Is Obama's Democratic coalition crumbling?

This is a rush transcript from "Journal Editorial Report," November 8, 2014. This copy may not be in its final form and may be updated.

PAUL GIGOT, HOST: This week on the "Journal Editorial Report," Democrats take a drubbing in the midterm elections but is President Obama set to double down on past policies or is he ready to work with the new Republican majority?

Plus, GOP governors have a very good night while their blue-state counterparts suffer some big setbacks. We'll look at the secret to their success.

And breaking through the blue wall. Tuesday's vote exposes some cracks in the Democratic coalition. We'll tell you what it could mean for 2016.


PRESIDENT BARACK OBAMA: Every election is a moment for reflection. And I think that everybody in this White House is going to look and say, all right, what do we need to do differently? But the principles that we're fighting for, the things that motivate me every single day and motivate my staff everyday, those things aren't going to change.


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

That was President Obama one day after his party took a drubbing in the midterm elections with Republicans capturing control of the Senate for first time in eight years and winning the largest majority in the House in generations. Both House Speaker John Boehner and Senate Republican Leader Mitch McConnell signaled this week they are open to working with President Obama in the next Congress. But should they? And is the president ready and willing to work with them?

Let's ask "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, let's start with you. Big Republican sweep, obviously. But what's the meaning of this election, the broad brush? Is this is more a repudiation of President Obama or was this really maybe an endorsement of potential Republican governance?

DAN HENNINGER, COLUMNIST, DEPUTY EDITOR: I don't -- the Republicans have been given a big opportunity here. But I think on the other side, Paul, it's important to make an important distinction. We should not -- however much of a presence Barack Obama has had in the life of the country in the last six years, this is not simply a repudiation of Barack Obama. This is a repudiation of the modern Democratic Party and Democratic idea of governance, which is, indeed, large government and spending, not only in Washington, but these state races were so important. States like Wisconsin, Michigan, Maryland, these are Democratic states and those voters there repudiated the idea that spending public programs would make their life better. It has failed. And it has been kind of a test case over the last five years. Now the -- I think that's really important. Now the Republicans have their own chance.

GIGOT: So, Jason, how do you read the president's body language there --


-- and genuine rhetoric that he offered? Do you think he -- it absorbed and internalized, the point Dan made, or not?

JASON RILEY, POLITICAL DIARY EDITOR: His body language doesn't suggest that he has, Paul. But here's what's different. During his second term, George W. Bush's approval rating averaged 37 percent.

GIGOT: Not good.


RILEY: Obama does not want to leave office that unpopular. Nor do Democrats want him to leave office that unpopular. That's the new incentive he has to compromise and get something done. Everyone has a dog in this fight. He knows his unpopularity could rub off on the next potential Democratic presidential nominee. And the Republicans know they need to show results between now and 2016, show the public what they can do with their majority. So everyone has a dog. There are incentives in here to get things done.

GIGOT: So should Republicans, James, should they be willing to work with the president? Remember, 2011 didn't work out so well. 2013 didn't work out so well. So this time, now that they have the Senate, should Republicans feel, OK, we really should attempt to get something done with the president or, wait, he's going to sand bag us no matter what?

JAMES FREEMAN, ASSISTANT EDITORIAL PAGE EDITOR: In his Wednesday remarks, incoming majority leader, Mitch McConnell, in the Senate, said his approach with the president is going to be trust but verify. That's probably about right. You would think maybe the -- after the drubbing, the thumping, whatever you want to call it, Democrats would be telling him to move to the center. But you look at the Democrats left in the Senate, it's a more liberal group in terms of those up in 2016. Michael Bennett, in Colorado, kind of a more of a moderate, but most of them on the left --


GIGOT: What does that tell you --


FREEMAN: There's not going to be take whole lot of pressure, I don't think, from that caucus to move to the center so I think for the --


GIGOT: No, but do you agree with Jason, though, that the president himself, who has only got two years left -- I mean, his caucus?

FREEMAN: Nothing I saw Wednesday says he's ready to move to the center. He said a moment of reflection. I think it might only have been a moment.


And I think for Republicans, what they have to expect is that they are going to get more of the same because that's basically what he said on Wednesday. Now, there may be opportunities. I think free trade agreements are a big one. Democrats in the House and Senate were really the stumbling blocks there. Now there are fewer of them. That should be easier. Other than that, I'm not sure they should be that optimistic.

GIGOT: Kim what's the mentality among the Republicans, particularly the leadership after this? They feel more confident. They have more votes. But do they feel an imperative to actually accomplish something, that they can go back to voters and say, see, we delivered some corporate tax reform. We delivered some pro-growth legislation. We helped to fix ObamaCare in certain areas.

KIM STRASSEL, WASHINGTON COLUMNIST: No, they absolutely do, because here's the thing, here's what the leaders in Washington are interested in. They don't know how Barack Obama is going to react to their overtures and I don't hold out a lot of home. But Republicans, what they've got to do is they've got to choose some bipartisan, popular issues. They can get some Democrats to go along with them in the Senate and the House. They send it to the president. And the important thing is, when they do that, they force him to then be the reason that something doesn't get done. If he decides to veto it, it's on him. In a way, they win that debate. And they also, therefore, show the country what things might look like and might be possible if there were a Republican president and Republican Congress going forward. So there is an imperative to simply move legislation and do it on their terms and on priorities that they think will resonate with the public.

GIGOT: But here is the rub. They can't govern from Capitol Hill by themselves.


GIGOT: The president has the veto. He can stop what he wants. And then there's that 60-vote barrier in the Senate, the filibuster. And the Democrats, as I think James pointed out, the Democrats in the Senate are not going to be enthusiastic about passing too much and giving Republicans credit for that. So how -- and so they are going to have to temper their expectations, I guess, and the Republican electorate will have to do that, too, because they can't get everything they want.

HENNINGER: Yeah. I think they have to treat the president with respect but they will also have to be firm. When they debate issues with him, they'll have to be clear about the principles behind their ideas: reviving the economy and recreating economic opportunity for people, and explain to people why the president's policy --


GIGOT: Briefly, Jason.

RILEY: A first big test of this will be immigration, whether he will compromise with the Republicans on this, share credit and accept that he won't get everything he wants.

GIGOT: He's going to do the executive order, I'm afraid, Jason.


That's going to blow that all up.

All right, when we come back, reform governors win big on Tuesday night with several incumbents beating back strong challenges. Why didn't blue state Democrats fare as well? We'll have the secret to GOP's gubernatorial success, next.


GIGOT: Well, many of them faced tough re-election fights but a group of so-called Republican reform governors swept back into office on Tuesday, with Wisconsin's Scott Walker, Florida's Rick Scott, Kansas' Sam Brownback and Michigan's Rick Snyder all beating back strong challenges. But some blue state Democrats did not fare as well, with incumbent, Governor Pat Quinn, losing re-election in Illinois and the Democratic candidates in Massachusetts and Maryland also going down to defeat.

So, Kim, the evidence of a Republican wave is probably best seen in the states. Republicans could hold as many as 31 governorships when this is all said and done. That's an extraordinary number. What's the political lesson here?

STRASSEL: Well, a favorite media talking point got blown out of the water on Tuesday, and that was that this was an anti-incumbent election, that every incumbent was going to go down. That's not what happened. What we found on Tuesday was that this was, in fact, in the governor's races, a referendum on red state and blue state governance. The red state governance model won. The blue state governance model lost. The guys out there out there doing tax reform, collective bargaining reform, education reform, in particular, those Republican governors, like Scott Walker in Wisconsin, Rick Snyder in Michigan, Rick Scott in Florida, Sam Brownback in Kansas, those who took big risks, they were rewarded for it at the polls.

GIGOT: So what's the exception, James, Republican exception of Tom Corbett of Pennsylvania? He lost in a rout. Why was he the exception when these other Republicans won?

FREEMAN: Well, you didn't see, with him, the kind of achievements we're talking about with these other governors in terms of Scott's education reform; Walker, a huge change in the size and power of government unions in that state --


FREEMAN: -- Brownback, big tax reform.

GIGOT: Well, that had results in Wisconsin. Collective bargaining reform delivered results in the sense that it freed up local education budgets, it reduced local property taxes or at least stopped the increase in property taxes, which are a problem in Wisconsin, and it reduced teacher layoffs.

FREEMAN: Yeah. I think this win, second win in a swing state, and big reforms on the resume, puts Scott Walker into that victory --


FREEMAN: Yeah -- into that top-tier of presidential candidates. Real contenders, Jeb Bush and Rand Paul in there. I think you have Walker as well.

RILEY: And even though Corbett went down in Pennsylvania, Republicans gained seats in the state legislature in Pennsylvania.

GIGOT: Yeah, it's amazing.

RILEY: And even in blue states, like Maryland, where Democrats still control the state legislature, Republicans picked up a sizable amount of seats. And so if there was a wave, a true wave, it was in the state, with these state legislative races. But I do agree with Kim that the red state model prevailed here. Rick Scott, down in Florida, took on teachers unions and he won. In Illinois, Quinn was punished for raising taxes.

HENNINGER: Let's talk about the blue state model that lost.

GIGOT: By the way, Dan, all hail Henninger.



GIGOT: Maryland, calling Maryland here --


HENNINGER: I'm fascinated by Maryland. Maryland is a textbook example of what we were talking about. Governor Martin O'Malley, a Democratic governor, raised 40 taxes or fees in that state, cut aid to police and fire departments at the local level. The Democratic model has been to spend on public programs but to do that, they need revenue. And in Maryland, in Illinois, and in Massachusetts, a lot of what they did was raise fees. These fees are regressive. They hit lower middle class pocketbooks right across the top. And that became a big issue in all of the states. Middle class and lower middle class people felt they were now being asked to pay for these programs.

GIGOT: And the symbol of that in Maryland, the rain tax.


GIGOT: It helps to pay for sewer runoff, so, I mean, they tax the heavens.



Massachusetts has a fee on tips in restaurants.

GIGOT: So, Kim, why the exceptions with Democratic model for California, New York and Connecticut, which has had some of the worst growth figures across the country? Why did Dannel Malloy eek out a victory and these other state governors? Because Jerry Brown raised taxes big in California but won comfortably.

STRASSEL: Well, look, out in California, it always helps to have Silicon Valley and all that money surrounding you. There's just a different mentality out in the state. Our in Connecticut, where you're mentioning it, look, what you saw in some places is Democrats still managed to use effectively some tactics against Republicans, complaining that the other side were people who were going to make severe cuts and do terrible things to education. The Connecticut race was very close in the end. But that might have been part of the margin of difference.

GIGOT: Jason? What do you got here for the blue state --

RILEY: Well, I would say even though Brown was victorious in California, and Cuomo, they took hits in their state legislatures where Republicans picked up seats. Republicans picked up the Senate in New York. And Jerry Brown lost super majority in California. So they were not immune to this wave.

GIGOT: All right. When we come back, breaking through the blue wall. Republicans made midterm gains in states and with voting groups the Democrats believed were solidly in their camp. So were Tuesday's results a one-time thing or GOP blue print for victory in 2016?


GIGOT: They were dubbed the coalition of the ascendant, the Millennials, minorities and single female voters who helped sweep President Obama into office in 2008 and re-elect him in 2012. It was a powerful block that Democrats hoped would lead them to a durable majority. So do Tuesday's results reveal cracks in this coalition? And what does it mean for 2016?

So, Jason, how many cracks do you see now in this Democratic coalition?

RILEY: Yes, there are some cracks. I wouldn't call it a breakthrough, but there was some progress made by Republicans, among blacks, among Hispanics, among women, among young people even.


RILEY: Even among people earning less than $50,000 they made some gains.

GIGOT: But still only 10 percent of the black --


RILEY: It's not a huge amount, although --

GIGOT: 35 percent of the Hispanic vote.

RILEY: Rick Scott got 12 percent in Florida, which was up from 4 percent four years ago. It's a big swing state.

GIGOT: How do you explain that?

RILEY: I can't explain it.


GIGOT: I would make at least a theory, an apotheosis -- the economy.


GIGOT: He created a lot more jobs. And you saw results over the four years.

RILEY: But it's -- these baby steps or these mini steps are still impressive given the race-baiting that the left engaged in, in this midterm election. I mean, given what they threw in terms of tactics, at playing the race card and bringing up Ferguson, bringing up Trayvon Martin, and the idea that Republicans were still able to make gains in that environment, I think is pretty impressive.

HENNINGER: A quick follow-up point to what Jason has been saying. The one thing the Democrats lost big with was with white men.

GIGOT: Right.

HENNINGER: Now, that's been happening for --

GIGOT: By 30 points or more.

HENNINGER: Yes, it was a huge margin. It's kind of a flip reverse example of what the Republicans have a problem with, Hispanics, and people say, don't worry about it, they are not our people. At some point, you have a big problem if you have lost the white male vote or lost the Hispanic vote. I don't see how the Democrats at this point are going to get the vote back.

GIGOT: Kim, what about the exit polling that showed that Republicans really scored very, very well among older voters. 44 and older, they won comfortably, but they lost voters under 44 in the exit polling. And one of the big reasons they won was because so many fewer younger voters turned out this time than in the previous -- than in 2012. College kids like to sleep in, whereas, the people my age and older, we get it. We pop up at 4:00 a.m., and run to the polls.


STRASSEL: You may, Paul.


GIGOT: So but what about that for the future of the Republican Party and their chances to become a majority? Obviously, younger people are going to be alive a lot longer than I am.

STRASSEL: Yeah, you are right.


This is traditional. You do tend to see in midterms a drop off among certain categories of voters, in particular, minorities, also younger people. Now, what was notable about the exit polls though, Paul, is that while Republicans still lost that vote, they made some real gains, especially among Millennials. And in the theory out there, these are the people that are hurting the most from the economic pain out there and that they feel most glum about their prospects and the future. So to the extent some of them didn't even turn out, that probably was a factor in that. But to the extent that some did turn out, voting for Republicans, suggested that their economic message, the GOP economic message was holding out a little more hope for some of this voting.

GIGOT: Yeah. And on that point, the white working class -- the people -- white voters who don't have a college degree went for Republicans almost 2-1. That's a huge hole in what used to be a pretty good voting group for Democrats.

FREEMAN: Yeah. You forget, because when people talk about projections on demographics, that's still a fairly large group of people. But I think the larger problem for Democrats is they should be concerned that parts of the coalition in the ascendant may be ascending over to the GOP.


FREEMAN: Look at Asian-Americans who, for example, went big for Obama, now kind of coming back to 50/50. And I think what Democrats are going to be tempted to tell themselves is, well, our constituency doesn't show up for midterms, forget about it, 2016 they'll be back. But I don't think they realize that they almost certainly will not have Mitt Romney to kick around anymore. You will not have a Republican candidate, I don't think, so effective at driving minorities --


-- and working class whites away from the Republican Party.

GIGOT: That's the key question. Is that Obama coalition from 2012 transferable to a different kind of Democratic candidate, like Hillary Clinton or somebody else?

HENNINGER: I think it will be very hard, Paul, because that candidacy, in the large part, was based on mood music and sentiment. The question is what policies will the Democrats now propose to the American people, the minimum wage? Climate change? I doubt it.

RILEY: And given Obama's approval rating, the next Democratic candidate might have to run away from Obama, which will put them in the dilemma that a lot of red state Democrats had this election, which is trying to attract Obama supporters while distancing themselves from the president.

GIGOT: All right. Thank you all.

We have to take one more break. When we come back, our panel's picks for the biggest winners and losers from the midterm elections.


GIGOT: Time for "Hits & Misses" of the week. But this time, the panel picks their biggest winner or loser from the midterm elections -- Dan?

HENNINGER: Well, in effect, I'm giving the win to Ed Gillespie, who lost the Virginia Senate race for Republicans by 16,000 votes out of some two million cast. This was a state Barack Obama has carried. No one gave Ed Gillespie a chance of even coming close. But by competing so well, Ed Gillespie has put Virginia back in play for his party and for his party's 2016 presidential nominee.

GIGOT: Jason?

RILEY: Biggest loser is Hillary Clinton because President Obama has driven his party into a ditch. She'll have to get them out of that hole without losing her liberal base. Very tough to do.



FREEMAN: Biggest loser is Harry Reid, not just for the obvious of losing control of the Senate, but his despicable campaign has failed, and that is to use his official office, the floor of the U.S. Senate, to attack private citizens simply for participating in the political process and disagreeing with him.

GIGOT: He's going to stay there in the Senate though, James.

All right, Kim?

STRASSEL: My big loser is billionaire environmentalist, Tom Steyer, who effectively lit a match to about $75 million of his own fortunes, which he plowed into Democrat candidates who were supporting his extreme environmental agenda, nearly all of whom lost. That's a lot of green up in smoke.

GIGOT: All right.

My winner, Rand Paul, the Kentucky Senator, who was everywhere this campaign, this election, running for -- helping Republicans as the sort of go-to surrogate. He helped himself a lot, got a lot of favors, and he'll be more than a gadfly candidate for president.

And if you have your own winner or loser for the midterm campaign, be sure to tweet it to us at

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

Content and Programming Copyright 2014 Fox News Network, LLC. ALL RIGHTS RESERVED. Copyright 2014 CQ-Roll Call, Inc. All materials herein are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of CQ-Roll Call. You may not alter or remove any trademark, copyright or other notice from copies of the content.