This week on the journal editorial report. President obamas green agenda, promised to make Climate Change a priority in his second term and why it may end up costing you big. And Phil Mickelson, pro golfer, says that high taxes may drive him out of california. Weve got discussisuggestions w should consider if he moves. And Hillary Clinton, her legacy as she prepares to leave washington at least for now. Now. We will respond to the threat of Climate Change, knowing the failure to do so would betray our children and future generations. Paul welcome to the journal editorial report, im paul gigot. That was president obama in his inaugural address monday, promising to make Global Warming a top priority in a second term, its an issue that is sure to bring some fierce policy showdowns, the first of which may come under the keystone xl pipeline since 2008. And a revised route through nebraska this week, the final hurdle to the project at the state level and 53 senators, including 9 democrats sent a letter to the white house on wednesday urging president obama to expedite its approval. And joining the panel this week, wall street journal assistant page editor, James Freeman and senior Economics Writer steve moore and washington columnist kim strassel. Kim, where did that come from . I dont remember the Climate Change being something that the president talked a lot about in the campaign if at all. Surprise. Paul and he didnt wait for the state of the union, its in the inaugural address. So, whats going on here politically . Well, i think some of us did think it was coming. Remember, this was a high priority of his back in 2008 when he campaigned. But they got beat up on it, they lost that fight in 2009 so he they decided to put it aside and not talk about it in the election and here we are, back with his promise and what was more interesting, too, not only did he make that promise, but you had somebody like barbara boxer, whose the senator from california, big climate person, she gave some details, too, how they intend to pursue this, normally through the epa for a carbon Regulation Program and thinking of putting in place a carbon tax. Paul oh, well, well talk a little about that. Steve, so is this really a regulatory agenda . I dont think that cap and trade, the old program can pass even a democratic senate. It couldnt the first time when they controlled everything. Yeah, theres a reason that president obama almost never mentioned the words Climate Change and cap and trade during the the campaign, paul, because theyre political losers, theyre big tax increases on workers, on union workers, on manufacturing workers, and so, the democrats have avoided that issue now that theyve won this election, theyve sort of sprung it on people and i dont believe the votes are there in the United States senate or the house to pass anything like the carbon tax, or the democrats are talking an energy tax, like a gasoline tax, kim is right. If theyre going to do this, through the regulatory angle and outlaw in that way. Paul but then, james, why mention it so prominently, or was this sort after bait and switch for the environmentalists and mention it and in policy terms dont. There may be some bait and switch, but this is key. If he doesnt need to get anything through the congress, like the potomac swatch kim strassel. So well. They think that they have a Court Decision a few years empowers them to regulate carbon. They think theyre off to the races here and this suggests to me that maybe the play is, with all of the Business Community expecting an approval of the keystone pipeline, the president might approve the pipeline, but then really ratchet down on the use of the oil going through that pipeline and i think he might be able to say to environmentalists. Paul how would they do that, they wont build this thing if they dont think theres a lot of oil that go through it. Certainly the people that want that oil are expecting a big market, but if hes at the end of that pipeline, once it goes out into the economy, if the president is severely restricting how its used, how its used in transportation, and in manufacturing, as smart b senator boxer had said he could say look, the end user is going to get hit hard and he reduce Energy Consumption and provides the construction jobs for the pipeline. Can i make a related point here, paul, about the pipeline and carbon change. Its interesting if you really care about Global Warming and you want to reduce carbon emission, there is no question the most important thing america can do would be to transition towards natural gas, a huge abundance of. It is cheap, it is abundant in the United States and it does not emit many carbons into the atmosphere and yet, the left is against that, too, and yet we need pipelines to get the natural gas to the markets. Thats because the natural gas would take the place of coal which is a much bigger carbon in terms of electricity. And energy. And is that what hes talking about maybe get keystone going and allow fracking to go ahead and a tax, potentially a huge revenue raiser, but if you start small on it, you raise a lot of of money, but over time, you can ratchet that thing up. Yeah, assume thats the winwin play for the president. Because look, what hes got to balance here is making his environmental left happy, which he did by putting out the comment that theyre going to address the climate threat, but hes sitting on top of this huge new boom in natural gas and oil and we saw in the election that he wanted to take some credit for at that. So, one way you could potentially do both of these things, do you green light some of the natural gas and oil projects and on the other end try it get an energy tax or something that makes it look as though theyre ratcheting down on use and you get the bonus of a huge new revenue stream for the country, if youre a democrat. Paul are republicans going to go along with this . Are they going to buy an energy tax if the president pushes it . Oh, hell no. I dont think it gets any republican votes and look, you know, the president talks, hes going it talk state of the union, we need more investment, we need more infrastructure in this country and here weve got an infrastructure project, it doesnt cost the government virtually a dime, its private sector money and yet, theyre upholding it and it doesnt make sense. Paul still ahead, pro golfer Phil Mickelson under fire after suggesting he may leave california for a more tax friendly local. Some states he might want to consider when we come back. E. Little did i know that one week later i wasnt smoking. [ male announcer ] along with support, chantix is proven to help people quit smoking. It reduces the urge to smoke. Some people had changes in behavior, thinking or mood, hostility, agitation, depressed mood and suicidal thoughts or actions while taking or after stopping chantix. If you notice any of these stop taking chantix and call your doctor right away. Tell your doctor about any history of depression or other Mental Health problems, which could get worse while taking chantix. Dont take chantix if youve had a serus allergic or skin reaction to it. If you develop these stop taking chantix and see your doctor right away as some can be lifethreatening. If you have a history of heart or blood vessel problems, tell your doctor if you have new or worse symptoms. Get medical help right away if you have symptoms of a heart attack. Use caution when driving or operating machinery. Common side effects include nausea, trouble sleeping and unusual dreams. It helps to have people around you. They say, youre much bigger than this. And you are. [ male announcer ] ask your doctor if chantix is right for you. Pro golfer Phil Mickelson caused a stir last weekend for suggesting he may leave his home state of california in search of friendlier tax climbs. And bothers there passed proposition 30 making california the state with the highest marginal tax rate in the country and add that to what mickelson will pay uncle sam after the fiscal cliff tax increase and its not hard to see why he may be shopping for a new place to live. James and kim strassel are back and with states he may want to consider and Phil Mickelson did the mea culpa and said i shouldnt get involved in tax talks and probably hurt his brand, but where should he move if he and the family decide to move . He may have more options, and more states consider getting rid of their income taxes, but the place tore golfers, for athletes in general is florida. It has no income tax, and obviously golf weather almost the entire year and sometimes the whole year depending where you live in florida. Paul no state tax. Arod put his house on the market. And if phil is shopping. Alex rodriguez. The new york yankees and theres another arod who is more important. And anyway, texas, nevada, if he wants to go to vegas, a lot of golf courses there. So, i think this is this is bigger than Phil Mickelson is the problem california is having, kicked the rate to 13. 3 , a lot of people are looking elsewhere. Paul steve, theres a lot of tax action in the states, tax reform, thats pretty interesting. A lot of governors tryin even eliminate the income tax, louisiana, kansas, nebraska, tell us whats going on and why . A great story and by the way, james, 63 of the great golf score, but it aint so good as a tax rate and thats what Phil Mickelson states, and the big story here, a lot of states have been looking at whats happening in places like texas and in places like tennessee, im in nashville, tennessee, today its boomtown, usa. States that have no income tax and the evidence is irrefutable that businesses and capital and families are moving out of those high tax states like where you live in new york and moving to these no tax states. He so youve got a number of places like north carolina, like arkansas, like kansas and oklahoma and the south and southwest, that say, you know, we dont want to be like california we want to be like texas and theyre looking at eliminating their income tax. Paul okay, steve, but what about the revenue losses . That will be the big complaint if you give that up youre going to lose revenue. How do you make it it up . A great question, a lot of states say well expand and maybe increase sales tax and thats been a political hazard if it hasnt worked well in places that tried that. I want to toss out another idea that some states are looking at. Why not use this bonanza of money from the Energy Revolution we talked about a little bit earlier and use some of that money in terms of severance taxes to raise and royalties and use that to replace the income tax. Thats how wyoming and alaska got rid of their income tax. Paul and you say the swap from income to sales tax doesnt work, you mean politically. Politically. Paul economically it makes sense because youre taxing consumption instead of investment and work and effort. Thank you for clarifying that, its an important point. What i was saying, sometimes its a hard sell to the people saying when you go to the 7eleven or to the Grocery Store might have to pay a higher tax. And people saying maybe ill take the devil i know, income tax, over the devil i dont know. The higher sales taxes. Paul and meanwhile, kim movement in the opposite direction in the states that are controlled by democrats, and Massachusetts Governor patrick, proposing a big tax increase and something similar in minnesota and follows california, illinois, new york, maryland, virginia under mark warner and connecticut, a lot of socalled blue states which raised taxes substantially in the last couple of years. The remarkable thing about tpaul, the evidence is there about what a disastrous policy this is. You know, you have the example of Phil Mickelson saying that he would like to look at a new place to live and we actually have the numbers showing that this is exactly what happens when you do raise, you know, maryland raised its taxes on millionaires as they called it and you know, the next tax year, most of those higher income job creators in the state had fled for others. And probably some of the states were talking about looking to in fact decrease income taxes. So its the wrong direction, but these states feel as though theyre under enormous bugetary pressures and the way to keep spending is just tax more. Paul is this somebody that would give somebody like louisiana governor bobby jindal, sometimes mentioned as a president ial candidate, some carry if he decide today run. Absolutely, absolutely and some of the reform governors because the reformers of a couple of years ago Chris Christie in my beloved adopted home state of new jersey has backed off the tax he reform issue. The problem is, new jersey still has high, almost 9 rate and its not going to help him. I think to the extent that bobby jindal comes in, hes proposing reforms on the tax side could become a name on the republican side. Paul its almost like the red states, you know, the republican states in the south, theyre practicing raieagan omices and the blue states obamanomics, the great thing about america, well see and the experiment of which states will prosper and im going to put my money on the south. And massachusetts is exploding health care costs. Thats right. Paul when we come back, Hillary Clintons swan song as she prepares to leave washington. A look at her final performance and her future in politics. With handlayered pasta, tomatoes, and real mozzarella cheese. But what makes us even prouder. Is what our real dinners can do for your family. Stouffers. Lets fix dinner. The fact is, we have four dead americans, was it because of a protest or was it because of guys out for a walk one night and decided theyd go kill some americans . What difference at this point does it make . An oscar caliber performance from outgoing secretary of state Hillary Clinton this week as she testified on capitol hill about the september 11th attack in benghazi that killed u. S. Ambassador Chris Stevens and three other americans. And wall street editor Matt Comiskey joins us and first lets answer the secretarys question, what difference does it make. And the question, why were we misled who was responsible for the death of the ambassador and three others, the first ambassador killing in decades tan the fact mislead they didnt mislead, a story out there, the story. The youtube video. Does it matter that this was, now we know almost certainly, an organized terrorist attack. Of course it does, that speaks to the tactful fact that we failed in libya and we saw the islamist militias. And we didnt want to play a role. We subcontracted. Yeah, and in qatar, we dont want to be involved, after the war stepped out and the same in mali and afghanistan now were pulling out and iraq weve totally pulled out so the question of accountability. She did a very good job to give her credit, secretary clinton credit, any major damage to her own political chances, but the question is unanswered and should be answered. One of those questions why we have that lightfoot print and we we didnt anticipate that attack and why the United States wanted to wash its hands of libya . Exactly, those questions, those other questions what, did president obama do that day . What options were being considered to try and help the compound in benghazi and the cia annex next door in the city . You know, why were there safety plans in place to help americans in case something happened in a war zone. Paul matt, i have the impression that most of the republicans, with the exception of ron johnson and marco rubio, werent prepared for this hearing. They didnt dig hard, didnt ask good questions. John mccain gave a speech and. Right. Paul hes got authority and rand paul gave a speech, but nobody really dug in to answer those questions and thats one of the reasons she emerged, i think, with unscathed. Exactly and the democrats have the time sort of said Hillary Clinton looking toward 2016 where shell probably run. Paul well, no question about that, i think she will. That doesnt bode well at all for the chuck hagel hearings, republicans talking theyll give him a tough time as a nom fee for defense secretary. What they really failed to do here, paul, not just have a response or press her on the big things and move her off the talking points on the questions that you just asked, but also that bigger question about putting and placing benghazi within the scope of a broader failure of foreign policy. And thats going to have to be what theyre going to do if theyre going to talk about chuck hagel. Highlight the obama failure in this area and that chuck hagel is going to be a yes man for that strategy. If theyre not able to do that in a hearing like this, theyve been pressing for for months, it does not bowed wede for her and what about her state and benghazi now a negative concerns and arms control deal with russia, you were not enamored of, i recall. Overall, whats her legacy . Shes one of the most traveled secretary of state and diplomacy to her credit well. And sort of a famous figure who went to many countries. In terms of her influence on obama policy or much of any sort of achievements, its impossible to me to point to anything and whats more remarkable about the hearings, that she sounded very hawkish and america must lead in north afri africa, we must halt the spreading you cant have a vacuum, but thats the policy that the administration has been following. And shes still in it. Thats a preview of 2016, all right . We have to take one more break. When we come back our hits and misses of the week. When you have diabetes. Your doctor will say get smart about your weight. I tried weight loss plans. But their shakes arent always made for people with diabetes. Thats why theres glucerna hunger smart shakes. They have carb steady, with carbs that digest slowly to help minimize blood sugar spikes. And they have six grams of sugars. With fifteen grams of protein to help manage hunger. Look whos getting smart about