This is a rush transcript from "Journal Editorial Report," April 15, 2017. This copy may not be in its final form and may be updated.
(BEGIN VIDEO CLIP)
PRESIDENT DONALD TRUMP: Right now, we're not getting along with Russia at all. We may be at an all-time low in terms of relationship with Russia. This is built for a long period of time, but we're going to see what happens.
(END VIDEO CLIP)
PAUL GIGOT, HOST: Welcome to the "Journal Editorial Report." I'm Paul Gigot.
That was President Trump Wednesday during a news conference alongside NATO Secretary General. The administration reversing course on its position with Russia as Secretary of State Rex Tillerson met this week with his counterpart Sergey Lavrov in Moscow, following US missile strikes on a Syrian military base in retaliation for President Bashar Assad's chemical weapon attack on his own people.
Russia still refusing to blame Assad for that attack, but Secretary Tillerson said, one way or another, Assad must go.
(BEGIN VIDEO CLIP)
REX TILLERSON, SECRETARY OF STATE: We did discuss at length the future role for Assad, whether it be in a future political process or not. Clearly, our view is that the reign of the Assad family is coming to an end.
(END VIDEO CLIP)
GIGOT: Joining the panel this week, Wall Street Journal columnist and Deputy Editor Dan Henninger; columnist, Bill McGurn; and editorial board member, Mary Kissel.
So, Bill, whatever happened to the president's plans for a reset with relations with Russia?
BILL MCGURN, WALL STREET JOURNAL EDITORIAL BOARD AND COLUMNIST: Yes. Vladimir Putin really did engineer the victory for Donald Trump. He's not getting his monies worth from this.
Look, I think it's really interesting because what Donald Trump is doing is not just taking actions against Russia in the bombing of Syria, it's a public embarrassment of Vladimir Putin before the entire world.
GIGOT: For siding with Assad.
MCGURN: For siding with Assad. But also on the little things like, one of the false dichotomies of the Obama years was that the only answer to anything anyone does is either a full-scale invasion of US troops, whether it's Ukraine or Syria, or nothing.
And I think the invitation to Montenegro to join NATO, and something doesn't want, there's a lot of levers that they can push. And Rex Tillerson seems pretty sophisticated. And he's pushing some of those.
GIGOT: In a way, Mary, what happened is, Donald Trump's ambitions for a better relationship ran up against Russian reality. They're supporting Assad and there's an alliance with Assad, Iran and Russia in Syria.
And then you get the chemical attack and it's a real - it's become a lever for the pivot.
MARY KISSEL, WALL STREET JOURNAL EDITORIAL BOARD MEMBER: That's true. It has. And I thought it was encouraging too that Rex Tillerson suggested that sanctions are not going to be lifted anytime soon on Russia, which is, of course, another big point of leverage that we have, given how weak Russia's economy is. That was good news.
He also mentioned cybercrime in that press conference. And by the way, that was a pretty frosty press conference. And if it looks that way in public, you know it's even worse behind closed doors. There was no love lost there.
GIGOT: That's good. You have John Kerry and Lavrov with these lovefests and you knew that they didn't really agree on Syria, in particular, behind the scenes, and yet it was nice up front.
DANIEL HENNINGER, WALL STREET JOURNAL COLUMNIST AND DEPUTY EDITOR: You mentioned Iran, Paul. The president of Iran Rouhani was in Moscow just two weeks ago, signed 14 economic agreements. The Russians said they were going to help the Iranians rebuild their nuclear plant at Bushehr.
And clearly, they are deepening their alliance. And the Iranians are trying to establish a Shiite crescent from Iran up to the Mediterranean, engulfing Iraq, and this is not in the interest of the - whatever help we might get from Russia fighting Islamic State is way outbalanced by this alliance that they're seeking with Iran.
And I think the Trump administration sees that very clearly now.
GIGOT: I want to elaborate a little bit on what Bill pointed out about Montenegro, Mary, because that's a small country. This is not a big deal, but it would be militarily at least. But it's close to Russia, its border. It's something that Putin really doesn't want it to become the 29th member of NATO.
And yet, Trump, this week, despite what he said in the campaign about NATO being obsolete -
KISSEL: Suddenly, it's not so obsolete anymore.
GIGOT: And he said that. Exactly. He said, I said it was obsolete. Not obsolete anymore. And he said, they sent a formal letter saying, we would agree to Montenegro's accession to NATO if the other countries agree. This is a direct pushback to Putin.
And what do you make of this in terms of Trump's own thinking and the evolving sense of what his foreign policy is?
KISSEL: Well, look, Trump ran on the promise that he wasn't going to send troops into Syria and get us back into in the Middle East. So, I think some part of this is rallying allies around, whether it's NATO in Western and Central Europe or whether it's bringing in leaders from the Middle East. Look at the parade of leaders he's had into the White House recently - Jordan, Egypt, Saudi Arabia, just to name a few. That's no coincidence.
I think he perceives that there is a threat in Syria that goes beyond just Bashar al-Assad. It's ISIS. It's Hezbollah. It's Al Qaeda, which is regenerating itself. And he knows that he's made this promise to the American people. So, he needs allies to rally around.
GIGOT: Changing view of alliances. That was one of the big raps on Trump as a candidate, which is that he has no concern for traditional American alliances. He' really now embracing NATO.
MCGURN: Yes. Look, we're never going to get a Trump doctrine in the sense the clarity and so forth. It's kind of like Nancy Pelosi said we had to pass healthcare to find what's in it. We had to elect Trump to find out what the doctrine is going to.
GIGOT: Absolutely. That can be dangerous.
MCGURN: It can be. But what we do see is he's not embarrassed by the use of American force. He's not inclined to let our enemies run all over us. And for the first time in eight years, Vladimir Putin has to be asking himself what will America's reaction be.
GIGOT: Yes. But he said - Tillerson said, Dan, Assad's days are numbered. Is that this administration's redline now that they're going to have to follow through with, make sure that Assad does leave power?
HENNINGER: Well, given it's this administration, they can change their minds. But I agree with -
HENNINGER: They put down a difficult marker. One of the alternatives would be to partition Syria into three parts, with an Alawite section reserved for Assad and that. And if they can get to something like that as a goal to get piece in Syria, I think they would pursue it. And if Assad wants to run one-third of the country, that would be fine.
GIGOT: Are we seeing the emergence of - and we don't have a lot of time - the emergence of a more conventional Donald Trump foreign policy, not the radical version that he ran on in the campaign.
KISSEL: I think we could be. But, remember too, Trump and Mattis both said this week that the Syria policy isn't changing. And also, after the strike - the Syria strike, they justified that strike because Assad had broken the chemical weapons ban and used a weapon of mass destruction, not because he killed all of those people.
So, I don't think it's a big change. No.
GIGOT: OK. Still ahead, what Putin stands to gain by doubling down on his support for Syria, even as the global community condemns Assad's actions. We'll look at the broader impact on the Middle East.
GIGOT: A key question for the Trump administration is whether it truly can weaken Russia's support for Syria, given that Moscow is Bashar Assad's biggest military ally in the Middle East. Here's President Trump this week on the FOX Business Network.
(BEGIN VIDEO CLIP)
TRUMP: Frankly, Putin is backing a person that's truly an evil person. And I think it's very bad for Russian. I think it's very bad for mankind. It's very bad for this world.
(END VIDEO CLIP)
GIGOT: Cliff May is the founder and president of the Foundation for Defense of Democracies. Good to see you, Cliff. Welcome.
CLIFF MAY, FOUNDER AND PRESIDENT, FOUNDATION FOR DEFENSE OF DEMOCRACIES: Thank you, Paul.
GIGOT: So, a week later, after the bombing of the Syrian airfield, how does that look as a way of changing the incentives and the behavior in the Middle East?
MAY: Well, in terms of Vladimir Putin, I think it causes him to reconsider. We know a few things, I believe, about Vladimir Putin after all these years. One is that, in his view, and it's a realistic view, the leader of Russia has a job to do, and that is to expand - in this case, to rebuild - the Russian Empire.
MAY: He wants to do that at home, in Eastern Europe with former Soviet states. He also wants to do that in the Middle East. He wants an Arab ally. He wants a warm water port on the Mediterranean. He gets both in Syria.
But, for Putin, it's more business than personal. If he gets what he wants, I don't think he needs Assad. That said, Dan Henninger, I think, is right. If Assad were to run a little Alawite homeland and there were a port there, that might be good enough.
Keep in mind, Putin has been playing a weak hand very well. He doesn't want to see Trump now play trump cards, if you will excuse the expression and beat him.
GIGOT: But here's the thing. I have seen no evidence so far in Russian behavior or Russian statements that they are at all backing away from Assad. In fact, they vetoed the resolution at the United Nations this week to assail Assad.
So, is there any sign at all that they're delinking?
MAY: No, we haven't seen that yet. Certainly, what he did at the UN, which was to totally negate international law at its most basic level, was a terrible thing. We haven't seen that.
On the other hand, Syria is a failing state. It's Humpty Dumpty. I don't see how it gets put back together again. One of the things that I would imagine the Trump administration is considering are what's sometimes called safe havens. I call them self-protection zones. That's likely to lead to some kind of partition of the state.
If that happens, then there will come a point where it's just the reality on the ground, the facts on the ground, that Assad doesn't rule the whole country. Now, part of that would may be ruled by ISIS, part of that may be ruled by various sectarian and ethnic groups.
If you have safe havens or self-protection zones on the Israeli border, the Jordanian border, the Kurdish areas, those will not be part of Assad's Syria any longer. There may be things that have to be accepted by Putin. And I think he can accept them.
GIGOT: Well, and we knew - and we know that Donald Trump did talk about these safe havens, safe zones in the campaign. So, it's not something that he'd be flip-flopping on if he went in that direction. But that would require American air power to enforce, and that would ramp up the potential confrontation with Russia.
Do you think that you'd see any - how big a risk is there of a military engagement between the two countries?
MAY: I would think that Putin would back down if the US were clear that it was going to, for example, establish a no-fly zone.
One thing that's been talked about for a long time, I think it would have been a good idea, it's certainly possible to do without boots on the ground, is to eliminate Assad's airpower, his entire air force. Just a few airfields, not a lot of planes, then he couldn't do barrel bombs, couldn't do chemical weapons. Once you do that, no-fly zone is not so hard. With a no-fly zone, it's not so hard to set up the self-protection zones.
GIGOT: Is there an alliance to be had with the Sunni countries in the Middle East and Turkey perhaps where you could get - the US could lead that, put that together. I'm talking about Saudi Arabia, the Gulf states and so on, Jordan, where you could put together an alliance that was really - it would be like, protected these safe zones and basically was a force to fight the Iranian-Russian-Assad triumvirate?
MAY: I think so, with some reservations. One is that the Sunni states, the Gulf states, the Saudis absolutely should be supportive of this. I think they should also be asked to pay for this. As for actually supplying troops, that's a little more doubtful, but Jordan will. And again, quietly, Israel will on its border. In some ways, it already is. It's supporting very quietly the Jews across its borders in Syria.
So, this sort of thing can be arranged. This is exactly what diplomacy can do if diplomacy is backed up by force. The idea that Obama had that diplomacy and force are alternatives, that was always really a very naive mistake.
GIGOT: All right. So, let's step back a bit. You're looking at the first days of Trump foreign policy. Are we seeing the emergence of what you would call a kind of - for lack of a better word, a normal kind of Republican administration foreign policy, quite in contrast to what he ran on?
MAY: I don't think that's unfair. I think that's in a way true. If I were speaking for the administration, which I'm not -
GIGOT: I know.
MAY: - here's what I would say that the Trump administration is going to be for what's in the American interest. But the American interest is not only to stop acts of terrorism inside our borders. The American interest is to recognize that there are threats overseas that are maturing that we have to deal with in advance. I think that's very much what he has just done in terms of Syria, very much what he has done in terms of Afghanistan.
Among other things, those two acts this week, they begin to reestablish the capability of strategic deterrence, which the US used to have, but lost during the Obama administration. That's vital for American interest. You want to establish a sense of awe in your enemies and in your allies as well.
GIGOT: All right. Cliff May, very interesting. Thanks for being here.
MAY: When we come back, stories of White House infighting make for juicy headlines, but when it all shakes out how will the popularity contest impact how the president runs the country?
GIGOT: Despite efforts by the White House to tamp down the rumors, the reports continue to swirl about Chief Strategist Steve Bannon feuding with the president's son-in-law as Jared Kushner takes on more responsibility in the West Wing.
They were helped along this past week when President Trump himself told the New York Post "I like Steve, but you have to remember he was not involved in my campaign until very late." The president went on to say, Steve is a good guy, but I told him to straighten it out or I will."
We're back with Dan Henninger and Bill McGurn. Also, joining us is editorial board member Joe Rago. So, Joe, is this the end of Steve Bannon in the White House or the beginning of the - what does it mean?
JOE RAGO, WALL STREET JOURNAL EDITORIAL BOARD: Well, I think it's certainly a diminishment of his role. He was the author of a lot of the early mistakes in the administration.
GIGOT: Such as?
RAGO: Such as a divisive inaugural address and especially the travel ban, which really inflamed politics in a way that the polarized our country.
GIGOT: And still isn't in place because it's been stopped by the courts.
RAGO: Right. And he's also taking some incoming for the failure to repeal and replace ObamaCare, I think a little bit unfairly, but, look, if you can't deliver results, Trump is going to go for someone who can.
GIGOT: Well, why unfairly on healthcare? Is it that because he seemed to have -- as somebody who is described as a conservative, a populist conservative, he couldn't deliver the Freedom Caucus, which was supposed to be his allies. Is that the rap?
RAGO: Probably took the wrong tone, making ultimatums, you have to vote for this bill. Somebody said, I haven't been told what to do since I was 17 by my father and I didn't do that.
HENNINGER: But I think, Paul, we're also learning something about Donald Trump's governing style here. One of the other things he said about Steve Bannon in these interviews is, look, "Steve is a guy who works for me, all right -
GIGOT: And it's true.
HENNINGER: Everybody is a guy who works for Trump. That's the reality. But Trump has peers that he admires and he's been having a lot of meetings with the people in the business community. And he is actually listening to these business leaders.
So, on the one hand he's going to reauthorize the Export Import Bank, which is a government subsidy.
GIGOT: A total flip-flop from his campaign.
HENNINGER: A total flip-flop because somebody convinced him that it was helping smaller businesses. On the other hand, he's going to push very hard on financial deregulation because it has been explained to him by people like Gary Cohn that that is what -
GIGOT: OK, Dan. Whoa, whoa, whoa, whoa, whoa -
HENNINGER: Steve Bannon has no role in competing with those people.
GIGOT: That's not the Donald Trump who ran. If you remember, the last ad that he ran, that 60-second ad whatever it was, he had Goldman Sachs in there as one of the villains of the globalists, OK?
That was, I think, an ad that was in part helped by - developed by Steve Bannon.
GIGOT: Now, he's got the globalists, at least what you're saying, advising him.
HENNINGER: My word to Steve Bannon, live and learn. You did in the election, dude. But now you're in the White House and we're talking about policy and Steve Bannon is not really contributing successful policy, as Joe was just explaining.
GIGOT: Well, how do you explain this bill in terms of policy? What does this mean? Is this the eclipse of the conservative wing of the Trump administration?
MCGURN: I think two things. One, infighting is endemic to any White House. People that haven't worked in a White House cannot understand how fast and furious things come at you and you're developing policy in a pressure cooker.
When it was the campaign, Steve Bannon was actually running the campaign. He was in charge of things, messaging and so forth. Now, he just has more an advisory role and there's a lot of conflict.
Look, when I was there, the war was going badly and people used to complain about speechwriters. I said give me a better war, I'll give you better a speech.
GIGOT: Bill was the key speechwriter for President Bush.
MCGURN: And President Bush did with the surge. So, there's a lot of - Steve Bannon has two problems, I think. One is, he doesn't have a policy portfolio really. He has a vision kind of thing, but other people are actually setting the policy.
Also, it's not that wise to go up against the president's son-in-law when the son-in-law and the daughter have official roles within the administration. That puts you at a disadvantage.
GIGOT: But, ideologically, is this going to matter to fundamental issues like healthcare and tax reform and other things, Joe?
RAGO: It will matter to the extent - as I mentioned, they can get results -
GIGOT: Well, the rap from the right is, OK, Jared Kushner is not a Republican. He was a Democrat. Gary Cohn, he's either Democrat or he's unaligned. He has no record of being - his donations were mostly to the Democratic Party. There's nothing wrong with that.
But the point is, is this going to be an administration that's moving to the left politically. That's the question.
RAGO: Right. I don't think that it is. If you look down at the National Economic Council, what the personnel's policy, to use the Washington cliche -
GIGOT: And that's Gary Cohn -
RAGO: Just this Gary Cohn shop. Very conservative. Murderers row of conservative policy experts on taxes, healthcare, energy down the line.
And I think Cohn himself, while a registered Democrat, really was left with a bad taste after the Obama years, the sort of degradation of free markets, entrepreneurship, and I think is most significantly to the right.
But, Paul, to a degree, the Trump philosophy is not the traditional conservative philosophy. But I think what it is where there's a lot of - it's a pro-business view as opposed to a pro-market view. And that's why you have the deregulation.
That's why, as Dan said, he's listening to these - that takes you a long way. It's not quite the same thing, but to a degree that he has a philosophy, it's a patriotic, pro-business point of view.
GIGOT: All right. We're going to see how this evolves. Thank you. Still ahead, a glimpse into the hearts and minds of the American voters post 2016. Tuesday's election in Kansas telling us a fair bit about where we're heading.
(BEGIN VIDEO CLIP)
MEMBER-ELECT RON ESTES, HOUSE OF REPRESENTATIVES, KANSAS'S 4TH DISTRICT: That it was a chance for the Democrats, they were motivated, there was a lot of angst against the president and they were going to fight back, but we really sold the pundits tonight, didn't we?
(END VIDEO CLIP)
GIGOT: That was Republican Ron Estes enjoying his victory this Tuesday over Democrat James Thompson. Estes won the special election in Kansas' 4th district to replace Mike Pompeo, who President Trump tapped for CIA director.
But Estes only won by just shy of seven percent in a state that Mr. Trump won by 27 points. So, what does this tell us about the upcoming special elections in Georgia and Montana and maybe, just maybe, next year's midterms?
With us again are Dan Henninger and Joe Rago and along with editorial writer Kate Bachelder Odell.
OK, Dan, how big a warning is this result for the Republicans?
HENNINGER: It's a big warning call. And I think Ron Estes himself just put his finger on it. What was going on out there was there was anxiety about President Trump and the Democrats were energized, fired up.
Paul, we're in a new political era. Energy and keeping their party's energy up is an important thing. And things like the travel ban and all the politics, the amount of money pouring into Democratic campaign, soliciting candidates right now, is extraordinary. And the Republicans needed to have Ted Cruz go in there and give speeches. They poured a lot of money in at the end. Donald Trump was making robot calls.
So, the burden is really on the Trump presidency to get some victories, keep the party energized or they're going to have trouble down the line with these special elections.
GIGOT: Joe, here's the argument you'd make. Well, (inaudible), look, Brownback - Sam Brownback, the governor, is unpopular there. He's a Republican. Estes was his treasurer. So, he was linked there. It's an open seat. Open seats are always closer than incumbent seats or typically. So, don't over-read this. That's the sort of the Republican not-worry crowd.
RAGO: Right. It's a special election. You can't predict turnout. Who knows what will happen? I think this is still a warning. This is a very, very red district. And when you have to drag your own voters to the polls, it's not a very good -
GIGOT: Just like those United Airlines -
RAGO: Momentum in politics matters. And if Republicans lose the Tom Price seat in Georgia, Montana is a little bit of a different state, but these are flashing and warning signs about the direction of the administration.
GIGOT: And, Kate, you were - let's talk about that Georgia seat, in particular. You were down there recently. You did a piece on it for us. How does it look there? Because Democrats are pouring money into that race.
KATE BACHELDER ODELL, WALL STREET JOURNAL ASSISTANT EDITORIAL FEATURES EDITOR: So, there are a couple of unique features about this race. The first is that it's a jungle primary, meaning that there are 18 candidates. And if no one clears -
GIGOT: Just like the presidential Republican -
ODELL: Exactly. And that turned out so well. Eighteen candidates. And if no one clears 50 percent, then they had - the top two head to a run-off regardless of party. So, there are 11 Republican candidates -
GIGOT: And one main Democrat who raised $8 million last quarter, which is a record for a House race. So, I think we'll find out.
But Jon Ossoff, who is a Democrat, his best chance of winning this seat is to win 50 percent and not give Republicans a chance to consolidate.
GIGOT: And the Democrats have consolidated around Ossoff, who is 30 years old.
ODELL: Thirty years old, yes.
GIGOT: And the Republicans are divided up and they - and so, what could happen is, they haven't consolidated around any one candidate. Why can't they consolidate?
ODELL: Well, right now, they're all attacking each other. The question, I think, is because you have the Club for Growth endorsing one candidate. You have major state politicians, some of them are behind Karen Handel former state secretary of state. Marco Rubio endorsed Judson Hill, and so did Newt Gingrich. You have this just complete mismatch.
GIGOT: So, what you're seeing then is the national Republican Party come in and try to knock Ossoff down by running negative ads against him. So, he stays under 50 and then they hope to prevail in a runoff.
ODELL: Right. But their message is please go out and vote for the Republican of your choice, which is not a real -
GIGOT: Thrilling message. Vote for whoever.
What about Montana?
ODELL: So, Montana is a little bit of a different story. And Trump carried the state by about 20 points, but that doesn't mean it's a safe seat at this point. The Democrat they've put up there is a poet musician and he is running on a centrist populist message of don't mess with Montana and that works there.
And the Republican lost the gubernatorial race last year. So, it could be competitive, especially with Zinke out of the mix for 2018.
GIGOT: So, whether or not this affects - these seats are relevant to - or this race is relevant to 2018 down, I think the big issue in question is how do Republicans in Washington, in Congress perceive this?
Is it they perceive this as, oh, oh, we're in trouble. You could see a lot of them run for the hills and look out for number one. So, they're not going to make - pardon the cliches, they're not going to make difficult votes on tax reform, they're going to take a difficult vote on healthcare reform. That means there's a danger they don't get anything done and that will really hurt them in 2018.
HENNINGER: Yes. A real dilemma, Paul. As with what the Freedom Caucus did on the healthcare reform bill, sinking that.
Tax reform, if you have these difficult votes and if the Republicans are not able to get tax reform through, those votes will be digging their own graves.
HENNINGER: No question about it because the Democrats seem to play book. They know how to run against a moderate Republican.
HENNINGER: And they have got to put some victories up on the board or is it's going to very tough in 2018.
GIGOT: All right. Thank you all. Still ahead. Sorry if this ruined your Easter holiday, but taxes are due this coming week. Congress hoping to score big with tax reform, but it may need to file an extension on getting a bill passed anytime soon.
GIGOT: A little break this year. We have until Tuesday, the 18th, to file our tax returns. Congress has gone off on its Easter break with tax reform looming as the biggest issue on its to-do list.
But with Republicans in the House and Senate disagreeing over many key points, it's looking like they might not get it done this entire year. And President Trump is adding his own priorities to the debate.
(BEGIN VIDEO CLIP)
TRUMP: We have to do healthcare first to pick up additional money, so that we get great tax reform. So, we're going to have a phenomenal tax reform, but I have to do healthcare first. I want to do it first to really do it right.
(END VIDEO CLIP)
GIGOT: We're back with Dan Henninger, Joe Rago and Mary Kissel.
So, Mary, president saying - reversing what he said just a couple of weeks ago, now saying we've got to get healthcare reform done before tax reform. Is he right?
KISSEL: Yes, he is. Absolutely yes. You heard him when he said we need to pick up more money, so that we can then do tax reform. That's because the healthcare reform bill would've involved about $1 trillion in tax cuts. So, if you don't get that done and moving to tax reform, well, you have to find $1 trillion in tax cuts to get levels down to where you want them to be.
Because you don't want to do tax reform where you're not really bringing down the marginal rate on the individual side, you're not really bringing the corporate rate down to make us globally competitive, the way that we should.
GIGOT: Right. In particular, just, for example, on capital gains and dividends, the 3.8 percentage point tax on investment income in that kind of investment income and interest income in the healthcare bill and if you don't repeal that, then you don't get those rates down to 20. So, you have a steeper hill to climb to get the tax reform, Joe.
RAGO: Yes. And I think there's a real danger that this isn't tax reform, but just tax cuts. So, it's tax relief -
GIGOT: Why is that a danger?
RAGO: Because it's much easier. Tax reform involves a lot of hard choices, what deductions to clean out, simplify the system -
GIGOT: But a lot of people would say easier sounds good. Let's pass it.
RAGO: Why we're in danger of getting tax relief instead of tax reform, it's really pro-growth changes that will create jobs, raise wages and improve the economy.
GIGOT: That's the key because if you make the tax code more efficient, you get out the subsidies, you get out the special favors that misallocate resources to things like ethanol - pardon me, Iowa, but ethanol - things that really aren't all that productive, then what happens is you put it into more productive uses.
You get a big supply-side boom and incentives and so on and capital investment, which at this stage of the recovery is the only way frankly we're going to boost growth from 2 to 3.
HENNINGER: Well, you've made a good case for getting a tax reform bill. The question is, can we get?
I think President Trump was making an interesting point about healthcare. It's a political point. What happened to healthcare with the Freedom Caucus is they let the genie out of the bottle, which is to say the moderates - because of the way it was negotiated - saw that there would be losers in what was going on, at least, short-term, people losing their insurance.
GIGOT: That's the definition of tax reform.
HENNINGER: Well, that's the point. You've got the idea that these legislations can create losers out there because of the healthcare fiasco, fast forward into the tax bill where they - inevitably, that's all the way, winners/losers. And so, that has made a lot of Republicans in the House skittish about this subject.
If they could somehow pull off the healthcare bill and set it aside as an accomplished -
HENNINGER: - then it would be easier to get the hard votes on taxes.
GIGOT: One thing we do know, Mary, is that Donald Trump ran on a tax reform plan that could itself fit on a postcard. It was just a simple, let's - three rates. Top rate, I think, was 25, something like it, it might have been 28, I can't recall. But 28.
But the point is that he's now tearing that up in the White House led by Gary Cohn at the National Economic Council, is rewriting it. Do we know anything about the direction they're going?
KISSEL: Well, the problem with a Goldman Sachs guy like Gary Cohn is that we don't really know what his principles are, except that he's not a strong conservative. We're not sure that he really believes in supply-side economics.
So, this guy could come out for great pro-growth tax reform or he could come out with a value-added tax on top of everything else. The Hill just reported -
GIGOT: I don't think that's going to happen.
KISSEL: I don't think that's going to happen. I hope it doesn't happen. But the point is, Paul, I think he's looking at every option here. And because he's not steeped in the kind of principles that a Larry Kudlow or a Steve Moore would've had had they been in the White House, we could come out with a great result from him or an absolutely terrible result. We just don't know.
GIGOT: Let me be the sunshine boy here and say that, at least the hiring of Kevin Hassett, an economist of some note, who is an expert on corporate taxes and their impact on wages, for example, done real solid economic research, he is now the White House chief of - at the White House economic advisors. So that's a good sign for tax reform, Joe.
RAGO: It's a great sign for tax reform. And, look, Gary Cohn is a pragmatist. He wants a bill that can pass. You can't get a bad through the House, much less the Senate.
KISSEL: How about with carbon tax, Joe? He's a climate change -
But it is going to be difficult. And one of the things that they would like to do, if possible, Dan, is to see if they can find a way to coax Democrats to come on in. And to do that, they're going to have to earmark a big chunk of the revenue from tax reform, from getting rid of loopholes, and from bringing money back overseas to infrastructure spending. That's the only way you'll get Democrats. And you may not get on that.
HENNINGER: And you may not get the top personal rate down from 39 to 28. It may stick at something like 35 because they don't want to give tax cuts for the wealthy.
GIGOT: I wish we were going to get down to 35, Dan. I see 37, 38 in the future, I'm afraid.
All right. When we come back, a tense and somber Holy Week following the deadly Palm Sunday attack on two churches in Egypt. We'll discuss how to keep Christians safe from terrorists in the world's dangerous battles.
GIGOT: Christian churches in Egypt holding scaled-back celebrations this Easter Week, following the deadly bombings at two churches last Sunday - Palm Sunday - that prompted President el-Sisi to declare a state of emergency. This, as Pope Francis plans his first visit to Egypt at the end of the month.
We're joined by Nina Shea, a senior fellow at the Hudson Institute. Good to see, Nina. Welcome.
NINA SHEA, SENIOR FELLOW, HUDSON INSTITUTE: Thank you for having me.
GIGOT: So, what is the condition this Easter of Christians in the Middle East? How bad is it?
SHEA: It's very bad. ISIS has declared a genocide, a religious genocide against the Copts in Egypt. It did so, of course, with the bombings on Palm Sunday. It also released a video in February declaring the Christians there to be their favorite prey and calling them apostates.
And, of course, they're not apostates. They date their religion, their faith to St. Mark, the evangelist, the gospel writer in the first century. And they are the largest Christian population in the Middle East. They number about 9 million. And they are also the largest non-Muslim minority in the Middle East, even more numerous than the Jews in Israel.
GIGOT: Wow! So, how big - why is Islamic State targeting Christians in Egypt? Is it because they think - there's, obviously, the religious apostate issue, but do they think that somehow the Egyptian state is unable to defend them?
SHEA: Absolutely. It's both religious and political. They want to - they have a goal of purifying Egypt and the Middle East for Islam. And they think that this can resonate among the people if they stand up as the biggest, most extreme Islamists.
And it's worrisome because a Pew poll recently showed that 74 percent of the Egyptian people want to be ruled by Sharia law. And the government has been actually incompetent in protecting them and discriminates against them in their own way.
GIGOT: I keep reading about an exodus of Coptic Christians from Egypt, more and more each year people leaving. How big - what kind of - what are the numbers of people leaving?
SHEA: Well, there are 9 million Copts, so they can't all leave, Paul. But many have left. And we've seen churches here, for example, in the United States, of the Coptic Orthodox Church grow from 2 in 1970 to about 200 Coptic churches here today.
SHEA: Yes. We don't know the actual numbers. But anybody who can is trying to get out - let's put it that way - at the point. That's what we're hearing.
GIGOT: OK. So, Pope Francis is coming there. Should we worry whether or not the Egyptian government can keep him protected from a terrorist attack?
SHEA: Well, I think that that is just such visibility that they will probably do a good job with that. More worrisome is the Coptic Pope. He has been the target of two attacks now, including on Palm Sunday, where he was in one of those churches.
So, it's going to be - but the greatest challenge that Pope Francis has is when he meets with Al-Azhar, the Sunni center of learning, and really communicating a message that they have to change the culture. They have to define what is meant by infidel and to make clear that you do not kill infidels.
GIGOT: Is it fair to say that Pope Francis has been relatively muted so far in what he's been willing to say about tormented Christians around the world?
SHEA: He has been fairly muted. He was the first one of prominence to come out and say that the Iraqi and Syrian Christians attacked by ISIS were facing genocide.
But he has not really harped on that issue. And one of the reasons I think is fear, fear that it will put them in further danger.
SHEA: I've been doing this human rights defense work for 30 years, Paul, and I've never seen where it made it worse to talk about a situation. It actually helps protect people.
GIGOT: All right. We're going to be watching that trip very carefully. Thank you, Nina Shea, for being here.
SHEA: Thank you, Paul.
GIGOT: We have to take one more break. When we come back, hits and misses of the week.
GIGOT: Time now for our hits and misses of the week. Dan?
HENNINGER: Well, Paul, I'm going to do a coin flip hit or miss this week. It's about the University of Michigan's longtime consumer sentiment survey. And what they've discovered is, for the first time, economic expectations have become totally politically polarized in the United States.
Since Donald Trump got elected, Democrats believe we're heading into a deep recession. Republicans think we're heading towards an economic boom time. They can't both be right. I think the only silver lining here is that at least the Democratic doomsayers have the possibility of being very cheerfully disappointed.
GIGOT: Well, I hope that a lot of people aren't investing based on those (inaudible). Somebody is going to lose a lot. Kate?
ODELL: This is a miss for the City of Lansing, Michigan, my home state. This week Lansing declared itself a sanctuary city, in that it won't comply with federal immigration laws. It was previously a welcoming city, whatever that means.
And this outraged the local business community so much that the City Council then reversed its decision to be a sanctuary city. And then, that outraged the progressives who wanted them to be a sanctuary in the first place. So, I hope this is a lesson to other cities that are considering this gambit.
GIGOT: Sanctuary or not. What is the -
KISSEL: That is the question.
GIGOT: I'm going to give a rare hit to the United Nations this week for unanimously voting to draw down its peacekeeping troop presence in the disastrous peacekeeping mission to Haiti, which has been going on for years. They're going to leave a little police force presence behind, but they'll be out by the fall.
Paul, this mission brought cholera to this Caribbean Island and killed more than 9,000 people, sickened hundreds of thousands more. There have been allegations of sexual abuse and assault that the peacekeepers themselves allegedly inflicted on the local population.
Peacekeeping is supposed to be about keeping the peace, not making it worse. It's time for bigger changes to this mission. I hope we'll see that under Nikki Haley.
GIGOT: Nikki Haley is trying to drive that at the UN.
MCGURN: Paul, a hit for Mike Pompeo. The new CIA chief, this week, gave some straight talk on WikiLeaks. As you know, Mr. Pompeo is a former Kansas congressman, who says that they're used to false wizards down there in Kansas, and he put it this way about WikiLeaks.
It's time to call out WikiLeaks for what it really is, a non-state, hostile intelligence service, often abetted by state actors like Russia. About time.
GIGOT: Well, where does that leave, Bill, President Trump who touted some of the WikiLeaks disclosures in the campaign?
MCGURN: Yes. Don't you think it's good to have someone acknowledge it honestly? He promised to go after them with great vigor.
GIGOT: No, I agree with you on it. I just think that it probably wasn't great to celebrate that in the campaign. All right.
And remember, if you have your own hit or miss, be sure to tweet it to us @JERonFNC. That's it for this week's show. Thanks to my panel. Thanks to all of you for watching. I'm Paul Gigot. We hope to see you right here next week. And Happy Easter.
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