This Week: Chris sits down for an exclusive interview with White House Chief of Staff Reince Priebus.
Michele Bachmann Looks Ahead After Iowa Straw Poll Victory
Written by Chris Wallace / Published August 14, 2011 / Fox News Sunday
Special Guests: Rep. Michele Bachmann
The following is a rush transcript of the August 14, 2011, edition of "Fox News Sunday With Chris Wallace." This copy may not be in its final form and may be updated.
CHRIS WALLACE, ANCHOR: I'm Chris Wallace, reporting from Ames, Iowa, where the GOP presidential race is heating up.
Politics in the Hawkeye State. Which candidate got the biggest bounce from the Saturday's straw poll? We'll have a report on the results and ask Congresswoman Michele Bachmann if her popularity here can carry her to the nomination.
Plus, she's here but not in and he's a late arrival to the Iowa party. We'll ask our Sunday panel what Sarah Palin's appearance and Governor Rick Perry's late entry in the race mean to the Republican field.
And a wild week for the Republicans on the trail, all right now on "Fox News Sunday."
And hello, again, this time from Iowa State University in Ames, home of the Cyclones. And for the past four days, the center of the political universe. The long road to the Republican presidential nomination has taken some big turns in the last 24 hours. In Saturday's Ames straw poll, Congresswoman Michele Bachmann narrowly beat Congressman Ron Paul. Tim Pawlenty, Rick Santorum and Herman Cain rounded out the top five. Meanwhile, in South Carolina, Texas Governor Rick Perry entered the race and immediately became one of the GOP frontrunners.
Fox News chief political correspondent Carl Cameron has been tracking all the action.
CARL CAMERON, FOX NEWS: Thanks, Chris. The morning after the 2011 straw poll, and it's a whole new race for 2012.
(UNKNOWN): The winner of the 2011 Iowa straw poll is Congresswoman Michele Bachmann.
CAMERON: Iowa straw poll voters gave a huge boost to Congresswoman Michele Bachmann.
BACHMANN: You have just sent a message that Barack Obama is --
CAMERON: In second place, Texas Congressman Ron Paul pulled off yet another organizational coup in what has been a string of straw poll triumphs this year. The most significant outcome may have been for Tim Pawlenty, who came in third place, barely enough to keep him in the race.
FORMER GOV. TIM PAWLENTY, R-MINN.: I don't just talk about it. We get the job done for Minnesota and for America.
CAMERON: The rest of the field included former Pennsylvania Senator Rick Santorum in fourth, Businessman Herman Cain in fifth, and Texas Governor Rick Perry as a write-in in sixth. Mitt Romney and Jon Huntsman were on the ballot but did not attend or campaign for votes in the event. Neither got even 1 percent. And while the votes were being cast in Iowa, the race changed in Charleston, South Carolina, where Texas Governor Rick Perry formally the race.
GOV. RICK PERRY, R-TEXAS: I will work every day to try to make Washington D.C. as inconsequential in your life as I can.
CAMERON: Perry got over 750 votes as a write-in. He did not aggressively campaign, but many of his supporters worked hard to help him out. But announcing his candidacy as he did, in another state the day of the straw poll, may mean he has some fence mending to do. Iowans don't like having it happen on the day of their big dance, so he arrives here this afternoon to campaign in Waterloo, Iowa, home of Michele Bachmann, where she'll also be today, to start patching things up and launch his caucus campaign. Chris, back to you.
WALLACE: Carl, thanks for that.
Joining us now, the winner of the Iowa straw poll, Congresswoman Michele Bachmann, and welcome back to "Fox News Sunday."
REP. MICHELE BACHMANN, REPUBLICAN PRESIDENTIAL CANDIDATE: Thank you, good to be with you, Chris.
WALLACE: And let me just say, because I inadvertently offended you in the last -- your last appearance here, and I want to say on television what I said to you personally, I sincerely apologize, I didn't mean to do it.
BACHMANN: All is forgiven, we move forward, so we're good to go.
WALLACE: All right, good. First of all, congratulations on your victory in the straw poll yesterday. What do you think is the message from Ames?
BACHMANN: Well, I think the message is that people want a change in Washington, D.C. They don't want what Barack Obama is giving, and I think we saw a punch to the gut in the United States this last week with what has happened in the economy. People are really tired of the spending. They want to make sure that we get it under control. They did not want us to raise the debt ceiling and they did not want the president to give another $2.4 trillion blank check. They sent a very loud and clear message.
WALLACE: But you know, they could have sent that through a lot of other candidates. What do you think the message is by voting for you?
BACHMANN: Well, I was very strong and very clear. People knew that I was leading on not increasing the debt ceiling. They wanted someone to stand up and say enough is enough on spending, and they appreciated the fact that I stood up and was kind of the lone voice, and they want to make sure that we do have that change in Washington, D.C.
And I think the other thing is, they want to know that they can trust the person that they are sending, that that person will be reflective of what they are sending them to do. And I think that's what they saw. They know that I am a person who will do what I say I'm going to do.
WALLACE: Not to take away from your victory in any way, but what about the argument that voters here, that voted in the Ames straw poll, represent an important part of the Republican Party, the Tea Party, the evangelicals, the social conservatives, but it's not the whole Republican Party. How do you -- do you feel that you need to expand your base to other elements of the party, and if so, how do you do it?
BACHMANN: We are expanding it already, because I have been all across Iowa and really all across the country. We'll be in South Carolina later this week and New Hampshire.
But here in Iowa as I have been on the street, there is not an event where I don't have Democrats and independents and people who have never been political a day in their life come up to me, we have wonderful events, and people are very frightened about where the economy is at right now, and they want to vote for someone they believe in.
So I've had a lot of Democrats, even here at the straw poll yesterday, a lot of Democrats came out to this straw poll to vote for me, and independents, and that's what I am seeing quite frankly all across the country. People who said I really thought very highly of President Obama but now I'm not so sure, he won't have my vote the next time, and they like what I have to say. They believe the message because they understand that I want to turn the economy around and I have a plan also for job creation.
WALLACE: Texas Governor Rick Perry got into the race yesterday in South Carolina, and his outreach to values voters is similar to yours. Let's watch.
(BEGIN VIDEO CLIP)
PERRY: I've learned that not everyone values life like we do in America, or the rights that are endowed to every human being by a loving God.
(END VIDEO CLIP)
WALLACE: Rick Perry has 10 years of experience as the governor of Texas. He has a strong story to tell about job creation since the recession. Why should voters go for you over Rick Perry?
BACHMANN: Well, I think I've demonstrated that I have been a fighter in Washington, D.C. And also just through life experience. I am 55 years old, I'm a federal tax litigation attorney. My husband and I own and started a successful company. I get job creation. I get how the economy needs to work, because I have seen how devastating high taxes are. I have a proven record.
But I think what even more so sets me apart from the field is the fact that I have been a proven fighter in Washington on issue after issue after issue. I've led to the point where I have even brought tens of thousands of Americans to Washington to fight against the unconstitutional health care mandate, which I am extremely grateful the 11th Circuit Court of Appeals set straight this week in their decision.
WALLACE: No one I think it's fair to say questions the strength of your convictions, and when you say you have a titanium spine, I think most people have come to believe it. But I want to explore something different with you today, and that is your willingness, your ability to be a practical politician and work to compromise. If you were president now, what would you do to reassure the markets and to boost the economy with this important proviso, that could get through a divided government?
BACHMANN: Well, we will have an election in 2012, and as nominee of the Republican Party I will work tirelessly to make sure that I can help elect also an additional 13 senators to come with me to Washington. Because I would like to get to that magic number of 60 so we can be filibuster-proof in the Senate, and retain a conservative House. If we do that, then we can repeal Obamacare and repeal Dodd-Frank.
I'm the first member of Congress to introduce both of those repeal measures. That would send a very strong signal to the market.
Plus, what we need to do is have someone who is very serious about cutting back on government spending. I am. And with my background as a tax lawyer, I see that we have got to reform the tax code. It is the job-killing center of the United States, and we have to lower tax rates considerably on job creators. And with everything from the death tax to alternative minimum tax to 100 percent expensing immediately for small businesses.
But what we're doing right now is not working. We have got to turn it around, and the regulatory burden is just killing industry after industry right now. I hear it everywhere. I mean, I was here in Indianola, Iowa, and one company, CemenTech, lost half of their employees. They are the largest manufacturer of volumizer cement mixers. And the CEO told me that most of those mixers are not even going in the United States. They are going out of the country because the construction industry is flat on its back. Housing prices are flat, they're falling. We are in a mess. And we can turn this around, but we have to have a president who is sending signals that they are serious about business.
I am. I'm a businesswoman, and I'm serious about turning the business economy around, because that's jobs. We have to focus on job creation.
WALLACE: But let's assume for the purposes of this discussion you are elected, and even maybe the Senate goes to the Republicans but you don't have the veto-proof majority. You've got to work with Democrats to get your agenda through. Are -- is Michele Bachmann, the woman of conviction, are you willing to compromise?
BACHMANN: Well, of course I can work with Democrats and Republicans. Probably the best example would be in my own home state of Minnesota. It's not known as a conservative bastion, my home state, but I was able to lead a movement to actually repeal Minnesota's education law that we had, and put into place something that had higher academic standards. That's how I cut my teeth in politics, on education reform. I'm a mother of five children. We raised 23 foster children in our home. Good education is extremely important to me. I brought together primarily a coalition of Democrats and independents to work with Republicans. Republicans were never going to get this through. But I have got a lot of Democrats and independents together. We actually accomplished it, and that is just one example of what we can do in Washington.
WALLACE: So I remember Ronald Reagan when I covered him used to famously say half a loaf is better than none. Is Michele Bachmann willing to accept in some cases, even if it goes against your principles, half a loaf?
BACHMANN: Well, I don't compromise my core principles. That's how you lead. You lead from principles. But you make advancements sometimes. Sometimes you can't get all the way, sometimes you make steps. As long as you are making progress, you are going in the right direction. That is the difference. The trajectory that the country is going right now is negative. Everyone knows it. So we need to have a president that's going to at least get us on the trajectory of going in the right direction.
WALLACE: Let's go back to that moment in the debate, though, when you -- and I've got to say, all the other candidates on that stage said that you would walk away from a debt deal, here it is right here, $10 in real spending cuts, to $1 in revenue increases. 10-1. Even Reagan's top economic adviser, Marty Feldstein, said that is too hard-line, that that would be walking away from a huge conservative victory.
BACHMANN: Well, I think probably Reagan would be the best example, because Reagan was going to get $3 in spending cuts for every $1 in tax increases. It ended up being $3 in tax increases for every $1 in spending cuts. That's the way it works in D.C. The deal sounds so rosy in the very beginning, and usually the cuts are illusory, they are off into future years. And of course one Congress can't bind the next Congress, and a Congress lasts for two years. So we can't bind what future Congresses can do. We can beat our chests and be really proud and say, oh, we're going to cut trillions of dollars, but we can't guarantee what future Congresses will do. That's why no one would take that deal on the Fox stage of the debate, because we all know that they're fake cuts, essentially. They sound good. They're soundbites, but they are not real.
I am about reality. That's what I care about. This is not a joke. This is not just a political game. This is getting the country back on the right track. People really are suffering, all across this state I have seen it. People want jobs, they want job growth, and they want someone who has the backbone to do it. I do.
WALLACE: In the debate, you said that the downgrade of the U.S. credit rating supported your decision to vote against the debt limit. Here's what you said in the debate, let's watch.
(BEGIN VIDEO CLIP)
BACHMANN: Heard from Standard & Poor's when they dropped our credit rating, what they said is we don't have an ability to repay our debt. That's what the final word was from them. I was proved right in my position. We should not have raised the debt ceiling.
(END VIDEO CLIP)
WALLACE: But a top S&P official says that a big part of their decision was, quote, "people in the political arena were even talking about a potential default. This kind of rhetoric is not common amongst AAA sovereigns." In effect, they seem to be saying the talk from you and others about not raising the credit limit and the political gridlock was one of the reasons that they downgraded the debt.
BACHMANN: Well, let's make a distinction. I never at any time talked about default. As a matter of fact, I introduced a plan to ensure that the United States sovereignty would not default. That's important. No wonder the markets would be roiled if we didn't have a plan. I had one, unlike President Obama. President Obama, as you know, had no plan, and yet the administration, going back to January, sent out a letter that I received, every member of Congress received, that said we had to raise the debt ceiling. But then in February, the president introduced his budget that had us overspending by $1.5 trillion. He did nothing in his policy to have us come to balance.
So then in April, we heard from Standard & Poor's, and they said, look, if you don't get your act together, we could potentially see a downgrading of the credit rating. The next day the treasury secretary went out and said there is no risk of us losing our AAA credit rating.
So the president has known all along what could happen, and they essentially put their hands up in front of their eyes and said it would never happen. It did happen, because you can't spend money you don't have. People all across the country have been trying to get the attention of Washington. We can't spend money we don't have. We have to start paying our bills. That's what Standard & Poor's is telling us. Get your act together, like any homeowner would have to do, like any business would have to do, and that's what the federal government has to do. Stop playing with other people's money and get your act together, and they aren't doing that.
WALLACE: You have been critical -- in fact, you voted against, but you've also been critical and you were in the debate, of the deal that was finally agreed to, and you pointed out that for all this talk about $1 trillion in cuts, it's -- how much in the first year?
BACHMANN: $21 billion.
WALLACE: OK, are you saying that--
BACHMANN: A $2.4 trillion blank check versus $21 billion in cuts, and that's for one year, that's for one year.
WALLACE: I understand, fair enough. But are you saying that Speaker Boehner and Senate Leader McConnell made a bad deal?
BACHMANN: I'm saying that's not the deal that I would have made. Because quite frankly, the problems that we have today, we can't put this off until tomorrow, because we know that on any number of levels, just with the Medicare hospital trust fund, we have nine years and that's broke. I don't want any senior citizen to be in a position where they are told we are out of money. We have got to reform that system sooner rather than later. That's why I say we need to pay the interest on the debt, that's how you don't default. We tell our military men and women, under no circumstances will you not get a paycheck. It was irresponsible of the president to suggest they wouldn't. And for Social Security retirees, we tell them, if you are currently in the system, you are getting your check. That was wrong for the president to suggest they may not.
WALLACE: But Congresswoman, if I may, here is the problem with that. The Bipartisan Policy Center -- and it really is bipartisan, the main analyst for this was a top adviser in the Bush 41 administration. He said that if we hadn't raised the debt limit, as you suggested, here is what would have happened in this month of August. If you pay, as you said, our creditors, Social Security, Medicare and the military, and you can look at it right there, you would have to cut everything else 68 percent. Veterans benefits, Medicaid, unemployment insurance, food and nutrition programs, IRS refunds, the FBI. Would you have been willing to gut those programs?
BACHMANN: Doesn't that tell how bad off the United States is? The fact that we're overspending to that level? Let's just take a look for a minute. All of us pay taxes, and that tax money came to $2.2 trillion this year. We spent every cent of it, $2.2 trillion. The problem is, we spent an additional $1.5 trillion that we don't have.
WALLACE: I agree with you. For every dollar that we spend, we borrow 40 cents.
BACHMANN: So this is what we have to do. So this is what we have to do. We have to grow the revenue side. We need to embrace pro-growth policies. We are not growing. The very first quarter of this year, it was anemic. It was 0.4 percent growth. That's basically stagnant, if that. And so we have to embrace pro-growth policies, and then shrink the amount of spending. So we have got to shrink the deficit but expand the amount of revenues--
WALLACE: All I would say is that's not shrinking, that's taking a meat cleaver.
BACHMANN: Well, I think the one thing we have to do is reject the new normal level of spending under the Obama administration. Because President Obama amped up spending to never seen before levels. Should we accept that we should just continue that on? I mean, one example I'll give you is we had one employee at the Federal Department of Transportation that made $170,000 a year at the beginning of the recession. We had the trillion-dollar stimulus, and 18 months into the recession, we had 1,690 employees making over $170,000. Government has really been growing, a lot of largesse, but the people in the real world aren't. And that's what has to change. Government has no conformity at all with the real world.
WALLACE: I want to ask you about a report that came out this week. You famously opposed the Obama stimulus plan. You called it wasteful and fantasy economics. But "Newsweek" reports -- excuse me -- that after the plan passed, that you wrote six letters to the administration asking for stimulus funds. They say that you wrote saying that a local bridge would create almost 3,000 jobs. You said a highway project would, quote, "promote economic prosperity." That sounds like you were buying into the stimulus idea?
BACHMANN: I voted against the stimulus and I was very public against the stimulus. After the stimulus was passed and the money was there, why should my constituents or anyone else be disadvantaged? Most of the money unfortunately ended up going to politicians who were politically well connected to Barack Obama. That's what's wrong with Washington. Too often the money has no connection to merit or where it should go. It goes to political connections. That's why I signed an earmark pledge. I think it -- I think earmarks are wrong. We have to do away with them. But I also think at the same time, that people across the country shouldn't be disadvantaged because they didn't vote for the bill.
WALLACE: I just want to ask you about the earmark pledge, because when it was imposed, you spoke out against it, the earmark ban. You said advocating for transportation projects for one's district, in my mind, does not equate to an earmark. But isn't that exactly where the outrage over earmarks started, with things like the Bridge to Nowhere?
BACHMANN: Well, that comment actually was in a different context. We do -- one legitimate function of government is to build transportation projects, roads, bridges, interchanges. That is something that government should do.
And so we need to do it in a way that has to do with merit and where these bridge should be built. You'll go in different parts of the country, and there could be a three-, four-lane highway that has no connection to the amount of people that use it.
WALLACE: But you -- so you think a congresswoman should be able to ask for money for a road-building project in her district?
BACHMANN: I think we need to reform the system currently that we have in Washington, because it's absolutely vile and corrupt. It has no connection with where we need to spend the money. It has everything to do with political connections.
WALLACE: Finally -- and I want to just ask you a couple of Michele Bachmann questions -- are you enjoying yourself?
BACHMANN: Oh, sure, I am. I'd like to get a little more sleep, but we're having a great time. I'm in Iowa. Who could not enjoy themselves? Today, I'll be going back to Waterloo, where I was born, just to -- this is where I launched my candidacy 48 days ago. And so I'm going there to thank everyone in Waterloo, where I was born.
And I'm a seventh-generation Iowan. We were early pioneers here 150 years ago, so we're having a big family reunion today in northeastern Iowa, so I'll get to go and see all my relatives and thank them for their support.
WALLACE: I think it's fair to say that when this race started, you were a long shot.
WALLACE: Do you now think you can win this race? Do you think you could win?
BACHMANN: Oh, of course I do. I know -- I know I can. I know I can, because what I've seen from people all across the country is, they really do want to take the country back. They want a new direction, and they want someone they can believe in. I think they see in me a champion for their values and their voice, and they want a real person in the White House, someone they can trust. So, yes, I absolutely do.
WALLACE: And let me press that a little further. In your heart of hearts, do you believe that you will win? And when you consider that thought, President Bachmann, what are your thoughts?
BACHMANN: Well, my thoughts are, we are the greatest nation that has ever been. And I'm not thinking just about today, Chris. I'm trying to think 50 and 150 years from now, for the next generations that are yet to come. The United States has been the greatest force of mankind in the history of the world. And I think the world is a better place if we remain that premier economic and military superpower. That's my goal, not just for today, but I'm trying to look into the future to make sure that we have that strength.
WALLACE: And do you believe honestly that you will win?
BACHMANN: That's what I'm working for, you bet.
WALLACE: Otherwise, you're working awful hard for -- and losing a lot of sleep for nothing, right?
BACHMANN: It's for them. It's not for me.
WALLACE: Congresswoman Bachmann, we want to thank you so much for coming on the air.
BACHMANN: Thank you.
WALLACE: A pleasure, as always.
BACHMANN: Thank you.
WALLACE: Glad we're clear. The road ahead, right?
BACHMANN: The road ahead.
WALLACE: Good. Thank you for starting you day with us. Safe travels, and we will see you again on the campaign trail.
BACHMANN: We'll be delighted.
WALLACE: Thank you, Congresswoman.
Up next, Governor Perry is now in the race, and we have the results of the Ames straw poll to chew over. Plenty to talk about with our special panel from Ames, Iowa, and the campus of Iowa State University, when we come right back.
(BEGIN VIDEO CLIP)
BACHMANN: I think that's a judgment on the people of America, because the people of America have said we're taxed enough already, don't spend more money than what you take in, and for Heaven's sakes, please act within the Constitution.
(END VIDEO CLIP)
WALLACE: That was Congresswoman Michele Bachmann explaining her victory in the Iowa straw poll Saturday. And it's time now for our special Sunday group: Bret Baier, anchor of "Special Report"; Matt Strawn, chairman of the Iowa Republican Party, and Steve Hayes from the Weekly Standard.
Well, folks, let me take you behind the scenes a little bit. We had to pre-tape that interview with Michele Bachmann about an hour ago. And while it was running, we found out some big news in this campaign, and that is that Tim Pawlenty, the former governor of Minnesota, a guy who was a very serious contender when this race started, has decided to drop out of the campaign. He spent more than 45 days in Iowa, more than 100 campaign appearances, finished a weak third in the Iowa straw poll. And within less -- what, about 12 hours, he's out.
Bret, you surprised?
BAIER: No, they had put a lot of their eggs in the Ames straw poll basket. And this morning, I'm told he said that, because of Ames, there was not enough fuel in the car to keep going down the road.
I saw Governor Pawlenty at the hotel this morning, huddled with his advisers. It was not a happy moment for them. I didn't want to go up and -- and interrupt and ask them questions, but I think they came to the conclusion that they couldn't go back to their donors and say, "This is a reality."
After that showing -- and he got fewer votes than Sam Brownback did, then Kansas senator, now Kansas governor, when he dropped out four years ago, three-and-a-half years ago. So it was a tough, tough day for Governor Pawlenty.
WALLACE: Chairman Strawn, Pawlenty had -- at least we thought that he had the big, best, ground game here in Iowa, and, you know, it's a savage business. He's out. Where do his supporters, where does his organization go?
STRAWN: Well, I think one thing we knew going into the straw poll, that there was still a tremendous amount of uncertainty as to, really, how the field was taking shape. And things are very fluid. You know, I've talked about with most Iowa activists, they're still at the dating phase with their chosen candidates. They really haven't decided which candidate to marry throughout the caucus process. And I think this decision is just evidence that it's still a very unsettled Iowa caucus electorate, and I think they're open to any of those new candidates -- Governor Perry will be here later today -- and any other potential candidates. So I think it's very fluid at this point.
HAYES: Yeah, I agree with that. And I think one of the mistakes that Tim Pawlenty made early on was over-reading the polling on electability. It's very clear that Republican activists want somebody who can beat Barack Obama. That's the number-one criteria in poll after poll. You talk to Republicans on the ground, that's what they say. "We want to beat Barack Obama."
But what Tim Pawlenty did was he crafted a stump speech that basically emphasized his electability over his views, his ideology. And I think with the victory here, a strong victory for Michele Bachmann, who spent her time talking about ideas, talking about her views, her principles, her views about America, and Tim Pawlenty not doing as well, that's one of the reasons. He was downplaying ideas, downplaying ideology, for the sake of electability, and I just think it didn't work.
WALLACE: You know, it's so interesting. It reminded me -- and I noticed this in the debate -- of Hillary Clinton versus Barack Obama in 2007 and '08. He kept talking about experience. And we all know, if it's experience versus ideas and change, experience loses. Maybe it shouldn't, but it does.
HAYES: Yeah, people -- I think people want to come out and be fired up about something. And I was out here with him a couple months ago, with Governor Pawlenty a couple months ago, and it was striking to me that, in a small group, he was giving a speech, and he said, look, basically, the other Republican candidates and I, we're going to come out here on this stage and we're going to say the same thing. Our ideas are basically the same, but I've done these things, and I'm electable.
And I thought at the time that was not a great message for people who are coming out, they're driving maybe great distances to come see him, they want to be inspired, and they were leaving thinking, well, this guy is telling me that he's basically the same as everybody else and that's not enough for me.
WALLACE: Bret, let's talk about the winner, Michelle Bachmann. What does this do for her? And also include Ron Paul. I mean, he finished second, but he lost by about 150 votes, and he probably spent one-tenth of what Michelle Bachmann did here at the Ames Straw Poll.
BAIER: Right. It was a good showing for Congressman Paul. But it does show that Michelle Bachmann has organizational chops.
There was some doubt whether she had the organizational structure to make this all come together. She did in the end.
In fact, anecdotally, I heard that yesterday, after she gave the speech in her tent, she had everyone who didn't have their finger stamped for voting raise their hand and say, follow me over to the voting area here at the straw poll. So she did the Pied Piper over to this -- the place where you vote, and she won by 152 votes. I think there were about 200 people in that gaggle.
So, I mean, that takes some organizational effort and some fire in the belly to be able to get that to happen.
WALLACE: Chairman Strawn, we've got to talk about the new place at the table. Rick Perry. First of all, does it bother you that he ignored the debate, ignored the straw poll, and in fact maybe stepped on it a little bit by announcing his decision?
STRAWN: Well, that will be a question that he'll have to answer when he's in Waterloo tonight. I'm sure Iowa Republicans will ask that question of him when they see him. But I think the timing of that certainly coincided with the fact that Ames was the center of the political universe this week. So I don't think it stepped on us at all. In fact, there's tremendous energy here coming out of Ames, and I think it really solidifies that Iowa is the political center of the universe going into the caucus season since he felt this was the weekend that he needed to announce his run for presidency.
WALLACE: Let's turn to Perry. And we want to bring you a taste of his announcement yesterday in South Carolina. Here it is.
(BEGIN VIDEO CLIP)
PERRY: In America, the people are not subjects of the government. The government is subject to the people.
(END VIDEO CLIP)
WALLACE: You know, Steve, we have seen glamorous candidates like this, late entries in the race. Some of them thrive, some of them flame out. I can't help but think of Fred Thompson four years ago.
A lot of strengths -- governor for 10 years, great record in creating jobs in Texas. On the other hand, critics are already saying that a lot of those jobs are in state government, government jobs that he created, and that Texas has had its own big debt problem.
How do you read Perry's strength in this campaign?
HAYES: I think the critics taking shots at the Texas economy, they have a tough argument to make. I mean, at this point, people aren't quibbling over whether they are low-wage jobs or not. They want jobs, and Texas has provided them. Texas has created them.
On the bigger picture, I think he gave a good speech yesterday. It was a speech that I think was designed to appeal both to Tea Party conservatives, but also to a broader spectrum of conservatives. He had some strong words on foreign policy and national security in there, saying that he wants to protect American values and project American values, which suggests that if there is a trend toward non-interventionism in the Republican Party, he's not part of it.
WALLACE: And Bret, briefly, to wrap up this segment, would it be fair to say or premature to say that there is now a top tier in this race, at least for now, of Romney, Perry and Bachmann?
BAIER: I think that's fair to say, as you look at the race right now. Obviously, a lot can change in a short amount of time and we have a lot to go.
Today, I'll point out that Governor Perry will be in Waterloo, as you heard Congresswoman Bachmann mention. He'll be speaking at the Electric Park Ballroom, the same place where she essentially launched her campaign. And you heard in your interview the congresswoman laying down the marker there, saying, I was born there, I went there to launch.
This will be quite a battle between them for Iowa, because obviously Governor Romney is not really playing as highly here.
WALLACE: All right. Game on. Right?
BAIER: Game on.
WALLACE: All right. We need to step aside for a moment.
But up next, President Obama comes to Iowa Monday as part of his economic bus tour. We'll talk about his sinking political fortunes when we continue our coverage from Ames, Iowa.
(BEGIN VIDEO CLIPS)
PRESIDENT BARACK OBAMA: There's been a lot of talk in Washington right now that I should call Congress back early. The last thing we need is Congress spending more time arguing in D.C.
TIM PAWLENTY, REPUBLICAN PRESIDENTIAL CANDIDATE: He should cancel his Cape Cod vacation, call the Congress back into session, and get back to work on this.
(END VIDEO CLIP)
WALLACE: President Obama and Tim Pawlenty disagreeing over how to reassure the markets and try to solve the nation's debt problem.
And we are back now in Ames, Iowa. You can see -- what is it? What do you call that?
WALLACE: They're just starting to pull up stakes here for the straw poll on the campus of Iowa State University on what, I've got to say, it is a beautiful summer day in Iowa.
Is this heaven? No, it's Iowa.
STRAWN: We do everything first class.
WALLACE: You do indeed.
Let me start with you, Chairman.
Barack Obama won Iowa in 2008 with 54 percent of the vote. As he shows up tomorrow to begin his economic bus tour, what kind of shape is he in politically here?
STRAWN: Well, I think when the wheels of Air Force One touch down tomorrow, he's going to realize that it's 2007 and 2008 anymore in Iowa. This is a state that has dramatically turned away, mostly based on the failed policies they've seen out of Washington.
We've got about 60 percent of the Independent voters in this state whoa re disapproving of the job he's doing on the economy. And he's going to northeast Iowa, which is interesting.
He's going to a place where he needs to shore up his base. In one statistic, since he was inaugurated president, the Iowa Democrat Party has lost 10 percent of their membership in the s. So 10 percent of Democrat Iowans have said no thanks, I'm no longer a Democrat since Barack Obama has been inaugurated . So he's in big trouble here, and people need to remember, this is one of those states that is going to determine who the next president is in November.
WALLACE: And let me look forward to that. Looking -- I mean, I don't make a straight line projection from August of 2011 to 2012, but at this moment, how would you rate Iowa in the 2012 election? Would you say up it's a tossup?
STRAWN: Yes, there's no question it's a tossup. And a couple figures, data points.
July marked the 29th straight month that Republicans have outpaced Democrats in voter registration in Iowa. And yesterday, for the first time, we had the second highest turnout in the straw poll, but we had first-time attendees that had never been to a straw poll before in their lives. So there's still that organic energy that fueled huge gains last November. So I think the president is in real trouble here.
WALLACE: Bret, the president, as we say, is taking his economic bus tour not only to Iowa, but also to Illinois and Minnesota. We're told by the White House that while he will talk about economic plans, he's not going to have some big, new thing to announce in policy, to announce this week.
Does he have that kind of time?
BAIER: Well, you know, that is a great question, Chris, because I think searching for that next thing, the big thing, has been the focus in Washington. There aren't a lot of arrows in his quiver when it comes to the economy.
That said, I think the White House sees an opportunity in capitalizing on that no negotiation line for Republicans. You ask Congresswoman Bachmann about the line, the 10-1 spending cuts to tax increases if you get that deal, no one on that stage would take it Thursday night. They are capitalizing on that, saying that it shows that it's grinding to a halt based on Congress.
If you look at polls, Congress fares really poorly not only here in Iowa, but around the country. And they're trying to capitalize on where the negotiators -- the stand in the corner on principle.
Now, for a primary and caucus-goers, standing on principle is important. President Obama is trying to turn those Independent numbers around across the country.
WALLACE: Well, let's take a look at the latest Fox polling, Steve, because it's pretty dramatic. And let's put it up on the screen.
Forty-two percent of voters now approve of the job that Obama is doing. This is overall voters, while 48 percent disapprove. But let's talk about those all-important Independents, the key to winning this election. Support among Independents is cratering. Thirty-three percent now say they would give Obama a second term. Fifty-seven percent would vote for someone else.
When you add that, Steve, to the credit downgrade, to this wild and frightening volatility in the stock markets, doesn't Barack Obama have to shore up his support, especially on leading on the economy, and do it fast?
HAYES: I think he does. And the difficulty for him, I think, is philosophically, what he would like to do is have more stimulus.
I mean, this is what he believes in, it's what the people who agree with him on the economy think would be effective here. You have Paul Krugman and others saying we need more stimulus.
The president can't do that. That's not an option for him right now, precisely because of the numbers that you put up on the screen.
WALLACE: And because he couldn't get it through Congress.
HAYES: You couldn't get it through Congress. He doesn't want to be making those arguments.
He's at the same time trying to position himself as someone who is suddenly serious about the debt and deficit after having had the first stimulus and after having expanded government the way that he did. So I think he's in a pickle. He's got to make an argument that appeal to Independents, but at the same time, he's got to motivate a base that is right now feeling sort of glum about President Obama, his policies, and his prospects.
WALLACE: You know, Matt Strawn, presidents always say -- and I think fairly enough -- that they don't really go on vacation, the whole White House apparatus goes with them. But you heard Tim Pawlenty saying, look, we're in this fix. You ought to call Congress back, forget the vacation.
How -- whether deservedly or not, how tough is that? He's supposedly -- after the bus trip, he's going to Martha's Vineyard for 10 days.
STRAWN: Well, I know most Iowans can't relate to a vacation on Martha's Vineyard, but I think what those numbers represent though is that Iowans and all Americans are looking for strong relationship. And speaking to the economy here in Iowa, we've got an unemployment rate at 6 percent. So, compared to the rest of the nation, we're doing fairly well here.
Corn and soybean prices are at great levels. Farmland values are at record highs. By all indications, Iowans should be satisfied. But they're not, because they have the same economic fears and anxieties of all Americans. I think that's reflected in those disapproval numbers we see with Independents here in Iowa. So it really does underline how much trouble he's in and how much Iowans, not just caucus-goers, are looking for strong, bold leadership.
WALLACE: So, to bring this around, Bret, how much time does the president have? Does he have do something dramatic, if not calling Congress back, then maybe after Labor Day something that says I get it and I've got some ideas, even if they can't get through to put the Republicans on the spot and say, here is a plan, pass it, this will help the economy, this will help reassure the markets?
BAIER: It has to happen pretty soon, one would think, Chris. And this super committee that's set up by the debt ceiling increase bill is meeting -- it's now formed and will start meeting. And they need to come up with a proposal by Thanksgiving.
You heard the president say and his staff say that he'll have some ideas in coming weeks. You know, there's been a long process here, and people have been looking for a specific plan from the White House for a while.
That said, I think when you get to this super committee, all the criticism about it, they will be moving things along into the early fall, and they'll have to have specifics pretty fast.
WALLACE: Real quickly, Chairman Strawn, what do people here in Iowa care about? And I know that they're somewhat related, but all the talk about the debt and cutting the debt, and there's also the question of getting people back to work. Do folks here in Iowa feel that the leaders in Washington are focusing on the wrong problem?
STRAWN: Well, there's a tremendous focus on increasing the debt ceiling and that recent debate. The fact that every member of Iowa's congressional delegation, Republican, Democrat, House, Senate voted against it, the fact that Michele Bachmann and Ron Paul, their initial ads here focused on how they were going to oppose increasing the debt ceiling, tells you that that's exactly what's driving the debate here. And we still understand the uncertainty related with a private economy that's not creating jobs.
So, I think the top-of-mind issues in Iowa are the same thing we're seeing all across the country.
WALLACE: All right.
We have to take another break here, but when we come back we'll take a look ahead to where the 2012 race goes from here.
Back in Ames, Iowa, in just a moment.
WALLACE: And we're back now with our panel on the campus of Iowa State University in Ames, the site of our Fox News debate Thursday and the Saturday straw poll.
Let me start with you, Chairman Strawn.
Let's be honest, the winner of the Ames Straw Poll doesn't always -- in fact, more often than not, does not win the Iowa caucus. And the winner of the Iowa caucus often does not win the GOP presidential nomination.
As you look at it -- and you're as inside as anybody can be -- how do you see this GOP race playing out? And particularly, what do you think, and to the degree that you can extrapolate beyond the state boundary, what do you think voters are going to have to decide for themselves as they pick a nominee?
STRAWN: Well, I think the straw poll, the role it plays in the caucus process -- to make a football analogy -- it was kind of that first game of the season after two days have ended. So now the campaigns are assessing where their organizations stand, retooling, looking at game film, if you will, for the rest of the caucus season. So I think the role it plays is not necessarily a predictor, but as far as Iowa's role and relevance in the process, I do like to point out the last time we had a Republican president, that path started by winning the straw poll and winning the caucuses and going on to the White House.
So I think what you're going to see in Iowa, what motivated people to come to the straw poll yesterday, and what's motivating voters across the state are those issues that are top of mind for all Republicans and Americans. You know, it is unsustainable debt. It is getting a private economy creating jobs again.
So I think the messages that motivate Iowa voters will resonate with the general electorate.
WALLACE: And how do you see them weighing, on the one hand, ideological purity, and in the other hand electability? I mean, do you think if it comes down to it, they're going to go for the person they believe in more, or would they -- you know, obviously I'm not saying that they're going to go for a liberal, but they might go for somebody who isn't quite -- passes many litmus tests, but a better chance to beat Barack Obama.
STRAWN: You know, it's interesting. This caucus season, it seems to be a much more deliberative process.
I think some of that does go to the fluidity of the field, but also, Republicans here understand we're not making this decision in a vacuum. We know what four more years of Barack Obama and his policies mean to America, and it offends our moral beliefs, it offends our economic policy. We just can't have that. So I think Iowans want to get this decision right not just for ourselves, but we understand that we've got a responsibility for America to make sure that we are very serious before we go to the caucuses next February.
WALLACE: Bret, to the degree that -- and again, it's premature that there's a top tier now of Bachmann and Perry and Romney -- and we haven't mentioned, and we should, Rick Santorum, who did really surprisingly well for the amount of money and resources he had here in Iowa -- how do you see this race playing out?
BAIER: As I said before, I think there's a lot of time. You point out Senator Santorum. He exceeded expectations here at the straw poll, and that's a big deal for his campaign, and to look forward to the caucuses to be an alternative.
You know, the fact that Governor Pawlenty pulled out the day after this straw poll shows the significance of this event. He's out of this race. For Mitt Romney, that is a good thing, because it's another person that people could vote for if they don't think that they are to the right like Governor Perry and Congresswoman Bachmann.
Perhaps Senator Santorum becomes the fallback position, as Governor Pawlenty was, if people don't like Governor Romney or don't think that they could go to a Governor Perry or Congresswoman Bachmann.
The race dramatically changes after today just by the fact that Governor Pawlenty is not a part of it. And I do think that there is developing a top tier, but again, we've got a lot of time.
HAYES: And on a very practical level, here in Iowa everybody agrees that Governor Pawlenty had really the best ground team. He had many of the top strategists, people who really knew the state well.
He's now gone. Rick Perry jumps in the race yesterday, comes, and I think has an opportunity potentially to pick up a bunch of those people and potentially some of Tim Pawlenty's supporters.
If you want to be the non-Romney candidate, if you're not comfortable voting for Michele Bachmann, you didn't support Michele Bachmann here yesterday, or you don't support her across the state, I think there is an opening for Rick Perry if he plays in Iowa, if he spends some time here and really makes a push.
WALLACE: I want to thank you all so much for participating. It's been a long week. And thanks for getting up and doing this.
And don't forget to check out "Panel Plus," where our group picks right up with the discussion on our Web site, FoxNewsSunday.com. And we promise we'll post the video before noon Eastern Time.
Up next, we go on the trail.
WALLACE: The Republican race for president has been slow to develop. Certainly much slower than four years ago. But all that changed this week with a rough and tumble debate, an exciting late edition to the field, and the big Ames Straw Poll.
As we said, things are heating up on the trail.
UNIDENTIFIED MALE: I'm going to give you a reverse split. Ready? We're not going to drop it. You ready?
PAWLENTY: It is an indisputable fact that in Congress, her record of accomplishment and results is nonexistent.
BACHMANN: When you were governor in Minnesota, you implemented cap and trade in our state. That sounds a lot more like Barack Obama if you ask me.
MITT ROMNEY, REPUBLICAN PRESIDENTIAL CANDIDATE: Look, I'm not going to eat Barack Obama's dog food. All right? What he served up is not what I would have done if I had been president of the United States.
WALLACE: How do you respond to people who say that your campaign has been a mess so far?
NEWT GINGRICH, REPUBLICAN PRESIDENTIAL CANDIDATE: Well, let me say, first of all, Chris, I took seriously Bret's injunction to put aside the talking points. And I wish you would put aside the "gotcha" questions.
WALLACE: I think those are questions that a lot of people want to hear answers to, and you're responsible for your record, sir.
REP. RON PAUL, REPUBLICAN PRESIDENTIAL CANDIDATE: Iran is a country that has been at war with us since 1979. The blowback came in 1979, and it's been going on and on because we just plain don't mind our own business.
SARAH PALIN, FMR. ALASKA GOVERNOR: I don't want to be seen as or perceived as stringing people along. Asking supporters, oh, don't jump in there on someone's else's bandwagon because I may jump in, so hold off a little bit, that's not fair to them.
PERRY: It is time to get America working again, and that's why with the support of my family and unwavering belief in the goodness of America, I declare to you today as a candidate for president of the United States.
PAWLENTY: We know what America needs, but unfortunately Barack Obama has absolutely no clue. He is like a manure spreader in a windstorm.
BACHMANN: Whether we are Tea Party or social conservative or fiscal conservative or national security conservative, we stick together, and this will happen.
WALLACE: If you had been in Ames, Iowa, Saturday, once again you would have been very proud of this nation. It was a kind of political state fair.
Thousands of Americans showed up to talk about issues, to listen to speeches, and most of all to vote. It was democracy at its best, and it was just plain wonderful to watch.
And that's it for today. Thanks to everyone on our Fox News crew here in Iowa for all their hard work.
Have a great week, and we'll see you back in Washington next "Fox News Sunday."
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