Candidates make closing arguments in key states

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This is a rush transcript from "Journal Editorial Report," November 3, 2012. This copy may not be in its final form and may be updated.

PAUL GIGOT, HOST: This week on the "Journal Editorial Report," the presidential campaign against back on track in the wake of superstorm Sandy. Headed into the final days, we'll look at the final arguments.

And there are 33 seats up for grabs in the Senate, but the balance of power there could hinge on a few key races. We'll tell you which ones to watch.

Plus, a look at some other measures on ballot in states across the country, and what they could mean for taxpayers, school kids and organized labor.

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

The presidential campaign kicked back into high gear late this week in the wake of Hurricane Sandy with both President Obama and Mitt Romney making their final pitches to swing state voters.


PRESIDENT BARACK OBAMA: Governor Romney has been using all his talents as a salesman --


-- to dress up these very same policies that failed our country so badly, the very same policies we've been cleaning up after for the past four years.



ROMNEY: And his campaign and his address is all about attacking. We actually have a plan to get this economy going.


GIGOT: And joining the panel this week, Wall Street Journal columnist and deputy editor Dan Henninger; Political Diary editor, Jason Riley; assistant editorial page editor, James Freeman; and Washington columnist, Kim Strassel.

So, Dan, any evidence that Hurricane Sandy is going to affect this race?

DAN HENNINGER, COLUMNIST, DEPUTY EDITOR: I think, yes. I think it might, in the sense that -- I think one of the big elements in the race is the level of enthusiasm on both sides. My strong sense, Paul, is that there is an enthusiasm deficit on the Democratic side.

GIGOT: Right. All the polls show that.

HENNINGER: All the polls show that. And I think it's a going to be a determining factor. Now, New Jersey, New Jersey, Maryland, it isn't going to decide whether -- Obama will win those states. His popular vote may be down though. I think the hurricane is going to suppress Obama's popularity vote.

GIGOT: So dampen the intensity for Obama?


JASON RILEY, POLITICAL DIARY EDITOR: I spoke to a Democratic pollster this week, someone not working for the Obama campaign, and he agreed with Dan's sentiment that turnout was an issue for Democrats. Enthusiasm is down. But he also says that he thinks this allowed Obama -- even though he missed some days on the campaign trail, this allowed him to get out there and show some leadership, show some bipartisanship, thanks to the New Jersey Governor, Republican Chris Christie, be being at his side for a couple of days.

GIGOT: I want to ask you, a New Jersey resident --


GIGOT: -- and generally a fan of Governor Chris Christie, what do you make of this embrace of the governor with the president?

FREEMAN: Well, our colleague, Peggy Noonan, says you want to keep your friends close, but your president closer.


I think certainly, Mr. Christy is dealing with an emergency and trying to get help as soon as possible. There is a sense that these kinds of situations will make people turn and embrace big government. But you're already seeing a lot of flaws in the federal response. FEMA not getting a lot of these generators that they promised online quickly. So, I don't see any kind of a national move toward bigger government as a result.

GIGOT: Kim, the other big story this week is that the Romney campaign has been expanding the field, the electoral field, moving into Pennsylvania with a very big ad buy, much bigger than the Obama campaign, and even talking a little how the fact that Minnesota could be into play. And the president was in Wisconsin, and is going to close to campaign in Iowa, places where he should -- you think he would have locked up. Do you take this expansion of the field seriously?

KIM STRASSEL, WASHINGTON COLUMNIST: Yes, and I think that this is part of the momentum argument for Romney. Now, you've had the Obama campaign desperately trying to tamp that down, saying it's not true, it's not real. The reality is what you've seen since the Denver debate is Mitt Romney pulling ahead in a lot of places. Now, that momentum has slowed down a little bit in some of these very hard-fought swing states, like Ohio and Virginia, where the president is now throwing a lot of resources. But that's the story, is that has continued in other areas, like Pennsylvania, Minnesota, Michigan, Wisconsin. And the fact that you are going to have both Romney and Ryan on separate occasions in Pennsylvania this weekend suggests that they take this seriously. You don't go to a state and two days before an election unless you think there's potential.

GIGOT: Let's take a President Obama ad attacking Mitt Romney in Ohio.


AD ANNOUNCER: It's said that character is what we do when we think no one is looking.

ROMNEY: They believe that they are victims.

AD ANNOUNCER: Mitt Romney thought no one was looking when he attacked

47 percent of Americans, his company shipped jobs overseas, his plan cuts millionaires taxes, but raises yours. He'll voucherize Medicare and make catastrophic cuts to education. So remember what Romney said and what his plan would do.


GIGOT: Taking our name in vein again there on that ad.


Falsely. I want to repeat again --


GIGOT: -- for the 15th time, just so our viewers know, the Wall Street Journal does not agree with any of the --



GIGOT: What do you --

HENNINGER: What do you think?


GIGOT: This is a distilled --


-- this is a distilled essence --


GIGOT: -- of the campaign.

RILEY: He keeps returning to this class warfare theme. And it's instructive that this ad is running in Ohio, in the Midwest. He thinks this outsourcing, hitting the rich, 47 percent plays well with less educated white men in the Midwest and that is where he's focusing ads like this.

GIGOT: But if -- is that really a good closing argument, Dan? That's not an argument for the second term.

HENNINGER: It's not. And I honestly do not understand it, Paul.

It's -- I think it reflects Barack Obama's antipathy toward Mitt Romney?

GIGOT: Personal?

HENNINGER: OH, I think so. He's been wanting to take him down from the beginning, doesn't respect Romney. And he's been running the same anti-Romney campaign from the beginning.

I agree that voters are sitting out there with the economy the number- one issue, waiting for the president to tell them what his plan is for a second term to get the economy growing than the jobs report this week suggested.

GIGOT: Let's turn to a Mitt Romney ad this week about President Obama.


AD ANNOUNCER: Barack Obama says he may appoint a secretary of business. His solution to everything is to add another bureaucrat. Why not have a president who actually understands business? Under Obama, millions of people can't find work, and more families on welfare and a record number of Americans on food stamps. Mitt Romney understands business, knows how to create jobs, and get our economy moving. He's done it before. He can do it again.


GIGOT: James, good message?

FREEMAN: Well, I think so. The second half of it was positive. And the first half, the secretary of business idea, it's a number of the -- one of the number of signs suggesting that the Obama campaign thinks it's losing, where they're throwing out ideas late in the campaign has a kind of a disorganized panicked quality. And as the ad says, another bureaucracy is not the answer.

GIGOT: Don't we have a secretary of commerce that's supposed to be a secretary of business?

FREEMAN: And we don't even need that one, so the idea that we want to add another --


Who knows? A secretary of business under an Obama administration, making sure that alternative energy companies getting more of an advantage over other types of firms? I mean, yikes.

GIGOT: My only problem with that ad is that I think it's a distraction, in the sense that I think Romney ought to be focused directly at the camera, here is my plan, here's my contrast with the president.

That's when he's been most effective.

Gentlemen, we're going to -- and Kim, we'll going to --


-- continue this after the break.

Much more ahead on this final weekend before the election. With October's unemployment numbers in, will the economy take center stage once again in the campaign's final days?


GIGOT: The unemployment rate ticked up slightly in October to 7.9 percent, with employers adding 171,000 jobs in the final measure of the U.S. economy's health ahead of Tuesday's election.

So, James, is this going to affect the campaign much, do you think?

FREEMAN: I think it does, because I think it confirms that President Obama's economic policies have failed on their own terms, that we still officially have a lousy economy, more than 12 million people unemployed.

It's 23 million, if you count the people who are working part time because they can't get full-time work, people who have quit. So, yes, if this is a referendum on his economic policy with it.

GIGOT: I know you wanted to get a point in here before I rudely interrupted --


-- in the first segment about that ad.

FREEMAN: Well, this is --


-- that we talk about the distortions of the ad, but the bigger whopper that the president is telling on the campaign trail in the first clip, where he basically says the deregulations and tax cuts of the Bush years caused the crisis, and now Mitt Romney is going to do them again.

There was no deregulation in the Bush years. It's a myth that he's been perpetrating for years. And any of the tax cuts caused the financial crisis, that that's why Lehman Brothers and Bear-Stearns had too much exposure to --

GIGOT: The housing market.

FREEMAN: -- to the housing market. It's insane.


I think Mr. Romney ought to be pushing back on that.


HENNINGER: As a quick extension to that, Jason, his idea is that, instead of doing that with the economy back on its heels, raise taxes, which he will do if he gets reelected, and impose more regulation on the economy. That's his solution to the problem we've had before.

RILEY: I think the contrasts in these closing arguments are very telling. Obama decides to double down on the character assassination and class warfare. Romney is talking bipartisanship, how he was a governor of a blue state, was able to work with Democrats in the legislature in Massachusetts. One sounds much more presidential than the other.

GIGOT: Well, Kim, you say, Kim --


GIGOT: -- the president is, in fact, now throwing out some attempts to say, well, I'm going to get a big budget deal with Congress, I real want a bipartisan immigration deal, hey, maybe, even tax reform. So --

STRASSEL: This is really important, yes.

GIGOT: Yes. What do you think of that?

STRASSEL: Because he's being very critical of Romney. But in this last week, suddenly, we're seeing these glimmers of the hope-and-change Obama trying to get some of that mojo back. And that is a testament to the difficulties the president is having with Independent voters and women.

And they voted for him in 2008 because, again, he claimed to be a new type of politician. I don't think this is working. It's falling over flat.

It's hard to look like the inspirational candidate when 90 percent of your advertising aimed at knee-capping your opponent. But he suggests that he knows that they have a problem with those voting segments.

GIGOT: You know, Kim, I don't -- I can't recall an election where both sides seem so convinced they're going to win going in the final days.

Usually, you get some concessions as you did in 2008 --


GIGOT: -- that McCain really doesn't have much of a chance. It was a Hail Mary. This time, both sides seem convinced they're going to win. How do you explain that?

STRASSEL: I think both sides have reasons to believe. You've got Obama's side, and they are looking back at their 2008 turnout machine.

They're seeing some aspects of it that look like they'll get a decent job of getting their Democrats out. But on the Romney side, you see a lot of enthusiasm among Republican voters.

GIGOT: Right.

STRASSEL: You also see Independents swinging for him in a huge way.

It's important, by the way, too. It's hard to win elections unless you have Independents behind you. So -- and you break it out into the swing states, and some are going for Obama, leaning toward him, some are leaning toward Romney. That's behind the enthusiasm on both sides.

GIGOT: No question that Romney has expanded the field well beyond McCain, and he's in striking distance or ahead in almost all of these key states.

RILEY: I think the polls are giving both sides hope. The national polls have consistently shown Romney with a slight lead since, you know, mid October or so. But these state polls continue to show Obama with some advantages in the electoral votes. So, I think both sides are looking at the polls and seeing hope.

GIGOT: Dan, let's step back briefly here. I mean, how important is this election? We always say the elections are the most important in X years, but, for me, I think this is the most important election since Ronald Reagan, certainly, in terms of setting the direction of the country and validating, or not, the huge expansion of government that Barack Obama has promoted in the first term.

HENNINGER: I agree, Paul. I mean, historically, the country is divided in this past century between the private economy and the public government. And there's always been a division of duties there. Barack Obama is trying to take spending from 20 percent of GDP over the last 25 years up to about 23 percent.

GIGOT: For the starters.

HENNINGER: For starters. And plus, make the federal government the lead role in the direction of the economy in a way that no previous president has ever done. And I think that that is the decision the American people have to decide, is whether they want Washington, the federal government finally to lead the country or to have that reside and decisions made by everybody who is working in the private sector.

GIGOT: All right.

Still ahead, we go from the presidential race to the battle for control of the United States Senate. Could a big night for Mitt Romney Tuesday mean a GOP takeover there? Our panel previews the races to watch, next.


GIGOT: Turning now to the battle for control of the United States Senate where, right now, Democrats hold a slim majority. But that balance of power could change with the outcome of just a handful of races on Tuesday. So which ones should you be watching?

We're back with Dan Henninger, Jason Riley and Kim Strassel. And Wall Street Journal editorial board member, Steve Moore, also joins the panel.

So, Kim, not too long ago, people were talking about Republicans picking up six, seven seats, net. Now, it looks like those fortunes have changed and some people are saying they may not pick up the three they need. What happened?

STRASSEL: Well, what you've got here is a number of races that are just become much more closer than you thought. The Republicans are three down. And they are likely to lose Maine. They may lose Massachusetts, where Scott Brown a rerunning. And may lose Indiana where Dick Luger was primaried earlier this year and now Richard Mourdoch is running against Democrat Joe Donnelly. They've got some good pickup opportunities in places like Nebraska and North Dakota.

But most of the reigning ones of these races are very, very close. So if you need five or six, what we seem to be looking at here is a replay of

2010 where the numbers are possible. But the Republicans, to take control, are pretty much going to have to run the table, and that may depend a lot on how Mitt Romney does that night.

GIGOT: Steve, is this a candidate problem in part? Scott Brown has done -- I mean, is a tremendous political talent. Very, very good politician for that state. But it looks like he may lose to Elizabeth Warren.


GIGOT: Is that just because that state is so liberal?

MOORE: Yes, well, let me answer your question. I think it's some pretty lousy candidates on the Republican side of the aisle. And actually, Democrats have recruiting pretty good candidates this year. Example, Bob Carey, in Nebraska, is making that race potentially tight. That's a very red state. Give you another example. Your home state of Wisconsin, Tammy Baldwin, from Madison, is hardly a centrist Democrat, but she's running --

GIGOT: That's for sure.


MOORE: She is running as one. And meanwhile, Tommy Thompson, who was the four-term governor of Wisconsin, is running a tired campaign and he's not appealing to voters.

My favorite race, Paul, is the one in Arizona, which should not be tight. That's a very red state. And the reason that's important is because Jeff Flake, who has been a taxpayer hero, made his career in the House as Mr. Anti-Earmark. Paul, he's being attacked in Arizona by some Republican business groups for not bringing home the bacon.

GIGOT: Right. But I've been told, Steve, that that -- my sources say that that race has turned toward Jeff Flake in the last week --

MOORE: Yes. Yes. I agree.

GIGOT: -- and he's got a pretty comfortable lead and is likely to win but --

MOORE: I agree.

GIGOT: -- what about this problem of candidate talent? I mean, Todd Akin, in Missouri, had a great opportunity --

RILEY: Some self-inflicted wounds, both in Mourdock and Todd Akin.

You mentioned Tommy Thompson and Jeff Flake. Both of them face tough primary races, left them a little bloody for the general election.

GIGOT: Tommy Thompson had no money.

RILEY: No money or high negatives, so that's hurt as well. It's not only the candidates. Sometimes, it's the primary process.

HENNINGER: Well, there's more competition on the Republican side.

That's what these primaries have suggested. There's ferment inside the Republican Party. On the Democratic side, less so. But an interesting thing about the Democratic Party -- and Kim Strassel wrote about this in her column this week 00 is, with the exception of Elizabeth Warren, in Massachusetts, virtually all of these candidates are running in this political center or even to the right of center, out of sync completely with the national Democratic Party.

GIGOT: Let's give our viewers a flavor of that with this ad from North Dakota, Democratic candidate, Heidi Hydecamp.


HEIDI HYDECAMP, SENATE CANDIDATE: I'm Heidi Hydecamp. And if you want a senator that only votes the party line, either way out on one side or the other, then I'm probably not your candidate.

I'll do what's right for North Dakota. That's why I stood up to President Obama to support a Balanced Budget Amendment and the Keystone Pipeline and I oppose capital and trade. And no matter what party leaders want, I'll protect North Dakota farmers from overregulation.

I'll approve this message because I'll only answer to you.


GIGOT: That's remarkable stuff, Kim.


And in Indiana, Joe Donnelly voted for -- he's a congressman. He's running against Richard Mourdock. He voted for Obama-care. And now he's running so far to the right he's going to bump the rear end of Michele Bachmann's pickup truck.


GIGOT: What -- what --

STRASSEL: You almost feel sorry for Rick Berg up there in North Dakota. How do you go to the right of Heidi Hydecamp? You know?


But you see this everywhere. You see all of these candidates -- Joe Donnelly, who you just mentioned, is out there saying, I'm going to extend all of the Bush tax cuts. Heidi Hydecamp, everyone talking about their opposition to Obama on the Keystone Pipeline, on Cap and Trade.

And this has been one of the problems for the Republican candidates, not only some of whom are a little inexperienced, maybe not as well know, they're tied a little bit to the Tea Party and grass roots, which has, in some ways, been a drag on them in some places. But also just the fact that it's hard, again, to make a big contrast with some of the Democrats running, even though their records suggests they wouldn't actually vote that way.


MOORE: Can I add something to that, Paul?


MOORE: I think that Kim is exactly right. I find it interesting that some of the states, like Montana and North Dakota, they are running very much against the Obama energy policy. These are people running for the pipeline. They're running for -- for more drilling. And by the way, Heidi Hydecamp says she would fire -- she would urge President Obama to fire Lisa Jackson. If she could get him to do that, I'd vote for her.


GIGOT: But if she's -- she's the head of the EPA, Lisa Jackson. But once they're in office, then they're probably going to be reliable votes for President Obama, if he wins.

STRASSEL: Of course they will.

GIGOT: One surprise, before we go. I think, if you look at New Mexico, Heather Wilson has been closing, the Republican there. It's a tough state, because Mitt Romney isn't going to win that state. But that may be one to look at because she's been gaining.

All right, coming up in our second half hour, with the national polls tied up, all eyes are on Independents. We'll check in with Pollster Witt Ayers who has some new numbers. Plus, with all 435 House seats up, a look at what the 113th Congress might look like. And a roundup of other measures on the ballot in states across the country, including a big tax showdown in California.



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

Well, it's the final weekend before the presidential election, and national polls show the race in a dead heat. Like many analysts, Republican pollster Whit Ayers says the key to victory for either candidate Tuesday rests with independents, and he has some new numbers to share with us. So, Whit, great to have you back on the program. Is the race -- is the race really as tight as the polls seem to suggest?

WHIT AYRES, POLLSTER: It is incredibly tight. Just incredibly tight.

But what's not tight now is the standing among independents, who gave Barack Obama an 8-point margin of victory in 2008, 52-44. We're now showing in our latest Resurgent Republic poll, independents going for Mitt Romney by a 12-point margin, 51-39.

Now, this is nothing new. Independents have been going south on Obama since the spring of 2009, after he proposed his stimulus package and his budget with $1 trillion deficit. But this is the first time in our polling that we've seen Romney with a double-digit lead over Obama. That would be a huge turnaround if the numbers held, a 20-point net turnaround from the election in 2008.

GIGOT: OK, but if that's true, and I agree with you the polls are showing that movement of independents to Romney, but if that's right and it is a big switch from 2008, then why doesn't Romney have a more comfortable lead, at least 2 or 3 points in these polls?

AYRES: 90 percent of the disagreement in the polls right now, Paul, involves differing assumptions about the makeup of the electorate. If we have an electorate that looks like 2004, with equal numbers of Democrats and Republicans turning out, then a double-digit lead for Romney among independents means he wins comfortably.

GIGOT: Right.

AYRES: On the other hand, if we have an electorate that looks more like 2008, with seven percentage points more Democrats than Republicans in the electorate, then that's probably enough to save Obama, even if he loses independents by a dozen points.

GIGOT: Well, where--

AYRES: So it's all in the makeup.

GIGOT: OK, so where do you think the electorate is going to turn out? Is it going to be somewhere maybe in between 2004 and 2008? And that would, I guess, make it very close.

AYRES: Our last poll shows a 4-point Democratic margin of 35 Democrat, 31 Republicans.

GIGOT: So that's right, halfway between 2004 and '08.

AYRES: Exactly. But frankly, Paul, nobody knows with 100 percent assurance exactly what this electorate is going to look like on Tuesday, and if anybody tells you they do, they're lying.

GIGOT: OK. Now, the other big discrepancy in the polls is the difference between the national surveys, which have Obama and Romney very, very close to tied, and these state, swing state polls, which have, except for North Carolina and Florida, basically have the two candidates either tied, but Obama having a one, two or more point lead, as many as five in some state polls, lead over Romney.

Why the discrepancy between the national survey and the state polls?

AYRES: The discrepancy is caused by the tremendous number of negative ads that the Obama campaign ran against Mitt Romney over the course of the last six months. A rising tide lifts all boats, but it doesn't lift them quite as far in the battleground states as it does elsewhere because of all the negative ads that the Obama campaign has run. Nevertheless, a lot of those states are incredibly close. There are eight states right now that are within less than 3 points. So, who knows which way those are going to go on Tuesday.

GIGOT: There's another factor here which is really interesting in the polling, which is that in these head to head surveys in the swing states, President Obama typically can't get above 47, 48 percent, even if he's leading Romney by a couple of points. He can't get rise to get to that 50 percent level, and that gives a lot of people in the Romney camp confidence that when it comes to election day, or the president is going to increase his vote much beyond that and they can-- and the undecideds will break towards Romney. What do you think about that argument?

AYRES: In open seat races, undecideds tend to break evenly, but with incumbent reelection campaigns, undecideds tend to break towards the challenger. That doesn't mean exclusively for the challenger. The people who decided in the last week in 2004 voted for Kerry over Bush by 52 to 46 percent.

GIGOT: So they went for the challenger.

AYRES: They went for the challenger disproportionately. That might be just enough to get Romney over the top.

GIGOT: It was the same thing in 1996, where even though Bob Dole lost by a big margin, the undecideds in the end did break for him, and at the end. So Whit, what is your prediction here? Where do you think this is going to go if I can put you on the spot?

AYRES: Well, with the knowledge that pollsters tend to be better at predicting the past than predicting the future, I will tell you that I think if current trends hold, I believe that Romney will probably win the popular vote. We will see whether that's enough to win the Electoral College as well.

GIGOT: Do you have any surprise states that Romney might pick up that aren't on the radar here, say Minnesota, Pennsylvania?

AYRES: Those are a stretch. The ones that we really need for it to go for Romney are ones like Virginia and Colorado, which are just incredibly close, along with New Hampshire and of course Ohio.

He wins those, he will probably pull it out.

GIGOT: All right, thanks, Whit Ayres, appreciate you being here.

Still ahead, with all 435 seats in the House up for reelection, does either party stand to win big or maybe lose big on Tuesday? Our panel is back to tell you next.


GIGOT: All 435 seats in the House of Representatives are up for election next week, but few are predicting a party change in the House, where right now, Republicans have a 24-seat advantage. So what should Congress watchers be looking for on Tuesday night? And will the outcome make a difference for governing? We're back with Dan Henninger, Jason Riley, Kim Strassel and Steve Moore.

So, Steve, Republicans picked up 63 seats in 2010. Now, usually in the next election.

MOORE: Right.

GIGOT: A lot of those members, some of whom probably weren't professionals, they won because of the wave, not because of their own talents, some of those usually washed out. Yet, this year, it sounds as if that's not going to happen with too many of them. Why?

MOORE: Well, it's going to happen with some of them. The Republicans probably picked up, Paul, about ten seats that were in pretty heavily Democratic districts, and they will probably surrender those, but they also, don't forget, Paul, Republicans have an advantage because they are going to pick up seats as the result of some of the redistricting in these states, where red states picked up more seats. For example, Texas, and blue states lost seats.

But I want to make one prediction here, and you can come back to me next week and see if I'm right. I actually think, and a lot of people aren't talking about it, I think there's an anti-incumbent mood out there that is not being fully picked up in a lot of these polls, and I wouldn't be surprised if both on the Republican and the Democrat side, you see some high-profile members that have been around for a long time losing.

I'll give you one example, just make an outrageous claim. I think Henry Waxman, for example, in California is in trouble, and it's because there's so much fear and anxiety among the voters out there.

GIGOT: Well, that's a real outlier prediction, I'll tell you, I'll tell you that. If you can pull that off, I'll buy you dinner, Steve, let me tell you. And here is the thing, Jason, I mean, congressional approval rating is what, 16 percent?

RILEY: It's that high?


GIGOT: So people have been saying, you know, as Steve said, it's throw the bums out, and yet, it doesn't seem to be happening.

RILEY: Well, you're going to see some of those Democratic seats that Republicans won in states like Illinois, and California, and New York, probably shift back. You're also going to see down in the South and some parts of the Midwest, Republicans sort of consolidating, no more blue dogs, probably after this election.

GIGOT: Those are conservative--

RILEY: Or very few.

GIGOT: Conservative Democrats, those are going away.

RILEY: But there are also some Republicans, some high-profile Republicans who are in trouble. Allen West, for example, is running in a district that Obama won in 2008. He's going to have a tough race in Florida. And Michele Bachmann is feeling the heat in Minnesota. Steve King in Iowa is running against the wife of a former governor, Tom Vilsack. He's feeling the heat there, too, so it's going to be an interesting night.

GIGOT: Kim, one of the Democratic strategies, the reason they said, oh, we're going to take the House back, was they were going to put pressure on the so-called orphan states, the Republicans in states like New York, Illinois, California, where the Romney campaign at the presidential level really isn't playing, because they're not competitive in that race. But of course you have all those House seats, so they thought, OK, we can just plow a lot of money in, and Republican turnout will be down, and we can turn these seats. But they're going to win a couple of them, but surprising so far in the polling, Republicans are holding their own in those seats, why?

STRASSEL: And you're right. They are doing this very aggressively, especially going after freshmen that won in 2010, guys like Bobby Schilling in Illinois, the first Republican to get elected in his district in 30 years. The reason that you're not going to see a huge shift is because one thing the Republicans did very well, they are not only being aggressive in the South and some of their home turf, but they, in contrast to the Senate, recruited some really great candidates themselves in some of these orphan states you mentioned. And they're putting a lot of pressure on prominent Democrats in races in some of these areas. So they may be actually -- they may lose some of these seats, but they may gain a couple and hold their losses to a minimum.

GIGOT: Dan, the Ryan budget was supposed to be the silver bullet for Democrats. Nancy Pelosi was waving it as the thing that was going to bring her back to the speakership. Doesn't seem to be working.

HENNINGER: Yes. A really interesting point, Paul, because I think one thing that has to be raised here in the context of this discussion, if Barack Obama loses, what does that mean for the progressive left wing of the Democratic Party represented by Nancy Pelosi and Harry Reid, and the fact that the progressives hold control of the big cities, Los Angeles, San Francisco, New York, northern urban areas? A lot of the elections we're talking about are out in the suburbs among people who are much more toward the center of politics, and I think if Obama loses, it's going to be a battle for the soul of the Democratic Party between the progressives and what Bill Clinton represents.

GIGOT: I think I know who wins that. I think the progressives win that contest. Steve, what do you think about what happens if the Republicans lose only a handful of seats in the House and President Obama is reelected? Is this going to mean that the Republicans feel chastened and suddenly have to do whatever Barack Obama wants?

MOORE: No, I think it's the Republican firewall, and it means you're going to have Speaker Boehner and Barack Obama doing battle again for four more years.

GIGOT: OK. When we come back, Tuesday's vote won't just decide the presidency and control of Congress. There are 176 initiatives on the ballot in 38 states, and they could affect everything from where your kids go to school to how much you pay in taxes. We'll profile some of the big ones next.


GIGOT: Lots of attention being paid of course to the presidential race and the balance of power in the House and Senate, and there are dozens of other measures on the ballot in states across the country that could have far reaching consequences. Back with a look at just a few of them is Kim Strassel and Steve Moore and Wall Street Journal senior editorial page writer, Collin Levy joins us as well.

OK, Steve, let's talk about California first, because that may be the second most important vote next week, which is a huge tax increase, raising the top income tax rate to 13.3 percent from 10.3. How is that going?

MOORE: Well, I'll tell you this, the people in states like Texas and Nevada are hoping they pass that tax increase, because every rich person in the state is going to continue to move out. I do not think it's going to pass. I think the people of California are going to turn this down.

Jerry Brown, the governor, has been pushing this, saying we're going to have to rip through the schools and the police departments if we don't pass this. I do not think it's going to pass. But if it does, Paul, I think it is -- it could be the end of California as an economic dynamo, because truly, the small businesses and the wealth producers of that state will move out if they put in place a 13 percent income tax.

GIGOT: But you know-- it's been interesting, Steve -- go ahead, Collin.

COLLIN LEVY, WALL STREET JOURNAL: Yes, I was just going to say, California should look at what happened here in Illinois. In 2011, Illinois raised corporate taxes, raised income taxes. Guess what? In the next few months, unemployment surged, businesses trying to flee the state.

It was a real mess, so that's a good lesson there.

GIGOT: Yes, the choice seems to be if you're going to put any pressure on Sacramento, the politicians in Sacramento to reform, it's fascinating to watch. A lot of the big businesses, Jerry Brown has been saying, look, if you -- you got to support this, so they've been chipping in money to help him, because they think that he'll be -- they'll be targeted if this goes down. And it's the middle class, Steve, that has been exiting California, more than the rich. The Hollywood guys and the Silicon Valley folks, they are rich enough, they can afford to pay higher taxes, but it is the middle class that is employed by these small businesses that ends up moving to Nevada, Idaho, and elsewhere.

So, Collin, let's talk about Michigan, which you've been following.

You got the battle over the collective bargaining, making collective bargaining a constitutional right in the state. And then there's a battle for the Supreme Court, too. Are the unions going to win these two?

LEVY: You know, Paul, a lot has changed actually in the past week, and I don't think they're going to win it. It's still looking tough, but right now, about 52 percent of voters are saying they oppose the efforts to enshrine this Proposition 2, the effort to enshrine collective bargaining in the Michigan constitution. And that's because the more people are learning about this, the more people are realizing how completely ridiculous it is.

You know, as for the Michigan Supreme Court, this effort to get rid of two of the conservative justices on the court is drawing a lot of attention as well. It's part of the get out the vote effort, it's a way for unions to say, hey, if we manage to get this collective bargaining thing through and we are going to fight over it, then we're going to want to have the court on our side as well.

GIGOT: So another couple of ballot tests where the unions, national unions are playing big are education initiatives, reform initiatives in Idaho and Washington. And Idaho in fact, a repeal of some education reform legislation that passed. Why would the National Education Association put in millions of dollars from Washington, to affect the schools in Boise?

STRASSEL: OK, because this is turning into basically the mini Wisconsin of this year. Last year -- and collective bargaining fight. Last year, Butch Otter, the governor of Idaho and his education chief, passed one of the best education reforms that's ever happened, but what it does, it phases out teacher tenure, it limits collective bargaining, it institutes a new merit bonus pay program for better performing teaches.

The National Education Association, they hate this, and they're petrified that this could become a model for the rest of the country. They and the Idaho Education Association have put $3.8 million into this. It's one of the biggest spending ever in the state of Idaho, trying to get people to vote down these three referendum that would basically approve these reforms.

GIGOT: Steve, what about tax initiatives, other than California, on some of these ballots? I know Oregon has got an initiative to phase out, eliminate its death tax.

MOORE: That's right, and there are a number of those. No death tax in Oregon. There are a couple of states that would, that would actually require a super majority to raise their tax rates. There's some Proposition 13 property tax initiatives around the country, so the taxpayers are on the march on these, and by the way, there's also about $5 billion worth of bond referendums on the ballot, so we'll see whether taxpayers are in the mood to fund big government.

GIGOT: The two states are Michigan and Washington, where that two- third thing is on the ballot. The measure is on the ballot. Kim, you're an Oregonian, in exile now, I know -- but is that going to pass Oregon or not?

STRASSEL: The estate tax?

GIGOT: Yes. The repeal.

STRASSEL: You know, it's weird, it may well, because what you have here, Paul, in Oregon is interesting. You've got a lot of people-- this is not a lot of money overall for the budget, but this estate tax really hurts a lot of Oregonians, ranchers, farmers, people who own a lot of trees and timber, because they're land rich but bank poor.


GIGOT: We'll be watching them all. OK, we have to take one more break. When we come back, hits and misses of the week.


GIGOT: Time now for hits and misses of the week. Collin, first to you.

LEVY: This is a miss for the Chicago public school system. You know, in September, the teachers union here went on strike. They demanded a big pay raise and they got it, despite all the city and state's budget problems. Now, the new Illinois report card has come out and said that the expenses for educating each student is an all-time high, while test scores are completely flat. It's now costing about $20,000 per student in instructional and operating expenses. That's 58 percent higher than 10 years ago. I think taxpayers and students are not getting their money's worth.

GIGOT: Pay up, Collin, you'll be doing it for a long time. OK, in Chicago. Dan.

HENNINGER: All right, Paul, a hit to the Walt Disney Company for its acquisition of the George Lucas company that made "Star Wars." I had the good luck many years ago to be sitting in a big New York City theater for the first showing of "Star Wars," and I got to tell you, I knew then movies had changed forever. It had to be the same feeling back in 1937 when people sat there to see "Snow White," the first feature-length cartoon.

They gave it a standing ovation. Snow White, meet Luke Skywalker.

GIGOT: Notice the sale just before the capital gains taxes are supposed to go up. Getting under the wire. OK, Jason.

RILEY: This is a miss for New York Governor Andrew Cuomo, who blamed Hurricane Sandy on us, Paul, on man-made global warming.

GIGOT: I think you're the culprit, Jason.

RILEY: Essentially using a disaster to score political points. I think it is pretty shameful. The only man-made disaster that Andrew Cuomo should concern himself with is the economy in upstate New York.

GIGOT: All right.

FREEMAN: The housing market that be helped--


FREEMAN: -- as HUD secretary.

GIGOT: So, James, speaking of the hurricane, you live in New Jersey, and you've been enduring without electricity here for the whole week. Any hits or misses on the hurricane front for you, other than the fact that you were hit?

FREEMAN: No, not really. I mean, I'm not -- you see the horrible suffering on the Jersey shore and Staten Island. Fortunately my neck of the woods, north-central Jersey, hasn't hit that kind of a problem, but a lot of power outages.

And I wanted to give a hit to the people of New York and my beloved adopted home state of New Jersey for a lot of resilience and spirit through this thing.

GIGOT: What grade do you give Christie?

FREEMAN: I'd score him well, but you know, like all politicians, I wouldn't really look to them. I think the story of this is voluntary efforts, businesses, churches really helping people out.

GIGOT: OK, James. That is it for this week's show. Thanks to my panel and all of you for watching. I'm Paul Gigot. We hope to see you right here after the election next week.

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