Will the GOP learn the right lessons from Cantor's loss?

This is a rush transcript from "Journal Editorial Report," June 14, 2014. This copy may not be in its final form and may be updated.

PAUL GIGOT, HOST: This week on the "Journal Editorial Report," Eric Cantor's stunning defeat raises questions about just what kind of leadership Republicans in Congress need and puts immigration reform in doubt. Will the GOP learn the right lessons from the loss?

Plus, Iraq on the brink, as al Qaeda-linked insurgents set their sights on Baghdad. We'll assess the threat to the region and to the United States.

And Hillary Clinton's book tour, looking an awful lot like a campaign rollout. What her performance tells us about the landscape heading into 2016.

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

With Republicans reeling from the stunning defeat of majority leader, Eric Cantor, in Tuesday's Virginia primary, new questions are being raised about just what kind of leadership the party needs to advance its agenda, with major party initiatives, including immigration reform, hanging in the balance. So will the party learn the right lessons from this week's defeat?

Let's ask Wall Street Journal columnist and deputy editor, Dan Henninger; Washington columnist, Kim Strassel; and Political Diary editor, Jason Riley, author of the book, "Please Stop Helping Us: How Liberals Make it Harder for Blacks to Succeed."

Kim, as we move towards the -- to the next week's vote, it looks like Kevin McCarthy, the number-three leader in the Republican House, is consolidating votes to move up to number two, to majority leader. How would that change the way Republicans operate in the House?

KIM STRASSEL, WASHINGTON COLUMNIST: Well, Kevin McCarthy is a politics guy within the Republican caucus.


GIGOT: Explain what that means.

STRASSEL: Well, he's been very involved over the years. He recruited a lot of the members that won election, and he helped a lot of them win election. As a result, he's actually very well-liked by a lot of people, which is why he's likely to win this race. And it could be, too, that he manages, as a result, to maybe bring a little bit more unity to the caucus. By contrast, Eric Cantor, who a lot of the more conservative members of the caucus viewed with a little bit of suspicion.


GIGOT: But when you say a politics guy, you mean he's focused more on winning elections, the nuts and bolts of elections, like how to you raise money, for example, how to you turn out voters, that sort of thing, more than policy, more than budget reform, more than the actual agenda. It's more, how do you get the votes.

STRASSEL: That's absolutely right. This is not a guy, who has been seen like a Paul Ryan, for instance, an innovator on policy or a Jeb Hensarling, who has very much pushed members to try to embrace some very tough policy decisions. And I think that's a really challenging question for the GOP in terms of where they go. Because they've got big decisions coming up, Paul. It's not just how they handle themselves the next five months until the election, but they've got to start thinking ahead. If they do actually manage to take back the Senate and they do have control over both houses of Congress, that's going to be -- they've got huge decisions to make about how they're going to handle that power. And the policy aspect of this is going to matter a great deal.

DAN HENNINGER, COLUMNIST & DEPUTY EDITOR: Well, just to continue Kim's point, Eric Cantor had a reputation for intervening or -- in the operations of the major committees. You can make an argument that sometimes that's worth doing, except that Kevin McCarthy probably won't do that. And the good news is that two of the people who were running for this post, Jeb Hensarling, who is running financial services now, and Paul Ryan, who will probably take over the Ways and Means --

GIGOT: Ways and Means.

HENNINGER: -- tax writing committee, are both very good committee chairmen. Jeb Hensarling probably will terminate the X/M Bank. He will try to rewrite Dodd/Frank in a way that will make it work. And Paul Ryan could produce an historic rewrite of the tax code, building on what Dave Camp did. If Kevin McCarthy is supporting them in that effort, and they, as Kim says, win the Senate in 2016, you could have a potentially very productive House of Representatives.

GIGOT: And my information, Jason, is that -- my sources are saying that McCarthy told the senior members, other senior members of the Republican Party he's not guaranteeing that he'll run for speaker if John Boehner departs, retires at the end of this year or in a couple of years. There's no -- so that would still leave the opening for somebody like Ryan or Jeb Hensarling, who is a Texas conservative, free-market conservative, for either one of those to run to succeed Boehner.

JASON RILEY, EDITOR, POLITICAL DIARY: Yeah. But I think we also need to remember, though, tht this is going to be more of a change in style than substance. The folks, the anti-establishment folks that were cheering Cantor's defeat in the primary, McCarthy will make this a very short-lived high for them. He was not their guy. They did prefer a Hensarling or a Sessions. Cantor --


GIGOT: Pete Sessions, another Texan.

RILEY: Yes, two Texans. Cantor endorsed McCarthy for this position. And it's interesting, the step below this is the House whip, which McCarthy is currently serving as, and it looks like that could be a three-way race that could involve his deputy winning, someone, again, that he tapped for that. So it shows you how difficult it can be to break up this establishment clique that the anti-establishment folks have been trying to do for a few years now.

GIGOT: Well, what about the future of immigration reform? I know Kevin McCarthy has supported it. Paul Ryan and Mario Diaz-Balart, of Florida, have been working behind the scenes to try to get some votes of the members, a majority of the Republican conference to support this. I've been told they had as many as 144 in support to do something this year before this election. And now half of that support has melted away.

RILEY: I think -- I think the results of Cantor's defeat mean it's probably dead for this year. And that's unfortunate, Paul, because I think there's a danger of reading too much into what happened to Eric Cantor. If you look at other races, Renee Ellmers, in North Carolina, faced the Tea Party opponent, ran on immigration. Ed Gillespie, in Virginia, just won the Republican nomination for Senate. He is very pro-comprehensive reform. So I think there is a danger in extrapolating too much from these results in Virginia. But I do think the political reality is, a lot of people are spooked right now, and I don't think anything is going to get done on immigration.

GIGOT: In a sentence, Kim, do you agree with Jason on that?

STRASSEL: Yeah, I don't think it's going to happen this year. Although, I didn't think it was going to happen even before the Cantor defeat.

GIGOT: OK. Well, I was an optimist.


When we come back, Islamist insurgents sweep through two Iraqi cities and set their sights on Baghdad. We'll take a closer look at the terror group, ISIS, how they rose to power and how they caught the U.S. off guard.


GIGOT: A rapidly deteriorating situation in Iraq where, this week, the al-Qaeda-affiliated terror group, known as ISIS, the Islamic State of Iraq and Syria, seized control of the cities of Mosul and Tikrit, and continued its march towards Baghdad. Just who are these insurgents and how are they able to advance so quickly and what threat do they pose to the region and to the United States.

Wall Street Journal foreign affairs columnist, Bret Stephens; and editorial board member, Matt Kaminski, join us with more.

So let's get to that last question first, Dan. What are we talking about here in terms of the outlook now? Because they are now on the outskirts of Baghdad.

HENNINGER: Well, it potentially poses some significant threats, not just to the region, but to the rest of the world.


HENNINGER: It's going to be an old reason, an old reason, traditionally, why do we care about the Middle East? We care about the Middle East, because of all of the oil that's there. And Iraq is a significant source of oil. The price of oil is already going up. It is already disrupting markets all over the world. If this went on for a long time, that would continue.

The new reason, this group, the Islamic State in Iraq and Syria, ISIS. Look, if they were going to establish a state in northern Iraq, establish Sharia Law, draw a circle around it and live happily ever after, who would care? This is not what they are. This is a centrifugal, outward-moving source. They're going to attract jihadists from all over the world. They're going to be able to plan terror strikes into the region, into other countries, like Jordan, conceivably even Israel, and then into Western Europe and the United States.

GIGOT: Isn't this the dream of bin Laden to establish what he called the caliphate --


GIGOT: -- which is a terrorist state? And right now, they control territory from Aleppo, in the west of Syria, all the way now to the suburbs of Baghdad.

STEPHENS: Yeah, you're talking about a distance of about 400 miles. We're not talking about a small amount of territory. And a caliphate, with its capital in Baghdad, was precisely the dream of people like bin Laden and Zawahiri (ph) and other al Qaeda figures.

You have to remember that among these ISIS figures, there are an estimated a thousand people with European passports. There are probably some people with American passports. If this becomes a statement, it becomes an incubator, if you will, for another global terrorist organization. We worried about Afghanistan precisely because it was harboring al Qaeda. This would be an actual terrorist state producing terror worldwide.

GIGOT: We're talking about a force, this ISIS force, of about 3,000 to 5,000 fighters. OK, how, Matt, could they overrun the Iraqi army so quickly and thoroughly? We have reports that they're just melting away, four divisions of the Iraqi Army, which, divisions are 15,000, 20,000 people, just vanishing.

MATT KAMINSKI, EDITORIAL BOARD MEMBER: It's a real condemnation obviously of the state of the Iraqi army and the Iraqi government. And at the same time, we pulled out our last military advisers and trainers four years ago in Iraq. So we gave them about $14 billion worth of weapons, but we didn't leave anyone behind to --


GIGOT: So good luck trying to --



GIGOT: Right.

KAMINSKI: I think it's slightly misleading. ISIS is the one leading the charge, but they're getting help. They're getting help from former lieutenants of Saddam Hussein. But they're getting --


GIGOT: It's a very important point. It's the old (inaudible), and a lot of the Saddam -- the military who we didn't finish off. We had for a while but then they melted away. And now they're back.

KAMINSKI: They are back. There also is grass-roots support among the Sunni minority that had been under Saddam, the dominant group in Iraq. Prime Minister Maliki, who is a Shia, the majority Shia party, has done a terrible job the last few years. He alienated people, become more repressive. So in some ways, he has brought this on himself.

STEPHENS: But, you know, this was so predictable. And we said, in 2009, when Obama decided he was going to withdraw forces or when he didn't conclude a Status of Forces agreement with Iraq, the United States, our military presence there served to give confidence to the Iraqi army, and it served to provide political balance between the three Iraqi factions, Shiites, Sunnis and --

GIGOT: Kurds.

STEPHENS: -- and Kurds. So it was not -- anyone could see that without -- without an American presence there, something like this might happen. Anyone could see, too, that if we allowed Syria to spiral from uprising into chaos, it, too -- the problems of Syria would spill over into Iraq. That's precisely what's happened.

GIGOT: The U.S. is now -- Obama has been asked to have air strikes. He has turned it down. But apparently the White House is reconsidering. No ground troops, they said. This is a choice -- a terrible choice now. Because if we do nothing, Baghdad could fall, with all of the consequences you described. If we intervene, there is no guarantee of success. Plus, we may be helping Iran, which wants the Maliki government to survive. What can we do?

HENNINGER: Well, I think we do have to strike ISIS. We just cannot allow the place to fall apart like this. We probably do have to intervene.

But you're describing a terrible situation of really hard choices. What we're seeing here, Paul, I think, is a real failure, not even of Obama, but of Democratic foreign policy, the idea that the United States had to lower its profile in the world. We have been saying on this program for over a year that this would incentivize bad people somewhere to take risks and move forward. That's what we're seeing this week in Iraq.

KAMINSKI: I think the real danger here, though, this is al Qaeda 2.0. This is not really a bin Laden do-over.

GIGOT: Right.

KAMINSKI: What you have now are affiliates who are independent of al Qaeda central, which has been decimated, but you have them in Yemen, you have them in Iraq, you have them in North Africa.

GIGOT: But this is the biggest threat yet, because this is much bigger, potentially, than what they had in Afghanistan before 2001.

KAMINSKI: But like 2001, the way that any of these groups is going to stand out and say we are the true heirs of bin Laden is by trying to strike in the U.S. And that is the real ultimate fear that people in Washington have.

GIGOT: And a realistic one.

When we come back, Hillary Clinton makes the media rounds, promoting her new book and facing questions about her time as secretary of state. Could the Obama foreign policy legacy hurt her chances in 2016?


GIGOT: In what sure feels like a campaign kickoff, former Secretary of State Hillary Clinton began making the media rounds this week, plugging her new book, "Hard Choices." But the carefully choreographed rollout hasn't been without its bumps, with Clinton claiming on ABC News that she and Bill Clinton were, quote, "dead broke" when they left the White House and facing tough questions about her role in the 2012 terrorist attack in Benghazi.


DIANE SAWYER, ANCHOR, ABC NEWS: Did you miss the moment to prevent this from happening?

HILLARY CLINTON, FORMER SECRETARY OF STATE: No. But I think as the independent board that investigated every aspect of this, including all the cables, concluded there was a lack of appreciation and response to the level of threat. Now, there were a lot --


SAWYER: By you, too?

CLINTON: Well, no. That was never brought to me.


GIGOT: We're back with Dan Henninger, Kim Strassel and Bret Stephens.

So, Bret, are you buying that answer on Benghazi?

STEPHENS: You have to sort of admire it, because it's so smooth. She takes responsibility and disavows all responsibility in the same --


GIGOT: In the same answer.

STEPHENS: -- in the same answer. And it's kind of remarkable. I mean, she is the secretary of state. There were clearly serious planning problems. This was one of our most exposed --


GIGOT: An ambassador killed for the first time in more than 30 years or something like that.

STEPHENS: First time, I think, since 1979. And yet, who was she -- how was she to know that something was amiss here?

You know, I saw her at the Council on Foreign Relations just this week, talking about her book. And, you know, I thought, on the one hand, marveling at how smooth she was. And then I couldn't quite remember, just as she had spoken, what exactly her answer was to any of the given questions.


And that's her political genius.

GIGOT: So, Kim, what is she trying to accomplish with this rollout? Because she is running into probably more tough questions from the press, which has been historically incredibly easy on the Clintons, to -- particularly at least when they're running for president -- to -- what are they trying to accomplish here?

STRASSEL: Well, I think they have been surprised. Look, in some ways, this feels so 1992. It's so Clintonian, right? As we said, very choreographed, roll out this big thing with all these happy headlines about Hillary, control the message, let the party know that she views herself as the presumptive heir to the Democratic nomination. And yet, what's ended up happening is she is in a tricky spot this time, right? And these are some of the challenges she's going to face. She is a Democrat who wants to follow a Democrat who is in office. She actually worked for him. He's not very popular right now. So she's not really saying much of substance about anything. She doesn't really want to have to define herself yet. And that is has invited the press to really pound her and try to elicit some answers, some answers from her. And she doesn't want to do that.

GIGOT: And --

HENNINGER: By contrast, Bill Clinton, in fact, was a policy wonk. He liked to talk about that stuff. And he would in public and on the campaign trail. Her problem is that her policy -- she was the secretary of state, and as Bret is suggesting, she is having a very hard time defending her time as Obama's secretary of state. And so her answers are standing very contrived. It's sort of just a moral equivocation. And as smooth as it is, I doubt she is going to be able to do that for two straight years if she is going to get pressed the way Dianne Sawyer was pressing there.

GIGOT: And yet, Bret, you wrote this week that she's going to be the next president of the United States.

STEPHENS: Yeah, madam president-elect, I like to call her.


Yeah, I suspect she is. She is very smooth. It's going to be considered a historic candidacy.


GIGOT: But can she distance --

STEPHENS: -- Benghazi aside -- look, the thing about her tenure as secretary of state, Paul, it's kind of like Gertrude Stein's definition of Oakland, there is no "there" there. You examine the record and you look for a major accomplishment, some kind of signature that's connected to --


GIGOT: And that takes her right into the White House? No accomplishment equals president of the United States? Is that what you're saying?

STEPHENS: Yes. Well, this is the age of --


-- this is the age we're living in. It fills her resume. And by the way, she speaks smoothly about foreign policy. She's knowledgeable. She's clearly seen her way around the world. It's just that her tenure as secretary leads to no Kennen moment, no Schultz moment, no Kissinger moment. It was a very hollow tenure as secretary. And yet, she's filled the line. She knows -- she's traveled the miles.

GIGOT: Kim, do you agree with Bret? Because I -- my --



GIGOT: My question is, how does she distance herself from Obama's record, if that record continues to deteriorate, and particularly on foreign policy, where she served for four years? If you see continuing, spreading global disorder, which we may, how does she separate herself from that?

STRASSEL: I don't think she does. And this is why I do disagree with Bret. The situation here is very different from 2008. We were just coming off a Republican president. You had a Democratic audience that was very eager to get a Democrat into the White House. Now you've got an unpopular president. As you say, she is going to have to figure out how to distance herself while, at the same time, doing the miraculous feat of supporting some main Democratic priorities that Barack Obama put into place.

And moreover, you just feel every time the Clintons come out -- and you're seeing this in the polls -- this sort of Clinton fatigue that they get out and it's just -- even Democrats wonder if they really want to go back and repeat this episode of history.

GIGOT: All right, Kim.

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.

Kim, start us off.

STRASSEL: Paul, a miss to the U.S. Senate which, this week, whipped through with 93 votes a bill that's supposed to help the health care crisis of the Veterans Affairs Administration. There are some reforms in this bill but it is so hard to see how they could possibly be worth what is now estimated to be an astonishing $50 billion new annual cost a year from this bill. The big fear, Paul, of this crisis all along was that rather than engage in some bottom-up reform of this institution that Congress was going to unite to throw more money at a dysfunctional bureaucracy. And I worry that we've headed in that direction.

GIGOT: All right, Kim.


RILEY: Paul, shootings in New York City are up 43 percent just in the past month. And fewer guns are coming off the street. Yet, the mayor, the police commissioner are pretending this has nothing to do with the fact that the city stopped using proactive police policies like Stop and Frisk. That's ridiculous. The bad guys know the cops' hands are tied and the bullets are flying.

GIGOT: All right.


KAMINSKI: Paul, every four years, Americans get a lesson in something called soccer, a very popular sport in other countries, like the World Cup.


But --

GIGOT: And your favorite sport.

KAMINSKI: Not my favorite.


KAMINSKI: But I do follow it.


But also, every four years, you can see the FIFA, which is the group that runs the World Cup, set a new low standard for mismanagement, and as one former British member of FIFA said, a mafia family, the decades-long tradition of bribes, bungs and corruption. It is led by Seth Bladder (ph), who gets this week's miss from me for running for a fifth term and denying there's anything wrong here.

GIGOT: All right, Matt.

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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