of more changes to come. We begin with the firing of Secretary of State Rex Tillerson. President Trump announcing Tillerson's ouster on Twitter Tuesday along with his pick to replace him, CIA Director Mike Pompeo, a Trump ally who the president says shares his foreign-policy vision.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I've worked with Mike Pompeo now for quite some time. Tremendous energy, tremendous intellect. We are always on the same wavelength. The relationship has been very good. And that is what I need in a secretary of state.

(END VIDEO CLIP)

GIGOT: Joining the panel this week, 'Wall Street Journal' columnist and deputy editor, Dan Henninger, editorial board member, Mary Kissel, and Columnist Bill McGurn.

So, Dan, what do you make of the Pompeo-for-Tillerson change.

DAN HENNINGER, COLUMNIST & DEPUTY EDITOR: Paul, I say it is the beginning of President Trump saying he is, indeed, beginning to assemble the cabinet he would feel comfortable with. We want to Mr. Trump to feel comfortable with the people around him.

I think, in some ways, the Rex Tillerson issue was unique. As the president himself said, with Mike Pompeo, he is getting someone who is on the same page with him. Rex Tillerson was not on the same page with at least two important institutions, one, the president, with whom he disagreed on climate change, the Iran nuclear deal and North Korea. But also, Mr. Tillerson was to a great extent alienated from his own State Department. This is not a place a secretary of state wants to be. So it is no surprise he is finally leaving the government.

GIGOT: Yes. It's fascinating to me, Mary, often a secretary of state becomes a prisoner of the State Department and is at war with other elements of the administration. In this case, Tillerson was at war with the kind of professional diplomats. So he didn't even have that institution. I always thought that was odd. He decided when he came in he was going to reorganize the State Department, always a high-risk exercise.

MARY KISSEL, EDITORIAL BOARD MEMBER: The lesson is, Paul, if you come to Washington with flowcharts, you are usually destined to fail. Unfortunately, Tillerson saw a great exodus of the senior staff. There were not a lot of senior people around him. Then he chose, with his chief of staff, Margaret Peterlin, to isolate himself.

I think the larger issue that Tillerson had is that he didn't come in with a coherent view of how to use American power in the world. What was the State Department supposed to do? He saw himself as the, quote, unquote, 'adult in the room' who was there to restrain Trump instead of coming in with a coherent view to say, look, President Trump, this is where we should take North Korean policy or Iran policy. I saw him as more of a break than anything else.

GIGOT: He's, obviously, a hugely successful man. He was the CEO of Exxon. A tremendous career making a sacrifice to get into government, Bill, so I feel kind of bad about this whole thing not working in that sense. But Trump says he will now get the people who are on board with him. Is that a good thing?

(CROSSTALK)

GIGOT: You need somebody to be able to say --

(CROSSTALK)

BILL MCGURN, COLUMNIST: The secretary of state's job is to implement the president's foreign-policy. And as Dan said, there were serious disagreements, personality disagreements. He believed the vanity of the adults in the room. He was quoted as calling the president a bleeping moron. Who thinks you can keep your job when you do that?

(LAUGHTER)

Compare it to Mike Pompeo, who briefed the president every day. He got to have a relationship, see how it works. He says, I'm much more in tune with Mike Pompeo's views of the world and so forth. But I think also the personal relationship, it is an important thing. For a president, defense secretary, secretary of state, treasury secretary, those are the big ones where you need to have a rapport. And it's underestimated how much personality drives policy in the White House. You're in very --

(CROSSTALK)

GIGOT: Especially with this president, I would say.

(CROSSTALK)

MCGURN: A lot of things, people think, oh, they're disagreeing on policy, a lot of it is, they say, this guy is a jerk and --

(LAUGHTER)

-- and you discredit your policy. You have to get along in some way.

GIGOT: Dan, what implications does this have for foreign policy? We will see some nuance changes. Obviously, Trump is going to drive it. But will there be changes we are going to see?

HENNINGER: I'm not sure I would so much see change as I would see emphasis. One thing Mike Pompeo did while he was in Congress was he was one of the most vocal opponents of Barack Obama's nuclear deal with Iran. He and Tom Cotton led some of that opposition. So I expect, since that is what the president wants to focus on, but Secretary Pompeo will be able to give him a lot of directed guidance on Iran.

The other issue is North Korea. That is the most imminent threat, the North Korean nuclear threat. Mike Pompeo spent a lot of time on it as director of the CIA. He knows the issue. I suspect he will spend a lot of personal time with the president trying to figure out what to say to Kim Jong-Un if he meets with him, but more importantly, what to do about the nuclear threat.

GIGOT: Any difference on Russia?

KISSEL: Look, Pompeo is a hawk. I'd expect him to be strong on Russia.

But I just put another issue on the table that Dan didn't mention in relation to Iran, and that is Syria. Mike Pompeo has gone on record saying, you cannot solve Syria without getting Assad out of power. That isn't the line that President Trump has taken. President Trump has continued Barack Obama's policy of letting Russia and Iran control Syria, prop up Assad. That keeps the terror problem going, the migration problem going. So I would expect Pompeo, hopefully, to maybe convince the president to take a stronger stance in Syria.

GIGOT: Bill, the rumors everywhere that H.R. McMaster, the national security advisor, he is in one day, out the next, in one day, out the next. President Trump telling people that he would like to replace McMaster, but for now, looks like he is staying.

MCGURN: Right.

GIGOT: That can't be helpful.

MCGURN: No, it's not helpful. Let me tell you, when I was in the White House writing speeches and the war was not going badly --

GIGOT: Not going well.

(CROSSTALK)

MCGURN: -- I thought I was going to go. I remember people complaining about --

(LAUGHTER)

-- I said, you give me a better war and I will give you a better speech.

(LAUGHTER)

MCGURN: There was always that kind of thing. And because President Trump hasn't been as clear on policy, the personalities tend to dominate. People feel they will get to decide it rather than the president speaking clearly. I don't know what the president's idea of foreign policy, like Syria and North Korea. We know vague principles he has. When the president is not forceful and saying this is the path we are taking, not the other, other people fill in.

GIGOT: All right, thank you all.

When we come back, a rare joint statement from world leaders about Russia's role in the nerve gas attack on a former spy. But will that condemnation or new U.S. sanctions hit Vladimir Putin where it hurts? We'll ask British businessman and prominent Putin critic, Bill Browder, next.

(COMMERCIAL BREAK)

GIGOT: The Treasury Department slapping sanctions on Russian organizations and individuals Thursday in retaliation for meddling in the 2016 presidential campaign and waging cyberattacks on critical U.S. infrastructure. Those sanctions coming the same day President Trump, along with British Prime Minister Theresa May and the leaders of France and Germany, issued a joint statement denouncing Russia for the nerve gas attack on a former spy and his daughter in Britain earlier this month, calling it a clear violation of international law.

I spoke to British businessman, Bill Browder, earlier. His Russian lawyer, Sergei Magnitsky, died in a Moscow prison in 2009 after exposing Russian government corruption.

(BEGIN VIDEOTAPE)

Bill Browder, welcome. Thank you for being here.

The poisoning in Britain has all the earmarks of a Russian action. Any doubts that it was Russia?

BROWDER: It's not just the earmarks. It was a Russia action. So this is a military grade nerve agent only produced by the Russians and the victim was someone who was considered a traitor of Russia.

GIGOT: OK. Why would the Kremlin -- I assume the Kremlin would have to approve this, do you think?

BROWDER: For sure. Only one person.

GIGOT: OK.

BROWDER: Vladimir Putin.

GIGOT: Why would he take this risk on foreign soil?

BROWDER: You are not calculating his other issues. The main thing he has going on right now is Russia is running out of money. And the way he motivates and keeps loyal all the secret policemen, intelligence agents and generals, et cetera, is allowing them to steal money from the state or get money from some other forms.

GIGOT: How does he get money from this operation?

(CROSSTALK)

GIGOT: -- at risk.

BROWDER: There is not enough money in Russia to pay all of these guys and to keep them loyal. So if you can't use honey, you have to use vinegar. If he can't give them money to keep them loyal, he has to send a message to them. He takes a traitor in England, who has been gone for a while, kills him -- he's not killed yet --

GIGOT: Right.

(CROSSTALK)

BROWDER: -- but he tries to kill him, tries to kill his daughter. And the message to all the guys back home is, it doesn't matter -- if you are disloyal, it doesn't matter where you go, when you go, we are going to come after you, we're going to liquidate you and we're going to liquidate your entire family.

GIGOT: That is worth the risk to him of greater sanctions and hurting the economy further?

BROWDER: The risk to him, a disloyal secret police service, is being overthrown. That is worth more than anything.

GIGOT: This this go to the presidential election that is going on?

BROWDER: First, you can't call it an election.

(CROSSTALK)

GIGOT: We know he's going to win because we know he has rigged it.

BROWDER: It's a fake election.

GIGOT: OK.

BROWDER: It does figure in. The average guy on the street says, yes, the guy was a traitor in Russia, right on, Putin, for killing him.

GIGOT: This filing, the normal accepted rules of spy craft, even in the Cold War, you didn't kill an agent who had been exchanged for your agents after the fact.

BROWDER: But Vladimir Putin violates every rule everywhere. He invades -- he rewrites the borders of Europe by invading Ukraine. He shoots down civilian aircraft. He cheats in the Olympics. He cheats everywhere. There are no rules for Vladimir Putin.

GIGOT: That applies to the use of chemical weapons overseas --

BROWDER: Of course.

(CROSSTALK)

GIGOT: -- in violation of the Chemical Weapons Convention.

BROWDER: He doesn't care about any convention. There are no laws, no rules, no morality that affects Vladimir Putin.

GIGOT: What do you make of the response so far by Prime Minister Theresa May and this extraordinary statement by France, Germany, Britain and the United States saying, yes, it was Russia and we condemn it?

BROWDER: Everybody is looking to Theresa May to say what is the prime minister going to do? So far, the British Prime Minister Theresa May said we are going to do one thing, which is kick out 23 diplomats.

GIGOT: Right.

BROWDER: It is totally not comparable to talk about a chemical weapons attack versus kicking out diplomats. There has to be something much more dramatic to stop Putin from doing this again.

GIGOT: She's rallied some allies to condemn. Even the United States, given all the doubts about Donald Trump and Russia, they are in on it, on the statement. Any importance to that?

BROWDER: It is all great, but she's got to come up with a policy to do something. The policy should be to go after Putin's money and to go after all oligarchs who look after Putin's money.

GIGOT: Right. On that point, the United States on Thursday introduced new sanctions against 19 individuals, five organizations that had to do with meddling in the American election in 2016. Also, the statement from the U.S. said cyberattacks, including the energy grid. Now, that is going after some of the oligarchs.

BROWDER: It's going after one oligarch, Putin's chef. There is a guy, Putin's chef, you is an oligarch. He's also --

(CROSSTALK)

GIGOT: You mean chef is a -

(CROSSTALK)

BROWDER: Apparently, he's a chef. But that's the other thing. He also runs a mercenary operation in Syria and during the election. The point is there are much more direct targets no one has gone after yet, and those are the people, the famous oligarchs, the multibillionaire guys who look after Putin's money.

GIGOT: When you say go after them, you can sanction them to say you can't travel to Britain, you can't travel here. What you are talking about something more ambitious, which would be maybe exposing the extent of their foreign assets?

BROWDER: I'm saying freezing their assets because Putin -- what we have to understand is Putin doesn't have any money in his own name.

GIGOT: Right.

BROWDER: It's all in the name of other people, what I call oligarch trustees. If you freeze their money, you are freezing Putin's money, and no more chemical weapons after that, I promise you.

GIGOT: Because he doesn't have any money in his own name, he depends on their good offices.

BROWDER: He depends on them and he depends on our weakness not to go after them.

GIGOT: Why isn't the West going after that, giving many depredations from Putin?

BROWDER: I'm here telling your audience and every other audiences that will listen, if you want to get to Putin, go after the oligarchs.

GIGOT: That's what you have to do?

BROWDER: That's what you have to do.

GIGOT: I can't believe, for example, the Western spy services, MI5, MI6 and the U.S. --

(CROSSTALK)

BROWDER: They know. They know.

GIGOT: -- they must know where the money is, how much it is. Couldn't they just expose it even if you don't freeze it?

BROWDER: There's no reason to expose it. They need to freeze it. And if it gets frozen, that will stop Putin right in his tracks.

GIGOT: You think that will stop him right in his tracks?

BROWDER: Right in his tracks. It's so obvious. And it's not just me saying that. Alexei Navalny, who is the only real opposition person in Russia, has said it, Marina Litvinenko, who is the widow of Alexander Litvinenko, who was killed with radioactive materials. Everyone knows who Putin is, knows exactly what to do. And that is what needs to be done.

GIGOT: All right, Bill Browder, thanks for being here. We will see if they take your advice.

BROWDER: Thank you.

(END VIDEOTAPE)

GIGOT: When we come back, more changes at the White House as President Trump picks Larry Kudlow as chief economic advisor. What the move signals about the administration's economic policies and plans, next?

(COMMERCIAL BREAK)

GIGOT: President Trump this week chose Larry Kudlow as his new chief economic advisor. The long-time TV commentator replaces Gary Cohn, who resigned earlier this month over the president's decision to impose tariffs on steel and aluminum imports, something Kudlow has also criticized. But the president said Tuesday the internal debate is something he welcomes.

(BEGIN VIDEO CLIP)

TRUMP: We don't agree on everything but, in this case, I think that is good. I want to have a divergent opinion. We agree on most. He now has come around to believing in tariffs as also a negotiating point.

(END VIDEO CLIP)

GIGOT: We are back with Dan Henninger, Mary Kissel, and 'Wall Street Journal' assistant editorial page editor, James Freeman.

Mary, you know Larry Kudlow well. What do you think this move?

KISSEL: I think it's a terrific pick, Paul. Larry Kudlow is all about economic growth. He was one of the main forces pushing for a big tax cut. And most importantly, he is a communicator. He is someone who can go on the Sunday shows and explain how Trump's tax cut will help the average American and improve prosperity for everybody. And that is important when you have the president out there pushing anti-growth things like the tariffs. His messaging will be a stark contrast to the guy he replaced, Gary Cohn, who was really an insider, who was really in the White House doing his thing there but was rarely seen out in front explaining the policies.

GIGOT: But let me defend Cohen. I was skeptical at first when he came. He's kind of a Wall Street Democrat, not my favorite type. They like big government. But I thought he did a terrific job.

KISSEL: He did.

GIGOT: He picked a great staff. He was very effective internally. He pushed the tax cut bill. He had Trump's respect. He lost the tariff fight but probably anybody was going to lose that fight eventually, James.

JAMES FREEMAN, ASSITANT EDITORIAL PAGE EDITOR: We need someone who will keep fighting that flight, because we are at the frontend of the argument. And Larry Kudlow is a fantastic choice. You really couldn't do much better in terms of a champion for the growth economics. A lot of people know him as a persuasive advocate on TV. They may not know, back when he was a professional economist, he was among the most accurate forecasters of the economy that you could find on Wall Street. So he brings a lot to the table in terms of experience and talent.

GIGOT: But is he going to be able, Dan -- and this is where the question I would have. We know the White House is a cutthroat place. Donald Trump says he likes differences of opinion, but he likes shootouts. It's not just a difference of opinion. There's rumors, everybody is leaking stuff. Larry is, whatever else he is, he is a very nice human being. And I don't know if he is going to go in with those cutthroats, how he's going to do.

HENNINGER: Larry had that TV program for years, and he would often have opposition figures on, like Robert Reich, Obama's former labor secretary, and he would get into some heavy debates with those people. But Larry Kudlow has a skill for working its way through those disputes. And I think one of the jobs he will have with what Donald is attempting to do on trade is there's a lot of internal contradictions. He's been talking about global tariffs on steel and aluminum involving the European Union and the rest of the countries of the world. NAFTA is on the table, this free trade agreement with South Korea. But especially, as the 'Journal' reported this week, there has been a working group developing a whole set of offensives against China. That is a complicated policy set, no matter your ideas are about tariffs. Trump, in a statement about Larry, suggested that he likes debate, a lot of internal conversation, and there's going to be that as this tariff initiative heads forward. To have Larry Kudlow in the center of that, playing that role of trying to arbitrate differences of opinion and hold his own, will be a good thing.

GIGOT: There's a couple of different factions, right, Mary? You have the protectionist faction, Peter Navarro, Robert Lighthizer, Wilbur Ross at Commerce, Steve Miller, White House aide. And then you have some of more traditional minded, free marketeers, Kevin Hassett, Mick Mulvaney, now Larry Kudlow, to some extent the Treasury Secretary Steve Mnuchin, at least on trade, that is a real clash, and it will continue.

KISSEL: It will continue. But there may be one saving grace, and it's called the U.S. stock market. If Trump cares about one thing, it's that he wants that market to continue to go up. Ever since those tariff announcements came out, the market has gone down to sideways. I think Larry can show the president that protectionism has real costs. Not just in the stock market, but also to the jobs that aren't created and the jobs that leave the country. Look what happened to Boeing this week. At one point, the stock was down almost 7 percent --

(CROSSTALK)

KISSEL: -- because of the higher income, income costs that they might have --

GIGOT: And a fear they might be a target of retaliation by China and other people.

KISSEL: Absolutely.

GIGOT: They might go with Airbus products.

That is the question, James. We don't have much time, but the negotiating strategy point.

FREEMAN: Yes.

GIGOT: Trump says, oh, it's a negotiating strategy. Well, but how do know how it will end up? If we do tariffs, they retaliate, we do tariffs, boom, boom. Pretty soon, you're in a place you don't want to be.

FREEMAN: It's very dangerous. The steel and aluminum tariffs immediately made beer cans more expensive. The E.U. says they will respond potentially with a tax on bourbon. The Irish prime minister in town this weekend saying that the counter may be a tax on Irish whiskey. This could quickly get out of control, not just a trade war, but really a war on --

(LAUGHTER)

GIGOT: All right, James.

Still ahead, Attorney General Jeff Sessions fires former FBI Deputy Director Andrew McCabe. Is he sending a message to other Justice Department officials?

(COMMERCIAL BREAK)

GIGOT: Attorney General Jeff Sessions taking the recommendation of the FBI's Office of Professional Responsibility and firing former FBI Deputy Director Andrew McCabe. The Justice Department's inspector general reportedly finding that McCabe authorized the disclosure of sensitive information to a reporter about the Clinton Foundation probe and then lied about it to investigators.

We are back with Dan Henninger, James Freeman and Bill McGurn.

So, Bill, how significant is this and why?

BILL MCGURN, COLUMNIST: It is very significant. He's the first player in the non-Trump issues to be punished and this is a very big thing. And I think Jeff Sessions didn't want to be vindictive. But as we said in the editorial, the recommendation didn't come from Donald Trump or a Russian bot. It came from the FBI itself. We've been told the last year by Director Comey how great it is in its ethical standards and it absolved Mr. McCabe from conflicts of interest from the money that his wife took. We should take them equally seriously now.

GIGOT: We should point out the significance. He was going to resign --

MCGURN: Right.

GIGOT: -- on March 18, and that date allowed him to collect his pension.

MCGURN: Yes.

GIGOT: If he is fired before that date, it is a possibility he could lose that pension.

MCGURN: Right. And --

GIGOT: It's a significant sanction.

MCGURN: It's a very big sanction. It's the first one. We haven't gotten any truth or cooperation from the Department of Justice or the FBI, even under the Trump administration. This is the first signal that if you're untruthful -- which really cuts against the FBI culture. It's a culture committed to truth in law enforcement -- this is a sign you may face consequences. And I don't think these will be the only consequences.

GIGOT: Dan, what do you think of this?

DAN HENNINGER, COLUMNIST & DEPUTY EDITOR: Well, another issue that it raises, Paul, is the call again this week by Senators Grassley and Graham for the appointment of a special prosecutor to look at what the FBI was doing during the Trump/Russia investigation.

Now, what happened with Mr. McCabe, is an office inside the FBI, called the Office of Professional Responsibility -- in other words, they regard themselves as professionals and they have a responsibility to their authority as FBI agents -- those are the people who said Mr. McCabe's lack of candor was sufficient that he should be fired without his pension. Which suggests to me, Paul, that perhaps the FBI realizes what has been going on here, and between this office to the inspector general's office, they can clean up their own house.

GIGOT: Do you think that's possible? Do you think we should name a special counsel, James?

JAMES FREEMAN, ASSISTANT EDITORIAL PAGE EDITOR: I don't understand why we need a special counsel. We have a Justice Department and we have a duly elected president. It's part of the executive branch. They should be able to do this job. And we've been talking about the messages this sentence, this is helpful in encouraging others at the FBI, some of whom are about to testify on Capitol Hill soon, to be forthcoming. We want to know a lot of details about the Clinton e-mail investigation and how the power of the government, the FISA court --

GIGOT: Well --

FREEMAN: turned on the opposition --

(CROSSTALK)

GIGOT: Why does this make them more likely to cooperate?

FREEMAN: It says there will be consequences. One of the previous FBI scandals was the lack of accountability after the IRS was caught targeting Americans. No one charged in that situation. I'm not saying this has to lead to criminal charges, but we do want the truth of what happened with the law enforcement authority acting really in politics and using surveillance power of the government.

GIGOT: What I want to see, Bill, too, is the inspector general report.

MCGURN: Exactly.

GIGOT: Because I want that out, and not just to know all the facts but to be fair to McCabe. All right, what is the fact base here and what is he actually accused of?

MCGURN: I've always said, prosecution of people for the -- that's secondary. In our system, the first important thing is political accountability, to know what happened. And the FBI, remember, the new director of the FBI, Chris Wray, and Rod Rosenstein at the Justice Department, when the House was asking for important information and the testimony of these guys, they only coughed it up when threatened with a contempt vote. This is not -- these are not cooperative agencies. You can't have them going off on their own. It is bad enough when politicians cheat or bend the law, but when people entrusted to uphold the law are found to be dishonest -- in this case, look, it is another example, if what's being reported is true, the cover-up was worse than the crime, that he lied to the inspector general's investigators about what he had done regarding the leak.

GIGOT: All right, thank you all.

Still ahead, a special election in Pennsylvania is seen as a wake-up call for Republicans heading into the midterms. Are Democrats making inroads with Donald Trump's Rustbelt base?

(COMMERCIAL BREAK)

GIGOT: A special election in Pennsylvania this week seen as a wake-up call for the GOP heading into the November midterms. Democrat Conor Lamb's razor-thin lead in the race to replace Republican Congressman Tim Murphy comes in the unlikeliest of places, a deep-red district in southwest Pennsylvania that President Trump won by 20 points.

Republican strategist, John Brabender, served as a senior advisor to former Pennsylvania senator and 2016 presidential candidate, Rick Santorum. He joins me now from Pittsburgh.

John, welcome.

I'll tell you, the one thing I noticed here was the Republican vote really fell off in this district from previous contested elections. What happened?

JOHN BRABENDER, R-REPUBLICAN STRATEGIST & FORMER SENIOR ADVISOR TO RICK SANTORUM: We have to be very careful and understand the district. This district, when we say it is a red district, it's a lot of Democrats who traditionally vote Republican. If you count non-Republicans, there is a 72,000-vote majority for Democrats and Independents. What historically happens in this district is Republicans do well because Democrats keep putting up very progressive left-leaning Democrats. Donald Trump won by 20 points because it was really Hillary Clinton driving numbers, not just President Trump. We have a race where we know we already have a Democrat base enthused based on the opposition, President Trump.

GIGOT: Right.

BRABENDER: You have a lot of Democrats who would just as soon vote Democrat, and a Democrat candidate who came close to running as a pro-Trump Democrat. That is what you need to have to win a race like this and that's why the election was so close.

GIGOT: Mitt Romney won the district I think by 17. Tim Murphy, when he was running, always had a pretty comfortable race. Would you agree this is a real warning sign for Republicans that if Democrats don't put Hillary Clinton on the ticket, and put somebody who seems reasonable on the ticket, they have a very good chance of running the table and winning the House?

BRABENDER: Yes. The mistake we could make and say, oh, this was an aberration, anomaly, whatever you want to call it, there are a lot of messages in here, but it is important to understand there were some distinctions. Tim Murphy was a pro-union Republican, voted for Card Check and other things, and so unions were happy to have a Republican to support, and often times did. Saccone was nowhere near that type of a position, much more conservative on those labor issues.

GIGOT: Right.

BRABENDER: With that said, the biggest disappointment to me was I saw a lot of research in this district and people were very mixed, for example, on the tax cuts. And here's a tax cut where 90 percent of taxpayers get more money in their take-home pay, yet they to be very mixed on it. So the real signal is, as Republicans, we have not always done a good enough job regarding some of our successes.

GIGOT: That is a key point. On tax reform, something Republicans say they will run on and the economic consequences. If you look at the way the Republican ran in this district, he didn't really run full-throated in favor of a tax cut. Conor Lamb, the Democrat, he opposed it and said, by the way, because it increases the deficit, they will cut Social Security and Medicare. We know this Republican Congress isn't going to do anything to Social Security and Medicare. How do you lose an argument based on a vote you are not going to have?

BRABENDER: He also lost the argument on the weight of message. Conor Lamb outraised Rick Saccone by a 5-1 margin. He had the ability to get a much stronger message out because of the weight of the message then Rick Saccone had the ability to do. There were a lot of independent outside groups that ran, but they tried to turn Conor Lamb into a Nancy Pelosi Democrat. Conor Lamb ran an ad saying I don't like Nancy Pelosi and I'm not going to support her, and that message didn't work well. But you are 100 percent right. The key moving forward for the Republican Party is we need to have a better effective message on why these tax cuts are so beneficial to all Americans, not just wealthy Americans, but all Americans.

GIGOT: Donald Trump, I think, in part, imposed the steel and aluminum tariffs because he thought it might help in the selection in Pennsylvania. And yet, it didn't. Conor Lamb basically said I agree with the president on the tariffs and the issue was neutralized. Tariffs, were they a big issue here or not?

BRABENDER: It turned out to be a non-issue only because everybody was in agreement. Conor Lamb said, I think this is a great idea that we should take a look at. What you see is, again, there's a lot of pro-union Democrats who sometimes vote Republican, but giving them a candidate who checks all the boxes of the items important to them, they would just as soon vote Democrat.

GIGOT: There's a big redistricting that took place in the dictate of the Supreme Court in Pennsylvania. The districts that each of these guys run in are going to be different in the fall, but they are different across the state. How many seats could Republicans lose in the House in Pennsylvania in that one state in November?

BRABENDER: You could make the argument that as many as six seats, maybe even seven are in play.

GIGOT: OK.

(CROSSTALK)

GIGOT: That's a lot of seats.

BRABENDER: It is a lot of seats. And if you go back to years like 2006, Pennsylvania lost more House seats than any state in the nation. With that said, I think Republicans have some very good candidates in some of these seats, better than the Democrat candidates. But take the suburbs of Philadelphia. These are always targeted seats usually held by Republicans, and the Democrats try to challenge them. And as we know, the president did better in some of the more western conservative parts of the state than the eastern part of the state. But the way Democrats drew the map -- and let's be clear, when we say the Supreme Court, it's a Democrat Supreme Court.

GIGOT: Right.

BRABENDER: The way they drew this was certainly to benefit the Democrats.

GIGOT: OK. John Brabender, thanks. We will be watching this state very closely.

Still ahead, as Republicans look for lessons from this week's special election in Pennsylvania, there's at least one Democrat who hasn't learned from her 2016 defeat. Out panel weighs in on what it means for November's midterms, next.

(COMMERCIAL BREAK)

GIGOT: As Republicans sort through the lessons from this week's special election in Pennsylvania, it appears that at least one Democrat hasn't learned from her own defeat in 2016. Speaking at a conference in Mumbai, India, last weekend, Hillary Clinton blamed her lose on white women being pressured by their husbands, bosses and sons to vote for Donald Trump. She went on to tell the audience, quote, 'I won the places that are optimistic, diverse, dynamic, moving forward. And his whole campaign, Make America Great Again, was looking backwards, you know? He doesn't like black people getting rights. He doesn't like women, you know, getting jobs.'

We're back with Dan Henninger, editorial board member, Allysia Finley, and James Freeman.

Dan, we'll get to Hillary Clinton. But on the Pennsylvania race, Paul Ryan saying it is a wake-up call. They said it was a wake-up call after Virginia. They said it was a wake-up call after the special election in the state election in Wisconsin. How many wake-up calls do the Republicans need here?

HENNINGER: Maybe just one more, Paul, and that is a wake-up call in the Oval Office. Donald Trump from went down there the Saturday before the election, spent 75 minutes giving a campaign speech nominally on behalf of Rick Saccone, who lost. The lesson is the great-man theory of politics only works for the great man.

(LAUGHTER)

Which is to say there really is a disconnect in these midterm elections between the presidency and the candidates running. In 2010, Barack Obama lost -- or the Democrats lost 63 seats in the House, a complete wipeout. And Obama said later that he admitted he had not done that much to help Democrats running at that level. I think the same is true of Donald Trump. There were losses in the Virginia gubernatorial, the Alabama special Senate election, and now this. I think President Trump should let the Republicans run these races on their own and stay home in Washington doing his job, raising the attitude toward the presidency. That would help them.

GIGOT: Yes. Ted Cruz, James, said that Democrats are going to crawl over broken glass to get to the polls this November. I think he is right.

(CROSSTALK)

GIGOT: Maybe underestimates the enthusiasm they have. Their enthusiasm was up in this district, Republicans way down.

FREEMAN: Yes. It is a wake-up call and it's also a psychological blow to Republicans. A lot of them in the House were looking at this race to get a read on where they will be in the fall. So it was not good for morale, but I am not sure it means a whole lot more than that. Fortunately --

(CROSSTALK)

GIGOT: You are an optimist, my friend.

FREEMAN: In this sense. John Brabender was talking about how Conor Lamb had five times the money, ran as a moderate. Rick Saccone --

(CROSSTALK)

GIGOT: He had plenty of money. The Republicans had plenty of money.

FREEMAN: I don't know how many Republicans are going to be losing the tax issue this fall, as he did. I don't want to say Lamb lied, because I don't know his intention, but the falsehood that only rich people got tax cuts that hit up and down the income ladder, is very easily rebutted. And for competent candidate talking about how everyone benefits, and we are seeing wages go up as a result, this is a winning issue. I don't know how Saccone made it a losing issue.

GIGOT: The Nancy Pelosi freight-mask strategy, and Democrats or Republicans say, oh, my god, Nancy Pelosi will be speaker again. It didn't work. Is it because Lamb said, I don't like her either?

(LAUGHTER)

ALLYSIA FINLEY, EDITORIAL BOARD MEMBER: -- going to disown her. And the Hillary Clinton freight mask isn't going to work either.

GIGOT: But she won't be on the ballot.

FINLEY: She won't be on the ballot, and that helped Republicans hugely in 2016. They were dealing with Trump. People dislike Hillary more than they dislike Donald Trump.

As for the argument, OK, Rick Saccone was a bad candidate, which you keep hearing. He won his state Senate district by 20 or 30 points in the last week to elections. And these were Democratic-leaning districts. He had managed to hold these districts. The difference this year was the Republican turnout had fallen off.

GIGOT: Hillary Clinton -- I know you are all going to pile on this.

(LAUGHTER)

How do you feel, Allysia, when you hear her say women who voted for Trump did it because of their husbands, fathers, brothers, the neighbor, whoever, some man?

FINLEY: I guess we're clinging to our husbands and bosses now, or our brothers and sons. That comes as the Obama comment about the, quote, unquote, 'deplorable's.' Hillary Clinton made the 'deplorables' comment about working-class people trying to explain why they don't agree with them. It is very condescending, and women will react that way.

GIGOT: Dan, it's the cultural condescension that is a big problem for the Democrats, and she typified that. They, basically, despise a huge chunk of the public and they communicate that, and that is a problem.

HENNINGER: That is the nature of identity politics, Paul, when you feel that there are grievances, deep grievances involving gender, race, the rest of it, you will talk about that all the time. The only way you can talk about it is by suggesting, as Hillary does, that large swaths of the population are against black people, against women. And that doesn't compute with most Americans. But that is driving a large part of the Democratic Party right now, especially on the coast, Nancy Pelosi, Hillary Clinton. And I don't think the Republicans would be remiss at all if they would say to some of those voters out in the heartland, this is what you will be getting if you return the Democrats to the House in November.

GIGOT: And I think Democrats are probably, in these swing districts, smart enough to nominate people who won't repeat that mistake.

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

(COMMERCIAL BREAK)

GIGOT: Time now for our 'Hits & Misses' of the week -- Bill?

MCGURN: Paul, a miss to Disney for its $100 million blockbuster, adaption of 'Wrinkle in Time.' It is not doing that well at the box office. This is a classic good-versus-evil tale, but Disney stripped the novel of its Christianity in favor of these P.C. platitudes. I remember, as a fifth- grader, my teacher read it out to aloud. Now, it appears even a two-story Oprah Winfrey with glitter and so forth is not enough to help this at the box office.

GIGOT: All right.

Allysia?

FINLEY: A miss to California's low-speed rail. New budget estimates put it at 20 percent over budget. And now, in order to shave costs, they are slowing down the rail. It is going to take more than four hours to travel from L.A. to San Francisco. Why not just fly for 45 minutes for $60?

GIGOT: This is the bullet train.

(LAUGHTER)

Thank you.

Dan?

HENNINGER: Paul, I will give a hit to the students who stayed inside their schools this week during the national school walkout over guns. The idea is very common now that, especially on campuses, that no matter what the cause, you have to shut down the institution or walk out of classes. Paul, these are the bedrock institutions of American life. They really deserve respect, not being used as instruments of protest.

GIGOT: Yes, that's certainly true.

Thanks, Dan.

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

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

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