Sen. Graham talks new Russian sanctions, Syria strategy

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This is a rush transcript from "Journal Editorial Report," April 7, 2018. This copy may not be in its final form and may be updated.

PAUL GIGOT, FOX HOST: Welcome come to the 'Journal Editorial Report.' I'm Paul Gigot.

President Trump ordered National Guard troops to the southern border this week, part of what appears to be a broader crackdown by his administration on illegal immigration. The Justice Department has announced quotas for immigration judges in an effort to speed up deportations. And it sued the state of California last month over its sanctuary policies. President Trump himself took to twitter last weekend to declare that a deal with Democrats on DACA is, quote, 'dead.' So do these moves signal a shift in the administration's immigration approach heading into the midterms?

Let's ask 'Wall Street Journal' columnist and deputy editor, Dan Henninger, and columnists, Mary Anastasia O'Grady and Bill McGurn.

Dan, looks like the president's gearing up to make this a big midterm election issue, immigration.

DAN HENNINGER, COLUMNIST & DEPUTY EDITOR: That's pretty clear, Paul. He's making an issue that he campaigned on, the wall and the influx of migrants and immigrants from Mexico. I have to wonder a little bit, Paul, whether it's a political issue is one thing. But the other question is whether it is a substantive problem down on the border. The DREAMers, the people connected to the DACA issue, they came here in the 1980s and 1990s when there was an enormous surge of migrants from Mexico. The surge has stopped, in no small part, because Mexico's birth rate has dropped to about 2.5, like ours is 2.1 per childbearing woman. There aren't as many of them that are going to come as there were before. The DREAMers, I expect he's going to blame that on the Democrats. The Democrats, in turn, will say President Trump has made a conscious decision to strand these people who are here under no fault of their own.

GIGOT: Mary, to Dan's point, the border apprehensions have been falling dramatically. They were way down last year. They've been up a little bit in March and February. I think you and I would probably agree probably because of the attractions of growth here in the United States.

But what about the caravan, the so-called caravan that was heading from Central America, that's the excuse the president made, the reason he made for sending the National Guard.

MARY ANASTASIA O'GRADY, COLUMNIST: I agree with Dan. I think this is mostly a campaign issue. He's getting ready for the next round. First of all, sending the National Guard is fine, but President Bush did that, President Obama did that. He initially said he was going to send the military. I think he realized he's not allowed to do that.

GIGOT: Right.

O'GRADY: But you also have to keep in mind that the most important thing he did was name more judges or say that he's going to put more judges there.

(CROSSTALK)

GIGOT: There is really a huge backlog.

O'GRADY: Yes. And the reason is because when a lot of these people come across the border, they actually give themselves up. They give themselves up because they think they have a claim to asylum because they're fleeing violence in Central America because of the gangs and rule of law problem probably that Central America has not been able to solve and the U.S. has not managed to help them solve. The judges will allow them to process these people. The big complaint has been they get arrested and they're told they have a hearing later and sometimes they don't show up.

GIGOT: The actual caravan vanished in Mexico. It broke apart, right?

O'GRADY: Yes. Again, it was sort of an urban legend. What was going on was that every year right around this time there's this protest march, asking Mexico to pay more attention to this problem of violence and these people from Central America fleeing the violence. They march from some place in Chiapas up to Mexico City. That's what they were doing. Some of them carry on to the U.S. border. But many of them didn't have the plan to come to the U.S. in the first place.

GIGOT: Bill, do you think it's smart for the president to give up on a DACA deal this year?

BILL MCGURN, COLUMNIST: No. I think that's a big point. Look, if I step back a little, I think this is a proxy fight. There are some on the left that don't want any border, don't want anyone to come in at any time, and they make all sort of excuses.

GIGOT: They want people to come in. They don't want --

(CROSSTALK)

MCGURN: There don't want any kind of rule or any kind of compromise. And I think there are some in President Trump's camp who don't want any more legal immigration either. There's a lot of that. In the middle is the possibility of a deal, the border wall Trump wanted for DACA.

GIGOT: Funding for that.

MCGURN: And I think he made a political mistake. I don't have a problem with sending the National Guard to the border. When he offered the path to citizenship to these people here, in exchange for some security that finally was showing the Democrat as not cooperating.

GIGOT: Right.

MCGURN: He's absolutely right on that that they don't want a deal. But now when he says no more deal, he's gets the fallout that should be going to them. So I think it's a mistake. I think he should actually make a smaller deal on DACA for his border security wall, just a straight-up, and just make it clear that he's willing to trade something. We're not going to get -- the answer to the border isn't the National Guard or whatever. It's a regular immigration system that gives us a border like Canada.

GIGOT: Dan, we had a visit from Erik Paulsen, the Republican Congressman from Minneapolis, the Twin Cities, in a district that Donald Trump lost by 10 points. And he's going to have a tough re-election. He told us he thought a DACA deal would be great for him. He thought it would show we accomplished something, we solved a problem that Democrats couldn't solve. So the failure on DACA may not help him.

HENNINGER: Yes, that's right. I mean, most polls show that most Americans are relatively sympathetic certainly to the DACA kids, the DREAMers. Certainly, they want the immigration problem somehow solved. Paul, we've been arguing about this for at least 25 years. The solutions that are being proposed, such as tightening the border, means we will argue about it for another 25 years.

As Bill suggested, we're in a tight labor market right now. If we have migrant workers, they need to be given work visas so they could come in, do their work, finish the jobs, go back where they came from, and then come back on visas when their work is over. As it is now, if they go back, they can never come back to the jobs so they sneak into the country.

GIGOT: Right.

HENNINGER: I think most voters want that system stopped and rationalized.

GIGOT: All right, thank you all.

President Trump pushing for a quick withdrawal of American troops from Syria, ideally, within the next six months. Does that give the U.S. military the time it needs to complete its mission? We'll ask Senator Lindsey Graham next.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I want to get out. I want to bring our troops back home. I want to start rebuilding our nation.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

GIGOT: The Trump administration slapped new sanctions on Russian government officials and oligarch with ties to President Vladimir Putin on Friday along with companies they own or control. This comes as the president continues to push for a withdrawal of U.S. troops from Syria, reportedly telling his national security team this week that he'd ideally like to begin the exit within the next six months.

Here to talk about it all, Republican Senator Lindsey Graham, who joins me now from South Carolina.

Welcome, Senator. Good to see you again.

SEN. LINDSEY GRAHAM, R-SOUTH CAROLINA: Thank you.

GIGOT: What do you make of these latest sanctions against a good number of oligarchs very close to Vladimir Putin?

GRAHAM: I think it's a big step in the right direction. You've got to hit Russia in the wallet. A few people live very large in Russia at the expense of others, and hitting Putin's inner circle, making sure they can't take their ill-gotten gain and buy houses and yachts throughout the world is a good first step.

GIGOT: Would you recommend sanctions against Putin himself and some of his --

GRAHAM: Absolutely.

GIGOT: You would? You would sanction him personally?

GRAHAM: Yes. Well, the British say they believe that the attempted assassination inside of Britain of a former Russian spy, a British citizen, was orchestrated by Putin. Our intelligence community believes Putin approved of the hacking into the 2016 election. Our intelligence community tells us he's up to it again. Nothing happens in Russia of any consequence without him knowing it. That's the upside of being a dictator. You know about everything.

But here's what I would do even bolder. I would take all the customers that Russia sells oil and gas to, all the major customers, and see if I could provide oil and gas through some alternative to Russia. That would really begin to cripple their economy.

GIGOT: Interesting. And we are increasing oil and gas exports towards --

GRAHAM: Yes.

GIGOT: -- over time.

Let's turn to Syria. You heard the president this week saying, 'I want to get out,' quote, unquote. That's a very direct signal. He has backed off from that immediately at the request of his advisors. On the other hand, everybody in the Middle East heard what he said about I want to get out. Is that a smart strategy?

GRAHAM: I don't know if the damage is done to the point it can't be reversed. I hope not.

The president really chided Obama, President Obama, for setting a timetable on when he was going to end military operations. We all lampooned Obama because it's a pretty dumb idea. So General Votel told me the hard part with ISIS is yet to come. It's not just defeating them on the battlefield. You have to hold the territory. So if we say six months from now we're leaving Syria, ISIS will come back with a vengeance, and nobody would be happier with that decision than the Iranians.

GIGOT: Because what happens if we do decide -- we've cleaned up ISIS, you declare victory, you come home and say Syria is somebody else's problem.

GRAHAM: Yes.

GIGOT: Play out that scenario for us. What happens then?

GRAHAM: It changes everything President Trump said in Riyad. He stood up in the Arab world and said you need to be better allies. You need to pay more. And they should pay more. They should do more in Syria and other places. But I stand with you against two threats. I stand with you against Iranian expansion. I stand with you against radical Sunni Islam, complete opposite of what Obama did. Obama was seen by the Arabs in the Mideast as being more concerned about Iran than them. But he made a very historic speech that I stand with you against these threats. If we pull out of Syria, it undercuts everything he told the Arabs. Syria, in short order, becomes a safe haven for Hezbollah. Iran and Russia will dominate Syria. It's a nightmare for Israel. ISIS will come back, and there will be new attacks launched against Western interests from Syria. And North Korea will look at Trump and say, hey, this guy's all talk.

GIGOT: I guess the response to that would be, you know what, that's sort of a worst-case scenario. But look, it's other people's responsibility to take care of that. Israel can take care of itself. The Saudis should ante up. And it's not our responsibility. Why don't the French and Germans and other people take care of the refugee problems, because that's where the refugees are going? Now that's not what I believe in. But that's the response you get from a lot of people.

GRAHAM: Here's what I tell those folks: Who takes care of America? Are the Israelis going to defend America? Are the French and Germans going to defend American interests? That argument falls apart if you believe ISIS is a threat to the United States. That argument falls apart if you believe Iranian expansion in the Middle East is not only hurtful to our allies but hurtful to the United States.

The one thing I've learned, when we don't lead, other people will. So if you believe ISIS is of no concern that the attacks that happened in Paris can't happen in the United States, then leave. I can't think of a Mideastern country that I would outsource our national security to. Building a border wall makes sense to me to deal with the threats coming from south of our border. What will we do to deal with Mideast threats? Outsource them to other countries? I think we need a forward-deployed force of Americans to protect the homeland.

GIGOT: Is that a recipe, Senator, for a long-term deployment that costs an enormous amount of money and more troops than the 2000 or so we have on the ground there? And can we afford that type of commitment? Will the American people support that kind of a commitment?

GRAHAM: The last time we ignored radical Islamic threats in the Mideast, in the region was Afghanistan. How much did it cost us from the 9/11 attacks? Here's what I think. I think you can take less than the number of troops we have in South Korea, 28,000, put them in Iraq, Syria and Afghanistan, less than 28,000 troops, and keep the homeland protected. The only thing I can tell you, if you leave Syria now, ISIS will come back, like they did when we left Iraq. How much money has the world spent, the United States spent due to the withdrawal from Iraq? So if you're looking at this from dollars and cents, it's going to cost a thousand times more to leave and let ISIS come back than it will to hold the territory once we destroy them.

GIGOT: All right. I'm sure you've made this argument to President Trump. We will follow this debate as it goes.

Thank you, Senator. Appreciate it.

GRAHAM: Thank you.

GIGOT: When we come back, Beijing responds to the Trump administration's tariffs targeting top U.S. exports. So could Trump voters bear the brunt of China's trade retaliation?

(BEGIN VIDEO CLIP)

TRUMP: We intend to get along with China but we have to do something very substantial about the trade deficit. And with that, nothing is easy.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

GIGOT: Trade tensions with China escalated this week after the Trump administration announced plans Tuesday to impose a 25 percent tariffs on $50 billion in Chinese-made goods. China responded hours later with its own $50 billion tariff list targeting American exports, including soybeans, cars and airplanes. President Trump raised the ante again late Thursday threatening additional $100 billion in tariffs on more Chinese imports citing China's unfair retaliation.

The president responded to claims that he's stoking a trade war in a tweet saying, quote, 'We are not in a trade war with China. That war was lost many years ago by foolish or incompetent people who represented the U.S. Now we have a trade deficit of $500 billion a year with intellectual property theft of another $300 billion. We cannot let this continue. When you're already $500 billion down, you can't lose.'

We're back with Dan Henninger, Mary O'Grady and 'Wall Street Journal' assistant editorial page editor, James Freeman.

Mary, we can't lose.

(CROSSTALK)

O'GRADY: Yes, well, actually that goes right to the heart of my problem with the Donald Trump trade policy. That is that he's putting all this emphasis on the trade deficit, and he keeps insisting that unless we get rid of the trade deficit we're somehow harmed. The fact of the matter is we have a trade deficit and we will have a trade deficit as long as we are richer than China. And the only way we're going to get rid of that deficit is if you impoverish American people so they cannot buy all these things from outside the country.

GIGOT: But what about the argument, and you hear it from a lot of people, Larry Kudlow, our old friend, now advising the president, this is not a trade war, this is a negotiating policy to get China to change some of their abusive policies, which I think you and I can both can see, intellectual property and other things. Do you agree with this?

O'GRADY: This is about the fifth shrewd trade policy we've had. We had one with NAFTA. We had one with South Korea. They've all failed. And I think --

GIGOT: He would say that South Korea worked out just fine. We got a new deal with South Korea, no problem.

O'GRADY: We have a new deal with South Korea in which we raised tariffs on importing pickup trucks. We raised taxes on U.S. consumers. The problem with President Trump is he doesn't understand the benefits of trade liberalization go to the liberalizer. If every other country in the world is protectionist, if we are an open economy, we do better than the rest of the world. And he insists that there has to be this tit for tat and that's not a manageable trade policy if you want to make Americans better off.

GIGOT: James, the markets are down, no question, not a lot, but they're down some since the trade advance -- trade policy forays by the president, despite what we all agree is a strong underlying economy. What are the economic risks here?

JAMES FREEMAN, ASSISTANT EDITORIAL PAGE EDITOR: There are a lot of risks. I think investors are reflecting that. I guess if you would see a hopeful sign here, it's that the president does seem to be moving away from wanting to fight with the whole world on trade, wanting to fight with our friends in Canada and Mexico, and he's focusing more on Chinese intellectual property. I think that is the right focus if you're going to seek better deals in trade. If people were selling stolen copies of the 'Wall Street Journal' outside for a nickel, we wouldn't say that's good for consumers. So I think that's the right issue to focus on. But there are high stakes here. As far as is this a brilliant "Art of the Deal" that's about to come together --

GIGOT: Do you think so?

FREEMAN: I think it's a concern because he's not sitting across the table from what you might think of as a normal business person on the other side. This is an old-style Communist thug who runs China. This is not someone who is looking for a win-win deal. Maybe this is a way to bring that person around.

GIGOT: Trump would say we've got all the leverage, they need us more than we need them, they need our market more than we need their market.

FREEMAN: It's absolutely true that we buy a much larger percentage of Chinese economic production than they buy of American production. So in that sense, I suppose he does have some cards to play here. On the other hand, that is a dictatorship. You are not going to have a business class, a consumer class demanding a different approach because, if they do, they're thrown in prison and their families may also be thrown in prison. So in that way, Xi Jinping has a lot of leverage, too.

GIGOT: Dan, one of the thing that's notable about the Chinese retaliation, in addition to Boeing aircraft and U.S. automobiles, it's really aimed at American farm products which are highly competitive, price competitive around the world. We have a tremendously competitive farm economy. Soybean exports, for example, are big in China. And the U.S. farm belt has been struggling with its income in recent years because of low commodity prices. Could this go down to the detriment of the U.S. farm belt?

HENNINGER: I think it could definitely do that. And it's beginning to be a political problem. Last week, Senator Joni Ernst, of Iowa, said it's reaching the point where it's not only hurting farmers but many of these farmers who voted for Donald Trump are beginning to have questions about whether he is acting in their best interest.

And I want to make one other international point about what's going on here, Paul. Roll the 'Journal Editorial Report' back one month. What were we talking about? North Korea and Kim Jong Un, and the threat of a nuclear missile. And what was the indispensable country in getting something done about Kim Jong Un? China and Xi Jinping. If we thought we had leverage, what do you think the Chinese are thinking now if the United States needs them to do something about North Korea and we're threatening $150 billion of tariffs on them? Looks like they are holding a very strong card right now.

GIGOT: Mary, how worried are you about the economic fallout here from this?

O'GRADY: Yes, I think Wilbur Ross, the commerce secretary, keeps saying it's only something happening at the margin, but as you just saw in the last couple of days, China keeps escalating and then Trump keeps escalating. We don't know where that's going. I think the uncertainty is very costly for economic decision making.

GIGOT: You could argue they're in negotiations, we're going to talk it over, and at the end of the day, they'll come to some deal. If that happens, maybe we have a happy ending here?

O'GRADY: You could argue that. That's possible. If Trump's other trade actions are any guideline, he ends up backing down, and not much is accomplished. That's what we can hope for.

GIGOT: All right, Mary, thank you.

When we come back, President Trump continuing his attacks on Amazon this week. What it could mean for the retailing giant's bottom line, when we come back.

(BEGIN VIDEO CLIP)

TRUMP: Amazon is going to have to pay much more money to the post office, there's no doubt about that.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

GIGOT, FOX HOST: President Trump stepping up his attacks on Amazon, claiming that the online retail giant is taking advantage of its deal with the U.S. Postal Service and hurting brick-and-mortar retailers. In just one of several tweets this week, the president said, quote, 'Only fools or worse are saying that our money losing post office makes money with Amazon. They lose a fortune. And this will be changed. Also, our fully taxpaying retailers are closing stores all over the country. Not a level playing field.'

Andy Kessler is the co-founder and president of Velocity Capital Management, an investment firm based in Palo Alto. He also writes 'The Inside View' column for the 'Wall Street Journal.'

Andy, welcome.

What do you make of the president's attacks on Amazon? How big a threat are they to Amazon's business?

ANDY KESSLER, CO-FOUNDER & PRESIDENT, VELOCITY CAPITAL MANAGEMENT: My first impression when I read the tweet that Amazon was using the postal system as their delivery boy, causing tremendous losses for the U.S., my first thought was, wait, we still have a postal service? They put stuff in my mailbox, I move it to the recycling bin.

GIGOT: Yes.

KESSLER: My sense is that what Trump is doing is like a magician's misdirection. There's a tariff-induced trade war going on. The stock market is like a yo-yo every day. This is a way to take people's minds off of it. Maybe there's a billionaire boasting brawl going on. Jeff Bezos is worth $100 billion, and Trump says, I'm going to put $100 billion in tariffs on China.

Will it affect Amazon? If their costs go up, it could. What Amazon is doing is they're working on their own delivery system. There's pilot programs going on, where if prices go up, they'll bypass the post office and bypass UPS and do it themselves.

GIGOT: A lot of people think one of the president's motivations is that Jeff Bezos owns, in his personal capacity, 'The Washington Post.' It's not an Amazon ownership, it's his. 'The Washington Post' has been very, very negative about Trump. If you were advising Bezos, would you say, look, take yourself away from being a political target like that and get rid of 'The Washington Post?'

KESSLER: Well, I agree. I don't think there is any reason for the richest person in the world to own a newspaper. I mean, it's going to set up issues and conflicts of interest.

As far as the Trump's line, 'only a fool would think they're not losing money,' the post office must be a fool, because they came out and said that all of their competitive package products, even those that Amazon uses, have to cover their costs. This was from an August 2017 press release. Maybe the post office needs new accountants. What the post office needs is to lose their monopoly on first and third-class mail and let's shut the thing. I mean, this 2018. Do we need a post office anymore, anyway?

GIGOT: It's also hard to know what the real costs and profit is because we don't know what the fixed costs are here for either of these companies and this kind of a circumstance. So in a way, we have to take the two partners at their word that it's a mutually beneficial kind of transaction. But let's look at --

(CROSSTALK)

KESSLER: Well, fixed costs -- go ahead.

GIGOT: Go ahead. No, go ahead, Andy.

KESSLER: I was saying fixed costs, per parcel or per piece, are going up. Ten years ago, they shipped 212 billion pieces. This year, it's 149 billion. Fixed cost per is definitely going up.

GIGOT: OK. Let's turn to Facebook. Last time we talked about this, you were saying all of the uproar over Facebook and the privacy breach was a buying opportunity. Now there's been another greater data breach disclosed, and Mark Zuckerberg is going to Congress next week. Do you still think that Facebook is going to -- is a buy?

KESSLER: You know, what I'm saying is that their problems show up everywhere but their results. The usage seems to be steady and rising. The long-term concern is that they run out of users. But near term, it's the frenzy about people worried about their privacy. And that's not going to stop. Congress, the congressional grandstanding is going to take place. What Zuckerberg has to do is flip this whole thing. With the concerns over privacy or security, by flipping it, by having users own their own data. I have friends, I click likes, I own that data, not Facebook. Facebook can rent is from me in exchange for me renting their servers and communications and all their software. But he really needs to turn this thing around and make it from, he owns all the data and is a sinister guy sitting there deciding what's good and what's not, to have users decide what they want to share and what they don't want to share.

GIGOT: And you do that by making it simple for saying, I don't want anybody to share my data except for people that I share it with myself, is that it?

KESSLER: You could do that, and Facebook would turn around and say, well, that's fine, but then we can't do the magic we do. Your news feed won't be as robust as opposed to if you did share.

GIGOT: Right.

KESSLER: So there's always tradeoffs. But by having users own their own data, it will change the whole paradigm of the Internet around. It will change Google. It will change Amazon. I think it will help their business. It will give these guys additional value-added services to sell if users own their own data.

GIGOT: Briefly, and we only have 30 seconds, Andy, what advice would you give Zuckerberg next week when he goes before the congressional grandstanders on Capitol Hill.

KESSLER: First of all, wear a suit, not a hoodie. Second of all, don't be smug. I mean, this is important stuff. This is serious stuff. And Congress wants to feel like they've won a battle. And so he's going to apologize, he's going to fall on his sword and all those things. But the biggest advice is to say that he's going to work hard to keep everyone's information private and secure. I think that's the most important thing that he can say.

GIGOT: All right, Andy Kessler, thanks very much. Good advice.

Still ahead, President Trump touting the Republican tax cuts in West Virginia this week, and hoping to ride that momentum into the midterms, but at least one Republican governor sees trouble ahead.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: You're going to have a chance to get a Senator that's going to vote our program, that's going to help you in so many different ways, and you're not getting that help right now. We didn't get one Democrat vote for tax cuts.

(END VIDEO CLIP)

GIGOT: President Trump touting the Tax Cuts and Jobs Act at a roundtable in West Virginia Thursday. Republicans are hoping that legislative victory and an effort now under way to make the individual tax cuts permanent will help save congressional majorities in the midterms.

But a big Republican loss in Wisconsin has the state's Republican governor sounding the alarm, with Scott Walker warning of a blue wave this November.

We're back with Dan Henninger, James Freeman, and 'Wall Street Journal' editorial board member, Allysia Finley.

Allysia, you've been looking at the Wisconsin results. Is Walker overstating things when he says there's a blue wave.

ALLYSIA FINLEY, EDITORIAL BOARD MEMBER: It's probably understating things at this point. Democrats picked up a Supreme Court seat in Wisconsin. They haven't picked up an open seat in 23 years.

GIGOT: In the court.

FINLEY: In the court. Right. They won by 12 points. A huge turnout in Dade County around Madison, as well as in Milwaukee. And Republicans just didn't turn out at all.

GIGOT: And she's a judge.

FINLEY: Right.

GIGOT: And it's not a partisan -- they don't say Republican and Democrat. But Biden went in there for her. Eric Holder, the former attorney general, went in for her. It was clear, she made Trump a big issue.

FINLEY: Right. She actually ran the election in part as a referendum on Trump, that you need a Supreme Court judge to act a check against the Trump administration.

GIGOT: We need a state Supreme Court judge to act as a check on the president of the United States. That's a little shot, if you want to use a pool metaphor. I mean, it's not direct. But she still used it and drove turnout with it.

FINEY: That's exactly it. You had almost an unprecedented high turnout, 22 percent for voter turnout, as compared to 20 percent in a normal spring election. This was with a snow storm.

GIGOT: I was surprised, that's my hunting ground, where he grew up, around Green Bay and Brown County and Winnebago county. And she won there big. That's swing territory.

FILEY: That's exactly it. This is a really -- this has got to make Scott Walker worried. He's up for re-election in the fall. So is a lot of the state Senate and assembly seats. You could use legislature and governorship this year.

GIGOT: So, James, Mr. Sunshine here, the taxes, the Republicans looking at taxes, they want to make that the issue. Is that going to work for them?

JAMES FREEMAN, ASSISTANT EDITORIAL PAGE EDITOR: It's a good issue for them. I think American prosperity generally is the right issue. If you look what happened from December, when they passed the tax cut, the generic ballot, who do you like, Republicans or Democrats for Congress this fall, Trump's approval rating, Trump's approval rating on the economy, they all improved rapidly. Lately, not so good, tailing off a little. And it's because the first year of Trump dominated by tax cuts and deregulation, now we're talking about the trade fights we were just describing earlier, and then a huge government spending blowout. So I think what they have to do is focus on economic prosperity, and that's round two of tax cuts. And it also -- it wouldn't hurt to take Kim Strassel, our colleague's advice and take back some of the big spending they approved.

GIGOT: The second round of tax cuts, they'll attempt to make the tax rate cuts permanent for individuals and expensing for businesses at 100 percent permanent. Right now, both of those phase out. They'll vote on that in the House but that's probably not going to get through the Senate.

FREEMAN: The point there is, in the Senate, you do achieve a political objective if you're Republicans, even if it doesn't get enacted. The individual rate cuts, which phase out years from now, and everyone knows they won't actually end, that has become a talking point for Democrats to pretend that the tax cuts are going away. For Republicans, sending it to the Senate is a way to get people on record and really expose what's kind of a charade, this game of pretending that the tax cuts are going away.

GIGOT: Dan, it seems to me the Democrats and Donald Trump share one objective in this election, and that's making this a referendum on Donald Trump. They both share that. It's the Republicans who want to talk about something else, like tax cuts or the economy. Trump is going to make this all about Trump, isn't he?

DAN HENNINGER, COLUMNIST & DEPUTY EDITOR: Absolutely. He was in West Virginia this past week nominally to give a speech on behalf of the strong economy and the tax cuts. At one point, soon, in his speech, he said, I find this kind of boring, I don't think I want to talk about this anymore, literally, and then proceeded to talk about the millions and millions of fraudulent votes in the 2016 election. That was the year before last. And as well as his saving the country from all of the rapists coming across Mexico. What does that do? It makes it about him.

And let's say this. A lot of Trumps voters love that sort of thing. They just love it.

GIGOT: Right.

HENNINGER: And that is great. But as the Wisconsin election pointed out, the big question in November is going to be, will more Trump lovers show up in these congressional districts or more Trump haters. And the indication at the moment is that the Trump haters are more energized than the Trump voters. Maybe that will change. But so long as the president is putting himself at the center of this, the election will come down to not the economy, not tax cuts, but Trump lovers versus Trump haters.

GIGOT: Briefly, Allysia, it's that enthusiasm gap. Democrats are fired up. They want to come out and paste one on the president and say, look, this is a vote against you. Republicans, some believe that, they'll come out, but others are saying, I'm not all that fired up.

FINLEY: Right. And Republicans are not really campaigning on anything either. They're trying to avoid talking about Trump. They need to put a forward-looking agenda. What will they do for the second term. We got tax reform done, but what are going to do during next two years.

GIGOT: The next two years.

FINLEY: Right.

GIGOT: OK. All right, thank you, Allysia.

Still ahead, hundreds of teachers walking off the job in Kentucky and Oklahoma this week. A look at what's behind the wildcat strikes when we come back.

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GIGOT: One month after a teacher strike in West Virginia ended with a 5 percent pay raise, teachers in Oklahoma and Kentucky walked off the job this week, shutting down hundreds of schools, with teachers calling for salary increases and more state funding for education.

'Wall Street Journal' editorial page writer, Jillian Melchior, has been looking into the walkout. She joins us now.

Jillian, do the teachers have an argument here on the merits that they are underpaid and there's not enough spending on education?

JILLIAN MELCHIOR, EDITORIAL PAGE WRITER: In Oklahoma, I think they have had somewhat of an argument. Nearly 100 school have gone down to four days a week. They've gone a decade without a pay raise. They haven't had new textbooks in several years. But, you know --

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GIGOT: And that's because the politicians aren't spending enough?

MELCHIOR: We're seeing a lot of things crowding the budget. The key one is Medicaid, not just in Oklahoma but in Kentucky and West Virginia. That's consuming a substantially growing part of the budget. That doesn't leave a lot of room for education unless you raise taxes.

GIGOT: What kind of magnitudes are we talking about here? Oklahoma is a state that did not expand Medicaid under ObamaCare, unlike Kentucky, which did, and I believe West Virginia did. And we know in states that expanded Medicaid, they really increased their spending. Oklahoma didn't. It's still increasing Medicaid spending?

MELCHIOR: It's still increasing. It's up to about 25 percent, if I'm remembering right. It's a pretty substantial part of their budget. We're seeing, in Oklahoma, they actually did try to remedy this by raising taxes on natural gas, on oil, on gasoline.

GIGOT: They've got a $6,000 raise.

MELCHIOR: A $6,000 raise before the strike.

GIGOT: Base pay across the board for all teachers.

MELCHIOR: Yes, it's 14 to 18 percent.

GIGOT: OK.

MELCHIOR: So that translates to about $6,100 per teacher. But teachers --

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GIGOT: They're not happy.

MELCHIOR: No. They're saying that's not enough. They want $10,000. The Senate's debating raising taxes further. That will be difficult to do. In Oklahoma, you have to have a 75 percent approval.

GIGOT: This is surprising in a way because you don't think of Oklahoma, West Virginia, Kentucky as states with a really strong union presence.

MELCHIOR: All right-to-work.

GIGOT: All right-to-work states. West Virginia and Kentucky relatively recently. But Oklahoma has been a right-to-work state for years, which means you don't have compulsory -- you don't have to pay compulsory union dues. What's the political impetus to take on the -- to do this?

MELCHIOR: I think, first of all, they saw in West Virginia that there was capitulation after nine days. It was significant capitulation. I think they're wanting to build off that momentum. They're encouraged by it. But I think they're also understanding that education is really important to a lot of voters. This is going to be a tough year for Republicans and they're hoping to make this a wedge issue.

GIGOT: They're sensing weakness politically among the Republicans and playing defense. So this is when we can drive our increases. And it can't be good politics in Oklahoma for Republicans to raise taxes.

MELCHIOR: You would think not. You would think not. But I think they feel like it's a crisis.

In Kentucky, the unfortunate thing is that the strike is about pensions, not pay. A very modest proposal to try to scale back their out-of-hand underfunded pension liabilities. They managed to pass legislation that is very modest, really makes a tiny dent in it, and the teachers are going nuts down it.

GIGOT: One of the arguments by our friends on the left, Bill, was if they had big collective bargaining deals that banned strikes, somehow, these people wouldn't be able to strike because it would be illegal. We've seen in Chicago and elsewhere, just because you have a clause to ban strikes --

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BILL MCGURN, COLUMNIST: I think they are illegal. It's called a walkout.

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MCGURN: Look, it gets back to one of the interesting things, is 35 years ago, this coming Tuesday, the Reagan administration put out a nation at risk about our mediocre education system. And all these years later, you see the same thing. This has been a system geared to adults. There's no discussion. I'm all for letting teachers get more pay. There's no discussion of how our students are doing. We have this crazy model. The only reason they have leverage is because they control this big quasi- monopoly, right? That's why all these student -- teachers can come out, leave their students high and dry. I'd like to see it tied a little more. In any other industry, when you have a uniform state wage and everything, it's crazy -- and not tied to any performance, it's crazy.

GIGOT: Merit pay and tenure --

MELCHIOR: And about the kids. Let's hear something about the kids.

GIGOT: Thank you, both.

We have to take one more break. When we come back, 'Hits & Misses' of the week.

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GIGOT: Time now for "Hits & Misses" of the week -- Jillian?

MELCHIOR: Well, in George Washington University, they have a seminar this week on Christian privilege to teach students all about how Christians are getting institutional privileges that no one else gets. But they may want to look at Montana, where the Supreme Court is hearing oral arguments this week on discrimination, specifically against Christian schools and their voucher program. I think that is a total miss.

GIGOT: OK, Jillian.

Allysia?

FINLEY: This is a miss to Andrew Cuomo, who, in his budget, it has about $50 million for Olympic facilities upstate, $2 million for industrial hemp seed certification programs. Meanwhile, he's raising taxes on Uber and New York City riders to fund the broken subway.

GIGOT: All right, New York, New York, a hell of a state.

Dan?

HENNINGER: Well, Paul, this is a very big miss to apparently thousands of Google employees who, in the past week, sent a letter to the Google CEO saying that they objected to Google's involvement with the Pentagon's artificial intelligence program research because they say it violated their values and violated Googles model, "Don't be evil." As far as I know, Russia and China are not slowing down their investment in artificial intelligence for military purposes. If these Google employees in Silicon Valley think that can opt out of that reality, they have to be the most naive and gullible people, on what they like to call, the planet.

GIGOT: Allysia, Andrew Cuomo still going to run for president, you think?

FINLEY: Yes, he is, but he has to get past his reelection first.

GIGOT: That's what this budget is about.

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 you for watching. I'm Paul Gigot. Hope to see you right here next week.

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