next fox news sunday. >> this week on the journal editorial report. north korea ramps up the rhetoric issuing more threats against the united states and moving military assets that could push the region to the brink of war. plus, is obamacare in trouble? new delays and bipartisan opposition threaten the president's health care plan and stockton, california became the largest city in the nation to go bankrupt. could your town be next? >> as they have ratcheted up their bellicose, dangerous rhetoric and some of the abbings they've taken the last few weeks, present a real and

clear danger and threat to the interests, certainly, of our allies. >> paul: welcome to "the journal editorial report," i'm paul gigot, that was secretary hagel on the war-like rhetoric and actions of north korea. those comments were made before the north korean army announced it was authorized to attack the united states. >> we will cop u.s. nuclear threat with a merciless nuclear attack and face the infiltration with a justified war. this is our military and people's unchangeable stance. the u.s. and followers should clearly know that everything is different in the era of respected kim jong-un. >> paul: those really are fighting words, but how serious a threat is it? let's ask wall street journal columnist and deputy editor dan henninging, matt comiskey

and kim strassel. are we on the brink of war or it's a bluff? >> it's happened before and they've done the kind of threats. the thing about north korea, we don't know. we don't know much about who is running north korea, a new, 28, 29, 30-year-old leader in kim jong-un. >> paul: we don't know how old he is. >> exactly. and is he controlled by the generals. is he doing this to establish his own legitimacy? we have the questions and there's a danger will north korea if you push them too far, they might do something stupid. >> paul: push them too far, how? they're reacting to the sanctions that the u.s. put on after the last launch and nuclear test. how does the world respond to that when it's a violation of global norms and previous u.n. actions? >> absolutely, you don't know because they are unpredictable and you be very careful how you manage this. i think we've responded well

by saying we've moved warships into the region and we've flown nuclear bombers over north korea and put the bartz in guam. and it's seriously. and they are trying to exert something from us, perhaps more money. >> paul: dan, is this a play for more money, the kind of threats in return for cash game that they've played for two decades? >> maybe. who knows? but under the circumstances, i think you have to be very, very prepared to take action. look, so-- >> so you agree with matt we did the right thing with that show of military deterrence? >> at the start, at the least. let's recall that kim jong predecessor, father and grandfather thought to be quote, unquote, more unstable than he is. they blew up a south korean airliner filled with passengers. and set off a bomb in to

assassinate the south korean president. >> as recently as 2010 they sank a ship. >> killing sailors. >> paul: your point is? >> they're capable of attempting shall i say a pearl harbor attack, and in our case makes no sense. and seems suicidal. i've talked to south koreans, they're unnerved about kim jong-un and they don't know about him and he's been in that system his whole life. >> paul: the president has taken a low profile and hasn't spoken out and left the comments to chuck hagel and the secretary of state, john kerry. what's the thinking in the white house about that strategy? >> look, i think what they're trying to do here, the obama administration should get some points. what the north koreans are trying to do is the same old

play book. you manufacture a crisis and secure high levels talk and concessions from the west. so far the obama administration to its credit has not been gulled into that situation and it has also-- and to his credit went out of his way to show an extra show of force as part of the annual military exercises it's doing with south korea. >> paul: why wouldn't the president speak up on this and do you think that would fear it would be giving torch respect to north korea? >> i think that's part of it. what you don't want to do is needlessly provoke the north koreans into something. what does have to be done at a certain point here is, the question that no one can answer, what happens when north korea doesn't get its way? because it it has pretty much always in the past and doesn't provoke some sort of greater thing. the white house doesn't want to provoke them into it. they want to say if they want to start a war, but the only

thing is the extinction of the kim regime. >> paul: as far as policy goes, what to do about it, we've tried this engagement and it doesn't work. china is the key. china has the most influence, north korea's biggest patron and it's always willing to protect north korea, do we see any signs of that changing? >> the not at the moment. it raises a questions of pro he-- proliferation. . >> paul: they had that umbrella. >> they're angry with the united states in failing in negotiations with north korea and they want the united states to bring tactical nuclear weapons back into south korea and are talking about the option of going nuclear. so i think this message should be conveyed to the chinese that that is weakening. >> paul: if they want-- if the chinese want a nuclear japan and a nuclear south korea, keep on the current

course, that's what you're saying. >> they don't want that. >> paul: they don't want that. are we talking about-- think about this in the context of iran. are we talking about, we're on the verge of a nuclear breakout around the world potentially? >> i think it's a test of u.s. leadership, really. there comes a time after election where the president said we have to do nation building at home the age of war is over and people in south korea and in japan don't fully believe that the u.s. will be there for them. same goes for taiwan and same goes for the persian gulf with iran. we have let north korea go nuclear. >> paul: right. >> we're about to let iran go nuclear unless we do something about it and it's not -- people don't have faith in the u.s. to show the will and leadership to stop these countries from going nuclear. >> paul: and north korea, once a country does get nuclear, a rogue regime they're hard to contain because they feel they can act with impunity and we can do nothing about it, it's

an important lesson for iran. when we come back, it's time for a checkup on obamacare, as the rollout begins for the next phase of the law. we'll get the real cost on americans, and the added burden of filling out a 20-page appli ♪ using supercomputing and mobile technology over our secure network, verizon innovators are building a world of medical treatment data in the cloud. so doctors can make a more informed diagnosis from anywhere, in seconds rather than months. because the world's biggest challenges deserve even bigger solutions. powerful answers. verizon. to prove to you that aleve is the better choice for him, he's agreed to give it up. that's today? [ male announcer ] we'll be with him all day as he goes back to taking tylenol. i was okay, but after lunch my knee started to hurt again.

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>> this week, more road blocks for obamacare and some of the pushback is coming from the president's own party. 79 senators, including 33 democrats, agreed to repeal a new tax on medical devices contained in the health care law. it was largely a symbolic vote that none the less shows a growing unease with the cost of the president's health care overhaul. what is the bottom line for americans as the october deadline approaches? we're back with dan henninger and kim strassel and joining the panel editorial board

member joe rago. and i read even liberal columnists are beginning to worry about the pace of this rollout. you've been warning about it for more than a year. what's the big problem? >> all right, well, hhs with the health and human services and the white house never realized how big of a task they've taken on in trying to-- >> in redoing the economy, they didn't figure that out. >> we're six months away from the rollout october this have year and starting to see growing misgivings and panic, will the exchanges be ready, what happens to premiums and so forth. >> paul: will they? >> it's going to be a really close call. hss is running the exchanges, the alleged marketplaces where people will get subsidized insurance, in 33 states, and this week it came to light that for small businesses they will have a choice of one health plan in the exchanges where hhs-- that was one of the selling

points, you were be able to have a big choice, menu of plans and now you've got vanilla, vanilla or vanilla. >> any car you want as long as it's black. >> and the health care costs, and now we've seen announcements, and they've going up for substantial number of people. >> competition is supposed to drive down cost and now we find out there won't be competition. on top of that, all kinds of new rules and regulations coming into place that will be driving up premiums and probably 20 to 30% on the average, individual, small business market. >> paul: 20, 30% on average, but even more potentially for some people who are younger i'm reading? >> younger and healthier people in their 20's, 30's, 40's could see 100% premium increases even triple what they're paying now. you know, much richer benefits than 98% of the plans in the market today.

>> paul: we're not sca scare-mongering. this is what the people are talking about. >> premiums are going up self-insured, 30%. they had comments, look, this is a subsidy program and somebody has to pay for it and it has to come from somewhere. and premiums were going to be rise for some middle class people. >> kim, what about the political fallout? we saw the votes i talked about, that vote i talked about on medical device tax. i mean, you had al franken and elizabeth warren and some-- very liberal democrats voting to repeal this thing, is this a sign that the coalition, the democratic support is leading the frey? >> yeah, i mean, these were the guys who -- some of the people were demanding a single payer system at the time and now they're worried to what it's doing to market competition and that device tax was one example and we've had the hhs recently, totally

reverse itself on the decision to cut more than necessary from medicare advantage, part of the medicare program where seniors used private insurers, a popular program that they would gut and more money than the law called for until there was a bipartisan revolt of democrats and republicans who wrote letters and now restoring funding. why? because seniors like it. so you have a lot of democrats themselves who are having second thoughts on this. >> and what does it tell us about the popularity of the law overall? has it changed? we have a poll that results recently. it doesn't look like it's any more popular now than it was when it passed, which is almost unheard of for any new entitlement? >> that's right, and the first few years are really going to be what's going to determine the fate of this law over the long-term. if you see people sort of, with just huge surges in the premiums, the subsidies don't offset them, there's other much larger disruptions in the

market. i think you'll see the unpopularity of the law increase and might have something like what you had in the late 1980's with catastrophic coverage in medicare where they passed it and it was rolled back a year later. >> paul: we'll be watching. when we come back, stockton when we come back, stockton california is an the capital one cash rewards card gives you 1% cash back on all purchases, plus a 50% annual bonus. and everyone but her... no.

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>> this week, a federal judge ruled that stockton, california is eligible for bankruptcy protection. last year the city became the largest in the united states to fail financially. california law says the city's biggest creditor, the state's public employee retirement system is to be paid in full. other creditors are fighting

back, saying federal law mandates that all who are owed take a financial hit. dan henninger is still with us and assistant editorial page editor, james freeman and alici alicia, you've been following this, terrible for stockton. >> the pensions could be cut in this case and other cities follow in bankruptcy to eliminate the bond and preserve the cushy benefits for public employees. >> paul: and why should everybody take a hit? what are the policies of hitting the bondholders, but sparing the pensioners? >> first of all, cal-pers. >> paul: that's the california pension. >> that's right, they threatened the pay area city of vallejo and said they would hold the city up in court for tons of money and lawsuits in order to stop them from

cutting pensions. and sure enough, it's working in stockton. >> paul: because the politics, the unions are very strong in these cities and they don't want their benefits cut and it's easier to get the dentist to tokyo or peoria who invested in the bonds and skim them instead of skimming the people on the local payroll. >> that's right. the unions of course, the unions helped elect these city council people and in fact, a lot of these people who are in a city government are part of the unions and they're the ones who are negotiating the so-called cuts. >> paul: james? >> well, i think if you're -- you mentioned the dentist in peoria. i think that muni bond hope they get lawyers to fight appeal. it's a horrible precedent in bankruptcy where normally

creditors, including all the people with contracts take a hit. >> paul: well, municipal bonds for years have, for decades have fought to be some of the safest investments. if suddenly they're at risk, then other cities to get credit will be vulnerable. >> they're safe because ultimately taxpayers are behind them. in this case are whether taxpayers can afford to pay all of this sort of thing. i have to have some -- the bond companies were selling these bonds well after they knew that stockton was making these sweetheart deals that alicia has been describing. there has just been a tremendous amount of moral hazard created here. so while that doesn't solve the problem, it nonetheless, in hindsight, makes it clear that there is no innocent party here, the municipal bond sellers-- >> hold it, you're telling us that you think that the bondholders deserve to take the hit because they're adults, they went in with

their head up and they should have understood the local politics in california that the the unions are so powerful and they should take it all? >> no, i think you have to think towards the future that you cannot continue to engage in this kind of behavior. the assumption that these muni bonds are entirely safe no longer exist. they don't, because there are going to be more stocktons in pennsylvania and other states, illinois, where these cities, even once a larger city does this, this game is really going be to be in the tank. >> paul: what does it do to the availability of credit potentially to other cities? >> well, it's going to increase the interest rates. how much of bad paper borrowing, and especially in california because california's really the epicenter of this. you have vallejo, you have san bernardino who also declared bankruptcy, and fresno, also in trouble. and they're probably going to

have to be paying more to borrow. >> paul: stockton, if the bondholders take it, then they will be frozen out of the bond market for a long time, i assume. >> they should be, you can't just wipe out bondholders. >> and all of these california cities you start to wonder about them, as alicia and others have written. this is a state where middle class people are fleeing. if you think of sort of long-term growth and the ability to fund these big debts, it's hard to see it in california. you throw on top of it this kind of ruling saying the bondholders are going to get beaten up, shall we say, in polite parlance, along with the union pensions untouched, it could be a rough road. >> and issuing more debt. >> where public unions are really, really powerful, beware, lenders. we have to take one more break. when we come back, hits and

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>> time now for hits and misses of the week. kim, first to you. >> a miss to the news that simon & schuster will be paying hillary clinton some untold sum for her second book. this one detailing the quote, dramatic moments of her time as obama's secretary of state. i have to assume this will be a short book since by all accounts mrs. clinton spent her time on one big global tour without accomplishing anything. some of us were cynical enough to believe that the only reason she was secretary of state bide her time in the public eye and bolster position for a run for president by writing about experiences. >> paul: james. >> a miss to cowboys owner jerry jones who recently gave quarterback tony romo, 108

million dollars contract. 55 million guaranteed which is more than the super bowl winning quarterback joe flacco has and more than eli manning. he's won one playoff game. >> this is a hit for packers fans. >> paul, maybe you've been following the amazing atlanta cheating scandal, among dozens of public school teachers, even the superintendent, anything you could do to a cheat on a test and falsify students scores. they did. and for the union it's not an indictment of-- it's intime of high stakes, this is like blaming the bathrobe scale for being fat. >> paul: if you have your own hit or miss, send it to us at jer@foxnews.com and follow us on twitter: @jer on fnc. thanks to m