This is a rush transcript from "Journal Editorial Report," February 10, 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.
President Trump Friday night declined to release a classified Democratic memo rebutting GOP claims that the FBI abused its power to spy on a former Trump campaign adviser. The White House sending a letter to the House Intelligence Committee asking it to work with the Department of Justice to remove sensitive material from the 10-page document. Democrats are calling the move politically motivated and hypocritical. But the president responded Saturday morning, tweeting, 'The Democrats sent a very political and long response memo, which they knew, because of sources and methods and more, would have to be heavily redacted, whereupon, they would blame the White House for lack of transparency. Told them to redo and send back in proper form. '
Let's bring in 'Wall Street Journal ' columnist and deputy editor, Dan Henninger, and columnist, Kim Strassel.
Dan, what do you make of the president's decision to say, send it back and not declassify and renegotiate?
DAN HENNINGER, COLUMNIST & DEPUTY EDITOR: Well, we have not seen the Democrats' memo. We don't know what was redacted. We have to assume that since they talked to FBI Director Christopher Wray and deputy attorney general, Rod Rosenstein, about the content of the memo that there's something substantive at the center of it. Mr. Wray and Rosenstein had their own letter that they sent simultaneously to the Democrats raising these questions.
And I have to say, Paul, god knows what the American people are making of this right now. I mean, they must feel like they were sucked in a John Cooray (ph) novel. It's hard enough for us to try to figure out. We have our own sources and methods. So you have one set of memos dueling with another set of memos. But I have to say, go back to the beginning of this. This is ultimately about whether Trump was colluding with the Russians.
HENNINGER: From day one, that's always been kind of a shaky story. And I always wondered, how are they actually going to nail down and verify that something like this collusion was taking place. I think the difficulty of that is being played right now in these memos.
GIGOT: Kim, on the Democratic memo, 10 pages, the Republican memo only four, so just on its face and length, the chances increase that you could get some compromising of sensitive material. But I have to say, my view is Trump ought to not play this game of this memo, that memo. Just get the original FISA application out in total. Let the American people see it. And all four of them, frankly. We know it was re-upped three times. Let them see it all.
KIM STRASSEL, WASHINGTON COLUMNIST: Look, and they've had so much time to do this now, and instead they just spent another five days letting Democrats play this game. They've been in possession of this memo for that long. And it was pretty clear from the start, my sources say, that this was sent up to him in a way that did contain information that was going to put the White House all along in a position where they had to say something about redactions, and then Democrats could turn around and say, you got a double standard, you're hiding something. Just get it out there, get the FISA application out there, finish un-redacting the Grassley referral letter that went out this week that has to do with Christopher Steele, and some of the 302 forms, the interviews that the FBI did with their sources.
Let the American public see what really happened.
GIGOT: All right, let's turn to that Grassley/Graham -- Lindsey Graham/Chuck Grassley letter on the Christopher Steele dossier. What did we learn from that this week, because there was pretty interesting information.
STRASSEL: As Dan said, all of this hinges on whether or not Donald Trump -- there's any evidence he colluded with Russians.
STRASSEL: And the problem now, increasingly, is that entire case is falling apart in terms of the original evidence that was put forward, which is, of course, this dossier, paid for by the Clinton campaign and the DNC through an oppo research firm and, ultimately, Christopher Steele. And the Grassley referral, what was important about it this week was it dismantled Christopher Steele's credibility. It showed he was out talking to the press, even though the FBI told him not to. That was undermining the FBI probe. And that he, potentially, lied to the FBI about having done so.
GIGOT: All right, there's another thing that's interesting that we learned here, and that's a couple of names from the Clinton era have appeared, Sidney Blumenthal and Cody Shearer, long-time friends of Hillary Clinton. And it turns out, Kim, that they may have played a role in getting some information to Steele. Tell us about that.
STRASSEL: Yes, they didn't may have, it did happen.
We now know that not only was the Clinton campaign funding this dossier effort, but it was providing information that went into the dossier. They came up with some reports, they funneled them to a middleman at the Obama State Department, a guy who worked for John Kerry, and he got them onto Mr. Steele. who incorporated them into his dossier. So this is another reason to wonder, look, if you're a super spy, like Christopher Steele has been presented, do you -- does it not fail your sniff test to go out and start putting information from noted political operators into your research?
GIGOT: And yet, James Comey, the former FBI director, under whom all of this happened, said, well, we trusted Steele because we knew him. But with all of this complicated partisan and political ties and potential motivation, this just makes the case even more to get it all out to see what they were looking at, so that the American public doesn't have to say, well, I trust this Republican because I'm a Republican, or I trust Republicans or vice versa. Let's see who really is telling the truth.
HENNINGER: Yes. Ultimately, Paul, there has to be an effort to -- and I hope Christopher Wray is doing this -- restore credibility of the FBI, who was handling this material back then while Jim Comey was the director of the FBI. Clearly, there were significant errors of judgment made during Comey-era. And now we have to get past that. And now the only way to do it is to let it all hang out.
GIGOT: All right. When we come back, lawyers for President Trump reportedly advising him against sitting down with special counsel, Robert Mueller, despite the potential legal and political fallout. So what should the president do? We will ask former White House counsel, Boyden Gray, next.
GIGOT: Should he or shouldn't he? The White House still weighting whether President Trump will speak with special counsel, Robert Mueller. The president's lawyers have reportedly advised him against sitting down for a wide-ranging interview with Mueller, and are instead looking to have Trump answer as many questions as possible in writing. The president told reporters in January that he was looking forward to testifying under oath.
So what should he do?
Let's ask C. Boyden Gray. He served as White House counsel to President George H. W. Bush.
So welcome, Boyden.
What would you recommend that the president do drawing on your experience of advising presidents?
C. BOYDEN GRAY, FORMER WHITE HOUSE COUNSEL: Well, I don't think you can duck everything to do with Mueller, and I don't think he should. But he should try to get a very constrained, well-limited interview, better interrogatories. But if it has to be in person, he will have his lawyers there. The central problem is there really is no scope limit to what Mueller's investigating and, therefore, there would be no limit to what he would ask. And the lawyers have to get some sort of constraint on that, otherwise, you couldn't prepare the president. He couldn't prepare for it because you wouldn't know what you were being asked.
GIGOT: Well, what about the idea that he should say, no, and say I'm not going to cooperate, I don't have to, particularly if he can't get that narrow writ on the questions that you suggested?
GRAY: Well, then he -- you know, Mueller could go to a grand jury and get a subpoena, and then he's in the grand jury room without a lawyer at all. And that's -- that's not good either. That's worst.
GRAY: So there's leverage. There's leverage that Mueller has. And let's hope he doesn't abuse it because there has to be some limit to what this discussion will cover.
GIGOT: But does that limit really, ultimately, stand on the good will or the forbearance of Mueller because, as you say, he has leverage here, could take a subpoena to the grand jury, which would make the president look bad politically if he didn't cooperate voluntarily. But ultimately, is it really up to Mueller or can the president's lawyer really insist on a set of written questions?
GRAY: I think they could, and I think they could justifiably test Mueller's willingness to go to a grand jury for a broader unlimited inquiry. I think the public would react adversely to that. But that does assume that there's some willingness to cooperate at some level. And I think Trump would lose that if he refused outright to even consider it.
GIGOT: OK, when you say narrow the questions, right now, Mueller is -- as you know, the special counsel order from Rod Rosenstein, the deputy attorney general, is very, very broad. But you're suggesting that the lawyers can say, look, Mr. Mueller, are you going to ask us about the firing of Jim Comey, are you going to ask us about Carter Page, are you going to ask us about this or that, and narrow it to two, three or four things, maybe even fewer, and say, all right, we will answer those but we don't want this to be open-ended hour-long, two-hour-long session.
GRAY: That's correct. That's what they should ask for. And I think that's what they could get if they were precise and clear to the independent counsel staff that this will not look good in the public if they turn this or wanted to turn this into a real, you know, inquisition into everything in his life.
GIGOT: OK. Let me ask you about something else base on your experience. And you have seen the story this week with Rob Porter, White House aide, alleged to have abused a couple of former wives. He resigned this week. He denies the facts as has been presented by his accusers. But I want to talk to you about the process by which the White House vets somebody like that on the staff. You get FBI reports in the White House counsel's office, correct?
GRAY: That's correct.
GIGOT: It would probably include such information. What do you do then if you're the White House counsel?
GRAY: Well, their judgment calls, always. And I think that there's no reason to expect the White House counsel and the others in the White House to have rejected his being hired into this very important job, which he's apparently done extremely well, just on the basis of a couple of allegations. The trouble is for any employee, potential employee, staff member, is the security clearance. That's when the going gets tough. In this case, it looks as though the going was too tough. He wasn't getting his security clearance. And that's the acid test. At some point, the staff, the White House chief of staff, the White House counsel, has to fish or cut bait and say, I'm sorry, you can't -- they are not going to give you security clearance and so you can't stay in this job. The president has the right to reverse a recommendation of no security clearance, but I don't think that's ever happened. It didn't happen when I was there.
GIGOT: So the FBI actually makes a recommendation and then the White House counsel -- neither the White House counsel, nor the White House chief of staff can overrule that? Only the president can? Is that what you're saying?
GRAY: I think only the president can overrule that. That's the practice. I don't think that's in a statute. That's just the practice.
GIGOT: OK. But if you would get this kind of information, you would go first to the person who is accused and talk to him about it, right? I assume.
GIGOT: And then would you take it to chief of staff?
GRAY: Of course. I mean, the question of security clearance is going to bother everybody because he is dealing with, you know, classified material, and that cannot, you know, go on indefinitely.
All right. C. Boyden Gray, thank you so much for being here. Appreciate it.
GRAY: My pleasure.
GIGOT: When we come back, another brief government shutdown ended as the president signs a bipartisan budget deal, but did Democrats exact too high a price for the Republican boost in military spending?
(BEGIN VIDEO CLIP)
SEN. CHUCK SCHUMER, D-N.Y., SENATE MINORITY LEADER: This budget deal will be the best thing we've done for our economy, our military, our middle class for a long time.
(END VIDEO CLIP)
GIGOT: A brief government shutdown, complements of Kentucky Senator Rand Paul, ended Friday morning when President Trump signed a bipartisan budget agreement. The two-year deal would lift defense spending by $80 billion in 2018 and another $85 billion in 2019, making good on a central Republican campaign promise. But busting those spending caps for the military came at high price, with Democrats winning an additional $131 billion in funding for domestic programs over the next two years.
We are back with 'Wall Street Journal ' columnist and deputy editor, Dan Henninger, editorial board member, Allysia Finley, and editorial page writer and budget follower, Kate Bachelder Odell, for her sins.
That's been your beat. So let's go through the good, the bad and the ugly.
What's good in this?
KATE BACHELDER ODELL, EDITORIAL PAGE WRITER: First, Paul, I think that the defense cap had to be broken because the damage to military due to sequester caps over the past few years have been pronounced. We have seen equipment issues, maintenance failures. And most pronounced is that personnel don't get the training they need and, over time, they are not ready for promotion, et cetera. So --
GIGOT: So big victory there, you think, for Republicans?
ODELL: I think so. It's unfortunate that it came at such a high price. But I will add it gave me some confidence to see Jim Mattis and that the Pentagon will earn the public's trust on how they spend this money because the Defense Department has been famous for wasting money.
GIGOT: The defense secretary.
OK, what else is good in it? Anything?
ODELL: Well, Republicans did get a discreet policy victory in repealing the ObamaCare death panels board, which the public hates and represents everything the public doesn't like about ObamaCare.
GIGOT: This was the board that was set up to basically impose price controls within Medicare. And it was designed in a way by the Obama central planners so that Congress virtually had no say in stopping those cuts.
ODELL: Right. It was very insulated from the political accountability and it was unelected bureaucrats, and that's why people hated it.
GIGOT: The Federal Reserve for budget cuts, for health care cuts, in essence?
ODELL: Right. That's basically the end of the good.
There is a lot of bad. Democrats got a high price. They got $20 billion for infrastructure. Who know where is that would go, broadband, water projects, right? They got community health centers, an additional four years of children's health insurance. They got $6 billion for opioids, which obviously this should be a GOP priority but it's not clear exactly what the money will accomplish or how it will be spent. And just a laundry list.
GIGOT: Allysia, expand on that. What is this big burst of domestic spending mean?
ALLYSIA FINLEY, EDITORIAL BOARD MEMBER: Well, the new baseline budget essentially. And heaven forbid, we enter another recession in another couple of years and the debt is going to explode even more. Right now, we are heading to a $1 trillion deficit. That's about double. But this will add another probably trillion dollars in debt. Eventually there will have to be reckoning. But entitlements, we have to look at entitlements, which constitute two-thirds of the budget.
GIGOT: And this budget deal doesn't really do anything like that. This focuses on essentially changing the terms of the 2001 budget deal that Obama did with John Boehner. And so the domestic spending that Kate talked about, these are all called discretionary accounts, transportation, education, health care, a whole variety of things. But Medicare, Medicaid and Social Security off the table.
FINLEY: That's right. Student loans, that's a mandatory expenditure, too. That's off the table.
GIGOT: All right.
So, Dan, I mean, a trillion-dollar deficit. Last year, the budget deficit was $660 billion, last fiscal year. We are heading to a trillion bucks.
HENNINGER: Right. And so conservatives in the House say they abhor this. They were threatening to shut down the government. Senator Rand Paul did so temporarily for a while in the middle of the night. But what is the bottom --- there's a couple of bottom lines here. Literally, Paul, you only have 51 seats in the Senate.
HENNINGER: They lost that one in Alabama, and so they are not going to be able to pass a fiscally austere budget on their own and they will not get it through the House. And Republicans are looking at the fact that they have to reset in November when they run for election again, hold the House, hopefully, if not lose the House, and at least hold the 51 seats in the Senate. And that's based on whether the Congress can't perform. They passed the tax bill. They had the momentum. The Democrats got blamed for the first shutdown. And the question here was Republicans going to show they could execute. They were in a tough spot.
GIGOT: That what I think a lot of viewers out there are saying, well, why did they have to accept that, Kate? The real answer is Democrats had leverage because Republicans don't have 60 Senate seats.
ODELL: That's true. Also, you have to consider this and what were the worthy alternatives. And the House was also rapidly losing support for these stopgap continuing resolution measures to kind of kick the can and then try to get a better deal, right. So they did not have a lot of options. And it makes one wonder if the Senate should pass appropriation bills with 51 votes as opposed to 60.
GIGOT: What was Nancy Pelosi up to this week, Allysia?
GIGOT: An eight-hour speech on the House floor, saying vote against this bill unless it includes legalization for the DREAMers. In the end, her own caucus, half of them abandoned her.
FINLEY: Right. It really showed her as weak leader. This really undermined her leadership. But I think she was actually trying to throw a bone to the left-wing of her caucus. And she's been under a lot of pressure. I mean, you have to consider that, well, if Democrats do take the House in this next year, you know, she may face leadership challenges. So she really had to show that she was standing up to Donald Trump.
GIGOT: So you think this was about her leadership next year and her ability --
GIGOT: -- to return as speaker if they win the House?
FINLEY: Right. Well, I think it backfired.
GIGOT: Because she couldn't keep --
FINLEY: I mean, maybe 70-some-odd Democrats still voted for it.
GIGOT: Right. OK. And Paul Ryan did get the majority of his Republican conference for the bill. There was some doubt about that for a while.
Still ahead, a bumpy ride on Wall Street as volatility returns to the stock market. What's behind the week's swing? And is it the new normal?
GIGOT: A bumpy ride on Wall Street, with the Dow Jones Industrial Average experiencing its biggest one-day point drop ever on Monday, followed by a turbulent week of ups and down. President Trump, who frequently touted the stock market's rise since his election, weighed in on the turmoil, tweeting, quote, 'In the old days, when good news was reported, the stock market would go up. Today, when good news is reported, the stock market goes down. Big mistake. And we have so much good, great news about the economy.'
We are back with Dan Henninger, Kim Strassel and James Freeman.
James, how worried should investors be about this correction?
JAMES FREEMAN, ASSISTANT EDITORIAL PAGE EDITOR: Well, I think the president is right that this was triggered by good news. I mean, the economy is doing well, and people expect that means higher interest rates than we thought and, therefore, a threat people think. Obviously, interest rates tend to be higher. We are getting back to a normal healthy economy, though. And if you separate the markets, which I know were gut churning for a lot of people lately, the news of the U.S. economy, the global economy is good, and the news on corporate earnings is good.
GIGOT: All right, Mr. Sunshine here.
Dan, are you a cloudy day?
DAN HENNINGER, COLUMNIST & DEPUTY EDITOR: A reality check. You know, if you're Donald Trump, naturally you think that the stock market, while you are president, should just go steady upward forever, right?
GIGOT: And interest should stay at less than 1 percent forever.
GIGOT: He's a real estate guy.
GIGOT: They all love low rates.
HENNINGER: Those low rates, that 1 percent or less, is kind of, I think, at the root of what is going on here. We had the suppression by central banks, the Federal Reserve, the European Central Bank and the Bank of Japan for eight years, a conscious suppression of interest rates to drive assets into the stock market, right?
HENNINGER: And this was kind of the greatest monetary policy experiment in the history of the world.
It had to end. But Trump has a contribution. He did all of that deregulation, big tax cut, released the real economy, which is taken off in the last couple of months. And now you see the markets trying to get in an alignment between the real economy and the sort of suppressed economy they were living for eight years. And it's going to be a rocky ride.
GIGOT: Right, because you have actually normal market pricing, James, for bond prices for a change. So you've got the 10-year going on, so, suddenly, there's more risk involved. That's what happens. But it means that if you have been pushing assets investors to risk assets artificially, so maybe as this unwinds you get investors going out.
FREEMAN: Yes. There is obviously risk, as you said. I think Trump's program on tax cuts and deregulation is the best way to try and transition back to a real economy. And I would say if you're looking for things that are bubbles, I would look at European and Japanese government debt more than U.S. stock market. But, look, stocks have not been cheap. They've been getting a little cheaper lately. But if you believe in the long-term of the American economy, I think it's gotten easier to believe in that lately, then you are probably not all that concerned.
GIGOT: A little blowback, Kim, for the Republicans though because of the president's touting stocks for so long. He got in the State of the Union and he said, look at your 401K, it's fabulous. Well, I have been looking at my 401K and it's less than fabulous.
STRASSEL: I haven't. I'm not doing it.
GIGOT: -- two days ago.
So, and on the other hand, most Americans don't really -- they don't invest in the stock market. And one of the reasons I would argue Donald Trump got elected was because what the Fed did, was it drove people into risk assets that rich people had, OK? So they benefited from the stock market more than the average American worker did. And now, if the real economy is going to take a hand-off and do better, then that's probably the thing we need to -- to have a better mood in the country and more people getting wealthier, not just the people at the top.
STRASSEL: Well, right. And look at why the market has all of these interest rate fears. It's because the labor market has been tightening and wages have been going up. It's because manufacturers are doing a lot more investing and increasing output. And they are sucking up more commodities, driving the prices of those up. Those are the things that Fed will pay attention to and may, indeed, result in higher interest rates. But the lesson here for Republicans is they need -- and President Trump -- is they need to be out talking about how they have helped inspire some of this recent uptick in terms the tax cuts and deregulation and everything else that's resulting in more jobs, higher wages and growth in the country.
GIGOT: All right, James, do you think they're going to -- I mean, that's a great suggestion. The problem is we are talking about other things. The president is talking about other things, Mueller, whatever the president tweets, parades down Pennsylvania Avenue for the military.
FREEMAN: Well, I think there's a lot of good news in the private economy. If you're going to be worrying about interest rates -- and they have often been higher in history -- I think maybe the politicians ought to be worrying a little more about them, because it's going to be harder to fund all of the stuff they love to spend money on if you get rates that are 3 percent or 4 percent or 5 percent on the 10-year treasury bond, which easily could be.
GIGOT: But if you're the Fed, you have got to start looking at - if the economy is that strong. You can't just sit down and say, oh, yes, we don't care, let's stay at 1 percent forever. Let's stay at 1.5 percent forever.
You have to go up.
FREEMAN: That's right. Ultimately, although this is a different market than we are used to, it is more volatile, this is progress to move back to an economy not dominated by Washington and the Fed, but by private decision-making.
GIGOT: All right, thank you all.
Still ahead, amid talks of an Olympic thaw, the U.S. issues a new warning to North Korea.
(BEGIN VIDEO CLIP)
MIKE PENCE, VICE PRESIDENT OF THE UNITED STATES: The United States of America will soon unveil the toughest and most aggressive round of economic sanctions on North Korea ever.
(END VIDEO CLIP)
(BEGIN VIDEO CLIP)
PENCE: We will not allow North Korean propaganda to hijack the message and imagery of the Olympics. We will not allow North Korea to hide behind the Olympic band the reality that they enslave their people and threaten the wider region.
(END VIDEO CLIP)
GIGOT: That was Vice President Mike Pence in Tokyo this week during a stopover on his way to the Winter Olympics in South Korea. The vice president warning North Korea that the U.S. is set to unveil its toughest sanctions yet amid what some are describing as an Olympic thaw between Pyongyang and Seoul. The North sent a high-level delegation to the games that includes Kim Jong-Un's younger sister, who extended an invitation Saturday for South Korean President Moon Jae-in to attend talks in Pyongyang, setting the stage for the first meeting of Korean leaders in more than a decade.
John Bolton is a former U.S. ambassador to the United Nations.
JOHN BOLTON, FOX CONTRIBUTOR: Glad to be with you.
GIGOT: Look, it looks to me like the last two, three weeks have been a propaganda windfall for North Korea. Would you agree?
BOLTON: Absolutely. They've pulled an old playbook out of their desk drawer. They did this in the 2000 Olympics, the 2004 Olympics, the 2006 Olympics under governments in South Korea basically similar in policy to President Moon, the current government in South Korea. And they are doing it again. And they are getting the same reaction from the Western media as they are from a lot of naive and gullible people in South Korea. This Olympics charade means absolutely nothing when it comes to North Korea's nuclear and ballistic missile programs. Tragically, they are continuing their progress while people are oo'ing and aah'ing about the women's ice hockey team of North and South Korea playing together.
GIGOT: And they have a girl band in North Korea. Send a girl band to Seoul. I mean, it's as if -- it's almost as if the North is trying to use this to say, look, we are just a normal country, OK, nothing to see here, we are not really isolated, just treat us normally. And I think they are winning, John. I really do.
BOLTON: They absolutely are. I tell you, I think it might be worst. My colleague, Nick Eberstadt has a great article in the current ' Commentary ' magazine talking about how many times, among other things, how many times South Korea, over the past 15 years, has subsidized North Korea under the mistaken view that if they only give them enough money, everything will work out. You have to ask the question, did President Moon of South Korea subsidize or provide other economic incentives for North Koreans to do this. I'm very worried the answer to that might be yes, which means that with a little help from their friends, Kim Jong-Un and his regime are actually empowered, not just the propaganda victory but have received economic benefits.
GIGOT: Did the U.S. -- I'm talking about President Trump and the administration -- have any choice, however, except to basically go along with what President Moon of Korea -- South Korea wanted in this because, you know, they obviously have a huge stake in the Olympics going well. And you didn't want to have the U.S. somehow interfere with that. What choice did the U.S. have as a policy political matter?
BOLTON: I don't think there was any choice. I put this down, again, to North Koreans' propaganda skill. The games are in South Korea, obviously. We have sent Vice President Pence on a very difficult and sensitive mission to try and show unity with South Korea, with Japan, but also, as he said, not to allow North Korea to have a completely open field for their propaganda efforts. And so I think he's got a difficult job. But it's important that we remind people that behind all of this blue smoke and mirrors, the nuclear and ballistic missile programs are continuing.
GIGOT: One of the things that the administration seems to be doing with Vice President Pence as strategy is starting to put human rights on the table, that is how North Korea treat its own people and visitors. So Otto Warmbier, the father of the man that North Koreans killed after they prevented him from leaving the country, he's going to attend with Mike Pence. The president met this week with some human right activists and defectors from North Korea at the White House. That's a turn from the Obama administration, and, I think, also the George W. Bush administration, which didn't like to talk about human rights in North Korea.
BOLTON: Well, I think the characteristics of the rogue states that we worry around the world, not including Iran, along with North Korea, they oppress their own people, they engage in international terrorism, and they pursue weapons of mass destruction. So I think that President Trump is well advised to find whatever arguments he can to try and show just how bad this regime is. Because notwithstanding the vice president's announcement of even stricter sanctions, I don't think we have time for sanctions to work. I think we are down to some very hard choices.
Let me say, as an alumnus of the Bush 43 administration, look at the last 18 years. How many times have you heard one administration after another say tough new sanctions on North Korea. What have we been doing for 18 years that they are any tough new sanctions left to apply? That's why I think we are perilously close to the end of this road here. The president has a hard decision about whether to use military force or whether to acquiesce and North Korea becoming a nuclear weapon state.
GIGOT: Well, I think, Ambassador, what they would say is that we are going to start to slap sanctions on Chinese companies that do business and other companies in Asia that do business with North Korea, and say, your choice is this, you either keep doing business with North Korea or you do business with us, you can't have it both ways. That's where I think this is going.
BOLTON: That may be. If we had done that 15 years ago, it might make difference. CIA Director Mike Pompeo said several times that North Korea is perhaps a handful of months away from being able to target thermal nuclear weapons on cities in the United States. So do we have a year for the secondary sanctions effort to proceed? I'm not sure we do. We don't have five years or 10 years, that's for sure. We are down to counting on our fingers and toes, I'm afraid, how close North Korea may be.
GIGOT: We should look after this two-week holiday where everybody says peace is at hand, see what the administration does and how hard it is, and whether or not South Korea goes along.
BOLTON: Right. And whether China pays the slightest bit of attention.
You know, to harm China economically through sanctions, we have to understand that the United States will feel some pain, too, because of the closeness of the economic relationships. How are the New York banks going to warm up to that?
GIGOT: Probably won't like it, knowing a few New York bankers.
OK, John, thank you very much. Appreciate it.
BOLTON: Thank you.
GIGOT: When we come back, a spate of fatal accidents in recent months focusing renewed attention on Amtrak. So what's behind the railroad's woes? And is it a problem that more federal funding can fix?
GIGOT: A high-speed Amtrak train broke apart en route to Boston this week. The Acela Express was traveling from Washington, D.C., when the mechanical failure occurred, causing two of the train cars to separate. The episode is the latest in a string of accidents for the passenger railroad. Last Sunday, an Amtrak train struck a freight train parked on the tracks in South Carolina, killing two and injuring more than a hundred. And a chartered Amtrak train carrying Republican lawmakers to a policy retreat slammed into a garbage truck in Virginia, killing one and injuring several others.
Amtrak's latest woes coming as details of President Trump's $1.5 trillion infrastructure plan are set to be released next week.
We are back with Dan Henninger, Kate Bachelder Odell and Allysia Finley.
So, Allysia, Amtrak, you take it once in a while. Why are they having so many problems?
ALLYSIA FINLEY, EDITORIAL BOARD MEMBER: Right now, it's a debate. But the issue here -- and these accidents were different causes. One appears to actually be caused by CSS, the private operator, that didn't change the signal.
GIGOT: That controls the tracks.
FINLEY: Right. And the northeast is actually the one area where it actually owns the tracks. And most of the country, others meet their tracks.
GIGOT: Amtrak does?
FINLEY: Right. So does not have complete control. I think the issue here right now we are getting at is safety, improvements in safety cost money. Politicians want to build things. They want to expand service. They don't want to put money into safety. And there's a trade-off, direct trade-off between these things.
GIGOT: There's not enough money to go around for everything?
FINLEY: Yes, I think this gets to especially into safety, they want positive train-track control so train conductors can be stopped if they are speeding. But they also want upgrades and grade crossings that also cost a lot of money. We need to do a cost-benefit analysis here.
GIGOT: Dan, we had -- after Allysia wrote a pretty tough editorial of Amtrak last year, we had the whole entourage come in and see us. And I think the CEO has since resigned who came in to see us. But it's a real difficult problem they talked about because so much of the infrastructure is really old.
HENNINGER: Yes, it is. But you know that CEO was previously the CEO of one of the private train systems, a very successful operator as well.
GIGOT: Norfolk Southern.
HENNINGER: Exactly. And I think one of the things going on here is that we are dealing with, whether it's air transportation, which we've had fiascoes recently, as JFK bags piled up everywhere -- these are increasingly complex systems. And the private sector, by and large, has done a pretty good job dealing with complexity. Consider what Amazon does or FedEx, the modern shipping industry, inventory control. But the public sector is so far behind the curb in the acquisition of the software or the knowledge to deal with these complex systems that it evitable results in these kinds of fiascoes. And it's not going to get better because people want increasingly want transportation, whether it's trains or airplanes, to get from here to there. And so the public sector is going to be pressured.
And I think we will see more of these kinds of mistakes.
GIGOT: So, Kate, infrastructure bill coming this week, $1.5 trillion dollars. That's not all public money. They will try to use some public money to leverage the bond markets for private money. Is any of it -- of that going to happen?
KATE BACHELDER ODELL, EDITORIAL PAGE WRITER: Well, that's a good question, especially after a very expensive budget deal. Do Republicans want to spend a bunch more money? They will say, we'll offset some of the cost, but we know how that works. They will upload the spending and then pretend some savings will come in year nine or 10 --
GIGOT: After I retire, the offsets don't happen.
ODELL: Right. They'll also try to encourage states to pick up some of the tab. And, of course, it's better when infrastructure is managed as locally as possible. But there's a lot of pressure on state budgets right now through pension costs and Medicaid expansion. I'm not sure that's such a worthy project either.
GIGOT: Well, and one of the problems, Allysia is permitting. If you throw money at a project, can you get it done this decade or next decade because of all the rigmarole and bureaucratic rules you have to go through?
FINLEY: Right, and that involves the safety improvements. Every kind of new grade crossing or barrier you create, you have to do environmental impact statement, too --
FINLEY: -- and the red tape add-on costs.
GIGOT: Should Amtrak to be privatized? Is that a realistic prospect at all? Rather than --
GIGOT: But is that because of the politics or is that because it's actually impossible to do?
FINLEY: Well, I think it's a little bit of both. Amtrak is losing money.
Passenger service is not profitable in this country. And you cannot ride a train from New York to Miami, which is ones that crashed by the way, and make money off that line.
FINLEY: The northeast corridor maybe, from Washington to Boston, privatize that. I don't think --
FINLEY: So the politicians don't want to do that because that helps fund the other lines and it's a subsidies shift.
GIGOT: If you were the king, and you could sit down and say, let's do a public railroad that makes money, it would be from Boston to Washington, and that's it?
FINLEY: Basically. Maybe high-speed service for Boston to Washington. The airlines wouldn't like that either.
HENNINGER: Is this a great country or what? I think it's Boston to New York.
GIGOT: OK. 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, first to you.
STRASSEL: Paul, this is a hit for Pink, which the day before the Super Bowl, acknowledged that she had the flu, but said she was going ahead anyway because an opportunity like this just happened to have come at a time when she, quote, 'had two small children walking petri dishes that literally cough into my mouth and wipe their not on my cheek, ' end quote. So this is a sentiment every working mother can identify with. And a hit to Pink for acknowledging that even pop stars are walking handkerchiefs like the rest of us. Congratulations on a great performance!
GIGOT: All right.
ODELL: Speaking of working moms, this is a hit for CBS which announced this week that as a result of tax reform, they'll be offering paid parental leave. And we've covered the benefits of tax reform. But I bring this up because some Republicans seem to have decided that paid family leave should be a federal entitlement run through Social Security. So just a reminder not to disrupt all of this success and generosity happening in the private economy.
FINLEY: This is a hit to American innovation. There have been now trials on a brain implant that works like a pacemaker. It increases memory for dementia patients or epilepsy patients by up to 15 percent. And this has a lot of promise in terms of biomedicine and innovation.
GIGOT: That is really cool! Even for some of us who maybe do not have those afflictions down the road.
HENNINGER: Well, I am giving another long line of misses to New York City.
This one to its district attorney. Manhattan District Attorney Cyrus Vance Jr says that they will no longer prosecutor fare jumpers, people who don't pay to go on the fareway (sic). We know the police are already not enforcing urinating in public, drinking in public, and now we going to have
GIGOT: Marijuana in public.
HENNINGER: -- marijuana in public. No one will expect you to pay your fares when some are jumping over the turnstile to you. What is next? The graffiti-covered cars of the 1980s that would be pulling into the station I would say in a couple of months.
GIGOT: I -- probably right, 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 panel. Thanks to all of you for watching. I'm Paul Gigot. We hope to see you right here next week.
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