This is a rush transcript from "Journal Editorial Report," April 21, 2018. This copy may not be in its final form and may be updated.

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

The closely guarded Comey memos were turned over to Congress late Thursday detailing a series of encounters between the former FBI director and President Trump in the months leading up to Mr. Comey's firing. Their release coming amid news that Comey's former number two, Andrew McCabe, has been referred to the U.S. attorney's office in Washington for possible criminal prosecution after the Justice Department's inspector general determined he lied to investigators.

Comey responded to the inspector general's findings this week on his book tour.


JAMES COMEY, FORMER FBI DIRECTOR: Good people lie. I lay out in the book, I think I'm a good person, where I lied. I still believe Andrew McCabe is a good person. But the inspector general found he lied and there's severe consequences in the Justice Department for lying, as there should be throughout the government.


GIGOT: Joining the panel this week, "Wall Street Journal" columnist and deputy editor, Dan Henninger, columnist, Kim Strassel, and, "Journal" columnist and Manhattan Institute senior fellow, Jason Riley.

So, Kim, we've got the memos now, the Comey memos, which were kept secret for a long time. Now they're out. What did we learn from them?

KIM STRASSEL, WASHINGTON COLUMNIST: I think two big take-aways. One is that Mr. Comey has been very spare with the truth in that when you read through these it's clear that the context changes a lot of his concern.

So, for instance, Mr. Comey was very concerned that Trump had demanded his loyalty. He was very concerned that Trump had asked him to let the issue of General Flynn go. When you read through these you find the loyalty discussions were, in part, related to Mr. McCabe, who we mentioned in the opening, the fact that Mr. Trump was very rough on him during the election season. He was worried there might be bad blood there. And the Flynn one, also making his case for why he didn't think that General Flynn had done anything wrong.


STRASSEL: That changes things.

GIGOT: What's your second point? You said that was one thing we learned.
What's the other point?

STRASSEL: Yes. The second thing is you've got to ask here, what was the basis for a special council? Because there's not a lot "there" there, even in all of these long memos.

GIGOT: Jason?

JASON RILEY, COLUMIST & SENIOR FELLOW, MANHATTAN INSTITUTE: My take is that we're not learning a lot here, either from the book or the memos. He testified before Congress saying a lot of this. A lot of this has been reported. A lot of the interviews I've been watching with Comey is him telling the interviewer, I can't talk about that, it's classified. And the back and forth is going like that. You know, we still want to know why Comey relied on a Steele dossier that he knew was unverified and that was financed by the Clinton Foundation. We haven't gotten answers about that yet. There are answers that we're looking for, but he hasn't been providing them, at least so far in these interviews he's given. Largely he's saying this is because it's classified stuff.

GIGOT: Dan, what about that? I have a similar reaction to Jason, that it didn't advance the ball all that much beyond what we knew. What do you think?

DAN HENNINGER, COLUMNIST & DEPUTY EDITOR: Yes. I think that's right. One thing we can say that is if the idea at the center of this is that the president committed obstruction of justice, this will be one of the weakest obstruction cases ever brought, if the base is inside the memos.

One other important thing, though, Paul. What we now have sort of identified is that James Comey told President Trump perhaps three times, it says in these memos, that he, Mr. Trump, was not a target of the investigation. He did say they thought there was an investigation going into whether the Trump campaign had involvement with the Russians, but Mr. Trump was not a target, the thing that Trump kept asking Comey to say --


GIGOT: Publicly.

HENNINGER: Yes. In all the reporting, from that January forward, the press has combined these two things into a single idea that Donald Trump himself would be implicated in this. That is a very important distinction.
And Mr. Comey refused to make it clear. I think Trump was entitled to be upset about the fact that that distinction wasn't getting out there.

GIGOT: On the obstruction point, Jason, I think that if you read these memos, actually, it doesn't make the case at all that, somehow, obstruction of justice was on Trump's mind. That is, a coverup of the investigation.
In fact, in a couple of places he says, Comey, maybe you should think about investigating what's in the Steele dossier, because Melania's really -- I don't want her believing this is true in there. So give it some thought. If you're going to ask your FBI director to continue to investigate something, you're not trying to cover it up.

RILEY: Right. Right. But the larger point, also, Paul, as I think about this, is the appropriateness of Comey writing this book and being out there discussing a president and matters that are still under investigation. Is that appropriate? A lot of us have gotten on the president's case about tweeting about this stuff, saying leave it alone, let Mueller do his job.
The same advice to Comey. Is this what he should be doing?

GIGOT: Kim, let's move on to McCabe and the criminal referral to the U.S. attorney's office. What do you make of that? Andrew McCabe -- what do you make of the fight that's going on between McCabe and Comey, the nastiest divorce since War of the Roses over whether the other's lying?

STRASSEL: That fight matters, because if you look at the inspector general's report, a great deal of the conclusions that he draws in the end rest on testimony or a discussion that Comey had with the inspector general's office, and that leads him to the conclusion McCabe lied. McCabe came right back out and suggested that Mr. Comey is lying. And this is going to have to be something that all gets sorted out by the prosecutors who take a look at this and decide whether or not to bring charges. But, look, whether one is lying or the other is lying, I think this is potentially a case for prosecution because, as Mr. Comey himself said, there are severe consequences.

GIGOT: One of the things, Dan, if you read the book by Comey, as he puts an enormous premium on prosecuting people like Martha Stewart and David Petraeus, who he says lied in the course of an investigation. Well, is that a standard that's going to apply to FBI agents as well?

HENNINGER: Well, we'll find out. I mean, that's going to -- the prosecutor in D.C. is going to make the decision about Mr. McCabe. But what's becoming clear, Paul, is that the FBI, in the director's office at the highest level under Jim Comey was in complete political disarray. It should have been accountable to someone. It doesn't look, Paul, as though the Comey operation was accountable to anybody at Justice.

GIGOT: And, Jason, Rudy Giuliani coming on board of president's team with a couple lawyers from Florida, Jane and Martin Raskin. He needs the help.

RILEY: He does need the help. He's turning to someone that he trusts very much. Rudy Giuliani was with him throughout the campaign. A very trusted advisor. But it does show that the president is having difficulty putting together a legal team to defend himself. That's something I'm sure that's keeping him up at night.

GIGOT: All right. Thank you all very much. Interesting stuff.

When we come back, President Trump warning North Korea that he's willing to walk away from a planned meeting with Kim Jong-Un. So what's at stake at the two sides prepare for the historic meeting? And what should the U.S. insist on before final plans are made? We'll ask General Jack Keane, next.



DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I hope to have a very successful meeting. If we don't think it's going to be successful, Mark, we won't have it. We won't have it. If I think that it's a meeting that is not going to be fruitful, we're not going to go. If the meeting when I'm there is not fruitful, I will respectfully leave the meeting.


GIGOT: President Trump on Wednesday, saying he's prepared to walk away from talks with North Korea, tentatively planned for later this spring.
The White House confirmed this week that CIA director and secretary of state nominee, Mike Pompeo, held a secret meeting with Kim Jong-Un over Easter weekend, setting the stage for the historic summit between the two leaders.

Retired four-star Army general, Jack Keane, is a Fox News senior strategic analyst.

Welcome, General Keane. Good to have you back here.

What do you make of all the cross-currents on North Korea? It's a lot of change that really is moving in the direction of a high-stakes discussion between the president and Kim Jong Un.

GEN. JACK KEANE, FOX NEWS SENIOR STRATEGIC ANALYST: I think Director Pompeo's visit was really pivotal. I spoke to the director on North Korea at length, and I knew that he has a huge grasp of all the issues. And the CIA profile's Kim Jong Un and he went there knowing who this leader truly is.

GIGOT: Right.

KEANE: So what he got I think from the leader is what we're seeing publicly now, that he does no longer hold removing U.S. troops as a condition to have these discussions on denuclearization. I think he got other things from that leader as well that convinced the president that he should go forward and have a visit with him, despite the huge political liability of such a visit, if he comes out of there empty-handed. He knows he's dealing with a liar and a cheat. That's why he's sending this message to him that he wants the visit to be positive. I'll tell you, Paul, there's a real opportunity here that we're facing. We could be on the cusp -- I don't want to get Pollyannaish here -- but we could be on the cusp of the most significant diplomatic achievement since World War II.

GIGOT: That's what's fascinating here because we've been down this road many times, first, with Kim Jong-Un's father, and then with Kim Jong Un.


GIGOT: They've promised, let's get into negotiations, you give us some money, we'll have denuclearization plans. They've pledge to do it before. They always cheat. They always renege. The question becomes, what changed this time to make a difference and to make Pompeo and the president think he might be -- that Kim might be sincere.

KEANE: There's a couple things. One is the conditions that he told Mr. Director Pompeo that he's not sharing with us.


KEANE: It gives us some indication. And obviously, one of them is out in the public. The other thing is what's happening between North and South Korea. They're talking about ending the war and ending the armistice between the two countries. The next step then is to demilitarize the peninsula. In other words, pull the forces off the DMZ.

GIGOT: Right.

KEANE: That is next logical step. Those are huge positive steps indicating, then, if those shoes fall, indicating that Kim Jong Un is likely sincere about denuclearizing -- and we'll have to put our conditions on the table. Listen, we're going to have to see the fuel sites, the storage sites, the launch facilities, the research sites. We've got to see everything and verify that. And that will take months and months down the road for all of that to happen.

GIGOT: But the key thing, one of the key points is, if U.S. forces can stay in South Korea, that's a huge concession, because that's always been one of the North Korea's biggest demands and, frankly, it's also been a goal of China, which wants the U.S. out of the peninsula, ultimately. And we don't know what role China's playing behind the scenes here.

KEANE: I think they are playing a pivotal role. I think the meeting in China was all about that. They shared exactly what the conditions would be when the North Korean leader met President Trump, what he was willing to concede, and I think China is playing a huge role here. And I think China has made up its mind that this headache of nuclearized peninsula and this constant frustration that the North Korean leader provides, not just to the West but also to China, this whole thing that's been going on for years as an impediment to China's huge geopolitical and economic ambitions. And they want to get on with it, particularly this new president. He is the most ambitious leader and the most powerful leader China's ever had since Mao Tsung. And the North Korean leader, I think, is an obstacle to him.

GIGOT: All right. Let's talk a little bit about Japan because Shinzo Abe has invested a lot in his relationship with President Trump. Yet, he has, I think, some cause to feel like maybe he's been left behind in the Korean discussions. One of the reasons I think he came to talk to the president this week was to say, look, what's going on here, and are we on the same page. What does the president have to do to reassure Japan?

KEANE: Japan's always had a cause for concern here, because South Korea's (sic) got missiles that range that country, and he's flown missiles over the country. They have huge, significant interests here. But I think the president gave him assurances on how tough-minded he is, that he's not going to fold and give -- pull the economic sanctions back as a result of these discussions. He's got to have to see and verify there really is denuclearization going on before he eases up the pressure. After all, the pressure is a contributing factor here. I was told by my sources that, before we started interdicting ships at the ports in North Korea, they lost about 80 percent of their revenue. And they wanted to get the other 10 percent stopped in the back door with shipping companies bringing in supplies. That's pretty significant economic pressure that's taking place here. I also believe that President Trump's played a large role here by putting the military option on the table. And other actions he's taken around the world, I think, has also convinced the North Koreans that he's likely sincere about a potential of a military option.

GIGOT: All right, a fascinating turn of events.

General Jack Keane, thanks for being here.

KEANE: Yes, good talking to you, Paul.

GIGOT: When we come back, Mike Pompeo makes the rounds on Capitol Hill gaining support of at least one red-state Democrat in his contentious confirmation battle to become secretary of state. So will other Democrats follow?



TRUMP: I think Mike Pompeo is extraordinary. He was number one at West Point. He was top at Harvard. He's a great gentleman. I think he'll go down as truly a great secretary of state.


GIGOT: President Trump Wednesday singing the praises of Mike Pompeo, his CIA director and secretary of state nominee. Pompeo made the rounds this week on Capitol Hill this week ahead of a vote Monday in the Senate Foreign Relations Committee. Although, at least one Democrat has said she'll support him, a number of others, even those who voted to confirm him for CIA, expressed their opposition to the president's choice.


SEN. RICHARD BLUMENTHAL, D—CONN.: Director Pompeo has shown a disdain for diplomacy, putting military action at a higher priority. He has devalued religious tolerance and women's reproductive rights and health care, not only in this country but around the world. I think he sets a poor example in terms of American values.

SEN. TIM KAINE, D—VIRGINIA: I think the diplomat that represents this country as secretary of state, especially under this president, has to be somebody who really has a strong orientation towards diplomacy and not somebody that will exacerbate the president's worst tendencies.


GIGOT: We're back with Dan Henninger, Kim Strassel, Jim Riley, and "Wall Street Journal" editorial board member, Mary Kissel.

So, Mary, why are the Democrats so set against, most of them, Pompeo?

MARY KISSEL, EDITORIAL BOARD MEMBER: Because they don't like the fact that he's Trump's pick for secretary of state, Paul. They don't like Mike Pompeo --

GIGOT: Wasn't that not settled in the election?

KISSEL: Yes, absolutely, it was. But those clips that you just played, where they're accusing of Pompeo of not being for diplomacy, that's code for saying he's against President Obama's nuclear deal. They don't like --


GIGOT: With Iran.

KISSEL: With Iran. So they don't like the fact that Pompeo is essentially agreeing with what President Trump campaigned on. They also don't like that Mike Pompeo stands for things like traditional marriage. Now what that has to do with negotiating with Kim Jong Un is anybody's guess.

RILEY: There's a lot of overlap, Paul, between lawmakers who claim that Trump can't get his act together and fill his cabinet, and people standing in the way of --


GIGOT: Of him filling his cabinet.


RILEY: That's what I think we're seeing here.

And the problem a lot of Democrats have is they voted for Pompeo to become the CIA director last year. That includes some of the people in the sound bite --

GIGOT: Fourteen of them.

RILEY: -- like Tim Kaine, who said Pompeo is not sufficiently interested in diplomacy, even though the same Pompeo spent Easter weekend in North Korea engaging in diplomacy.


So I don't think the arguments really hold up. This is about scoring points with the resistance and the Democratic basis.

GIGOT: All right, Dan, Rand Paul, Republican from Kentucky, sits on the Senate Foreign Relations Committee, which has only a one-vote Republican majority. If he votes "no" and all the Democrats line up, then you could get no recommendation out of the Senate Foreign Relations Committee. That would be extraordinary. Where is Rand Paul coming from?

HENNINGER: Rand Paul is coming from inside his own head, Paul --


-- where he resides all of the time.


He has no relationship to the Republican Party, the president. The president -- President Trump purports to have a friendship with Rand Paul, and he has reached out to him on this issue and said he would like to meet with him and talk about whether he can't see his way to supporting Mike Pompeo. Rand Paul opposes any kind of intervention overseas. And he has been extraordinarily obstructive. But if he held on in this one, and the Democrats held back, then Rand Paul would have to take primary responsibility for a secretary of state not being approved for the first time in over 100 years.

GIGOT: So they can still find a way to get him to the floor, although, as Dan suggests, this would be humiliating.

KISSEL: Yes. It also sends a message to America's enemies at a very perilous time, Paul. You've got all the problems in the Middle East, Syria, Iran's expansion, you've got the summit coming up with North Korea, we're in a trade dispute with China, Venezuela is collapsing, there are a lot of crises going on around the world right now. Not the time to signal to our enemies that we're not behind President Trump's security cabinet.

GIGOT: Kim, what about the Foreign Relations Committee? You have a Senator in Rand Paul, who has very distinctive views on foreign affairs. I mean, let's face it, he believes the military should be used only for defending the territory of the United States, not much else. I think that's a fair summary of his views. And yet, he's in that pivotal position where he can block the president's security appointees. Should he be off Foreign Relations?

STRASSEL: Well, you know, I think that that's a legitimate question to ask. There are obviously issues of seniority. But Mitch McConnell does have a lot of power and the ability to also -- and this is something Democrats do very effectively, to keep their people in line, to let them know that if they're not going to help the interests of the party at times, then they're not going to get what they want out of their time in the Senate. So I think that's something Mitch McConnell will have to think about. This is, meanwhile, also a message to the president, overall, Republican and Democrat, that he's going to have a tough time with any future nominees, no matter how qualified.

GIGOT: Was the White House caught by surprise here, Mary?

KISSEL: I think they were. The White House held a call this week with reporters, basically, laying out all of Pompeo's qualifications. I think it was a sign that they were caught on the back foot.

RILEY: If you want to know why, all you have to do is look at the history of the support, the bipartisan support that previous nominees for this position have gotten, from Colin Powell to Condoleezza Rice to Hillary Clinton to John Kerry. So it's really the Democrats, I think, that -- whose behavior here is odd.

GIGOT: I think Hillary Clinton was confirmed with only two opposition votes, and John Kerry with three?

KISSEL: That's right, huge Republican majorities. Colin Powell, unanimous voice vote.

GIGOT: All right.

Still ahead, President Trump and Prime Minister Abe wrap up a two-day summit in Mar-a-Lago admit simmering trade tensions and in the shadow of the U.S./North Korea sit-down.



TRUMP: Unless they offer us a deal that we cannot refuse, I would not go back into TPP. We'll see what happens. But in the meantime, we're negotiating. And what I really prefer is negotiating a one-on-one deal with Japan and that's where we are right now. And we will, hopefully, in the not-too-distant future have a very good deal, good for Japan and good for the United States.


PAUL GIGOT, FOX HOST: GIGOT: President Trump Wednesday saying he prefers to deal one on one with Japan when it comes to trade matters, despite Prime Minister Shinzo Abe's efforts to bring the U.S. back into the Trans Pacific Partnership trade agreement. The two men wrapped up a two-day summit in Mar-a-Lago this week, with trade and North Korea at the top of the agenda.

We're back with Dan Henninger, Kim Strassel and Mary Kissel.

Dan, the prime minister has invested a lot, maybe more than any other head of state around the world, among our allies, anyway, in a close relationship with President Trump, first, to meet him after the election, meeting in Florida far early in his administration. But has that investment paid off for Abe?

HENNINGER: It hasn't paid off very well. His approval rating is 27 percent. In the fall, he has to get a vote of support from his party. There's the expectation that will not come. Prime Minister Abe's government could fall. For that reason, I think, Paul, I would take serious issue with what President Trump just said about the bilateral trade relationship. For one thing, that negotiation isn't going much of anywhere. Notably, the Trump administration did not exempt Japan from its steel tariffs. That did not play well in Japan. And Prime Minister Abe, in fact, has been trying to use the TPP negotiations to open the Japanese economy. Now, if Prime Minister Abe falls, the United States and President Trump are going to lose their primary ally in Asia, vis-a- vis, the negotiations with North Korea and China. If he goes, the Chinese are going to exploit it, and our interests over there are going to be hurt. I think he should rethink that strategy on trade with Japan right now.

GIGOT: You and I, Mary, both lived in Asia. We covered Japan's economy. And this issue of its domestic market has been a long-standing one. We've complained, for decades, rightly so --


GIGOT: -- about protection for agriculture, protection for retail, protection for services, protection for automobiles.

KISSEL: Pretty much everything.

GIGOT: All these things. And TPP was the battering ram that Abe wanted to use to be able to break up some of the domestic opposition. Here we had that opportunity and we are walking away. And a bilateral -- I don't see how they wanted a bilateral because I don't think he can -- he thinks it can get the same outcome for him.

KISSEL: Yes. The thing about TPP is it gave Abe cover to open up long- protected markets --

GIGOT: Right.

KISSEL: -- like agriculture in Japan. It was a strategic agreement. It didn't include China. But it was also a strategic agreement, Paul. It didn't include China. It was a way to draw the countries in the Asia- Pacific closer to the United States at an important point in time.
President Trump's emphasis on the bilateral deal seems to echo the technique that he used with South Korea, where he's using the steel and aluminum tariffs as a lever to press Japan to open up their markets. In South Korea, that resulted in so-called managed trade where they basically agreed to quotas, we buy X, you buy Y, and not the kind of broad opening that TPP achieves. I hope that's not where we're going with Japan.

GIGOT: Kim, what about the security relationship with Japan? It looks like -- I mean, of all the Japanese political class, I would say Abe is about as good as you're going to get as a potential security ally of the United States. He's moved Japan to where they're willing to do more to cooperate militarily, willing to spend more military on the United States.
It's not an ally you want to alienate.

KIM STRASSEL, WASHINGTON COLUMNIST: No. And there were two things he came, and he really wanted to talk to President Trump about on this visit, which was this question of North Korea and its missiles, pointing out that intercontinental ballistic missiles, it's one thing for any future talks with North Korea to deal with them. But what Japan cares about is short and medium-term missiles that can hit the island from North Korea. So they want the Trump administration to make that an issue in any North Korea negotiations.

Also the question, long-standing Japanese concerns, about abducted citizens that they claim North Korea took back in the '70s and '80s. And in this regard, the summit seemed to go a bit better in that they did seems to get some indication that these are things the United States will look into.
They're not going to be preconditions for talking to North Korea. But I think these meetings have been an attempt to strengthen the relationship, and that is an important ally that the president needs in that region.

GIGOT: All right.

Still ahead, Democrats stepping up their campaign against the GOP tax cuts this week. So how can Republicans capitalize on their signature achievement heading into the midterm elections?


REP. NANCY PELOSI, R-CALIF., HOUSE MINORITY LEADER: It's a scam. And why is it a scam? Look at this. They've put forth a tax bill that gets 83 percent of the benefits to the top 1 percent, 80.


PELOSI: They try to call it a middle-class tax cut and, yet, 86 million middle-class families in the life of this bill will be paying more taxes.


GIGOT: The House minority leader, Nancy Pelosi, on Tuesday calling the Republican tax cuts a scam during a Tax Day rally on Capitol Hill.
President Trump responded to Pelosi in a tweet Friday, saying, "Nancy Pelosi is going absolutely crazy about the big tax cuts given to the American people by the Republicans. Got not one Democrat vote. Here's a choice. They want to end them and raise your taxes substantially.
Republicans are working on making them permanent and more cuts."

Scott Hodge is president of the Tax Foundation.

Welcome back, Scott. Good to see you.

First, let's take the -- let's fact-check the minority leader on those two figures. And 86 million middle class families, will they pay more and 83 percent of the benefits to the wealthy?

HODGE: No. In fact, Congress' own scorekeepers, the Joint Committee on Taxation, says that virtually every American will get a tax cut this year. What she's doing is pointing ahead about eight or nine years from now when many of the provisions expire, and that's why we need tax reform, part two, in order to make them permanent.

But I find it kind of interesting or amusing, the fact that she'll say this. At the same time, we have liberal governors in New Jersey, New York and California trying to provide work-arounds to the cap on the state and local tax deduction, which is actually raising taxes on high-income taxpayers in their state. So on the one hand, she's trying to say this is tax cuts for the rich. At the same time, the liberal governors are saying, no, you just raised taxes on my rich people.

GIGOT: Let's talk about how the tax cut's playing so far, economically and politically. Let's start economically. The CBO, Congressional Budget Office, came out and said growth is going to be 3.3 percent this year for the overall U.S. economy. And next year, not as high, but also high.
Those are big increases since before the tax reform passed.

HODGE: They certainly are. They're predicting that it will create about a million jobs over the next decade. I think what's interesting is their report also analyzes all of the various independent analysis of the tax bill, including the Tax Foundation's macroeconomic analysis, and all of the independent analysis shows it's a pro-growth tax plan that will raise the size of the economy and create jobs. That's all good news.

GIGOT: OK. I read the CBO report. One of the things it seems to say, that I read, was that this $1.5 trillion cost over 10 years, already, a third of it or so will is going to have been made up by the faster growth in the first couple years.

HODGE: That's exactly right. That's what our model predicted as well. In fact, we expect that as much as a trillion dollars of that static cost will be recouped because of the higher economic growth. And that just tells you that this is an extremely pro-growth plan. The supply side of it is working, things like the corporate rate cut, and especially the expensing provision, which is really boosting a lot of the new investment in the economy.

GIGOT: That's 100 percent expensing for new business investment.

Let's talk about the stock buyback issue. Democrats are making a lot about that. That is corporations taking the lower tax rate and the higher profits that flow from -- the higher net profit, that flows from that and buying back their own stock. Their argument is, hey, that does nothing for workers, it's just a boom for rich shareholders.

HODGE: There's a lot of ways for companies can reinvest in their company. Certainly, they can invest in new plants and equipment, if that's needed. Otherwise, they could give back dividends to their shareholders or these stock buybacks. This is pretty good for the 401-Ks that you and I have, or all of the pension funds out there, particularly, some of the pension funds that are underwater. This is all good news, I think, and a way of putting money back into the economy in this way.

GIGOT: We also are seeing -- we've seen the bonuses that have been paid.
We're also seeing some raises, particularly for in the minimum wages that some companies are paying. And obviously, in the impact of growth and higher profits over time, we suspect will flow to workers and raises.

HODGE: Well, all of the independent research that we've reviewed, all of the economic studies show that eventually corporate rate cuts will translate into higher wages for workers in some way. In fact, some of the studies show as much at 50 percent or more of those benefits will flow into higher wages. That's good news for workers and it's good news for the companies as well.

GIGOT: OK. But let's talk -- if all that's true, all right, and it's good news, why is the tax cut still kind of on the edge politically? Our poll, NBC/"Wall Street Journal" poll said, good idea, 27 percent, bad idea, 36 percent. Those aren't good numbers.

HODGE: Certainly, some of the relentless opposition from Democrats and elsewhere, trying to beat down the favorability of the plan. Also, people are -- they don't look at their paycheck every day and see that, my goodness, they are getting a tax cut. And I think Republicans need to do a better job selling this. They need to remind people of the stories that we're hearing of new investment, of job creation, the higher bonuses, et cetera. All of that has to be reinforced so that people remember that, yes, indeed, this is benefiting the economy.

GIGOT: And also, a connection between the tax reform and the faster growth that we're seeing.

Thank you, Scott Hodge, for being with us.

HODGE: You bet.

GIGOT: When we come back, the Supreme Court hearing oral arguments this week in a case that could change the way you shop.




ALLYSIA FINLEY, EDITORIAL PAGE WRITER: -- actually losing revenues and they're sympathetic to the --

GIGOT: But that's not true.

FINLEY: Well, that's right --


FINLEY: -- are increasing 25 percent and, the last five years, the sales tax increased across the nation. And online sales tax only makes up about maybe 1 percent to 2 percent of the total budget.

GIGOT: But in the oral arguments this week, Jason, it was hard to detect who was coming where. There wasn't a clear ideological distinction here.


GIGOT: That I could detect, at least.

JASON RILEY, COLUMNIST & SENIOR FELLOW, MANHATTAN INSTITUTE: Right. But we do have some hints that Neil Gorsuch, for example, in his previous job, hinted where he might come down on this. He is skeptical of the Quill (ph) decision, the current -- the governing process. Kennedy, Justice Kennedy is also someone who has quibbled with whether Quill (ph) is still necessary. You have to remember, back in the early '90s, the argument was the Internet is new, we don't want to smother the baby in the crib, let it grow, let it grow


RILEY: -- let's not burden it. Kennedy saying it's a fully formed entity now. It's doing fine. This Quill (ph) -- do those arguments still apply?
But I think, Paul, this really boils down to what Allysia was getting at.
This is a money grab by the states. They want a new source of revenue and they find a very rich vein here in e-commerce. And it's also a way for them to sort of raise taxes effectively without putting it to a vote in the states.

FINLEY: Is not just retail taxes. It they can't overturn Quill (ph), it's going to be all kinds of other taxes and regulations they will try.

GIGOT: Such as?

FINLEY: Such as maybe they will try to tax online videos.

GIGOT: OK, in other words, once that's --


FINLEY: This is just the first.

GIGOT: And, Dan, I guess the argument would be, since Congress has the right to regulate interstate commerce, Congress could pile in and lay out parameters of what can be taxed and what can't.

HENNINGER: That's right, Paul. In fact, they already took a shot at making a more simplified taxing system and they failed. Now they are dumping it on the Supreme Court to figure it all out for them.

But what is at issue here, Paul, is, indeed, the Commerce Clause. And what is the whole point of the Commerce Clause, which dates back to the Constitution? We have a federalist system. We now have 50 independent states. They are not, however, independent countries. The founding fathers understood that the economy could only work if we were able to operate smoothly across all the states. If you now have 12,000 jurisdictions setting up different sales tax systems, the economy will come, not quite to a screeching halt, but you are really throwing sand into the gears. That is the point of the Commerce Clause.

GIGOT: All right.

Another decision this week that came out, Allysia, really interesting, an illegal immigrant deportation case. Neil Gorsuch sided with the four liberals in saying the statute that was used to deport this person or tentatively deport him is too vague.

FINLEY: Right. So he based -- the liberal, Elena Kagan, wrote the majority and based it on a 2015 court decision that was eight to one. It involved very similar statutes. Gorsuch essentially said these statutes are similar and we don't want to invite arbitrary government and give -- allow prosecutors and police to interpret statutes however they wish.

GIGOT: Vague laws invite arbitrary power, Gorsuch wrote in a concurrent opinion, Jason. And that's what's really interesting. He didn't adopt the logic of the liberals.

RILEY: No. But he did stay true to what he said he would stay true to, which is the spirit of Anthony Scalia, Paul, who was very much skeptical of judicial activism, a big fan of judicial restraint. Gorsuch said, listen, Congress, wright more specific laws. It's not our job to cover for you here. And that is what Congress should do.

GIGOT: The president, Allysia mentioned, was a Scalia opinion.

All right, we have to take one more break. When we come back, "Hits & Misses" of the week.


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

Kim, start us off.

STRASSEL: Paul, this is a miss for New York attorney general, Eric Schneiderman, who this week asked his legislature to change the law and to allow him to prosecute and jail Mr. Trump and his friends, even if Mr.
Trump used his pardon power to excuse him from any federal crimes. I know the left hates this president, but how much are they willing to burn down?
The double-jeopardy protection is vital for citizens and it shouldn't go in any state.

GIGOT: All right. Thanks, Kim.


RILEY: This is a miss for Starbucks. Paul, as the world now knows, two black men were arrested at a Starbucks recently for loitering, prompting all kinds of Twitter outrage and so forth. In response, Starbucks is going to close all of its locations for a day and subject all of its employees,
75,000 people, to sensitivity training. I have a better idea. Why not just make their loitering policy clear? Are you allowed to hang out at Starbucks without buying anything or not?

GIGOT: Are you?

RILEY: I don't know.


GIGOT: All right. Allysia?

FINLEY: This is a hit to Desi Linden, the first American woman to win the Boston Marathon since 1985. She's a fellow Californian, and she ran in probably the worst weather in 30 years, just showing that Californians are tougher than they seem.


GIGOT: Spoken like a marathoner herself.

OK, Dan?

HENNINGER: Barbara Bush, it is impossible not to notice the outpouring of national and bipartisan affection for Mrs. Bush. She wasn't a celebrity and she never really tried to be in the public eye. Her husband left office 25 years ago. I think what's going on is a kind of national recognition that Barbara Pierce Bush, a woman born in the 1920s, personified a set of values we admire but realize have been largely set aside in our time. We may hope that our memories of Barbara Bush will bring those values back to life.

GIGOT: Hear, hear, Dan.

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

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