This is a rush transcript from "Journal Editorial Report," January 7, 2012. This copy may not be in its final form and may be updated.
PAUL GIGOT, HOST: This week on the "Journal Editorial Report," with Iowa in the rearview mirror, the Republican pack hits the Granite State. With a double-digit lead there, can Mitt Romney be stopped?
Plus, Rick Santorum makes a big play for blue collar voters. Is he the GOP's best hope for the wooing working class?
The return of the imperial presidency. Mr. Obama makes recess appointments when Congress isn't in recess. What would Senator Obama think about that?
Welcome to the "Journal Editorial Report." I'm Paul Gigot.
One candidate lighter after Michele Bachmann's departure, the GOP presidential pack blanketed the Granite State this week ahead of Tuesday's first-in-the-nation primary. Rick Santorum hoping to capitalize on his Iowa momentum, Newt Gingrich hoping to mount a comeback, and Mitt Romney hoping to maintain the double-digit lead he enjoys in the polls there.
Joining the panel this week, Wall Street Journal Political Diary editor, Jason Riley; assistant editorial page editor, James Freeman; editorial page member, Dorothy Rabinowitz; and Washington columnist, Kim Strassel.
So, James, is Rick Santorum the most serious threat so far to Mitt Romney or not?
JAMES FREEMAN, ASSISTANT EDITORIAL PAGE EDITOR: He's a major threat. I think that Santorum could win this thing. And it hits Romney's vulnerabilities. Obviously, we saw in Iowa, speaking to the Values Voters, that Santorum has the edge there. But he quickly pivoted to the economy. And what you find is a better spending reform plan and a better tax cutting plan than Mr. Romney. And as we go to Republican primaries and caucuses, that usually does well.
GIGOT: Kim, what about Santorum's weaknesses? He's already being attacked for some of his Senate record, the fact that he supported earmarks and isn't a Libertarian on the economy in terms of cutting government.
KIM STRASSEL, WASHINGTON COLUMNIST: Yes. I would push back a little on James' analysis. I think what you see in this race so far is candidate after candidate try to emerge as the guy who can until a coalition to the right of Mr. Romney and fail to do that once they start to be analyzed by voters. What you'll see with Mr. Santorum is a look at his earmarks, his spending. He's very good on taxes. But on earmarks and spending, many view him as part of the Bush spending crowd in that period of time. And he's got some issues, a protectionist stance and anti-trade votes, and that's going to get put through the wringer.
JASON RILEY, POLITICAL DIARY EDITOR: And, Paul, he's got issues in terms of style and presentation. He's not the most nuanced. How you say things in politics sometimes matters as much as what you are saying.
GIGOT: What do you mean by that?
RILEY: He can be a little dour. He said some things that the press is going to jump all over --
RILEY: -- and the social conservative -- concerning gay marriage and so forth. So I think he's got some issues there.
But, James, the issue here is that 60 percent of Iowa caucus voters were evangelical. He's not going to see that. He's not going see those percentages in the primary going forward, and that's what really helped him --
FREEMAN: No, but he showed you, he can play in other issues. The Tuesday night speech after the Iowa voting, yes, he did the political equivalent of Tebowing at the start of it.
He thanked God. But he quickly pivoted to the economic issues. And it was a strong speech. It was basically about the Obama war on business and he's making a case in a way that is more persuasive than Romney.
GIGOT: Stressing freedom, stressing the working class, Dorothy.
DOROTHY RABINOWITZ, EDITORIAL BOARD MEMBER: He can stress all he wants to, but nuanced, not the most nuanced, understatement of the year.
The other is you really can't transform your core. And as I was walking around the apartment this afternoon with the radio in every room, it was surreal. Every voice was reciting from the horror lists of things that the candidate Santorum had said. It was startling. The gay thing, the --
GIGOT: The gay thing, what, he's against gay marriage? OK --
RABINOWITZ: It's more than that --
GIGOT: So is Barack Obama.
RABINOWITZ: Wait, it's -- wait, it's the discussion of bestiality. It's very detailed. It's the discussion of whether you should use contraceptives. and that's very detailed. This is a core --
GIGOT: I heard him this week say that he's not against contraception?
RABINOWITZ: There are those quotes. He says he's not against it. Look, all of these are after the fact. The list is terrorizingly long. And it will pursue him.
FREEMAN: What he was criticizing -- the contraception point, he was criticizing the Supreme Court decision in the 1960's, which found a right to privacy that led to Roe v. Wade. But I have to tell you, where he is on these social issues? Obviously, he's not going to win in this city. But for most of the country, this would be a problem for Barack Obama going up against that agenda.
GIGOT: Let me talk -- let me get Kim in here on Mitt Romney. What's the best that the Republicans -- the rest of the -- Romney has a huge lead in New Hampshire. What's the best the Republican -- the rest of the field can hope to do to Romney in New Hampshire? Just dent him some?
STRASSEL: New Hampshire is a staging ground. These is where these guys go -- and, again, the goal here, the only way that you stop Mitt Romney, if you're one of his opponents, is if you somehow manage to coalesce a conservative group of voters to his right. This is staging ground and they're going to go out there, try out their messages. It has to be on the economic front. You've got Gingrich running a contrast campaign, saying he is the growth candidate versus the timid Massachusetts governor. You're going to have Santorum trying to ref up his own economic credentials. Perry, too. And they're staging for South Carolina and Florida, and beyond. They're not going to beat him in New Hampshire.
GIGOT: Let me ask you about Jon Huntsman. He's made New Hampshire his one attempt to try to break through. Put all his resources there. How is he going to do?
RILEY: I think he'll do well. But considering Romney's lead, he'll have to do very well. He'll have to do almost as well as Santorum did against Romney in Iowa. And he's not going to do that.
What Romney really has here is history on his side as well? The last candidate to win both Iowa and New Hampshire and not win the party nomination, Ed Muskie, 1972. He's got the money --
GIGOT: You want to roll this thing up already. You want to roll this thing up already.
RILEY: There's an argument, Paul, a long, drawn-out contest will help Romney and it will make him battle ready. I'm not so sure. It could also depress Republican turnout.
GIGOT: All right.
Newt Gingrich, Dorothy, is staying in.
GIGOT: And a lot of people say, he's just staying in to hurt Romney. But I don't think that's right.
GIGOT: He really does think he could be the last one standing.
RABINOWITZ: That's right. The assembled press, like an assortment of analysts, over there, uniformly state, of course, he is doing this out of spite. And that isn't really true. Gingrich had a considerable sense of his own success. And it's been, you know, mirrored in the response to him even today. So he didn't win in Iowa, he's going forward because he really believed that he can set off a spark. And he will be helping the upcoming debates that are coming up. And it's simply nothing he's shown that sheer malice is driving him. It's a convenient notion to people who have essentially wanted him out of the race. And I have to say, the idea that one should simply sacrifice yourself so as to get this uniform --
GIGOT: But as long as the field is divided, the non-Romneys are splitting the vote, James, then Romney can continue to do 25 percent and rack up the delegates.
FREEMAN: You'll probably see someone emerge. Gingrich he -- we've been talking about the dueling tax plans, he has the tax plan. It's the most pro growth. But Santorum, obviously ascending. His is pretty good, too, even beyond manufacturing.
GIGOT: Hold that thought. We'll talk about that in the next block.
When we come back, the Republicans candidates and the working class. Rick Santorum has the blue collar background and he's not afraid to use it. So is he a better bet than Mitt Romney to take on President Obama and his class war strategy?
(BEGIN VIDEO CLIP)
RICK SANTORUM, R-FORMER PENNSYLVANIA SENATOR & PRESIDENTIAL CANDIDATE: If we have someone, who can go out to western Pennsylvania and Ohio and Michigan and Indiana and Wisconsin and Iowa and Missouri and appeal to the voters that have been left behind by a Democratic Party that wants to make them dependent instead of valuing their work, we will win this election.
(END VIDEO CLIP)
GIGOT: That was Rick Santorum this week after the strong finish in Iowa. The former Pennsylvania Senator is playing up his working-class roots, making the case that he is the Republican candidate best suited to appeal to a broad swath of blue collar voters and best able to beat President Obama who is making class warfare a central theme of his reelection campaign.
So, Kim, what do you think of the strategy of Santorum, first of all, as politics?
STRASSEL: Identity politics is not a bad thing and often works in America. You go out there and say, I'm one of you and you really make a connection with voters, and that's something that I think was behind his rise in Iowa, and will be a big strength of his going forward.
One of the problems though, when you get politically to the contrast of Obama is what Mr. Santorum is also doing and some of the center of his agenda is not just identify with a lot of the white, working class people, but then to tailor his policies to help them with things like a zero corporate tax on manufacturing or tripling the tax deductions for children. And the problem is that that's, in its own sense, sort of what President Obama does with the tax code and the Democrats. You muddy the field there. And it's difficult to start making the contrasts with the president.
GIGOT: You also, maybe, sacrifice, Jason, economic growth to the extent that you play favorites, for example. You can run the risk of misallocating capital, if I can use that economic argument. And you get a less efficient economy.
RILEY: It's a divisive tactic. It operates on the assumption that there's some fixed high. You're telling working-class people that you're in the condition you're in because other people are rich in this country. And it's playing -- it's playing on the Democrat's battlefield.
FREEMAN: The explicit message from Santorum -- and this is why I think he has great potential -- he talks about how the burdens of government, regulations and taxes are hurting businesses and causing layoffs. And this is really -- Republicans have looked for years for someone who could make the government burden on government a kitchen-table issue, and explain how when you tax and regulate companies they can't hire people. He seems to be that guy.
FREEMAN: And I think that's the potential. Even if you're not a manufacturer, you get a tax cut.
GIGOT: It's a different message than Mitt Romney, for example. The White House is will already saying that Mitt Romney doesn't identify with any of you because he's a rich guy. He's got the multiple homes. Whereas, Santorum, they can't make that argument against him.
RABINOWITZ: But -- that's true. But you cannot have a grievance candidate to oppose Obama. You cannot be the person who says, you have been oppressed. That whine is simply not going to reach out to an electorate.
GIGOT: But doesn't he put it in the larger context of freedom and the burden on business? And what about James' point? That's the context that I hear Santorum making this case. He's saying it's not a grievance against the wealthy. He's not making a class-war argument. He's saying, I can lift you up, not that we can take away from the other guys.
RABINOWITZ: You're hearing the words. Some people can hear the music.
The music is the grievance. The music is the same thing that --
FREEMAN: Well, unlike -- unlike Romney, he hasn't designed a tax plan to make sure that no rich person ever benefits.
If you're part of the upper class and you're worried about Santorum, there's stuff in that plan for you, too. I mean, he's got the end of the death tax and a simple, lower rates for everyone.
RILEY: I think this is also politically short sighted on the part of both Romney and Santorum going after this white working class vote. The Republicans do well with this vote. And the idea that the Obama campaign is writing it off is also I think a little overemphasized. John McCain beat Obama among white working class voters by 18 points in 2008.
You can't really write off something you didn't have. Now, Obama will appeal to the folks. He'll say, this is what the auto bailouts were about. This is what Obama-care is about. And he'll say -- and he'll scare them by saying, what the Republicans want to do is take away your entitlements. Social Security, Medicare reform that they talk about and so forth. So he will make a play for those voters. The fact is he won last time largely without them.
GIGOT: Kim, what do you think about the point from Jason?
STRASSEL: Look, I think this is overdone. What Mr. Romney understands and Mr. Santorum understands is the margin of victory among this particular group of voters, which have increasingly been forming part of the Republican voting block that could win them a presidential victory. President Obama got 43 percent of the white working class vote. Yet, by 2010, 63 percent of those people have voted for Republicans. If you have margins like that going into the presidential election, it becomes much harder for Democrats to keep the White House. and that's why Romney and Santorum are targeting this group so hard.
GIGOT: And the Keystone Pipeline decision, where it's opposed by the president's well-to-do environmental supporters, but supported by his union working class representatives, that would seem to be an example of the president siding with the well-to-do, so-called knowledge class workers. What do you think he's going to do on that, Kim?
STRASSEL: Well, I think it's not just that. It is Keystone, it's his EPA agenda, which also appeals to that group of people. It's the fact that he's been putting in an enormous amount of time campaigning in states like Virginia and North Carolina, where this class is sort of educated voters is more prominent. Democrats won in 2008. They'd like to keep that. And what they're trying to do is build a cushion for themselves in case they don't do as well among white working class voters in Ohio and Pennsylvania.
GIGOT: All right, Kim, last word.
When we come back, President Obama picks a fight with Congress, making some controversial recess appointments without the recess. Is it a smart strategy?
(BEGIN VIDEO CLIP)
PRESIDENT OBAMA: When Congress refuses to act and, as a result, hurts our economy and puts our people at risk, then I have an obligation as president to do what I can without them.
(END VIDEO CLIP)
GIGOT: Eager to pick a fight with Congress as part of his reelection strategy, President Obama bypassed the confirmation process this week and installed Richard Cordray as the first chief of the Consumer Financial Protection Bureau. He also named three new members to the National Labor Relations Board. The White House is calling them recess appointment, even though the Senate isn't in recess.
So, Kim, why are Republicans so upset about this? And they are.
STRASSEL: Well, just as you said, the president has appointed these people to these very important agencies and the Senate is not in recess. The issue here, they've been holding what are called pro forma sessions where people meet, only a few Senators meet and only briefly. Now, the Democrats actually pioneered this process to keep President Bush from appointing any recess appointees. They would hold these brief sessions. Now that the Republicans are doing the same to President Obama, President Obama has decided that he's simply not going to abide by pro forma sessions and pretend that they're in recess and appoint away anyway.
GIGOT: Jay Carney, the White House spokesman, said that these pro forma sessions are not really sessions.
FREEMAN: Well, they are. He mentioned they just passed his tax holiday in December during this pro forma session.
The fact is, when you've got the floor of the House or Senate open for business, things can happen. People can raise motions. You may have to call people back to head off a vote. It's open for business. But the point is the president's own Justice Department has opined within the last few years that this is not constitutional. So, it's shocking.
RABINOWITZ: Speaking of the president's own Justice Department, this is now the case of the politicalization of another office of the government. Here's a guy who is coming out to say I am the avenging angel of the working class and all and --
GIGOT: In Obama, President Obama.
RABINOWITZ: Obama -- and I'm doing this for you. And in the eye and in the face of the Republicans. And it's transparent that this is his effort. And this cannot really look good. The fact that this is so obvious and the fact that it is in violation of the Constitution -- even people on the left have made this point.
GIGOT: Well, not everyone. There's a debate about this. And some people are saying, well, look, the president has the ability to do the recess appointments and it's in the Constitution. The debate is over whether or not --what constitutes a recess. That's the process argument. But what about the politics in this --
RILEY: I think, on the merit, the Republicans are absolutely right on the merit. And Obama may well lose in court on this issue. But he doesn't care. Politically, he's not worried about legal niceties. He said --
GIGOT: But think about that second. The president is unconcerned about legal niceties.
GIGOT: Aren't you supposed to care about the Constitution if you're the president of the United States?
RILEY: We're in full campaign mode now. And we know, as you said at the outset, part of Obama's reelection strategy is running against Congress. However, unpopular Obama is, Congress is much, much less popular.
And the question is, is this a good fight for Republicans against the president, this P.R. fight that they're engaging in, or are they playing into Obama's hands? We saw, with the payroll tax fight at the end of December, the Republican Congress didn't do too well. They're largely believed to have lost that fight. I'm not so sure this is a smart fight for them to engage in.
GIGOT: Dorothy, should they surrender?
RABINOWITZ: No, I don't actually think -- this is very different from the payroll fight. Yes, it looks piddling, but the point of view is -- the vision of what this means, that the president has taken this on unnecessarily, but deliberately in the interest of the campaign is just another established show of, this is the most political president. He has used the offices of the government to his ends.
GIGOT: And the hypocrisy by Harry Reid here is off the charts. I mean, he pioneered this strategy to block Bush. A lot of the people in the Bush administration, some of his advisors said, Mr. President, you should just do what Obama has done this time. Bush said, no, I don't want to have that fight. I don't believe I have the constitutional authority to do it. Obama, now that he's done it, Harry Reid says, hey, great, override us in the Senate.
FREEMAN: And it's a constitutional debate. Eugene Volett (ph), generally sensible, is sympathetic --
GIGOT: A conservative legal analyst.
FREEMAN: But the plain language of the Dodd/Frank bill, which created this bureaucratic monster, says it doesn't have authority until the Senate confirms a director. The Senate has not confirmed a director. So what this means is I think it will ultimately be bad politics because it's more uncertainty over the economy. Every decision that comes out of this building now is going to be -- face a big legal challenge and uncertainty, whether it ever gets enacted.
GIGOT: Kim, what response should the Republicans make to this? Do they have -- suing probably won't make much difference. What can they do actually using their powers?
STRASSEL: They won't sue. They'll continue to hold pro forma sessions and make this a political issue going forward, making the point that this president has basically held great contempt for Congress and actually thinks he gets to say if Congress is or is not in session. And what they'll do is highlight the policy mess that is going to come out of this that James just touched on. Every decision that comes out of the Consumer Financial Protection Bureau, every decision out of the NLRB, is going to be one that is potentially not legal. And the uncertainty and the mayhem that that will cause for a business community that is already not knowing what to expect is immense.
GIGOT: There's no question, when the new agencies with these appointees, issue rules, they will be challenged in court. Not by Congress, but by the parties who are -- who claim they'll be hurt by them, and they will have standing to sue.
All right, we 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.
Kim, first to you.
STRASSEL: This is a hit to a state-appointed panel in California that this week became the latest to state the obvious, that a high-speed rail project proposed by Governor Jerry Brown, from Los Angeles to San Francisco is, quote, "not financially feasible. This is a $98 billion boondoggle in a state that's broke. Californians don't want it. It's a long-term money user. It's only supporters are increasingly Governor Brown and Barack Obama who see it as a gift to their union and green interests. The good news is the panels have advised the legislature that it not issue the bonds for it. Let's hope the legislature is listening.
GIGOT: All right.
RILEY: Americans bought a record number of guns over the holidays, according to the FBI background checks. No one is quite sure why. We do know that the British press is quite alarmed about it. They've been writing a lot about it.
So a hit to Americans for offending European sensibilities, which I think is always a good thing.
GIGOT: Even -- well, they just--
GIGOT: They haven't liked our guns since the Revolution.
GIGOT: All right.
FREEMAN: This is a hit to -- excuse me. This is a miss to the federal regulators, especially the Commodity Futures Trading Commission, who were supposed to be overseeing that firm known as M.F. Global. It went bust on Halloween. And more than a billion dollars in client funds is still missing. It's not accounted for. And this is the same crowd that tells us they can remake the entire derivatives architecture of the financial system.
GIGOT: There's a registry failure here, James. Is that --
FREEMAN: Believe it or not, yes.
GIGOT: I can't quite believe that that could happen.
Remember, if you have your own "Hit or Miss," please send it to us at jer@FOXnews.com. And be sure to visit us on the web at foxnews.com/journal.
That's it for this week's edition of the "Journal Editorial Report." Thanks to my panel and especially to you for watching.
I'm Paul Gigot. We hope to see you right here next week.
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