This is a rush transcript from "Journal Editorial Report," October 26, 2013. This copy may not be in its final form and may be updated.

PAUL GIGOT, HOST: This week on the "Journal Editorial Report," ObamaCare web woes continue and the finger pointing begins on Capitol Hill, with even some Democrats expressing concern. Could we see a delay in the law after all?

And New Jersey Governor Chris Christie on track for a big re-election win, but could the gay marriage controversy derail his 2016 presidential ambitions?

Plus, a growing rift with one of America's staunchest allies and what it means for American standing in the Middle East.

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

Well, the finger pointing began on Capitol Hill this week as healthcare.gov's lead contractors testified before Congress about the problems plaguing the website, with even Democrats voicing their frustration.


REP. ANNA ESHOO, D-CALIF.: There are thousands of websites that handle concurrent volumes far larger than what healthcare.gov were dealt with. Amazon and eBay don't crash the week before Christmas and Pro Flowers doesn't crash on Valentine's Day.


GIGOT: Other Democrats have joined New Hampshire Senator Jeanne Shaheen's call for an extension on the deadline to enroll in the health care exchanges. Could we see a delay in the individual mandate after all?

Let's ask Wall Street Journal columnist and deputy editor, Dan Henninger; Washington columnist, Kim Strassel; and editorial board member, Joe Rago.

So, Joe, a new story came to the floor this week in addition to the website, which we want to get to, but it's this dropped coverage. Policy holders all over the country are getting notices saying that they're losing their covers. That wasn't supposed to happen here.

JOE RAGO, EDITORIAL BOARD MEMBER: Right. You may remember President Obama's frequent incantation, if you like your health plan, you can keep your health plan.

GIGOT: Why aren't they being able to keep their health plan?

RAGO: The current coverage right now does not comply with all sorts of Affordable Care Act mandates and regulations. You know, the essential health benefits rule, for example.

GIGOT: Which if the minimum required for coverage.

RAGO: Right. These are sort of 10 areas of coverage that all health plans must cover.

GIGOT: But people like them, presumably, or they wouldn't have them.

RAGO: Right. Exactly.

GIGOT: They wouldn't buy them now.

RAGO: A health plan like Kaiser Permanente in California dropped half their market business in the country.


RAGO: -- in the state, one of the most popular health plans, and often held up as a model of health reform. California Blue, 80 percent of their policy.

GIGOT: There are about 19 million people, as I understand it, in this individual and small-business market that is who aren't part of larger corporations, who buy on the individual market. How many of those people could lose their current coverage.

RAGO: According to a peer-reviewed study in the journal Health Affairs last year, about half of them will lose their coverage, and probably more. The health care bill included a grandfather clause that was supposed to give these people a safe harbor. When Health and Human Services Department wrote it, it was very narrow and very hard to qualify.

GIGOT: They wrote it very restrictively and that's what's tossing all these people out. This is deliberate political choice.

RAGO: Exactly. Because the entire apparatus of this bill is about political control. So when they say your health plan is inadequate, you need to get something better, something that we've approved, that's why you're seeing these cancellations right now.

GIGOT: Wow. Amazing.

Dan, let's talk about the exchanges. You followed the hearings this week. What did we learn about the development of the website to sign on?

DAN HENNINGER, COLUMNIST & DEPUTY EDITOR: Well, we developed that they're obviously not ready for primetime and they're going to bring in the A-team to try to fix it.

GIGOT: So they say.

HENNINGER: So they say.

GIGOT: What were they using the B-team, C-team, the D-team, what?


HENNINGER: They did not give these people -- this is one of the complicated software pieces architecture that anyone has ever tried to create. It's huge and complex. And it was going to be hard.

But I think there's one aspect to the failure that we need to focus on a little bit. And this is a failure and what is going to kick in is actuarial science. The insurers are telling them, we need to have this up and running by about November 1st, so that the insurance pool will include healthy people, young, healthy people who are uninsured, not just the sickest people. Because if they don't get that right, this exchange, these exchanges are going to be holy unbalanced, full of the sickest people, which will blow up the cost of this law. That, I think, is the problem that is maybe never going to get fixed if the young, healthy people pull back from ObamaCare.

GIGOT: Joe, is this just a technical or management problem in developing the website, that they didn't hire the right computer science? They could have gone to eBay or some place like that. Obviously, that's one element. But is there something larger here in terms of how they proceeded?

RAGO: You mentioned deliberate political choices earlier. That really does factor into the failure of the exchanges so far. So, for example, one thing we learned at this hearing was that HHS was acting as the general manager of the 55 contractors who were spending actually about $1 billion, we now know, on building this website.


RAGO: And normally, a government agency would outsource that to someone with the expertise and talent to sort of do the quarterback for this kind of project. They didn't do that. Because that would mean somebody else would decide what is supposed to be valuable or appropriate to the consumer --


GIGOT: They didn't want to give up that political control.

Speaking of politics, Kim, political fallout on this is growing. So, what -- you wrote a column this week about how Democrats are beginning to get nervous. How widespread is that concern?

KIM STRASSEL, WASHINGTON COLUMNIST: It's widespread and growing. You know, the White House is the greatest protection here has been it has maintained a solid wall united with it in the Senate among its Democrats against doing any big change to this law. You saw this in the shutdown. You mentioned New Hampshire Senator Jean Shaheen. She broke with that this week. She sent a letter to the White House saying we need to extend the enrollment period. We also need to consider about dropping the tax penalty on those who can enroll. This is significant. Within a day, she had six more Senate Democrats who were behind her on that, or five, the six altogether. They are very much worried about how they're getting hit with this back home. And the importance here, Paul, is once they stepped out and admitted there needs to be some sort of consequential change to this, the pressure is going to grow on them to do something even more significant.

GIGOT: But if you just delay the enrollment period, that, at this stage, would seem very -- be almost essential. And that gives them a little political cover. Are they going to go as far as Democrats -- as far as Republicans want them to do which is delay the individual mandate for a full year, which would seem to be a growing possibility? If they don't do that, aren't Democrats just trying to get a little political cover and not really addressing the big problem?

STRASSEL: Well, that's what they're trying to do at the moment, no question. But, again, the importance of having agreed that there is a problem now, they have opened themselves up to the question of, if there is a problem, what are you going to do to actually fix it? Given that there are continued hearings in the coming weeks, more of the revelations of what a big mess this is, it's going to be hard for these guys to dodge at some point doing something more.

GIGOT: All right, Kim.

Thank you, all.

When we come back, Republican Governor Chris Christie is well on his way to a big re-election win in the bluest of blue states. But will his New Jersey record and this week's gay marriage controversy hurt him with conservatives in 2016?


GIGOT: With just over a week until Election Day, polls show Chris Christie poised for a big re-election win. And in the heavily Democratic Garden State, his decision this week to drop a legal challenge to same-sex marriage may well add it his margin of victory. But what it does for his 2016 presidential prospects is less clear.

In a statement Monday, Tony Perkins of the Family Research Council criticized Christie's decision saying, quote, "Apparently, the governor is giving up all hopes of identifying as a conservative in any future political aspirations."

We're back with Dan Henninger. Wall Street Journal editorial board member, Dorothy Rabinowitz; and assistant editorial page editor, James Freeman, and New Jersey resident and voter.


GIGOT: So, let's talk about -- he's going to win. And maybe big. But what's his record? What has he accomplished?

FREEMAN: Basically, what he's done is stop the bleeding in a high-tax, slow-growth state. He held the line on property tax increases, or restrained them a bit, held the line, no more income tax increases. Made some progress on pension reform. He said he's cut over $100 billion in costs over the next three decades. But they still have pretty big unfunded liabilities.

GIGOT: So his re-election campaign theme is, "I stopped the bleeding"?


FREEMAN: Well, this is the question. He is going to win big, we know that. The real question is whether he has coattails, whether he can flip one of those houses of the legislature to really get the state growing, get some real reform.

GIGOT: Where has he fallen down? Because the state income tax is very high.


GIGOT: He proposed a cut, didn't succeed. And the state business environment, still not very good.

FREEMAN: I think that's the problem. He needs to go a lot further on reform. New Jersey has an unemployment rate of 8.5 percent, all its neighbors are in the 7s. For the sake of me and my fellow citizens, and also for his presidential aspirations, he has to get reform in this next four years here and try to get a vibrant economy growing. It is not going to compare well to Texas, for example.

GIGOT: Dorothy, you're a student of the governor. What do you make of his tenure and his re-election campaign?

DOROTHY RABINOWITZ, EDITORIAL BOARD MEMBER: Well, his re-election campaign, we know, he's going to win big. But, you know, he's the head of a victimized state. This catastrophe hit in New Jersey.

GIGOT: Hurricane Sandy.

RABINOWITZ: Yes. And this is going to elevate his standing in many ways. I look at him now on the stump and I see the future of a political run. He has not only not lost any of his magic powers, he has gained. He has these moments of Reaganesque brilliance, if you can say that.

To give a classic example, he's on debate somewhere and some one asks his opponent, Ms. Bono, to say something nice about the governor and she said some sleazy, cheek thing about --


GIGOT: She's a state Senator, by the way.

RABINOWITZ: State Senator, yes. And it gets to Chris Christie, who says, you know, this woman is the most magnificent public servant, a wonderful mother, she could not be a better servant.


The house comes down. But he does it -- this is the point -- in this incredibly heartwarming, credible way, and not political. This -- no one is going to be bored by.

GIGOT: The gay marriage controversy would not stand in his way in 2016?

RABINOWITZ: Absolutely not. His presence is an overwhelmingly magnetic one. Think about the last election. Think about the absence of --


GIGOT: You mean a 2012 presidential election.


GIGOT: I thought that is what you were hinting at.

RABINOWITZ: Think about the governor -- think about Mitt Romney, who could not connect, nor could the one before. Here, you have a person who can't fail to connect.

GIGOT: What about that embrace last year of the president right before the election, which really didn't please a lot of Republicans? He embraced President Obama. Of course, Christie now says, well, I got a lot of money out of it. And what am I going to do, I'm the governor of a stricken state, I have to work with the president. Is it going to hurt him, Christie, in the 2016 primaries?

HENNINGER: I don't think it will hurt him with the general population. It will hurt him with Republican professionals, because it is known that late- breaking voters went to Obama because of that photo-op that he did. It hurt Romney.

Now, Chris Christie is going to argue that he is the candidate who can incorporate the center, that these Independent voters and so forth. We have just --


GIGOT: Powerful argument.

HENNINGER: Powerful argument. But the government shutdown has displayed that there are highly animated aggressive conservative voters out there, and that is a faction in the party that is going to have to be dealt with in the primaries. His argument is, "I can win." And one of the things "I can win" does for you is it gets campaign donations from the big-money people who really want to win. At this point, he's stealing a march on his competitors.

GIGOT: Is "I can win" a winning theme among Republican primary voters?

FREEMAN: Well, like I said, I think he's going to have a problem with his record. And talks about the economy not growing the way he would like, now, he says the private sector is growing now --

GIGOT: He's had to work with the Democratic legislature.

FREEMAN: He's had to work with the Democratic legislature but he has not gotten the kind of pension and state governance reforms that, for example, Scott Walker has gotten in Wisconsin. As we mentioned, he's going to have a lot of competitors who come from faster-growing, more competitive states. I think it is going to be some distance since Sandy when he's talking to Republican primary voters. He's going to need to have more to show.

GIGOT: I gather you don't think that's a problem, Dorothy?

RABINOWITZ: No. Not from what I see. But I have to see, related to what James said, we did have a visitor, who shall go nameless, but a politically astute one, who said, I don't know if you can sell Christie to middle America. He said I don't know how much you can do with somebody whose notion of political connection is "shut up."


GIGOT: Well, that -- he would have to change that appeal. There's no question about that.

All right, thank you. We'll be following this.

When we come back, a long-time ally in the Middle East, pulling no punches in the criticism of the Obama administration. What a rift with Saudi Arabia means for America's influence in the region, next.


GIGOT: While long one of our staunchest allies in the Middle East, Saudi Arabia has apparently had enough of the Obama administration shifting policies there, threatening in recent weeks to scale back it's decade's-old partnership with Washington over the White House failure to stand up to Syrian President Bashar Assad and its willingness to engage Iran in nuclear negotiations.

"Wall Street Journal" foreign affairs columnist, Bret Stephens, joins us with more.

So, Bret, this is a seven-year partnership. How serious is this breakup and what's behind it?

BRET STEPHENS, FOREIGN AFFAIRS COLUMNIST: It's serious in the sense that it's now public. People have been hearing privately for a long time, really, since the beginning of the Obama administration, the unhappiness towards in Riyad towards the Obama administration's willingness to negotiate and extend its hand to Iran and then dissidence in dealing with Iran's client, Bashar Assad. Now, it's completely out in the open. Their foreign minister did come to give a speech at the U.N. They turned down a seat at the U.N. Security Council. Prince Bandar, very influential figure, who was for many years ambassador here, had a talking with European diplomats to let the Americans know how unhappy they are. For them to be as public as they are is what is most compelling.

GIGOT: Just to show you how public, I want to read something here from a Prince Turki al Faisal, who is a major figure: "The current charade of international control over Bashar's chemical arsenal would be funny if it were not so blatantly perfidious and designed not only to give Mr. Obama an opportunity to back down but also to help Assad butcher his own people." He said that in public. So that is really -- a rebuke you really don't hear of the United States.

STEPHENS: And how often do you hear a Saudi aristocrat have the moral standing to rightly rebuke --


GIGOT: So you think that's a proper critique?

STEPHENS: Absolutely, it's a proper critique. People are being butchered in Syria. You don't look to Saudi Arabia as a paragon of human rights concerns.

GIGOT: But I think that some viewers might ask, look, the Saudis have, not the government, but the Saudi royals, some of the family, have financed jihadists around the world, including some of those who ended up attacking us on 9/11. Is it really so bad for U.S. interests if, suddenly, a rupture in the relationship. Maybe we've been too close to them all along.

STEPHENS: Without fully quoting Lyndon Johnson, we'd rather have these guys in the tent rather than outside of it. That's true with a lot of our allies around the world.

And, look, if Washington had said, look, we're going to downgrade relations with Saudi Arabia until they start cutting ties with some of their Wahhabi allies around the world --

GIGOT: Wahhabi being Islamists fundamental.

STEPHENS: Islamist extremists, right -- then that would be understandable. But this is over purely strategic-shared interests.

By the way, countries can share strategic interests, even if they don't share values. The Saudis understand what a threat Iran is to their own interests and to the region, what the continuing bleeding in Syria is doing to them, even to Israel. And they see an America that is just not willing to honor its security guarantees.

GIGOT: And fascinating, Dan, Israel and Saudi Arabia seem to have the same perception of this administration and the same criticism of its weakness in the Middle East.

HENNINGER: Yeah, Paul. The next question is, what other Western leading nations in the region are coming to that conclusion, such as Turkey or Egypt, if it ever gets its act together. Big countries over there, and strategically important countries.

The approximate issue here was the pullback from the red line. The whole - -

GIGOT: The chemical weapons in Syria.

HENNINGER: The chemical weapons in Syria. The Saudis, everybody there thought we were going to do that, and then he pulls back to do a deal with Vladimir Putin over the chemical weapons, with Turki al Faisal ridiculed. And then within about 10 days, suddenly, President Obama is calling up the president of Iran, Rouhani, to strike a deal over nuclear weapons. For everyone in the region, this is kind of abruptly shuffling the balance of power over there. And the Saudis pulled back, and I think the Turks may, as well, at this point.

STEPHENS: And there's an issue as well --


GIGOT: What are the consequences, though, of this, Bret? What does it really mean for U.S. interests?

STEPHENS: Look, what it means is that we're entering into a world, certain in the Middle East, of foreign policy freelancers. For many years, Israel has restrained itself from attacking Iran because it believes that it would rather follow the United States and follow its diplomatic lead and even follow its military lead. Now, it's on its own, so are the Saudis. It's every man for himself.

GIGOT: The Saudis could end up getting nuclear weapons themselves.

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


GIGOT: Time now for "Hits and Misses" of the week.

Bret, first to you.

STEPHENS: This is a giant miss to all of the governments in Europe and Latin America expressing full outrage over revelations, thanks to Edward Snowden and assorted journalists, about the wiretapping and the eavesdropping that is done by the NSA. Governments around the world have known that other governments spy on them on a very regular basis. This is a Claude Rains shocked, shocked moment. And I think we would all like to know a little bit more about what German spies do and French spies do and Brazilian spies do before everyone else piles on the United States.

GIGOT: OK, Bret.


RABINOWITZ: An even larger miss to the legions out there trying to save us from illegal mentions of God, led by the military Religious Freedom Foundation, whose leader, Matthew Weinstein, found out, to his horror, that the U.S. Air Force Academy oath, which all cadets must take, ends with "so help me, God." A noxious violation of the Constitution, according to Mr. Weinstein. Well, we have an unparalleled devotion to fanaticism in our time.

GIGOT: All right.


FREEMAN: You know, Paul, I have so few opportunities to say nice things about soccer --


-- but this is a hit to the French soccer players, who are going on strike at the end of November to protest the 75 percent top income-tax rate in France. And this is a message I think around the world, even to the Obama Democrats here, that if you push rates high enough, eventually everyone joins the Tea Party.

GIGOT: James Freeman getting his World Cup tickets now.

And, remember, if you have your own hit or miss, please send it to us at JER@FOXnews.com. And be sure to follow us on Twitter, @jeronfnc.

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.

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