This is a rush transcript from "Journal Editorial Report," June 13, 2015. This copy may not be in its final form and may be updated.

PAUL GIGOT, HOST: This week on the "Journal Editorial Report," as ISIS vows to liberate Baghdad, the White House orders 450 more advisers to Iraq, but is it enough to stop the jihadists?

Plus, an already strained relationship just got a little more tense as President Obama criticizes the Supreme Court again. Is there a strategy behind the scolding and will it work?

And G.E. threatens to call it quits in Connecticut after one too many tax increases. Will other blue state governors take heed?

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

Just days after saying that the U.S. did not yet have a complete strategy for fighting ISIS, President Obama Wednesday ordered an additional 450 U.S. military advisers to join the more than 3,000 already in Iraq. The move comes as militants continue their advance on Baghdad, vowing in a new propaganda video to, quote, "liberate the Iraqi capital soon." So is the administration's latest escalation really an escalation at all? And will it make a difference in the fight against the Islamic State?

Let's ask Wall Street Journal columnist and deputy editor, Dan Henninger; columnist and editorial board member, Bill McGurn.

Dan, is it a tacit admission, that he's -- by the president -- he's not saying it outright, but is it an admission his strategy is failing?

DAN HENNINGER, COLUMNIST & DEPUTY EDITOR: Well, the first thing I would do, Paul, take issue with the word "strategy," the idea that he has a strategy in Iraq.

(CROSSTALK)

HENNINGER: A gesture, all right.

GIGOT: He calls it.

HENNINGER: He calls it a strategy. Calling in air strikes and sprinkling 3,500 advisers around.

GIGOT: To train the Iraqis.

HENNINGER: Train the Iraqis. Meanwhile, Islamic State has forces of between 30,000 and 50,000 armed, trained fighters.

GIGOT: Right.

HENNINGER: The force is centrifugal. It's beyond Iraq. It's gone into Libya, Yemen and up even into Afghanistan. Boko Haram, in Nigeria, has affiliated with the Islamic State. So this is a force. Because they are calling themselves a caliphate, they are drawing fighters in from all over the world.

GIGOT: OK, but is this strategy -- if all that's true, does it show that he's losing?

HENNINGER: All he's doing is insufficient to counteract that force and the Iraqis are disorganized. I mean, the key issue, a factoid, as people say, is that he is the one who pulled down our forces to zero, right, in 2011?

GIGOT: Right.

HENNINGER: And now he is trying to react to the consequences of that. And the word "incrementalism" has come up, as in Vietnam. It's unavoidable that the Vietnam analogy would come up.

GIGOT: I don't think, Bill, it's a change in strategy. What it is, it's another bet, an escalation, a bet, an old strategy that he's going to put up a new base in Anbar Province, which is to the West of Baghdad, the Sunni territory, and they're going to be based to train Iraqis there, which is a kind of a way to say, all right, we're here, we're giving you more confidence. But we're not really here, because we're not putting a combat brigade.

BILL MCGURN, COLUMNIST & EDITORIAL BOARD MEMBER: Right.

GIGOT: He's not putting Apache helicopters, which are terrific to clear an area for ground troops. He's not putting in spotters there who can call in air strikes. It's just more training. It's just a little further west.

MCGURN: Right. I have a slightly different take on why he's doing this. I think he does have a strategy. It's just -- it's just not the strategy we're looking at or even what he's talking about. His strategy is no combat troops --

GIGOT: Right.

MCGURN: -- in Iraq. And he's been remarkably consistent about that from when he was campaigning to president to now, and every tough action he's announced, whether it's Iraq or Afghanistan, it's always no more combat troops. The one time he did announce the combat troops for Afghanistan, the next breath was the withdrawal date. It's a very disconcerting coherence. And he'll do what he needs to do to sound tough, in the meantime, hope this thing just doesn't reach Baghdad until after he's gone. But that is his bottom line, his bottom principle is I'm the man that got us out, and I'm not going back in.

GIGOT: So do enough to try to stop, say, the black flag of ISIS flying over the U.S. embassy in Baghdad which would be a catastrophe --

MCGURN: Exactly.

GIGOT: -- but not enough to roll back Islamic State.

MCGURN: Right. And in fact, if you look at it, it's consistent with his red line in Syria and so forth. He does something to sound tough because people see -- you know, they see Assad using chemical weapons, they see is beheading people. You can't be a president and say nothing, so, you know, he poll-tested degrades and destroys and he comes out with that. But he won't back it up to the point that you're talking about helicopters and combat troops.

HENNINGER: You know, to the extent he has a strategy, it is to accomplish a nuclear arms reduction deal with Iran. That is his strategy --

(CROSSTALK)

GIGOT: That's his overall.

HENNINGER: That's right. That's his overall. He argues that if he achieves this deal that, then, things will calm down. The Iranians will have a stake in not destabilizing the area. There is no evidence of that. The Wall Street Journal reported at the end of this week that Iran is now sending cash and arms to the Taliban in Afghanistan. The Taliban are our enemy in Afghanistan.

GIGOT: Well, if he can't -- what message does it send, Bill, if you say you are going to degrade and destroy something and a year later they are advancing in territory? If an American president promises that and doesn't follow through, it sends a signal of weakness. We're talking here about, as Dan said, 3,000 irregular troops. They're good, OK? There's no question about that. But we have to have respect for them. But they're not as good as America.

MCGURN: Two points. What did it say when he drew a red line about chemical weapons and then didn't do anything? It's the same thing. I'm a dad. You make threats, you don't follow through --

(LAUGHTER)

-- and your credibility is gone. And in foreign affairs, it's a lot worse. You know, we blame these Iraqi troops for fleeing and so forth, but, again, ISIS has a strategy. Those beheadings, the social media, that's to scare people. If you are a 25-year-old Iraqi, you're sitting there, your officers are not well trained, you don't think the United States is there, there aren't any Apache helicopters coming up behind you, would you stand your ground? I'm not sure.

GIGOT: And Islamic State, as Dan suggested, isn't just a threat in Iraq. It's the whole region. And it's also a threat to us because they're inspiring people here. We had the NYPD in here, Dan, and they said we're worried about Islamic State. All right, when we come back, President Obama scolds the Supreme Court again! This time, for daring to take up a challenge to his Affordable Care Act. Is there a strategy behind his court criticism? And will it work?

(COMMERCIAL BREAK)

GIGOT: Well, he's at it again. President Obama is criticizing the Supreme Court. This time, as it prepares to rule on a challenge to his signature health care law, telling reporters in Europe Monday that it shouldn't have taken up the case in the first place.

(BEGIN VIDEO CLIP)

PRESIDENT BARACK OBAMA: This should be an easy case. Frankly, it probably shouldn't have even been taken up. And since we're going to get a ruling pretty quick, I think it's important for us to go ahead and assume that the Supreme Court's going to do what most legal scholars who have looked at this would expect them to do.

(END VIDEO CLIP)

GIGOT: It's not the first time the president has taken on the nation's highest court. Of course, he famously scolded the justices in his 2010 State of the Union address over their decision in the campaign finance case known as Citizens United.

(BEGIN VIDEO CLIP)

OBAMA: With all due deference to separation of powers, last week the Supreme Court reversed a century of law that I believe will open the floodgates for special interests, including foreign corporations --

(APPLAUSE)

-- to spend without limit in our elections.

(END VIDEO CLIP)

GIGOT: We're back with Dan. Wall Street Journal senior editorial page writer, Collin Levy; and Best of the Web columnist, James Taranto, also join the panel.

So, Collin, with all due deference to the separation of powers, as the president said, how unusual is it for a president to criticize the Supreme Court as it's considering a case, and even say, look, you shouldn't have even taken the case?

COLLIN LEVY, SENIOR EDITORIAL PAGE WRITER: Right. This is extremely unusual, Paul. Look, presidents have opined on Supreme Court cases before, to be sure, but they don't typically disparage the justices. With what he said, he was basically saying that their judgment already in taking the case was flawed.

Now, you have to remember here, Paul, that, you know, no other president has probably had his legacy so bound up with the courts, and I think he's incredibly aware that how history sees his administration is going to be determined by the justices. So he's trying to either push their hand or else, you know, delegitimize their opinion if it goes against him.

GIGOT: James, is that a smart strategy? In other words, is he going to persuade any of the justices here?

JAMES TARANTO, BEST OF THE WEB COLUMNIST: Well, probably not. At this point, they have certainly made up their mind about this case, and I don't think we'll see a switch, as some speculated we had in the last Obamacare case.

GIGOT: With Chief Justice John Roberts changing from the time that the oral arguments were heard to before the -- until the decision was reached.

TARANTO: According to some reports, yes. I think that it's an understatement to say that he's criticizing the Supreme Court. We criticize the Supreme Court all the time. But I think what he's doing is something more. He's adopting a rhetoric. And this is only rhetoric. He's not actually threatening to disobey court orders. But he's adopting a rhetoric of defiance and disrespect toward the court's authority and the court as a co-equal branch of government.

GIGOT: How so?

TARANTO: And a non-political branch.

GIGOT: How so?

TARANTO: Well, you look at when he upbraided them at the State of the Union with the justices sitting right there and he --

(CROSSTALK)

GIGOT: But unable to respond.

TARANTO: Unable to respond. And he completely mischaracterized the decision. It doesn't leave no limits on foreign corporations. Foreign corporations cannot donate to political campaigns. Justice Alito was shown during the statement mouthing the words, "That's not true." He hasn't gone back to the State of the Union since, by the way. But --

GIGOT: You don't expect him next year?

(LAUGHTER)

TARANTO: Yeah. But he's treating the court as a political adversary and thereby diminishing its authority as the interpreters of law.

GIGOT: So, Dan, if this won't work, OK, to change the minds of the justices, then could he be signaling that, in fact, he thinks he may have information, he may or may not, but he thinks he's going to lose this case, this Obamacare subsidy case, and so, in advance, he's essentially spinning the result and attacking the court?

HENNINGER: I think that's entirely possible. And I think he is -- he is spinning the court as a political issue in the coming election.

GIGOT: 2016.

HENNINGER: In 2016, when Hillary's the nominee. And do you know what, Paul? I don't think it's a bad strategy.

GIGOT: For him.

HENNINGER: For him. Or for Hillary.

GIGOT: Right.

HENNINGER: It's clear now that --

(CROSSTALK)

HENNINGER: Yeah. Hillary Clinton is now going to try to reassemble the Obama coalition of the ascendant young people and minorities and unions and so forth, and I don't think these people are particularly disturbed about checks and balances or about separation of powers, right?

GIGOT: Like Brother Taranto.

HENNINGER: Like Brother Taranto.

(LAUGHTER)

They don't care about those delicacies. They want to win and they want power and they want another president who will exert strong and aggressive executive authority, however much disputed, the way Obama has.

GIGOT: Collin, you made an interesting point about the extent of that president's agenda is wrapped up in the courts. When you think about it, it's net neutrality, the regulation of the Internet. It's immigration reform, for example. That's also in jeopardy in the courts. You've got his climate change agenda, is also going to be challenged in the court. Why is so much of his agenda wrapped up in the courts?

LEVY: Clearly, because he's been engaged in amazing regulatory overreach. But, Paul, you have to think about the fact, too, the fact that Obama comes from the Chicago school of political intimidation. So what he's doing here with the court is just sort of what he's learned about the way politics works.

And by the way, you know, it may be late in the day here, but if this was aimed at anyone, it was aimed at Chief Justice John Roberts. And I think Roberts probably might have thought that he was trying to depoliticize the court in some way when he switched his vote there, but I think, in many ways, that has certainly backfired.

GIGOT: But, Collin, do you agree with James that it's going to work, or do you think it could work with Roberts and sway him?

LEVY: Look, the last time this happened, it happened in May, according to reports, and so --

(CROSSTALK)

GIGOT: The switch by Roberts, you mean?

LEVY: Yeah, the switch by Roberts, that's right. So I think it's very late. I think it's a cynical strategy. And I think, again, he's trying to cover all bases, badger them or punish them if they go against him.

GIGOT: Briefly, James?

TARANTO: I just wanted to make a point about Mrs. Clinton. She has said that if elected president she will demand of all potential Supreme Court nominees a vow to overturn Citizens United. I think that would be unprecedented. Two previous presidents have at least publicly disavowed litmus tests.

GIGOT: All right, thank you all.

When we come back, General Electric mulls a move out of Connecticut after lawmakers there raised taxes by more than a billion dollars. Texas and Indiana are already making a play for the company. So will G.E. jump and will other blue states learn a lesson?

(COMMERCIAL BREAK)

GIGOT: General Electric Chairman Jeffery Immelt is warning employees at the company's Connecticut headquarters that he's mulling a move out of the state after lawmakers there approved a $40 billion budget last week that slaps new taxes on corporations, hospitals and high-income residents. A move by G.E. would be a serious rebuke of the fiscal policies of Democratic Governor Dannel Malloy, not to mention a big blow to Connecticut's already stagnant economy.

"Wall Street Journal" assistant editorial page editor, James Freeman, joins us with more.

So, James, as a long-suffering resident of New Jersey --

JAMES FREEMAN, ASSISTANT EDITORIAL PAGE EDITOR: Yes.

GIGOT: -- how do you look at -- what does this tell you about the state of Connecticut and its economy and policies?

FREEMAN: Well, we're seeing the impact of a high-tax, high-spending experiment in state governance, and what you have in Connecticut is very little opportunity, unemployment rate above the national average. You have a state that's losing population because of that lack of opportunity. And just this week, the Federal Bureau of Economic Analysis came out with its numbers. The economy in Connecticut grew 0.6 percent in 2014. So, business obviously is not thriving, and now another tax increase has companies like G.E. say maybe we should leave.

GIGOT: Do you think G.E. is -- is that threat serious, Bill, or is this a way to say, well, give us a particular tax break? That's what we saw in Illinois --

(CROSSTALK)

MCGURN: Right. It could be. I think it is serious. Businesses are moving out of Connecticut. Connecticut used to be a refuge for businesses.

GIGOT: Right. They didn't even have an income tax until the early '90s.

MCGURN: Right. Right. This is one of the bluest of blue states, blue governor, blue congressional delegation, blue House, blue state Senate. And they've got a blue economy to go with it.

(LAUGHTER)

This 0.6 percent is one-quarter of what the U.S. grew and we're sort of at an anemic growth rate ourselves.

GIGOT: We saw this, though, when Illinois raised taxes in 2010 the big companies threatened to move, but what happened is they went to the politicians we'll take a tax break for us but -- well, maybe G.E. will get one, maybe Aetna, maybe Traveler's, who have also complained will get one. But here's the problem, you can't give it to every business.

FREEMAN: Right. And you worry about the smaller and medium-sized firms that don't have the megaphone, the P.R. muscle, the lobbying muscle like a G.E. or an Aetna would have to cut its own deal. So that's why you can't be optimistic about growth for everybody. But good for G.E. for speaking up. This is kind of a nice Libertarian streak maybe for a company that's been known for getting along with big government. They also don't want to be a too-big-to-fail bank, so a good trend.

GIGOT: Our friends on the left, Dan, would say, all right, you are criticizing Illinois and Maryland and Connecticut, which have had this public union-dominated government, but so has California, and that's a rip- roaring success.

HENNINGER: Oh, yeah.

GIGOT: We raised taxes to 13.3 percent.

HENNINGER: From 10.3 percent.

GIGOT: Yeah. And, look, we've got job creation. The budget is overflowing with revenues. So, how do you explain California?

HENNINGER: Well, I explain California with maybe two words: Silicon Valley. I mean, tax collections were up 55 percent on income and capital gains. The tax rate was raised on people making over $1 million.

GIGOT: Their capital gains in California are taxed at regular income rate?

HENNINGER: That's exactly right. Do you know what the poverty rate is in California? It's the highest in the nation, 23.4 percent. Nearly a quarter of the population is living in poverty. The state sounds like "Les Mis," a tale of two states here.

(LAUGHTER)

You've got the rich bunched in L.A. and San Francisco and then a quarter of the state still living in poverty and unable to get out of that.

(CROSSTALK)

HENNINGER: That doesn't sound like a success to me.

GIGOT: You don't think it's a success?

There's also the issue I guess in California tht they really have roller coaster revenues. Because what happens is they depend so much on the rich for 50 percent of their revenues that, in the good times, it really flows in and it looks like it's wonderful, but when the stock market falls or something and the revenues fall off, and they have a huge deficit.

MCGURN: That's what the bipartisan tax commission found many, many years ago, that they needed to broaden the tax base, which they're not doing.

Also on the jobs front, this year, their job creation is roughly equal to Texas when you factor in population, but if you look at the past seven years, I mean, I think Texas grew more than 10 percent and they grew under 1 percent. So, you know, you can't just take one year and say revenues are good and --

(CROSSTALK)

GIGOT: California's done OK for the last three or four years I think. You're right, it hasn't been up to Texas over the long haul, but recent -- the last decade, but they've done OK.

James, are you moving to Connecticut?

FREEMAN: Oh, Connecticut? No, no. Maybe -- Pennsylvania has tons of growth, actually.

(LAUGHTER)

But I think I'm stuck in New Jersey for now until the legislature wants to embrace reform.

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

(COMMERCIAL BREAK)

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

James Taranto, start us off.

TARANTO: A hit to our friends at "The New York Times" for their expose of Marco Rubio's personal finances. It's a bit of a doge as journalism but, boy, is it comedy gold.

(LAUGHTER)

My favorite pitch is Senator Rubio's luxury speed boat. This dinky fishing boat, which costs all of $80,000, somebody called it the Toyota Camry of boats.

(LAUGHTER)

GIGOT: All right.

Bill?

MCGURN: A miss, and this is a bipartisan miss to New York State legislature. Today, New York has a public school system where more than 90 percent of teachers are rated effective or highly effective and one out of three students is at grade level at English or for math. So what does Albany do? They change the names, both the Democratic assembly and the Republican Senate, and approved a bill that would officially change references to failing or persistently failing schools to struggling or persistently struggling.

GIGOT: That makes me feel better.

FREEMAN: Yeah. So you could just say I'm struggling --

(LAUGHTER)

GIGOT: I do most of the time.

(LAUGHTER)

FREEMAN: You know, Paul, statistically, kids do much better when they're raised in a household with a mom and dad who are married, so this is a hit to the states with the highest percentage of teenagers being raised by married biological parents. And the list is Utah, Minnesota, Nebraska and, perhaps surprising, New Jersey.

GIGOT: So that's why you live there.

(LAUGHTER)

(CROSSTALK)

GIGOT: So that's a hit for New Jersey.

FREEMAN: Absolutely.

GIGOT: OK.

You know, James, I don't think the Democrats are going to be able to turn Marco Rubio into Mitt Romney.

TARANTO: I think that's safe to say.

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

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