Declining fertility rate the biggest threat to America?

This is a rush transcript from "Journal Editorial Report," March 30, 2013. This copy may not be in its final form and may be updated.

PAUL GIGOT, FOX HOST: This week on the "Journal Editorial Report," the Supreme Court takes up the controversy over same-sex marriage. After two days of oral arguments, are there clues as to how the justices will rule?

And the Senate after dark. They've gone on spring break, but not before passing a trillion dollars in new taxes and so much more. We'll fill you in on last weekend's late-night budget votes.

Plus, America's baby bust. Forget terrorism and the national debt. The author of a provocative new book tells us why the nation's falling fertility rate is the biggest threat America faces.

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

The Supreme Court wrapped up two days of oral arguments this week on a pair of gay marriage cases, setting the stage for another historic and contentious ruling this June. On Tuesday, the court considered a challenge to Proposition 8, California's voter-approved ban on same-sex marriage, and on Wednesday, moved on to the federal Defense of Marriage Act, known as DOMA, which defines marriage as between one man and one woman, and prevents gay spouses from receiving benefits like Social Security survivor's payments and tax deductions.

Joining the panel this week, Wall Street Journal columnist and deputy editor, Dan Henninger; editorial board member, Joe Rago, and editor, James Taranto.

So, Joe, are we going to get a Supreme Court saying that gay marriage is a constitutional right that imposes that on 50 states?

JOE RAGO, EDITORIAL BARD MEMBER: I don't think so. You saw real disquiet across the political spectrum, left to right, with even the liberal justices realizing this would be an especially radical step to say that the marriage arrangements that have prevailed for millennia are unconstitutional and a result of invidious bigotry.

GIGOT: Let's listen to Sonya Sotomayor on exactly that point.


SONYA SOTOMAYOR, U.S SUPREME COURT JUSTICE: If you say that marriage is a fundamental right, what state restrictions could ever exist?


SOTOMAYOR: I mean, what state restrictions with respect to the number of people, with respect to -- that could get married, the incest laws, that mother and child, assuming --


SOTOMAYOR: -- that they're the age. I can accept that the state has probably an overbearing interest on protecting a child until they're of age to marry, but what's left?


GIGOT: She's suggesting that it would be difficult for governments to put any limits on marriage --

RAGO: Right.

GIGOT: -- if gay marriage is suddenly a constitutional --

RAGO: Once you kick out the strut, what else is going to fall? We say that marriage is a permanent union. What about if people want to have time-limited marriages, term-limited marriages, sort of get a lease that renews every year? Once you change one definition, you kind of take the power away from the states to define the institution.

GIGOT: James, how did you see the debate?

JAMES TARANTO, OPINIONJOURNAL.COM EDITOR: Well, I wouldn't read too much into that question from Justice Sotomayor. I think she asked a pertinent question, but that doesn't necessarily tell us how it's going to vote.

The more interesting justice is the one who is almost certainly going to be the key here and that is Justice Kennedy. He was very reluctant take up the equal protection argument, the claim that the traditional definition of marriage discriminates against gays.

GIGOT: Right.

TARANTO: And so, I think -- the likeliest outcome of the Proposition 8 case is probably that the court will kick it back, saying that the people who are appealing it don't have standing because the state is not defending its law. The effect of that would be that the trial court ruling would stand and California would have same-sex marriage, but it would have no legal precedence and no effect on other states.

GIGOT: Let's go, move on to the Defense of Marriage Act, which is the federal statute. And Justice Kennedy -- you mentioned Kennedy -- raised a question about that law on federalism grounds, that is, the tension between state and federal power. Let's listen.


ANTHONY KENNEDY, U.S SUPREME COURT JUSTICE: You are at real risk of running in conflict with what has always been thought to be the essence of the state police power which is to regulate marriage, divorce, custody.


GIGOT: Dan, is the federal government trying to regulate marriage with DOMA?

DAN HENNINGER, COLUMNIST & DEPUTY EDITOR: Well, that's the argument that they're trying to define marriage. When that was --

GIGOT: Is that regulating it at the state level?

HENNINGER: Well, they're trying -- they regulated it with DOMA because they felt they had all of these 1,100 federal statutes, such as we see in Social Security, which are -- which use marriage as a marriage between man and a woman, and they're trying to keep that intact.

GIGOT: Right, but they did that at the federal level. They didn't force that on the states.

HENNINGER: They didn't force that on the states, but the states then have to decide, you know, just what -- make up their own mind what marriage is going to be. And I think this conversation and what the courts argue, makes it cheer that this case came upon the Supreme Court so quickly, the idea that same-sex marriage has gained acceptance in society, that they're saying that we are very uncomfortable with the making of a decision that the Supreme Court should enshrine same-sex marriage in the Constitution.

GIGOT: Right.

HENNINGER: This has not been litigated and only nine states legalized it.

GIGOT: Right.

HENNINGER: 31 states have put in their constitution that marriage is defined as between a man and a woman. And so I'm kind of with James, saying that they're going to find a reason to kick this back to the states.

GIGOT: I think that's true in Proposition 8, but that doesn't mean they couldn't overturn DOMA.

TARANTO: I think they will probably overturn DOMA on federalism grounds.

GIGOT: Right.

TARANTO: What is crucial here, as Justice Kennedy said, if Congress doesn't have the authority to define marriage because that's traditionally a state role, then we don't need to reach the equal protection question.

GIGOT: Right.

TARANTO: We don't need to decide, as the appeals court did in this case, that the law -- whether the law constitutionally discriminates against gays. So that would be a minimal way of disposing of the DOMA question.

GIGOT: Do you agree with that, Joe?

RAGO: I don't. The way to understand DOMA is that it was written in a specific context and time. What you had in the 90's was the Hawaii Supreme Court legalizing gay marriage. And, suddenly, the federal government has to confront a world where some states are allowing gay marriage, some states aren't. And whatever it does, whether it recognizes these marriages, whether it doesn't, it's putting its thumb on one scale or another. What it's saying is, whoa, let's wait a minute. We will recognize the traditional definition for the time being, and see how the debate plays out in the states.

GIGOT: Dan, briefly, is this as a political matter, is this debate over, essentially? Will gay marriage be ultimately passed in almost all states?

HENNINGER: Oh, I don't know about that, Paul. I think south of the Mason- Dixon Line, it pushes in the opposite direction, to tell you the truth, down south, evangelical Christians. I don't think it's going to move that quickly, which is why it should go back to the states rather than have the Supreme Court decide it for all the states. Then we'll be in another 40- year war like we had with Roe v. Wade.

GIGOT: But it will be passed in a lot of states?

HENNINGER: It will be passed in a lot of states.

GIGOT: All right.

When we come back, after four long years, and under the cover of darkness, Democrats finally pass a budget with a trillion dollars in new taxes. Find out what other goodies were included in last weekend's all-nighter, next.


GIGOT: Well, in cased you missed it, the Senate finally passed a budget last week before heading home for spring break. And after a four-year wait, it is something to behold. Before the final pre-dawn vote in which Democrats narrowly approved nearly a trillion dollars in new taxes, Senators worked their way through dozens of amendments. And you may be surprised at what passed and what didn't.

We're back with Dan Henninger and Joe Rago. And senior economic writer, Steve Moore, joins us.

So, Steve, you followed the follies. What were the highlights for you?

STEVE MOORE, SENIOR ECONOMICS WRITER: Well, first of all, Paul, you know how for the last four years, we have been urging the United States Senate and Harry Reid to pass a budget? Never mind --


-- I kind of liked it better when he they didn't pass a budget. This was just an abomination. You mentioned the trillion-dollar tax increase and then, of course, you had $100 billion of new stimulus spending. And it really polarizes where the House Republicans are and where the Senate Democrats are. They could not be more opposite in terms of their --


GIGOT: OK, Steve. But there were some interesting votes as part of this - -

MOORE: Ok, yes.

GIGOT: -- that signaled some interesting political trends. For example, on the Keystone Pipeline, 62 Senators voted -- said that the president should approve it.

MOORE: Yes, that was one of my favorite ones. And then there was actually two votes on the -- on one of my favorite ones was on the carbon tax, something that the environmentalists have been drooling for for years. Both amendments were soundly defeated to have the carbon tax. My favorite part of this was Sheldon Whitehouse, who was the sponsor of the carbon tax says, the pope wants to have a carbon tax and he invoked God. And my favorite response by Roy Blunt from Missouri said, wait a minute, the pope cares about poor people and this is the most regressive tax you could possibly put on the --


GIGOT: Steve, I think we could safely stipulate that the pope is agnostic, if I can use that word --


MOORE: Exactly.

GIGOT: -- on the carbon tax.

But I want to get to Keystone. 17 Democrats voted for that, including many in western states, Joe. That suggests there is bipartisan support for approving this big pipeline.

RAGO: Right. We've known that for a long time. There were some better votes than for the carbon --


RAGO: -- for the larger budget. For example, the medical device tax, a 2.3 percent tax on innovation and the life sciences that was part of the affordable care.

GIGOT: On medical device companies and what they make, on sales, not profits, on sales.

RAGO: That's right. That went down 72-20, with 34 Democrats breaking with the White House and saying we don't want to impose this tax that we created and we voted for the bill.

GIGOT: Wow, that's amazing.

HENNINGER: Well, Paul, let's talk a little bit about why it is called Senate after the Dark. Most of this happened between midnight and 4:00 or 5:00 in the morning.


And the really tragic part of it is we're currently talking about a sequester, hard, across-the-board cuts. Senate Republicans, like Jerry Moran of Kansas, tried to introduce bills that would have mitigated some of the cuts to, say, airport traffic control --


GIGOT: Wouldn't have to be furloughed.

HENNINGER: Wouldn't have to be furloughed. Tom Coburn, Senator Coburn of Oklahoma, came up with seven or eight adjustments to the sequester and Harry Reid ordered his caucus not to vote or vote against all of these ideas.


HENNINGER: Why? Because they want to go forward to the Patty Murray budget, which is simply going to ask to raise taxes a trillion dollars to pay for --


GIGOT: But they don't want to ease the pain on the sequester. They want to increase the pain on the sequester on the public.

HENNINGER: Exactly right.

GIGOT: Because that will put more pressure on Republicans.

But I want to go to the vote on medical devices, Joe. Are we seeing maybe bipartisan support for beginning to break up part of the financing of Obama-care? The Democrats have said all along, you can't touch any of this.

RAGO: Right --


GIGOT: Is this the beginning?

RAGO: -- finger of light in the tablets of stone. But no, what you're seeing, as a lot of these things come on line, as the ramp up over the coming year --

GIGOT: Obama-care.

RAGO: Right. They're going be to be harmful, costly and unpopular. So I think the bill is a lot more vulnerable than people in Washington claim to think on this or that piece. And we start to see it come down.

GIGOT: Steve, what does the vote tell you about the overall prospects between a big budget deal between Republicans and Democrats later this year?

MOORE: As I said I think the parties are polar opposite, how they want to deal with the budget. The Republican budget cuts taxes and the Democratic budget has the trillion-dollar tax increase.


GIGOT: Understood, but what's the prospects for a deal?

MOORE: Well, I don't think very good right now. I think the parties are so far apart. What was most interesting to see, having stayed up until 2:00 or 3:00 in the morning and watch vote-a-rama, the Democrats passed their budget but they were stricken. It was the Republicans for once who looked like they had had victory after victory in all of the votes. And I think it gives the Republicans a bit of momentum going into the subsequent budget fights to come.

GIGOT: OK, Steve, thanks.

When we come back, America's baby bust and the coming demographic disaster. The author of a provocative new book is here to tell us what to expect when no one is expecting.


GIGOT: A nuclear Iran, cyber warfare, the spiraling national debt -- all front-page news at the moment and all viewed as threats to American life as we know it. But what if the greatest menace to the health of the United States is us and our declining population? My guest this week says the nation's falling fertility rate is the root cause of many of our problems and it's only going to get worse. Jonathan Last is a senior writer at "The Weekly Standard," and author of the new book, "What to Expect When No One is Expecting: America's Coming Demographic Disaster."

Jonathan, welcome. Good to see you again.


GIGOT: So we've been told for years, decades that the world had too many people. Now you're saying the United States may have too few. Explain that.

LAST: Yes, well, hundreds of years, actually.


It goes back to Thomas Malcolm (ph), you know, the danger of overpopulation around the corner. And it turns out that hasn't been the case. Growing populations has been the source of lots of good things. People live longer and with higher standards of living. We've had declines in commodity prices.

But what we've seen since 1968 is a marked decline in fertility rates across the globe. It started across the West and has spread across the developing countries as well. What we worry about now is that most the models projected in the next 50 or 60 years, global population is going to peak somewhere around 10 billion and then begin declining rapidly. And the question really, is how far and how fast.

GIGOT: The U.S. replacement rate is about 2.1 children for every woman, every mother, and the U.S. fertility rate is 1.93. But that's much better than Japan, where it's 1.4, or Italy. Are we better off relatively speaking than these other countries?

LAST: Our fertility rates, truth be told, is fine. If we could sustain 1.9 fertility rate, I wouldn't have written the book. The problem is there are a lot questions of whether or not it's sustainable in the long run. Our fertility rate is really the result of massive immigration over the last 35 years, which has saved our bacon. Without that immigration, demographically, we'd be in much, much worse shape.

But there are two problems with this. The first problem is that when we get Hispanic immigrants to America, they come with much higher fertility rates and they then regress to the mean very quickly. The leveling effect of American culture pulls their fertility rates downward. And secondly, the source of immigration, regardless of the policy decisions we make here, the source may be drying up as well. Fertility rates in Mexico and Central and South America are collapsing as well.

GIGOT: Why is the declining population or a stable -- I guess you're saying, even a stable population is a problem. What is -- what other problems does that create?

LAST: You know, a stable population would be fine, but the declining population, what worries us isn't the numbers game, really. It's what happens to your population profile. Because when your fertility rates are sub replacement for a long period of time, your age profile inverts so you wind up with many more old people than young people, and that's the real danger. You think about the problem with entitlements, Social Security and Medicare, all of those problems become tremendously exacerbated when you have more old people than young people. And then there are problems with the macroeconomic effects as well. The recessions we've seen in Japan since the 1990's, a lot of financial problems and economic problems we've see --

GIGOT: Right.

LAST: -- in southern Mediterranean countries and Europe are largely driven by demographics. They have too many old people and not enough young, productive people.

GIGOT: Why don't we just solve this by letting in more immigrants? That's always been one of America's secrets, say in contrast to Japan where they let in few immigrants. America could go back to that kind of -- that solution. Won't that help us?

LAST: Well, immigration is a big part of any solution. You look, there are no industrialized countries which have gotten close to the replacement rate without any massive immigration. The problem is you wind up needing more and more immigrants. What immigrants don't do -- they help the fertility rate -- but for complicated mathematical reasons I won't go into on television --


-- they don't provide what demographers call the rejuvenation effects to your population profile. So that's part of the solution. You need lots of immigrants. But you also need to have people having a reasonable number of babies.

GIGOT: Right. OK.

And obviously, having children requires personal sacrifice. So somebody, one of the parents might --

LAST: Yes.


GIGOT: -- have to stay at home. One of the parents -- you know well. One of the parents, you might have to sacrifice career advancement. And historically, people have done that. Americans now are less likely to do that or are less willing to do that. How do you engineer such a big cultural change to get people thinking about that again?

LAST: You know, what's interesting is that societies have tried engineering these cultural changes for a very long time. You can go back to the falling years of the Roman Empire to see attempts at social policy. And it almost never works. It's very difficult to get people to have kids.

GIGOT: The roman analogy, that's not very optimistic.


If it's hard to get people to change the culture, what do you do? Are there government solutions to this? Are there public policies changes that we could negotiate?

LAST: There are public policy solutions out there. They're not particularly effect though, is the problem. If you look the at Asia and Europe, there are lots of countries in the last 40 years which have tried to boost their fertility rate through -- I would say crudely liberal solutions, like --


GIGOT: Tax policy.

LAST: -- day care. And then there's crudely conservative solutions, which are tax based and incentive based. And the research shows that the efficacy of both camps is pretty low. Your return on investment is about - - for every 25 percent increase in state spending on natalist policy, you get about half a percentage point increase in the fertility rate.

GIGOT: So leave us with one optimistic note here. What could we do?


LAST: So the one optimistic note here is that -- it isn't that people don't want babies in America. Our ideal fertility rate has actually been constant for 40 years. It's 2.5. And so what we have is this yawning chasm between our ideal fertility and our achieved fertility. That suggests I think the management of our problem is a little bit different.

GIGOT: All right, well, Jonathan, thanks so much.

We'll have to take one more break. When we come back, our "Hits and Misses" of the week.


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

Steve, first to you.

MOORE: Paul, the revelation of the week was that Kathleen Sebelius, the health secretary, told Americans that actually the health care law may increase people's health care premiums and costs.

GIGOT: Imagine that.

MOORE: Wow. What a revelation. This is something, of course, we've been saying for four years on the page. And by the way, the people who really get shafted according to Ms. Sebelius are people under the age of 30. When you've got employers dropping plans, when you've got costs out of control, this has not getting the cost curve down, maybe it's time to repeal this law once and for all.

GIGOT: All right.


FREEMAN: Paul, a hit out to the U.S. Supreme Court, which this week announced it will take a case on racial preferences at the University of Michigan. A federal appeals court says that voters can't repeal preferences because their purpose it to help minorities. But 10 years ago, the Supreme Court said that these preferences were constitutional only because their purpose was to promote a diverse student body. The justices got it wrong in 2003, and now is their chance to get it right.



HENNINGER: Paul, this is a one of the solemn weekends of the year for many people of faith. Many prayers are being said. I think it would be appropriate to give a hit to the peacemakers, which is to say the Americans troops which have served or are serving in far away places like Afghanistan. It's sometimes too easy to remember that they're over there. This weekend would be a good one to remember.

GIGOT: Here-here, Dan.

Remember, if you have your own "Hit or Miss," please send it to us at Be sure to follow us on Twitter at JERonFNC.

That's it for this week's show. Thanks to my panel and to all of you for watching. I'm Paul Gigot. We hope to see you all right here next week.

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