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May 20, 2005



PAUL GIGOT: Welcome to THE JOURNAL EDITORIAL REPORT. What does President Bush need to do to make sure Congress takes him seriously, and doesn't treat him like a lame duck? What does he need to do to get the federal judges he wants? And aside from wine lovers, who might benefit from this week's Supreme Court decision on direct wine sales across state lines? Those are some of the questions raised by developments this week, and joining me for our quick takes on this week's news are: Dan Henninger, columnist and deputy editor of the Wall Street Journal editorial pages; Kim Strassel, a senior writer for the editorial page; and Jason Riley, also a senior writer on the editorial staff.

This week the Senate defied President Bush's spending limits on the highway bill -- voting 11 billion dollars more than the president wanted, which was already generous. Mr. Bush has threatened to veto any bill that exceeded his spending limit, but even Senators of his own party don't seem to care. Jason, is there any hope of enforcing spending restraints?

JASON RILEY: Well, it looks like it'll be up to President Bush. His ceiling for this bill -- 284 billion dollars -- is as you said very generous. It's 35 percent more than the last highway bill. This comes up every six years. And what the Senate did this week undermines all the rhetoric from Republicans about bringing spending under control. This bill is just a spending bill. It's not about roads. This is about museums and bike paths and hiking trails. It's just become -- there's no policy debate going on any more around this bill. It's just let's shove as many earmarks on there as we can. If the president doesn't show he's serious in vetoing this bill, if it doesn't come in below his limit or at his limit, he'll open up the floodgates. They'll walk all over him for the rest of his term.

DAN HENNINGER: You know, I think one other thing here, Jason, is there's so much public cynicism about this kind of spending. And I think the president is risking some real damage to his reputation, because whatever else, people believe George Bush is a strong, credible leader. If he backs off on this veto I think he's going to take a hit.

PAUL GIGOT: One reason the Senate did this is because they don't believe the president will veto. They don't take him seriously, because he hasn't vetoed anything yet and Jim Inhofe, the senator from Oklahoma, and Kit Bond, the senator from Missouri, went in and the White House said, "Look, we're going to veto it," And they said, "So what."

All right. Senate majority leader Bill Frist got his picture taken with two of President Bush's nominees for the federal bench, a photo opportunity in the power struggle between Republicans and Democrats over who controls the selection of federal judges. A show-down grew closer over whether Senate rules should be changed to prevent filibusters, and force an up or down vote on the President's nominees. Dan, can there be a compromise here, and should there be a compromise?

DAN HENNINGER: Well, I think if you're Harry Reed and the Democrats, the answer is yes and yes. You know, Reed and the Democrats have gotten to the point where they have invested a huge amount of political capital in this fight. And it's really, let's face it, over second level Appeals Court nominations. They've got the big mother of all battles coming up over one, or maybe two Supreme Court nominations. And they probably want to reserve the filibuster for that, if anything. They're going to need a lot of public support if they want to oppose a Supreme Court nomination, and I think the public is disaffected over this battle and that the Democrats have to find a way to get past this fight that they're in right now, and that probably means a compromise.

PAUL GIGOT: I'll tell you, there's some peril here for Republicans in the Senate, though, too, Dan. Because if they go up and put these nominations on the floor and the Democrats do filibuster and Republicans don't have the votes to make the rule change, it'll be a real blow to them. And I think a lot of Republican voters will feel that, ask questions on whether this is a coherent governing majority.

JASON RILEY: And it's important to remember that this is, for all the talk and all the discussion in the country, just a rule change. And the filibuster rule has been changed before. It's not sacred. It's been altered before. But the president's ability and authority to name judges is in the Constitution.

PAUL GIGOT: Well, and this is probably, I would argue, the most important issue for an awful lot of Republican voters, more important than Social Security, more important than even tax policy or a lot of cultural issues. All right.

It used to be okay to buy wine on the Internet only if you were buying within the same state. Now the Supreme Court has ruled that states allowing that kind of direct sale cannot prohibit direct sales across state lines. Kim, this seems to be a victory on many fronts for Internet commerce.

KIM STRASSEL: Yeah, I mean, pop the cork. This is a great decision. The people who always defended these laws like to make the argument that they were doing it to protect minors so that they couldn't buy wine on line. And they were always undercut in that argument by the fact that you could buy online within the state. I mean, the [UNINTEL] laws, these laws were only meant for one purpose, which was to protect these in-state liquor cartels, these wholesale distributors who have complete control over the way that wine is distributed and didn't like being cut out of the process. So this is great news for wine lovers, who are going to have much greater choice and at much better prices, and for all those hundreds of flourishing wineries around the country who are suddenly going to have a much bigger market.

PAUL GIGOT: Especially small wineries, which can now use the Internet when they couldn't before.

JASON RILEY: I'm curious to find out in the follow-up on this, what states decide to do. Because to be in compliance, you just can't discriminate. In other words, states could come into compliance by banning direct sales of everyone, out of state and in-state wineries. And these distributors that have been pushed aside in this decision might exert their authority in some of these states and get their way. I wouldn't be surprised if these states just simply ban all...

KIM STRASSEL: [OVERLAPPING] I think you'd have a lot push back from your in-state wineries, too.

JASON RILEY: Yeah, you're right.

PAUL GIGOT: All right, next subject.