'Journal Editorial Report': Candidates Make Their Final Push

This is a rush transcript from "The Journal Editorial Report," October 30, 2010. This copy may not be in its final form and may be updated.

PAUL GIGOT, HOST: This week on the "Journal Editorial Report," as candidates make their final campaign push, a look at the most important races and why they matter, and some sleepers to watch for.

Plus, lessons from the campaign. Our panels take on what's really driving voter anger and their picks for the best and of course the worst moment of the election season.

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

Candidates across the country are using this final weekend before the election to shore up support and garner last minute votes. And while some high-profile races still remain too close to call, some clear trends are emerging this midterm campaign.

Fox News's own Michael Barone is here to break it down. He's the senior political analyst for the Washington Examiner and frequent contributor to the Wall Street Journal and co-author of "The Almanac of American Politics."

Michael, good to have you back here.


GIGOT: All right, a weekend before the election and we likely to see a big a wave, anti-incumbent wave as some people are predicting?

BARONE: well, Paul, just about all the indicator that I've seen indicates a wave more substantial than we what saw, for example, in 1994 when the Republicans picked up the 52 seats. We've got the, you know, the generic ballot question, which party's candidate will you vote for House of Representatives. The average recent polls in realclearpolitics.com shows Republicans ahead by seven points. If you go back, Gallup has been asking that since 1942. And during that time, I believe that Republicans haven't been ahead by four points and now averaging 17 points ahead, 14 points in Gallup's likely voter low-turnout model. So we see—

GIGOT: It sounds like it really could be extraordinary. When you and I talked about a month ago, you know, we talked about how the Midwest, the upper Midwest, going into the Mid-Atlantic, was an area where Republicans hadn't done well in recent elections, but were making a comeback. Is that trend still holding?

BARONE: Yes, that trend seems to be holding and what we're seeing here is that that in the industrial heartland, blue collar America historically trends towards the Democrats in times of economic distress. We saw that in recessional year elections in 1958, 1970, 1982. That area seems to be trending toward the Republicans.

You know, for some years I've been anticipating that the potential rise in high income — income tax rates on high earners would move the high income towards Republicans, when the Bush tax cuts expired, as they do at the end of this year. What we're seeing is not so much that. We're seeing more, the middle income, the blue collar areas, support for the Democratic programs is just collapsing. The Obama Democrats thought they were going to be giving these people $400 tax rebates in the stimulus package. They would be giving them health care. And they would be grateful if Mr. Obama with his — he told Joe the plumber, spread the wealth around. It doesn't seem to be having that effect at all. Quite the contrary.

GIGOT: One of the states I've been looking at with fascination is Pennsylvania because that has been a swing state before, but it has trended very much Democratic as of late. Yet the Republicans could pick up the Senate seat there, the governorship there and even as many as five House seats. What's going on in Pennsylvania? I'm thinking particularly those collar counties around Philadelphia, which have trended Democratic. But have — looked like they could throw out Democratic incumbents?

BARONE: Well, the suburban counties around Philadelphia, Bucks, Chester, Delaware, Montgomery, from the middle 90s to 2008, were trending Democratic. I think part of that was the cultural issues, the sense that the Republican Party was tied to southern Christian conservatives. And that was out of line with the more liberal views of suburbanites there.

I think that one of the things that's happened in the past two years is that those cultural issues have been brushed aside. We have what Governor Mitch Daniels described as a true culture war. Some people, cultural conservatives and cultural liberals don't like that, but the voters are focusing on something else besides the scope of government, so we've seen some move back toward the Republicans in the Philadelphia suburbs. They've got a good chance to pick up the 8th Congressional district in Bucks County, northeast of Philadelphia. They've got a chance at picking up the seat, the 7th district seat, close-in suburbs with increasing black population that had been held by Joe Sestak, the Democratic Senate candidate.

GIGOT: Right.

BARONE: So that's been happening there. At the same time, Paul, in Pennsylvania what we've been seeing is that in the blue collar industrial areas, the old country in northeast, Pennsylvania, we see Paul Kanjorski who's been in the Congress a long time, the number two on the banking committee and played a role in that financial regulation, he seems to be running behind his Lou Barletta, who's run against him before, hasn't succeeded. This year, it seems like Mr. Kanjorski's luck may have run out.

GIGOT: And those are those blue collar voters, working class voters you were talking about earlier up in the Northeastern Pennsylvania.


GIGOT: There's one exception this year, at least in the polling — if the polling is right, against this national trend for Republicans, and that's California, where the state-wide candidates are behind, the Republican candidates are still behind. Why is California appearing to be an outlier?

BARONE: Well, it's tempting to say that it has to do with the proposition on the ballot that would legalize marijuana.


And that some voters are already anticipating ahead. But basically in California, you have an increasingly bifurcated population in coastal California which includes most of the population of the state. It's starting to look like the population of Mexico City and Sao Paolo, Brazil. You have a group of affluent people, many of them from out of state, very high educated, very high income, very liberal on the cultural polices. And they've been voting Democratic, arguably against their immediate economic interests, for a long time, and they seem ready to do so again.

GIGOT: Michael, is that because they're somewhat isolated from the economic down turn?

BARONE: I think it's because they're insulated from the economic down turn. California has 12.4 percent unemployment, but these people are employing Household servants in significant numbers and they're getting money from high-tech and other firms. What's happened in California though, is that you've got— you've had increasing population of low income people, of immigrants, and many of them low-skill immigrants from Mexico and Latin countries and you had a flight outward of middle class people.

GIGOT: Right, to the states, Nevada, Utah, a lot of the other states.

BARONE: And even going as far east as Georgia and North Carolina. Basically, California's just not hospitable country for middle class Americans anymore and they're losing — they're losing that tax base. They've got a system where they're taxing high-income people at very high rates, but if they don't have any capital gains, they don't have any capital gains revenue.

GIGOT: Michael, thanks for coming on. And we'll watch and see what happens. Thank you.

BARONE: Thank you.

GIGOT: When we come back, lessons from the campaign. With Republicans poised to make big gains on Tuesday, Democrats are already trying to explain their likely defeat.

And what's really behind the voter backlash. Our panel weighs in after the break.


GIGOT: There's little doubt the Republicans are poised to make big gains on Tuesday with many predicting they can take back the House and perhaps coming close in the Senate. And Democrats and their allies are already rationalizing their pending defeat, blaming the economy, GOP obstructionism and the influence of corporate money, to name a few. But my panelists this week have their own explanations how the Democrats and Republicans got to where they are.

Joining me now, Wall Street Journal columnist and deputy editor, Dan Henninger; columnist, Mary Anastasia O'Grady; senior economics writer, Steve Moore; and opinionjournal.com columnist, John Fund.

So, Dan, how did the Democrats get to this position where. Two years after they had racked up huge majorities. they could lose them?

DAN HENNINGER, COLUMNIST & DEPUTY EDITOR: Well, I think the short answer, Paul, is they didn't notice there was an economic hurricane going on outside their windows. I've long believed —

GIGOT: How could they? That's why they won in 2008.

HENNINGER: That isn't why they won and that's not what they governed on. I long have felt this goes back to September 2008, the beginning of the financial crisis, the mortgage-backed securities crisis, then we discovered we were in the deepest recession in the nation's history. Unemployment was rising and 401ks were shattered. They come in and the first thing they do is throw $800 billion stimulus at that and figure we've taken care of that problem and now we are going to do what we really want to do, which is these incredibly complex regulatory bills, Obamacare, cap-and-trade. And I think that this was working in completely at cross purposes with the deep anxieties and concerns of the American people. They did that through the entire term of the last 18 months and I think they'll pay a price for that.

GIGOT: And the social agenda interfered, you're arguing, with the economic recovery. And then, so we're left with a stalled recovery and 9.6 unemployment?

HENNINGER: The two bills, especially Obamacare, which everyone watched for a year, was this incredibly complex regulatory apparatus that was in fact going to overlay on the economy. This wasn't like Social Security where you just give people money.

GIGOT: Right.

HENNINGER: This was going to affect the economy. And I think the American people said enough of this.

GIGOT: Rahm Emanuel's line, a crisis is a terrible thing to waste, can go down in history as one of the most misbegotten quotes ever.

STEVE MOORE, SENIOR ECONOMICS WRITER: What happened, I think, Paul, the Democrats misread the mandate they got in 2008, when they had that, you know, huge election. And Dan is right. Right out of gate, it was more spending and the health care bill.

And by the way, Dan, I think that cap-and-trade is it really unpopular in the states where the Democrats are behind.

GIGOT: The House voted for and passed it.

MOORE: Pennsylvania, Virginia, Ohio. And I think all of those piled on. And don't forget the bottom line, where are the jobs, and that's the question the Americans are asking.

GIGOT: John Fund, can money explain it. The Democrats say it's all corporate money?

JOHN FUND, COLUMNIST, OPINIONJOURNAL.COM: Well, if you look who is spending the money, labor unions are actually spending at least as much, if not more, than everyone else put together. They're pouring tremendous resources into this campaign, so I think it's just bizarre. The American people, in all of these races, are not focusing on the commercials. They're focusing on the fundamentals of the economy, and they're upset. The commercials are not going to change that.

GIGOT: Obama really did let himself get wrapped very closely, Mary, with the House and the Senate. He subcontracted a lot of this agenda to the House and Senate. I would argue that he latched his to the Nancy Pelosi mast. And if that goes down, he's taking a big part of that presidency with him.

MARY ANASTASIA O'GRADY, COLUMNIST: Yes, but he takes responsibility for that because he allowed her to almost become the leader of the movement. I see this as a failure of, really, classic progressivism. I mean, this guy, a silver-tongued demagogue, comes to power, promising —


O'GRADY: Yes, promising that you're not doing well and the reason you're not doing well is because he has what is owed to you. And I think that what's encouraging about this election is that the American voter is saying, you know, that they're not going to go down that populace path. They want more liberty. They don't want what somebody else has transferred to them.

GIGOT: We have a couple of poll— poll questions results from The New York Times/CBS poll this week. Let's show them. One, for example, Independents going to the Republicans this year, 47 percent to 32 percent. Almost a reversal of where they were in 2008 — John?

FUND: Well, what's curious about this, these are the same kind of numbers we saw in the Virginia governor's race last year, the New Jersey governor's race, and the Scott Brown victory in Massachusetts. That was all a year ago. The Democrats had lots of warning scenes there were troubles with the Independents. They ignored them.

GIGOT: We've got another one, Mary. Women, traditionally a big part of the Democratic base, usually more Democratic than Republican, this time, four percentage points in favor of Republicans.

O'GRADY: Yes, which as Michael Barone was saying, there's been a shift away from putting so much focus on the cultural issues and the culture wars to —

— is my family better off? I think a lot of families are struggling and probably explains the gender shift.

GIGOT: Bread-and-butter economics?

O'GRADY: Yes, is my family better off? And I think a lot of families are struggling. And that probably explains the gender shift.

HENNINGER: You know, related to this, Paul, one of the big stories of this election is how the Blue Dogs are getting absolutely hammered, conservatives, moderate Democrats.

GIGOT: These are the moderate Democrats.

HENNINGER: Yes. What was their claim to fame? That they were all about fiscal rectitude. And most of them ended up voted for Obamacare and cap-and-trade. So the fiscal —

GIGOT: And the stimulus.

HENNINGER: — were shown to be a sham. And you know what? Obvious shams don't play well very well in America.

GIGOT: All right.

Steve, we'll get back to you. We have another round to go.

We have to take a quick break. When we come back, from the high- profile matchup center, still too close to call, there's some sleepers to look for. Our panel's picks for the most important races to watch on Tuesday.


GIGOT: With several big races still too close to call and long- serving incumbents in peril, our panel is back for their picks for the most important races to watch on Tuesday.

Mary, what are you watching?

O'GRADY: I'm watching Pennsylvania, a very blue state, used to have a Republican Senator that behaved like a Democrat.


GIGOT: Arlen Specter.


O'GRADY: And Pat Toomey is the favorite to win there, although it's within the margin of error. But what's interesting about that race is they tried to tag him as an extremist. It's true that's he's pro-life and believes in pro choice for education. But he's also a former businessman. When he was a Congressman after three terms, he stepped down as he promised, term limits. And he also believes in eliminating the corporate tax. He believes in less government, and I think that's really what is resonating with voters in Pennsylvania.

GIGOT: If he wins, he immediately becomes reinforcement for the growth wing of the Republican Party —


GIGOT: — a pretty small group.


HENNINGER: Paul, in Wisconsin, it looks like businessman Ron Johnson is going to be beat three-term incumbent Russ Feingold. This has really significant implications for the presidential politics. Barack Obama carried that state, 52 to 46 percent, but in the previous two presidential elections, George Bush lost both times by less than 1 percent. What this would suggest is that Wisconsin is turning into a swing-state status. And if that's true, it may also mean that Minnesota, Iowa and Michigan are in play because their demographics are very similar to Wisconsin.

GIGOT: End of the year, Ron Johnson saying there are 57 lawyers in the Senate and not a single manufacturer.


We don't need anymore lawyers. We could use a manufacturer.


FUND: Late into the night, we'll going to looking at the very close Senate race in California, between Barbara Boxer, Democratic incumbent, and Carly Fiorina, former CEO of Hewlett-Packard. Boxer has been the Senate's most reflexive, down-the-line liberal. And I think she's in trouble. She's lead throughout the campaign, but always under 50 percent.

GIGOT: This is your upset pick?

FUND: She's always been under 50 percent, which is a dangerous signal for an incumbent. I think Fiorina will win.


FUND: She will be the most conservative Senator California has elected in a generation.

GIGOT: Coming up on the inside rail with Carly Fiorina.

All right, Steve?

MOORE: The political sonic boom this year has been the Tea Party Movement and they are deeply invested in two races, the race in Nevada between Harry Reid and Sharron Angle, and in the race in Kentucky with Rand Paul. Those are two races where the Tea Party movement put forward conservative candidates in the primary against the GOP establishment. And the Tea Party needs to win, Paul, both of those races.

GIGOT: Why? I mean, because if they don't, they'll be seen as having lost?


GIGOT: Two really winnable seats and, therefore, the Tea Party influence will not be as significant in the next Congress?

MOORE: Liberals and GOP establishment will say, see, the Tea Party had a negative impact. They've lost us these two seats.

I think the Republicans, by the way, will win those two seats. I think that Harry Reid is going to lose his seat as Senate majority leader.

GIGOT: John, I've been watching the Midwest governor's races, particular Wisconsin where Scott Walker, the Republican, running against Tom Barrett, the Milwaukee mayor. And John Kasich in Ohio, the former chairman of the budget committee when they balanced the budget, remember that, a century and a half ago or whatever it was, running against Ted Strickland, the incumbent. Both of those Republicans are winning, as they are in Illinois and Michigan. What do you make of these potential Republican gains in the Midwest?

FUND: In all of those states, you have seen recently pension and public-employee scandals, where there have been enormous cost overruns in those areas. And I think there's a reaction by the part of the average voter who is seeing manufacturing jobs leave the state because of high taxes, and seeing the public-employee unions prosper, and frankly living a whole lot better than people who pay their bills.

GIGOT: And also some big tax referendums on the ballot, Mary. One in Washington State where Bill Gates Sr., the father of the billionaire — I don't know if he's a billionaire himself, but he's probably not doing too badly — trying to support, along with the public employee union, a big — a new tax.

O'GRADY: One of the most interesting things about the election across the country, I think, is that people are starting to realize that those higher brackets punishing the higher-income brackets is not a way to get richer. And in fact, that's what is part of what's causing the higher unemployment, because when you tax wealthy people, they don't hire as many new employees in their businesses.

GIGOT: This is really one of the interesting themes. We don't read a lot about it, but this question of populism, of soaking the rich as an economic theme, is being litigated this election. And if the Republicans still manage to win in places like Pennsylvania and Ohio and elsewhere, it means that that strategy is not as useful as it used to be.

HENNINGER: Well, I think it does look back to the state of the economy and the need for economic growth, and that more people at every income level understand that we need everybody pulling on the oars, including employers.

GIGOT: All right, Dan.

We have to take one more break. When we come back, the best and worst moments of the 2010 campaign.


GIGOT: Time now for our "Hits and Misses" and, this week, the best and worst moments of the long, long campaign season — Steve?

MOORE: Republicans may come one vote short in the Senate of taking the majority. If they do, it will because they'll lose that Delaware seat that was very winnable. Christine O'Donnell is the candidate there. She was very famously in an ad that said, "I am not a witch."


Ever since then, it's been downhill for her. I guess the new adage in politics is you never say, "I'm not a crook," "I'm not beating my wife," and "I'm not a witch."


GIGOT: All right.


O'GRADY: Every week, there's a new low. And this week, we had President Obama talking to a group of Latinos on a Spanish radio station. And he said that, "If Latinos sit out the election and instead of saying we're going to punish our enemies, and we're going to reward our friends, then that would be a mistake." I think for the commander-in-chief to refer to his political opponents as enemies, is really a new low.

GIGOT: All right.


FUND: You know, the October surprise the Obama White House brought to this campaign was an acquisition the Chamber of Commerce was using foreign money to influence the election. Turns out, that wasn't the case. But in 2008, the Obama campaign consciously turned off its computer filters that told who was contributing under $200. Half their money came from that. I think that a lot of money came from foreign sources. So did auditors at the Federal Election Commission.


This is beyond chutzpah.

GIGOT: All right.


HENNINGER: Paul, as a native of Cleveland, Ohio, the high point for me was discovering that their Westside congressman, Dennis Kucinich, who may just run for president —


— has a real challenger this year in a guy named Peter Corrigan, a smart, economically astute businessman. And let me tell you, that poor city could use somebody in Congress who understands the economy. That's not Dennis Kucinich. It might be Peter Corrigan.


My miss goes to Bill Clinton for urging Kendrick Meek, the Democratic candidate for Senate in Florida, to get out of the race so Charlie Crist, the Republican-turned-Independent, could have a better chance of beating Marco Rubio, the Republican. Not only is that a betrayal of Meek, who won the Democratic primary fair and square, but it also shows how much Democrats and also Bill Clinton fear Marco Rubio, who becomes an instant star if he does win.

And I think that Bill has maybe 2016 on his mind —


— and Hillary running for the White House. They want Rubio out of there.

MOORE: They're back.

GIGOT: All right.

Remember, if you have your own "Hit or Miss," please send it to us at jer@FOXnews.com.

That's it for this week's edition of the "Journal Editorial Report." Thank to may panel, and especially to all of you for watching.

I'm Paul Gigot. We hope to see you right here for post-election analysis next week.

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