Jam-packed agenda awaits lawmakers' return to Washington

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Jam-packed agenda awaits lawmakers' return to Washington

President Trump urges lawmakers to pass criminal justice reform, secure border wall funding before new Congress takes office.

This is a rush transcript from "Journal Editorial Report," November 24, 2018. This copy may not be in its final form and may be updated.

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

As we look ahead to the busy end of the year in Washington, the Mueller probe perhaps winding down with President Trump 's attorneys announcing this week they have submitted written answers to the special counsel's questions about Russian interference in the 2016 campaign. This, as the House and Senate gets set to return from Thanksgiving break, facing a jampacked agendas the final three weeks of the 115th Congress. President Trump keeping the door open to a partial government shutdown early next month if Congress fails to give him the money he wants to fund a border wall.

(BEGIN VIDEO CLIP)

PRESIDENT DONALD TRUMP: We are talking about the border wall. We are talking about quite a big sum of money, about $5 billion. And I think probably if I was ever going to do a shutdown over border security, when you look at the caravan, when you look at the mess, when you look at the people coming in, this would be a very good time to do a shutdown.

(END VIDEO CLIP)

GIGOT: Joining the panel of this week, Wall Street Journal columnist and deputy editor, Dan Henninger, editorial page writer, Kate Bachelder Odell, and assistant editorial page editor, James Freeman.

So, Kate, how lame will this lame-duck be? Or is it going to get something done?

KATE BACHELDER ODELL, EDITORIAL PAGE WRITER: Yes, Paul, I wish I could spread more holiday cheer this week but I think I'm expecting disappointments on all fronts. The Congress has a lot it needs to get done by the end of the year. As you mentioned, the appropriations process, also a farm bill, some openings for things a prison reform perhaps, if the majority leader is amendable, and then judges and nominations are also a big priority. We'll see but I don't think we should expect very much.

GIGOT: What about the shutdown scenario? Because Trump seems to be serious about it. And if he's ever going to get some money for this, probably would the best chance would be now before Democrats take the House. About two-thirds or so of the government is already funded for the next year. The shutdown would be less severe. Does that create an opening here that maybe we do get a showdown over this wall funding?

ODELL: I think it's very possible we do get a showdown over the wall funding, but I'm not convinced of the wisdom of that strategy, Paul. The Senate has agreed to about $1.6 billion for the wall and physical barriers and Donald Trump wants closer to $5 billion. My question is, as always, with shutdowns, what's the plan after the shutdown? If they were to agree to a short-term continuing resolution to move this to January, as you described, his hand gets so much weaker. So I think this is an opening to get as much as he can but I do not think beyond the $1.6 billion. The policy trade-offs that Republicans are going to have to make to get more money, I don't think they're very good if there even possible.

GIGOT: James, as I read it, the Democrats are saying, oh, you want your $5 billion, we will give it to you, but here is our list, A, B, C, D.  Protection from Robert Mueller, for example, or we want policy concessions on trade or other things. Is it worth the trade?

JAMES FREEMAN, ASSISTANT EDITORIAL PAGE EDITOR: I don't know if you have to make that trade. I think as you said the top, the president is in a strong position. The military is already funded. So the Republican constituency that might be against the shutdown is not really relevant here. You basically have a lot of left-leaning people who work in the domestic agencies who want to get paid.

(LAUGHTER)

Republicans historically have not done well in these battles.

GIGOT: Right.

FREEMAN: This president is the exception. And it was over immigration that the Schumer shutdown happened. It lasted a weekend. And Democrats didn't have the stomach for it. I think the president has some leverage here.

GIGOT: But that's because Schumer wanted it and advertised the shutdown.  Trump --

(CROSSTALK)

FREEMAN: They got calls all weekend from their constituents who depend on governments saying keep those checks flowing.

GIGOT: All right, Dan, can you mediate this dispute with Freeman?

DAN HENNINGER, COLUMNIST & DEPUTY EDITOR: It is not going to be easy. It is a lame-duck session. And it ends at the end of December. There are only so many days left in the congressional calendar. And Senate Majority Leader Mitch McConnell has a to-do list. Included on that to-do list are about 35 federal judges he would like to get confirmed and approved. He wants them through. You need votes on the House on the Senate floor to do that. And they're also going to try and negotiate the wall. The wall is really the tail wagging the dog here. Donald Trump insists on that wall.  All of the other spending and all the other activity that will take place in December is going to be affected by that.

And there's one other thing, one other of the president's pet projects, is criminal justice reform. That bill is out there, too. Mr. McConnell would probably rather do the judges than criminal justice reform but if Donald Trump forces a government shutdown, a lot of this, including the judges, will get pushed to the side.

GIGOT: But, Kate, on the judges issue, it looks as if McConnell does not necessarily want to get all of the judge's through. He has a couple that he wants to push but not as many as 35 in this Congress. And when they hold the Senate in January, they figure they can do it, they can get some more. Is that a fair summary of the facts?

ODELL: I think it is still shaping up, Paul. I think we can see more.  There's cloture on two as it stands that will be voted on after Thanksgiving. Like Dan said, there are more than 30 ready for a floor vote at any time. I think that should be the bare minimum that Congress does before heading home for Christmas. Probably a little earlier than the rest of us will start celebrating the holidays. There are also 20 more that are still awaiting a vote in the Judiciary Committee, that Jeff Flake has been saying he will hold up because of the Mueller investigation. He wants to vote on the protection bill, right? There's a lot of opportunity to get more judges done. And I'm confident we will see more than two. Depending on how the farm bill and prison reform, etcetera, shape up, hopefully we get at least 30.

GIGOT: All right.

And Robert Mueller. Trump submitted the answers to the questions. I think was a call not appearing in person with Mueller.

FREEMAN: Yes.

GIGOT: But Rudy Giuliani saying this is close to wrapping up. I don't have any confidence that that is true. I don't think we know that.

FREEMAN: Yes, it is a debate about how long you go without these long- sought collusion evidence. The government has now been at this for two and a half years. Mr. Mueller, specifically, a year and a half. I think it is reasonable to say, out with it, if you have a collusion case, let's hear it. If not, let's move on.

HENNINGER: Once again, the inevitable Flake footnote. Senator Jeff Flake, a lame-duck on his way out, said he will hold up votes on those3 judges unless he gets a vote on the Mueller protection bill.

GIGOT: And his leverage in the committee to do that. But I think basically, this is -- it's an unconstitutional provision. You can't tell a president not to fire someone who is an inferior officer.

HENNINGER: When has that ever stopped anyone in politics?

(LAUGHTER)

FREEMAN: And, you know, Jeff Flake surely knows that. This not really the way I think you should go out.

GIGOT: All right.

When we come back, trade tensions are high as President Trump prepares to meet with Chinese President Xi Jinping at next week's G-20 summit. Can the two sides reach a deal?

(BEGIN VIDEO CLIP)

TRUMP: China has been ripping off our country for many, many years. And they do not rip us off with me.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

TRUMP: China wants to make a deal very badly. They might not say that to you but they want to make it very badly. I have another $250 billion worth of tariffs to put on if we do not make a deal. And believe me, I will be putting them on.

(END VIDEO CLIP)

GIGOT: President Trump earlier this week warning that the U.S. will proceed with a threat to impose additional tariffs on $250 billion worth of Chinese products if Washington and Beijing do not reach deal on trade.  Signaling that tough negotiations are ahead as the two sides prepare to meet at the G-20 summit, which begins next week in Buenos Aires. President Trump and Chinese President Xi Jinping scheduled to sit down on the sidelines of that summit, their first face-to-face meeting in nearly one year. What should we expect?

Let's ask John Murphy. He's the senior vice president for international policy at the U.S. Chamber of Commerce.

Welcome back, John. Good to see you.

The president says China wants to do a deal badly. How do you size up the incentive on both sides to do a deal?

JOHN MURPHY, SENIOR VICE PRESIDENT OF INTERNATIONAL POLICY, U.S. CHAMBER OF COMMERCE: I think the administration has a good diagnosis about the industrial policies and trade practices that China has undertaken that are a problem. They deserve to be confronted. Specifically, the theft of intellectual property, the forced technology transfer policies. But so far it is unclear just how this is going to play out. This is a meeting where there hasn't been that much staff work to prepare for it yet. It is difficult to say that a deal is ripe. And U.S. trade representative, Bob Lighthizer, has released an updated report about the details of the industrial policies that suggest, in his view, it's not exactly time for a deal yet. So we may see this linger on for quite a lot longer.

GIGOT: It seems to me the president is correct in that the Chinese economy is feeling some pressure from the tariffs and slowing growth. No question that there's some capital flight out of China. And yet, if you look at the United States, we seem to be slowing down, too. You can see in the business investment figures that there's some uncertainty affecting business investment in the United States from trade. How do you diagnose on either side, the -- the weight of incentives to do a deal?

MURPHY: Right. I think that's absolutely right that, across United States, we are seeing the impact. In agriculture, China, historically, has been buying 30 percent of all U.S. production of soybeans, for instance, the top crop in the United States and that's been switched off this year.  So that has been felt. And other crops as well. For manufacturing as well, we are seeing a lot of the inputs that have come from China, raw materials and components that have gone into U.S. manufactured goods, are more expensive. Companies do not like talking about that much that their costs are going up but the pain is there underneath the surface, and you see it in construction as well where a lot of the input costs, you see prices rising.

GIGOT: The president needs a strong economy. If he goes into reelection year with two percent growth, a la Obama, or worse, I think he will lose.  So sooner or later, he's got to do a deal. It is something that -- for that reason, is this something that has to be done, a deal to remove the uncertainty on China trade in the early part of 2019 at the latest?

MURPHY: Certainly, pressure will be mounting. Because the tariffs that we're slapping on China are actually taxes paid by Americans. And that is why we at the chamber think they are the wrong approach. So we do think that this is going to linger on a bit longer. But the pressure is going to be there mounting I think day by day. Especially if after January 1st we see a lot of that 10 percent tariffs ratchet up to the 25 percent level.

GIGOT: Let me turn to NAFTA. The new NAFTA passed. The president signed it with Mexico and Canada. U.S./Mexico agreement, Canadian agreement.  Normally, you would think that would be something to be voted on in the next Congress. But Pat Toomey, the Republican Senator from Pennsylvania, has come out and said, with 11 other Republican Senators, Mr. President, sign the deal before the end of the month and get a vote on it before the end of the Congress. Is this realistic?

MURPHY: Probably not. As Senate Majority Leader Mitch McConnell says he doesn't think there's time. I think other trade leaders in Congress look at it that way. You would really have to have everything lined up. As you know, Paul, there are many other items on the agenda for the lame-duck session.

GIGOT: Right. Well, but I will tell you what, it looks to me that the politics of this are not going well for the next Congress. You're already hearing Democrats saying, well, OK, this bill, this NAFTA deal, we will look at it but you have to do several things before we even consider a vote. For example, you will have to tighten up the enforcement provisions.  You're going to have to do more on labor protections and environmental protections. The environmental lobby is lined up totally against it. And FLCIO is lukewarm on it. I guess my question is, is this going to have a hard time passing a Democratic House?

MURPHY: There certainly will be a lot of wheeling and dealing and a lot of talk about how to enhance the enforcement provisions in the agreement. We, at the Chamber, see a number of things you can do to prepare the way. One that we think is a priority is to lift the tariffs on steel and aluminum imports from Canada and Mexico. The administration pledged these would go away as soon as a new NAFTA deal was struck and, yet, still they are there.  We think that addressing issues like that could help build support across both sides of the aisle.

GIGOT: That would certainly increase support amongst some Republicans but that will not get you Sherrod Brown's vote in Ohio, for example, is it?  How many Democrats is that really going to turn?

MURPHY: I think that in the incoming House of Representatives, there are quite a few new members coming in, who are Democrats, who spoke out against tariffs. It was an interesting cycle in that sense. So it is too early to say. But there's interest in working on the trade issues on both sides of the aisle I think.

GIGOT: All right, John Murphy, thanks for coming in. We will follow this closely as we go. Appreciate it.

MURPHY: Thank you.

GIGOT: When we come back, the Trump administration stands by Saudi Arabia, taking an America First stance in the wake of the Khashoggi killing. So is that the right response?

(BEGIN VIDEO CLIP)

MIKE POMPEO, SECRETARY OF STATE: It's a mean, nasty world out there, but the Middle East in particular. There are important American interests to keep the American people safe.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

TRUMP: If we abandon Saudi Arabia, it would be a terrible mistake. They are buying hundreds of billions of dollars' worth of things from this country. If I say we do not want to take your business, if I say we will cut it off, they will get the equipment, military equipment and other things from Russia and China. Right now, we have oil prices in great shape. I'm not going to destroy the world economy and I'm not going to destroy the economy for our country by being foolish with Saudi Arabia.

(END VIDEO CLIP)

GIGOT: President Trump Tuesday defending the administration's support of Saudi Arabia, pledging to maintain its military and economic ties to the kingdom, despite news reports that U.S. intelligence has determined that the Crown Prince Mohammad bin Salman was directly involved in the murder of "Washington Post" columnist, Jamal Khashoggi, who was killed inside the Saudi consulate in Istanbul in early October. The U.S. sanctioned 17 Saudi officials in response to the killing, but many members of Congress, including Republicans, are calling on the administration to do more.

We are back with Dan Henninger and James Freeman.

Dan, what do you make of the president's remarks on Saudi Arabia?

HENNINGER: Well, I guess what we would call that, Paul, realpolitik on steroids, realpolitik being the idea that only practical concerns matter in foreign policy, only the interests of the United States matter. Everything else is secondary or perhaps irrelevant. There was a lot of realpolitik practice during the Cold War when we were fighting Soviet Communism. One difference here, the Saudis clearly have virtual knowledge that their intelligence murdered one of their own citizens in its consulate in Istanbul, Turkey.

GIGOT: They've acknowledged that?

HENNINGER: They have acknowledged that brutal murder --

(CROSSTALK)

GIGOT: -- whether MbS, Mohammad bin Salman, the crown prince --

HENNINGER: Right.

GIGOT: -- was someone who gave the order or did he, for example, say, yes, you can take him but -- and then, it just got out of hand.

HENNINGER: Yes, and the way this has developed, it would suggest that Mohammad bin Salman was the only person in Saudi leadership who did not know this was going to happen.

So it is a violation of the U.S. ideal. And in his statement, the president really gave no bow whatsoever to the horror of what happened here. This is a position that most public figures in the United States cannot defend. And I think our big concern over what the president has done is a lot of what he said about the Middle East was true. A lot of what he said about Iran and his threat is true. But by not acknowledging that there was a violation here of America's ideals, by not be more critical of Mohammad bin Salman, he makes it very difficult for his natural supporters in Washington, such as Senator Lindsey Graham or Senator Mitt Romney, to support his policy. It makes it more difficult to achieve his policy goals in the Middle East, which I do not think was his intention.

GIGOT: The statement of the national interest is real. Oil prices we care about. The Iranian showdown, and our alliance against Iran, we care about.  It is important. Also, arms sales, fine, good, OK. We can sell that. But it is the reductionist description of that in Trump's rhetoric that says that's all it is. That I think most Americans say, really, you know, we can't be more forthcoming in denouncing killing an opposition figure?

FREEMAN: Yes, we buy their oil and they buy our weapons. I think maybe it is not the most persuasive moral case for a lot of people. You saw in that Tuesday press conference where one of the reporters then asked about the moral case and that is when he went to I think the more compelling argument that Iran is even worse and this is essentially a counterweight to them.  But it is -- the crown prince and his regime obviously not making it any easier. Whether or not he actually ordered this killing -- and it is kind of interesting watching the political left now embrace the CIA's conclusions. Suddenly, the CIA is to be trusted at all times. Funny how that has changed, especially in relation to the Middle East analysis over the last two decades.

But I think what is a problem here is that the crown prince of Saudi Arabia has sold himself as a modernizer who wants his country to enter the 21st century, to adopt western-style tolerance, transparency, etcetera, and we are not seeing it. We are not seeing it here. We're not seeing it with "The Journal" news reports of women being tortured, essentially political prisoners inside Saudi Arabia. We would like to see the proof of modernization.

HENNINGER: Yes, I covered Asia, South Korea when it was run by a dictator, and they attempted to kill Kim Dejong (ph), an opposition leader. I was covering the Philippines under Marcos when Aquino was killed. That was in the Reagan years. What they did was they - obviously they continued to deal with those allies, those authoritarian allies. But there was an element of idealism and -- in the relationship and in the statements. And they distanced themselves from Marcos and they really squeezed Tin Jiwon (ph), for example, not to hurt Kim Dejong (ph). It was, you do not behave this way, is the message that we sent. I would hope that the U.S. would say that to Mohammad bin Salman, you do this again and there will be real consequences.

HENNINGER:  Well, I think they have to do that, Paul, because the relationship with Saudi Arabia going forward will be difficult now because MbS has shown some real errors in judgment. Yes, he's attempting to do exactly what James described in modernizing Saudi Arabia. But this was a real bad call on his part and he has made some others. I think that Secretary of State Pompeo, national security advisor, John Bolton, now have got to talk straightforwardly with MbS and say, look, we have got to have a better understanding of our relationship. It cannot be based on what we have seen.

GIGOT: All right. Still ahead, the Trump economy. The president is touting robust growth and low unemployment. But do trade tensions and market turmoil signal challenges ahead? We will ask a former Trump economic advisor, next.

(BEGIN VIDEO CLIP)

TRUMP: As a country, we are doing great. Our unemployment is at a record low. You look at all of these different statistics. I think the tech stock have some problems but that will come back.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

TRUMP: We have the greatest economy, one of the greatest economies we've ever had. And we've had it from the time -- and by the way, had the other side won, it would have been a disaster. You would have been down 4.2 percent instead of up 4.2 percent.

I think, on the economy, you have to give me an A-plus maybe.

(END VIDEO CLIP)

GIGOT: President Trump giving himself the modest grade of A-plus on the economy in his recent interview with Fox's Chris Wallace, citing robust growth and low unemployment. But amid trade tensions with China, stock market turmoil, and signs of global slowdown, are there challenges for the Trump economy ahead?

Let's ask Steve Moore. He served as senior economic adviser to the 2016 Trump campaign and is co-author of new book, "Trumponomics."

Steve, good to see you.

STEPHEN MOORE, FORMER SENIOR ECONOMIC ADVISOR TO 2016 TRUMP CAMPAIGN & AUTHOR: Hi, Paul.

GIGOT: How would you define Trumponomics?

MOORE: Trump is not ideological like Reagan was. Reagan was an ideological conservative.

GIGOT: In the sense of believing in free-market principles.

MOORE: Well, just having also an understanding of the conservative movement and having read Bill Buckley and things like that. Trump is not ideological. He's a common-sense businessman. And one of the points we make in the book is that he just addresses -- he sort of brought business principles to the White House and, fortunately, those are kind of common- sense principles, get taxes down, get government off to back of business, reduce regulation that we don't need. But he's also -- you know, he also is very pro-worker. I mean, that's the one thing I think people don't - people, oh, he just cares about rich people and so on. I mean, every conversation that Larry Kudlow and I and Art Laffer would have with him on the campaign, we say, OK, we would suggest a policy, well, how is that going to affect the steel worker in Bethlehem, Pennsylvania, or the coalminer in Charleston, West Virginia, or the auto worker in Flint, Michigan. He knows who brought him to this dance and he's very hyper concerned about those workers.

GIGOT: I would argue that Reagan cared about those people --

MOORE: Of course.

GIGOT: -- deeply about those people.

MOORE: Yes. The obvious example of where he's not free-market ideological is on trade, right?

GIGOT: Two big places where I see a difference with most conventional conservative economists would be trade and immigration.

MOORE: Yes.

GIGOT: Because most conservative economists, I think you agree, think you need people to work and we have a labor shortage now.

(CROSSTALK)

GIGOT: And that's hurting in some areas. And then, on trade, a tariff is a tax. And a tax -- you tax something, you get less of it. He doesn't have problems with either of those.

MOORE: So I will make a point to you that you may not like to hear, but I believe those were the two issues that probably won him the election. The fact is -- and by the way, you know me, I'm pro-immigration and pro-trade, but that message doesn't sell very well in a lot of these Midwestern states. People really believe that it was the Chinese or the Mexicans that were responsible for, you know, their factories leaving. And so Trump used those issues to great effect to win -- to crash through --

(CROSSTALK)

GIGOT: OK. Even if I accept that, and I think I might dispute it --

(CROSSTALK)

MOORE: Let me make the point. Some people say, well, you and Larry, you were selling out your principles. No, we told Donald Trump we disagreed with him on those issues. But he basically -- you know, one thing, Trump is very transactional. He bases - OK, we can agree to disagree on that. I want your help on tax cuts and deregulation.

GIGOT: I want to talk to you about tax cuts, because you follow in the book, you follow the debate over taxes.

MOORE: Yes.

GIGOT: But I know from my own reporting, in the summer of 2018 -- 2017, Donald Trump was saying, why not 44 percent top marginal tax rate. Steve Bannon was pushing that inside.

MOORE: He was.

GIGOT: And it was only the Republicans in the House and Senate who said, Mr. President, no, no, no, you have to tax cuts across the board and it will ultimately prevail. So my question is, if he is that transactional, and now he goes into a congressional session with Nancy Pelosi in the House, is there a danger that he says, oh, taxes, let's raise them?

MOORE: Look, I don't think so because, look, again, Trump isn't ideological but he understands his conservative base. I think he does understand, look, if I start raising taxes and do things that alienate my voters, I'm not going to win in 2020. He may make some deals with Pelosi but he's not going to -- he's not going to give up these kinds of core principles that helped win him an election. The tax cut was big election issue for Trump. I still think --

(CROSSTALK)

GIGOT: I would argue that it helped him when the election, too.

MOORE: You don't think the tax cuts helped him?

GIGOT: It did. It helped him enormously.

MOORE: Yes.

GIGOT: Yes, that's what --

(CROSSTALK)

MOORE: And, look, I think the polling is wrong. People -- in 2020, when the Democrats run on repealing the tax cuts, that's not a winning issue for them. People understand that they've got more money in their pocket but --

GIGOT: Would he be willing to do a deal? Somebody asked him in the press conference recently, well, if you want that middle-tax class cuts you are talking before the election would you make adjustment in the raising rates on Steve Moore?

(LAUGHTER)

GIGOT: So would he do that?

MOORE: No. I don't believe he would.

(CROSSTALK)

MOORE: I believe he understands that -- he understands that the people in the top 1 percent are small business owners. That was the other thing that Trump used to talk about all the time on the tax cut. You've written a hundred editorials on that, right? About the gap between our rate and their rate.

GIGOT: Yes.

MOORE: And he'd say, yes, I get that. But he would say, what are we going to do for the small businesses, the 27 million small businesses. That's why we cut the highest income tax rate on the individual side because that's the tax that the small businesses are paying.

GIGOT: Let's talk about the economy now because there's real signs of a slowdown. Business investment is a little shaky right now. What's going on?

MOORE: Well, look, I'm not -- I'm still pretty bullish on the economy. I think we will get 2.5 percent growth for the fourth quarter. House is --

(CROSSTALK)

GIGOT: That's down from --

MOORE: I know it is. I know it is. But, you know, still, for the year, we will come in at 3 percent to 3.5 percent growth. And I don't believe these forecasts by the Goldman Sachs people who predicted the last two recessions, that say recession's around the corner. The left looks at the situation today, they can't quite understand how it is Trump's policies have created this prosperity. So they have fallen back on this position, it's just Keynesian sugar high.

GIGOT: Sugar high.

MOORE: Right. The problem, number one, it isn't a Keynesian sugar high.  Number two, the tax cut doesn't -- it's not like it expires next year. We have at least five more years of this. My view is this tax cut is just starting to kick in.

GIGOT: You have trade problems, you have the slow growth abroad, and the trade uncertainty is affecting investments.

MOORE: Absolutely. No question about that. But I'm going to give you the positive twist on this. If Trump prevails on China -- and I am an outliner on China, as Trump is. I think China is a bad actor. I think he has to win here. I think he is going to win. I don't if it will be three months or six months or nine months. But if he can get that deal, Paul, that starts to open up the Chinese market to us and stops the stealing, you're going to see the biggest boom you ever saw. So if this has a positive outcome, I think it's good for the economy and workers.

GIGOT: All right, thanks very much, Steve.

MOORE: Thanks, Paul.

GIGOT: Good to see you.

Still ahead, Facebook under fire. Reports of management turmoil as the company struggles to respond to recent controversies.

(COMMERCIAL BREAK)

GIGOT: Facebook and its executives are under fire amid claims that the company failed to effectively combat fake news and Russian political meddling on its platform. A recent New York Times story accused Facebook of attempting to deflect blame over Russia's election manipulation and revealed that the social media giant hired a D.C. consulting firm with Republican ties to plant negative stories about its competitors and critics.

We are back with Dan Henninger, James Freeman, and Wall Street Journal editorial board member and Facebook follower, Allysia Finley.

Allysia, why is the press and the media suddenly so hard on Facebook?

ALLYSIA FINLEY, EDITORAL BOARD MEMBER: I don't know if it's suddenly, all year they have been attacking Facebook partly because of the news that Facebook or Russian agents used Facebook to promote fake news, disinformation that may have benefited Donald Trump.

(CROSSTALK)

GIGOT: You don't --

FINLEY: No. I think the Russians spent about $100,000 to make 3,000 ads.  That did not in any way determine the outcome of the election or even probably influence it.

GIGOT: Just a drop in the ocean of all the media coverage in 2016.

FINLEY: That's right.

GIGOT: Now, what about these recent management problems?

FINLEY: Well, I think what we are seeing or what we are reading about is Mark Zuckerberg really doesn't have control over his company, in terms of he doesn't know what's going on. He even said that. Like, how do you expect me to know what's going in a company with 10,000 employees. I can't. Right? He claims he was unaware that they had hired this P.R. firm in D.C. to push back against critics. I wouldn't call it opposition research firm that the left does, but he was unaware that this -- that they had hired it.

GIGOT: You're arguing that, given the political stakes here, this is something that a CEO should certainly have a handle on?

FINLEY: I think that's exactly right. And certainly his chief operating officer, Sheryl Sandberg, who was brought in to manage P.R.

GIGOT: Our colleague, Holman Jenkins, Dan, says that Facebook is a scapegoat for the Russian election, for Donald Trump's victory.

DAN HENNINGER, COLUMNIST & DEPUTY EDITOR: Well, yes. And I think Holman also said that Facebook is essentially a scapegoat for all the problems of society now.

(LAUGHTER)

But you know what? He --

GIGOT: James would agree with that.

(LAUGHTER)

HENNINGER: Mark Zuckerberg himself said earlier this year, when you connect more than two billion people -- the number of Facebook people -- you will see the good and bad of humanity. Well, that's right. And you know what Facebook's revenue was last year? Over $40 billion. I mean, Mark Zuckerberg, with Facebook, basically captured the sun. He's got the whole world, you know, coming onto Facebook, making all the revenue.  That's all they do now. And now he has to figure out a way to manage it.  It's not clear to me, Paul, that this is company is indeed manageable because they want him to be in charge of fake news, they want him in charge of trolling content, and so forth. Yes, all of bad of humidity does show up on social media. And how is Mark Zuckerberg supposed to control all of that?

GIGOT: They wanted to take -- they want to profit from content that they get, good and bad, including high-quality content from the Wall Street Journal. But they don't want to pay for any of that content or take responsibility for it.

JAMES FREEMAN, ASSISTANT EDITORIAL PAGE EDITOR: Well, that would suggest the business model is working pretty well.

(LAUGHTER)

Maybe Mark Zuckerberg is onto something here.

GIGOT: But can it last, I think, is Dan's point.

HENNINGER: Yes.

FREEMAN: I don't know. I mean, part is this anger on the left that they haven't embraced the Russia collusion theory to Facebook's great credit.  They're kind of acknowledging it now in an effort to improve P.R. relations. But they shouldn't. They should continue to point out that it really didn't really affect the outcome in 2016.

As far as business model generally, they have had a phenomenal run by having all of us trade our personal data to them in exchange for free services, which many people around the planet enjoy. So I think consumers ought to be very skeptical of any Washington deal that tries to rein in Facebook, whether on privacy or anything else. It's probably going to end up being great for Facebook and not so good for potential competitors --

(CROSSTALK)

GIGOT: What about the content differentiation. Do they have to start to behave more like a publisher?

FINLEY: I think the question is if the government will force them to.  They are really loathe to do that. They don't want to have to make decisions whether something is, quote, unquote, "fake" or misinformation versus real or conveying actual news. Partly, that's going to unleash criticism that they have censoring, which they don't want, but on the other hand, they are going to invite political scrutiny if they don't.

GIGOT: Going to be fascinating to watch.

Thank you.

When we come back, Education Secretary Betsy DeVos under fire from the left for her newly released proposal on campus sexual assault. We will tell you what's in the guidelines, next.

(COMMERCIAL BREAK)

GIGOT: Education Secretary Betsy DeVos released her long-awaited proposal to overhaul how colleges and universities handle sexual misconduct complaints. And reaction from the left was swift, with California Democrat Maxine Waters claiming it amounts to the destruction of civil-rights protections for students. And former Vice President Joe Biden saying it would return us to the days when schools swept rape and assault under the rug. So what exactly is DeVos proposing?

Wall Street Journal editorial page writer, Jillian Melchior, is here.

Jillian, you followed this. What -- what are the key proposals?

JILLIAN MELCHIOR, EDITORIAL PAGE WRITER: So I think the most important thing is that every single campus hearing about sexual assault or harassment is going to have cross-examination now. That's really important because you want adjudicators to be able to ask hard questions and view the demeanor of somebody as they are making assessment about credibility.

GIGOT: That was frowned on before under the old Obama guidelines?

MELCHIOR: It was. It was viewed as something that would subject the victims to re-traumatization. But again, this is really important. I think we're seeing through the entire Title IX reform a focus on due process, a focus on truth finding and --

(CROSSTALK)

GIGOT: Title IX being the law that applies to education, schools that get federal funding.

MELCHIOR: Exactly.

GIGOT: OK, so cross-examination. There was a Sixth Circuit Court, a federal appellate court ruling saying it was required in the case of the University of Michigan so DeVos in that sense is following court precedence.

MELCHIOR: Yes, I think so. There's been several Title IX John Doe cases brought by students who said they were accused of sexual assault and deprived of their right to an education without due process. I think this is something that we're seeing increasingly work its way up through courts.

GIGOT: One thing she didn't change though was the preponderance of evidence standard, which usually means basically more than 50 percent or more, 51 percent, proof that something happened. She didn't go to a clear- and-convincing standard which is sometimes used in courts, much less a beyond-a-reasonable-doubt standard. Why?

MELCHIOR: Preponderance is the standard used in civil cases. The argument there is you have other due process protections so it's sometimes OK. But even with this reform, we are not seeing all of the due process protections. I think this was a compromise move to try to get some of her cross-examination evidence rules, other things through. This was the bone that she threw to the left. But I don't think they are taking it. I don't see --

(CROSSTALK)

GIGOT: She's not getting credit for it.

MELCHIOR: She's really not.

GIGOT: Why not? Since when is the left against cross-examination of accusers?

FREEMAN: It's kind of amazing how bedrock principles have become controversial, suddenly. Lately, due process, the right of the accused to --

(CROSSTALK)

GIGOT: To confront their accuser.

FREEMAN: To confront their accuser, people to be cross examined, the search for evidence. I think you would say maybe if it ought to go further in the DeVos vain. One question is, why are these questions for college administrators. These are legal matters. If it is an assault, it should be handled by law enforcement, not by college administrators setting up some kind of sort of legal judicial process, but not really. So I think to the extent these cases, whether civil or criminal, can be move into the law enforcement arena where they belong, I think that would be --

(CROSSTALK)

GIGOT: I guess -- Dan, what do you think of that? Because I guess the argument would be, look, you are attending our school, the question we get to decide is whether or not you can continue to attend the school.

HENNINGER: Well, that's true. What has to be understood here is that what the Obama Education Department -- the Obama Education Department was full of lawyers who had come out of law schools, left-wing jurisprudence, was arguing that in certain kinds of cases now, such as sexual assault accusations, due process should be altered or modified. So the preponderance is believing the victim. And that's what they did in the Title IX guidance. This is indeed a parallel system of justice. The question is, would they just stop at sexual assault or would they start pushing into other areas of criminal justice, such as white-collar crime.  And I think the answer is no, they would not, as we saw in the Kavanaugh hearings, where due process was simply set aside by the Democrats.

GIGOT: What happens now, Jillian? Will this go forward with the Education Department?

MELCHIOR: It's open for notice and comment right now. It's going to face a ton of controversy. But I hope DeVos stays strong on this. Reading through it, some of the things they had to specify, you have to consider exculpatory evidence and inculpatory evidence, that you can't be a bias adjudicator. These things are so obvious and so fundamental to any American notion of justice that I think it is important to stand up for them on campus.

GIGOT: All right, thank you, Jillian.

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

(COMMERCIAL BREAK)

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

Kate, first to you.

KATE BACHELDER ODELL, EDITORIAL PAGE WRITER: Paul, I'd like to give a hit this week to promising results in an experimental drug for peanut allergies. Paul, the point is not for the drug to be able to allow people with severe allergies to eat a bunch of peanut butter but this drug could allow patients to avoid severe allergic reactions from trace elements that might be in Kit-Kat bar or something. This could be a huge game-changer for day cares and schools and other places that are on constant high alert for peanut allergies. I hope the president takes a look at this good news and says, I don't want to do anything to lower the incentive to bring new cures to market.

GIGOT: All right.

Dan?

HENNINGER: I'm giving a potential hit to Senator Lindsey Graham, the South Carolina Senator, who became the stuff of legend with Jeremiah against the Democrats on the Judiciary Committee during the Kavanaugh hearings. He's about to become the chairman of that committee, which puts him in charge of the Justice Department, the FBI, the nation's judges. And I think this is something worth watching. It could be interesting. But it really will be entertaining.

GIGOT: All right.

Allysia?

FINLEY: A miss to Stacey Abrams, the Democrat who ran for governor in Georgia. She finally made a non-concession concession speech this last week, basically blaming systematic disenfranchisement for her lost. Voter turnout had a record high this last midterm, 90 percent higher in Fulton County around Atlanta. What she's really trying to do is stoke minority turnout. But the price is going to more cynicism and just political polarization.

GIGOT: More turnout for when she runs again maybe in 2020.

Jillian?

MELCHIOR: I've got a hit at my own expense. So Hasbro came out with a game. It is called Monopoly for Millennials and the motto is: Forget about real estate, you can't afford it anyway. And instead, Millennials collect experience points. You want to be the first to crash on your friend's couch or find a vegan restaurant or go to a yoga retreat, that sort of thing. The game pieces are actually, instead of the classic ones, emojis, hashtags. It's the most Millennial ever. But I went and bought one. And it was selling for 20 bucks at first, now it's selling for $75. So a lesson in supply and demand.

GIGOT: Play it at home at Christmas.

That's it for this week's show. Thanks to my panel. Thanks for watching.  I'm Paul Gigot. Hope to see you right here next week.
 
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