The FBI has confirmed that North Korea was behind the recent cyber-attack on Sony Pictures, and now the entertainment company has announced that it will no longer release the controversial comedy “The Interview” on Christmas Day, amid threats of violence and pressure from theater owners. Have we underestimated North Korea’s cyber capabilities? We’ll discuss exclusively with Rep Mike Rogers (R-MI), Chairman of the House Permanent Select Committee on Intelligence.
Sen. Kelly Ayotte, Gov. Martin O'Malley talk economy, race for the White House
Written by Chris Wallace / Published October 07, 2012 / Fox News Sunday
Special Guests: Sen. Kelly Ayotte, Gov. Martin O’Malley, Brett O'Donnell
This is a rush transcript from "Fox News Sunday," October 7, 2012. This copy may not be in its final form and may be updated.
CHRIS WALLACE, HOST: I'm Chris Wallace.
A new jobs report and the first presidential debate shakeup the race for the White House.
WALLACE (voice-over): Unemployment drops below 8 percent for the first time in 44 months. Both sides say Romney wins debate one.
With 30 days until the election, we'll discuss where the campaign stands now with Republican Senator Kelly Ayotte and Democratic Governor Martin O'Malley.
(on camera): Then, a debate guru explains the dos and don'ts, when 67 million people are watching.
(voice-over): We'll ask Brett O'Donnell to review what Obama and Romney did in the first debate and what they should do better, next time.
(on camera): Plus, this week's face off between the vice presidential candidates.
(voice-over): We'll ask our Sunday panel to handicap Biden versus Ryan.
And with the campaigns in post-debate spin cycle, we go on the trail.
All, right now, on "Fox News Sunday."
WALLACE: And, hello, again, from Fox News in Washington.
Big changes in the presidential race, this week. The Romney campaign was reenergized by the governor' strong performance in the first debate. But President Obama got a big boost with a new jobs report, that showed a sharp drop in the unemployment rate.
We're going to have our own debate today between Democratic Governor Martin O'Malley of Maryland and Republican Senator Kelly Ayotte of New Hampshire.
And to both of you, welcome to "Fox News Sunday."
GOV. MARTIN O'MALLEY, D - MD: Thanks, Chris.
SEN. KELLY AYOTTE, R - N.H.: Great to be with you, Chris.
WALLACE: Let's start with those jobs numbers that came out Friday, the unemployment rate dropped from 8.1 percent to 7.8 percent. That's the lowest since President Obama took office. The government said 114,000 jobs were added. But in a household survey, 873,000 more Americans reported having jobs. Senator Ayotte, isn't the economy getting better?
AYOTTE: Well, I think, what is disappointing about the report is the downtick we saw in unemployment is because of part-time work, for economic reasons. So people who want full-time jobs, taking lower pay, you can't support a family on part-time work.
And, of course, we still have the sad fact that we have the lowest labor participation rate since 1981. If the number of people who were working or participating in the workforce were the same as when the president came into office the unemployment rate would really be 11 percent.
So, I don't think there's any cause to celebrate, here and I think if you told the American people four years ago, that the unemployment rate is going to be 7.8 percent, at this point, during the president's term, I don't think anyone should be satisfied or happy with that.
WALLACE: Governor, are you satisfied or happy?
O'MALLEY: No, I don't think any of us should be happy. We want to return to full employment. But what we've seen now is 31 months in a row, consecutive months in a row, of private sector job gains. So, it is far better to be gaining jobs than losing 800,000 a month, as we were when George Bush was in office.
We still have a long way to go, but we are moving in the right direction. Unemployment, now, has been driven down to a 44-month low. It is lower now than it was in the last month of George Bush's presidency, the last four months.
And we'd have seen home foreclosures driven down to their lowest levels, in five years. So, they are lower now than when President Obama took office.
So it's all about middle class security -- security in your home, security in your jobs and we are making progress.
WALLACE: But, Governor O'Malley, at 7.8 percent, what it is as of Friday, no president has been re-elected with unemployment this high since FDR back in 1940. No president has been elected with growth this low. It's now 1.3 percent, for the second quarter -- with growth this low, since they started measuring GDP growth in 1930.
By historical standards, this is still a very weak recovery.
O'MALLEY: Oh, without a doubt. We still have a long way to go.
And speaking of FDR, no president since him was left bigger job losses, bigger unemployment and bigger deficits and more wars than President Obama, was, by the failed policies of George W. Bush, which resulted in directly, the greatest job losses since FDR. This is not easy and it is hard work but we are moving forward.
AYOTTE: Hey, Chris, let's talk about, though, his policies. Of course, we didn't hear in the hour and 25 minutes of debate anything about the stimulus package, because if you look at the policy, the trickle-down government policy, as the governor described it, they represented below 6 percent unemployment right now, after spending all of that money.
So, they had full charge of the first two years and the policies that this president put into place, actually made it worse. Including the fact that ObamaCare is actually -- you ask small employers, it is causing them not to hire because of rising health and gas prices doubled.
The middle class is buried under this administration. And the vice president said it aptly and it's true.
WALLACE: Let's turn to a couple of issues that came up in the debate. Obviously, the jobs report came out after the debate. Both sides since the debate have been saying that the other candidate is lying about his position and let's start with taxes.
Governor, the president keeps saying that Mitt Romney is proposing a $5 trillion tax cut. That's not true.
O'MALLEY: Well, Chris, wait a minute here. The governor -- former Governor Romney is proposing a 20 percent cut to income taxes, including income taxes for the wealthiest of Americans. And, I believe a 30 percent cut to corporate income taxes, including for people like big oil, that is socking all of us at the pump, right now.
Any economist may debate whether it adds up to $4.9 trillion or $5 trillion and the fact of the matter is, in this debate, we saw Big Bird meet the big lie. In fact, when you do those sorts of tax cuts, there are costs to those tax cuts. The biggest driver to our deficit --
WALLACE: If I may, sir, that's -- you are talking about half the plan. It would be like talking about Obama's jobs plan, the entire plan for getting the country back to give more money to teachers and, then saying, well, that's a ridiculous plan. Well, it's not Obama's plans.
Similarly, you are mischaracterizing the Romney plan, you're saying, it is -- you are right, $5 trillion by lowering the tax rate but he talks about cutting loopholes -- but is part of the plan.
O'MALLEY: Oh, Chris, which loopholes and which deductions?
Senator, I doubt seriously you would be in favor of doing away or cutting the home mortgage deduction, for middle class Americans.
Senator -- I mean, Governor Romney has not said what the secret plan is for these $5 trillion in tax cuts like he will not talk about what his tax returns have been or how much money --
AYOTTE: With all due respect, Governor, Governor Romney made it clear in the debate and he was actually able to speak directly to the American people, that he is not going to lower the burden on upper income individuals. We all know, Chris, that upper income individuals rely more heavily on deductions, that he is going to give the relief to the middle class, that it's going to be deficit neutral.,
And, of course, one of the best lines of the debate, you can -- I've got five sons and you can tell the story, I'm used to hearing the story five times and having me believe it to be true. But we know it's not true what they are saying about his tax plan.
Now, let's talk about the president's vision.
O'MALLEY: Well, let's talk about where his deductions are.
WALLACE: Wait, let's finish that and then we will talk about that, Senator, because part of the problem, I have asked Romney and Ryan repeatedly, I asked Ryan on this show, last Sunday, I don't agree with you it is a $5 trillion tax cut but, I said where do you make up the $5 trillion for lowering tax rates in terms of the deductions and, the loopholes, how do you make it up -- they refused to tell us, and, independent experts say even if you took away all the deductions, it's not going to add up to $5 trillion.
AYOTTE: Chris, what the governor said in debate, he understands he has going to have to work with both sides of the aisle. We know, right now, that for example, in the House, Dave Camp is working on the issue of lowering, simplifying -- even Max Baucus in the Senate -- they've had discussions and he said in the debate, listen, I'm going to work with members of both sides of the aisle. It's looking at a Simpson-Bowles-type model.
This is not new and we know it can be done. And, of course, if you go back to when it was last done, of simplifying the tax code, that was of course --
WALLACE: Simpson-Bowles were a lot more specific about lowering the rates, but also how they were going to --
AYOTTE: What he has said is he's going to work across the aisle -- unlike this president when he pushed through the health care bill on a partisan basis -- he's going to listen to both sides of the aisle and he's going to make sure, though, that these three principles stay clear. That he is going to give relief to the middle class, and he's going to make sure that we're more competitive, of course, creating jobs, because so many small businesses, file as individuals, and higher income individuals will not pay less and it will not impact the deficit.
WALLACE: Now, you were about to talk about the president's vision.
AYOTTE: Yes. You know, one of the things is the president's vision for or country, the best way you put forth a vision is the budget. And he talked about, at the debate, his so-called $4 trillion plan to reduce the debt.
But, what that really is, is this budget, the budget that he puts forth, one of the most shocking things about the lack of leadership in Washington, from this president, is that in three years, not one member of either party would vote for his vision, his budget. Why? It's the worst of both words, a massive tax increase that hurts jobs creators, and it brings us to $25 trillion in debt.
And so, that's the vision. We can expect more.
One of the things that came out of the debate is, here we are, we're going to have more of the same -- more taxing, regulations, and debt, and economic stagnation.
WALLACE: Let me ask you about the president's budget, Governor, because, one thing he counts a trillion dollars, that was already part of the debt deal last August. It's not a new proposal, it's old savings, that both sides agreed to in August, and, he also takes almost a trillion dollars in budget savings -- spending savings -- from the wars that we weren't going to fight anyway and we were borrowing money for.
So, you are not saving money, you're not reducing the budget. You are just saying we're going to count as savings the wars we were never going to fight in the first place.
O'MALLEY: I think there is actually -- actually two different numbers, you have to look at. You have to look at the operational budget, but you also have to look at the structural deficit. When President Obama took office he was left a $10 trillion deficit, by his predecessor, who squandered our surplus, into a huge deficit.
So, in paying the deficit down, you should score the fact that we are coming out of Iraq and Afghanistan.
And, the other thing that the president has proposed and understands, is, that we cannot cut our way to prosperity. We need a balanced approach. And, growing our economy, by doing things like the senator opposed, like restructuring the auto industry, in order to put people back to work, and make manufacturing jobs grow, is one of the actions that we need to take, in order to do that.
The fact of the matter is, the president, because he has the responsibility of office, has been specific about what he proposes and Mitt Romney tells us, to trust him, with his plan, it is hiding behind door number 3, with Carol Merrill and his undisclosed tax returns.
AYOTTE: You know --
WALLACE: I'm glad you practiced some lines for this.
AYOTTE: Really, the lines are great, but, Chris, the bottom line is this: his budget, tax increase on job creators, budget gimmicks, and, brings us to $25 trillion in debt over 10 years. In fact, this president has added more debt than any other president.
O'MALLEY: Not true.
AYOTTE: He said he would cut the deficit in half --
O'MALLEY: Well, Senator -- Senator --
AYOTTE: -- Governor, and we have had four years of trillion dollar deficit.
O'MALLEY: Senator, it's simply not true. You know, you are in the United States.
AYOTTE: -- is it not true that he said he would cut the deficit in half?
O'MALLEY: Senator, $10 trillion is what he inherited and you should know the deficit is now around $15 trillion or $16 trillion, it is not true. When you say it and you're repeating Governor Romney.
AYOTTE: He has added more debt than any other president.
O'MALLEY: That is not true.
AYOTTE: Than any other president.
O'MALLEY: No, it is not true. President Bush left him with $10 trillion deficit --
AYOTTE: President Bush added $4.8 trillion over eight years.
WALLACE: Guys, I said I'm going to be tougher than Jim Lehrer and I'm going to be.
Let's discuss a big issue that never came up in the debate, and that is the fiscal cliff of spending cuts and tax increases that is coming at the end of the year -- sequestration as it's called, unless the president and Congress work out a deal.
Under what's called the WARN Act, employers, this is not just federal employers, all companies, must tell workers, 60 days in advance, of mass layoffs.
But 10 days ago, the Obama administration told companies with federal contracts to ignore the law, don't notify your workers of these coming layoffs, as part of the fiscal cliff, sequestration, and, it would pick up the legal costs from any losses.
Senator Ayotte, what's wrong with that?
AYOTTE: It's actually quite shocking, Chris, but it's another example of this administration ignoring or skirting the law, to help the president's re-election chances, because, here's where we are. Sequestration is going to be the law in January, if we haven't seen the leadership on the president on this, and, he is worried because the companies know they'll have to lay people off and they've told Congress this.
And so, OMB comes out with an opinion saying you don't have to comply with the law and the worst part is that taxpayers are on the hook for the litigation costs when their workers don't receive the warnings that they are supposed to.
WALLACE: Governor, why is that right?
O'MALLEY: Chris, I have a lot of moms and dads who work in places like Northrop Grumman and Lockheed Martin, I refuse believe, once the election is passed that members of Congress will not come together, to find a way to put a greater priority on our nation's defense than we do on defending gobs of tax cuts for millionaires and billionaires.
The senator, herself, I think voted against the sequestration move. Paul Ryan voted for it. I do believe. It is an irresponsible path.
And, I'm confident that after this election, this we'll find a way to reprioritize --
WALLACE: If you are so concerned about the middle class, why not let these workers know they may be laid off?
O'MALLEY: Chris, none of those employers wanted to send out those WARN notices. Why would you do that when -- why would you assume --
WALLACE: Obviously the law was passed because they didn't want the employers to decide, they wanted to force them to notify their workers.
O'MALLEY: But to cause that sort of disruption about something that, all of us as Americans, trust, and believe that our Congress will be able to work out --
WALLACE: Why would you believe Congress is going to work out anything?
O'MALLEY: Well, Chris, because the devastation to the economy would be so great. I mean, look, I oftentimes disagree with my counterpart, Bob McDonnell of Virginia but we share a region of science and security, jobs depend on our ability to put a greater priority on our nation's defense and a balanced budget than it does on more tax cuts for millionaires and billionaires.
AYOTTE: I just have to make two points, Chris. First of all, we know from Bob Woodward's book said it was the president's idea on sequestration.
Second, the other that's ironic about this -- do you know that when the president was in the Senate, he and Hillary Clinton introduced a bill to allow workers to have greater notice. But now, he doesn't want to comply with the law because these notices will fall right before the election. Here's the most disturbing fact. What sequestration does to our national security and this president has not shown leadership, and I'm deeply concerned. He should be leading the effort now in Congress to resolve this.
WALLACE: We have less than a minute left and I'd like you to share it equally.
Early indications, after the debate, that Romney got some kind of bump in the polls, I'm going to ask you both, briefly, 30 seconds, each, Governor, where does this race stand now?
O'MALLEY: Well, I think we have three more debates coming up, one of which is the vice presidential campaign. Where Paul Ryan has been very specific about what he'd do in a budget, and that is the budget that would be bad for our economy, bad for job growth, it would increase taxes on 18 million people.
And, so, we have a few more rounds to go on this fight. What we saw on the first one was a very energized performance. It was Big Bird meets the big lies. And now, Governor Romney is going to be challenged for the remaining 30 days to explain how it is he pays for $5 trillion in cuts and tax cuts for millionaires and with billionaires, without the rest of us suffering the cost --
WALLACE: Senator Ayotte?
AYOTTE: The debate was a reset of this campaign, Chris, and what it gave was an opportunity for the American people, first of all, to debunk the myths created by the Obama campaign, through false advertising about Governor Romney. We saw the Mitt Romney that I know and those who have work with him and the American people got to see that, which is someone who is a proven, effective leader with a vision how to turn around the economy, and a path forward to address the debt. Unlike this president, we heard more of the same, America can't afford more of the same.
WALLACE: Senator Ayotte, Governor O'Malley, thank you both for coming in, who was the person behind door number 3?
O'MALLEY: Carol Merrill, you don't remember that?
O'MALLEY: "Let's Make a Deal?"
WALLACE: "Let's Make a Deal" but Carol Merrill, she was the one behind door number 3?
O'MALLEY: I believe so, and Governor Romney is hiding his plans and his tax returns --
WALLACE: I got that part of it. I mostly remember people dressed up like lobsters. Thank you.
AYOTTE: I think his vision was clear, unlike where we've been in the last four years.
WALLACE: All right. Enough. Thank you.
Up next, a debate guru tells us what Romney and Obama did right and wrong this week, and how they need to rethink their strategies.
WALLACE: He's been called the nation's best political debate coach. He prepped George W. Bush in 2004, John McCain in 2008, and, Michele Bachmann and then Mitt Romney in this primary campaign.
So, we've asked Brett O'Donnell to join us today to talk about this week's debate and how both candidates need to recalibrate for the next one.
Brett, the next question, I think it's fair to say, coming off this debate is what happened to President Obama? Why did he do so poorly? Now, obviously, you were not in the room. But best guess, what do you think his debate team failed to do, to prepare him for Wednesday night?
BRETT O'DONNELL, POLITICAL DEBATE COACH: Well, think, you know, there are three areas, Chris, where you have to prepare a candidate. The first is they have to know the issues. They have to know policy on both sides. I think President Obama is fine in that area.
But the last two areas, I think, his team may have failed, the second is, you have to have a strategy, going into the debate, to execute.
And, the second -- and the final thing is, you have to be mentally prepared. I don't think the president was mentally prepared to take on Governor Romney and I certainly thing that he was in shock when Governor Romney went on offense, and stayed on offense, throughout the debate. And put the president on his heels.
And, you know, the president's worst moments are when he's on defense and that is where he spent most of the night.
WALLACE: All right, we asked you to pick some moments where you felt the candidates did something particularly good or particularly bad. And we're going to start with your good moment for Romney, here it is.
(BEGIN VIDEO CLIP)
GOV. MITT ROMNEY, R - PRESIDENTIAL NOMINEE: My plan has five basic parts. One, give us internally independence, North American energy independence. That creates about 4 million jobs.
(END VIDEO CLIP)
WALLACE: And then he went on to list the other of his five-point plan. What's your point, get out your basic program right from start?
O'DONNELL: Yes. You know, from the very beginning, Governor Romney cast a vision for the debate. You know, folks had accused him of not being specific. The president was on him about specifics.
And from the very beginning, Governor Romney offered a vision of two different paths. The path the president has us on and the path that he would put us on and he talked about it specifically, he gave us five things that his plan would do.
And in a debate, that's a good amount of detail for the audience to catch onto. So he really set in motion a frame for the debate, which allowed him to really cast vision in the debate, which the president did not do.
WALLACE: All right. But for all of your criticism, you say the president did have some good moments, too. Here's your pick for that.
(BEGIN VIDEO CLIP)
PRESIDENT BARACK OBAMA: For 18 months, he's been running on this tax plan, and now, five weeks before the election, he's saying his big bold idea is never mind.
(END VIDEO CLIP)
WALLACE: What's so strong about that?
O'DONNELL: Well, you know, it takes the big issue of taxes that they had gone back and forth about for several minutes in that first opening block, and, it capsulized the president's entire argument in one sentence, and that creates a moment that the press can catch onto, a sound bite that the press can replay and that the audience can grab onto.
So, it was really the president's best line of the night. Beyond that, he was very much on defense, the entire night.
WALLACE: Now, you say that both candidates, both candidates, also stumbled during the debate, and this one, I have to say I didn't need your help on, this is a mistake that Obama made repeatedly during the debate. Let's watch.
(BEGIN VIDEO CLIP)
ROMNEY: You put $90 billion into green jobs. And, I -- look, I'm all in favor of green energy, $90 billion. That would have -- that would have hired 2 million teachers.
(END VIDEO CLIP)
WALLACE: And we saw that throughout the debate. Mr. Obama kept looking down, while Romney was making points, or criticizing him or attacking him.
Brett, I've got to think that's debate 101, that you would tell your candidate, always assume you're on camera and that, you know, they're looking at you, even if the other guy is speaking.
O'DONNELL: You know, it is funny, though, Chris, debate history, presidential debate history is replete with examples of where candidates don't pay attention to how they look, and how they say things, and are only worried about what they say.
But, audiences tell us that they take as much as 65 percent of their meaning from how candidates -- how people say things. You know, so you have the famous George Bush looking at his watch, or Al Gore, sighing in the debate. And this time around, we have the president, who seems to be disinterested, who seems to be irritated and not focused on the debate.
WALLACE: What do you tell a candidate to do when the other guy is speaking? Or even attacking?
O'DONNELL: Well, you know, certainly, you can take notes. You can look out at the audience. But every now and then you need to look at your point. It's kind of odd, if you -- if a person is talking directly to you, like Governor Romney was, during most of the debate, and, you don't look at them.
It's almost -- it's -- it could be considered rude or disinterested, irritated. It certainly sent the wrong message and at times, you've noticed the president is either looking to his left when his podium is canted to the right. And so, it sends the message, I'd like to get out of here as fast as possible.
WALLACE: Well, he certainly sent that message. But you said that Romney, for all of his good points, stumbled, too, during the debate. And you say one was when he was talking about reforming Social Security and Medicare, entitlements. Let's take a look.
(BEGIN VIDEO CLIP)
ROMNEY: If you are 60, or around 60 or older, you don't need to listen any further. But for younger people, we need to talk about what changes are going to be occurring.
(END VIDEO CLIP)
WALLACE: Now, I got to say, I was surprised by this. What did he do wrong there?
O'DONNELL: Well, I don't necessarily think -- you know, it is degrees of weakness and I think Governor Romney had a strong night. But in this section, on entitlements, he didn't necessarily look the best, and, it seemed to be the moment where he wasn't as sure of himself in the arguments as he was throughout the rest of the debate.
I mean, he was very strong on tax policy, he was strong on his economic policy, and, he used that $90 billion figure to great advantage, twice, he used it, against the president -- on energy policy, and he used it against him on education policy. But, during the section on entitlements, he didn't necessarily seem to be at his strongest. But still --
WALLACE: Now --
O'DONNELL: -- certainly much stronger than the president.
WALLACE: Now, I want to ask you about a moment you didn't bring up, that has gotten a lot of attention, let's take a look at this one.
(BEGIN VIDEO CLIP)
ROMNEY: I'm sorry, Jim. I'm going to stop the subsidy to PBS. I'm going to stop other things.
I like PBS. I love Big Bird. I actually like you, too. But I'm not going to -- I'm not going to keep spending money on things to borrow money from China to pay for it.
(END VIDEO CLIP)
WALLACE: Now was that smart, as a way to show that he is serious about cutting spending or is it always a mistake to take on Big Bird?
O'DONNELL: Well, you know, Big Bird is pretty popular but, you know, maybe the president would say Big Bird didn't build his own nest, I don't know. But, you know, I think that it is -- you know, it probably, you know, maybe not going after Big Bird, but, certainly, PBS, and, public broadcasting is popular in terms of taking them on in the spending, you know, on the spending side.
So, I don't think he was going down the wrong path, maybe not so much with Big Bird.
WALLACE: All right. We got a couple of minutes left. I want to look forward.
What do you expect from this week's vice presidential debate between Joe Biden and Paul Ryan?
O'DONNELL: Well, I am sure that Vice President Biden got a phone call from the White House, and said, you know, look, we didn't go after Governor Romney as much and so, you have to turn up the heat. Because, you know, the debates are about controlling the ground.
Whoever is viewed as the one who controls the debate, who is on the offense and I don't necessarily just mean attacking your opponent, Governor Romney didn't attack the president the entire night. Governor Romney stayed on his message.
And, whoever stays on message is going to be viewed as the victor and so I'm sure that Vice President Biden has been coached to get back on message and to go after Paul Ryan. Now, how much he can do that, we'll see. And, you know, I'm sure that Congressman Ryan has been preparing on the policy side, preparing mentally for this and it is the first time he'll have been on the stage. And so, you know, I think both men will be very prepared.
WALLACE: And briefly looking ahead to the next presidential debate on October 16th, nine days from now, you got to know that Obama is going to be much more aggressive to show that that was -- you know, just a bad night. If you are his coach, briefly, what do you tell Obama to do, and, if you are Romney's coach how do you tell him to prepare for a much more aggressive president?
O'DONNELL: Yes, if you are the president, you've got to get on offense. You have to use the things that have been successful to this point for them in the campaign. It was shocking that he didn't go into the 47 percent remark or Bain Capital or some of the other things that he has been using which seem to have given him a perceptive advantage coming into the debate. He's got to get on offense.
More importantly, he's got to offer a vision. I mean, the president had no vision for the future, in terms of what he would do, where he would take the country.
And, Governor Romney's vision was really clear. If you are Governor Romney, you have to stay on message, and, keep pressing on offense. I mean, that worked for him in the debate but he's got to be ready for a different President Obama.
The risk is, like Al Gore, back in 2000, if the president changes his persona too much, folks will report -- well, a different president showed up, and that hurt Al Gore in the 2000 debates. And the president really has a problem on his hands in terms of how he approaches his next debate.
WALLACE: We're going to have to leave it there. Thank you so much for coming in and sharing some of the tricks of your trade. And we'll see Thursday if Biden and Ryan were listening.
O'DONNELL: Thanks. Good to be with you.
WALLACE: Up next, with 30 days until the election, we'll ask our Sunday group whether Governor Romney's debate win or the drop in the unemployment rate will have a bigger impact on the race for president.
(BEGIN VIDEO CLIP)
PRESIDENT BARACK OBAMA: Well, my opponent -- he is doing a lot of -- a little tap dance at the debate the other night, trying to wiggle out of stuff he's been saying for a year.
(END VIDEO CLIP)
(BEGIN VIDEO CLIP)
GOV. MITT ROMNEY, R - PRESIDENTIAL NOMINEE: You heard his answers. And -- and I think, as a result of those -- those answers, the American people recognize that he and I stand for something very different.
(END VIDEO CLIP)
WALLACE: Governor Romney and President Obama still arguing, late this week, about who won their first debate.
And it's time now for our Sunday group, Brit Hume, Fox News senior political analyst; Mara Liasson of National Public Radio; Kimberley Strassel from The Wall Street Journal; and Kirsten Powers of The Daily Beast website.
Well, before we talk about the debate, let's dig into the latest news, and that was the jobs report that came out Friday that showed a sharp drop from 8.1 percent to 7.8 percent.
Brit, how big a boost for the president and how big a setback for Romney?
HUME: It's a -- it improves the talking point that the president has that it's now, you know, below 8 percent. Eight percent has been thrown in his face now for some time. I don't think, however, people make up their minds on the economy based on the unemployment number. I think they make up their minds about the economy based on what they see around them, what they feel in their own life, what the people they know and -- or are related to are telling them about their experience in the job market and so on.
And, given the fact that, left intact in this job report is the overall employment and underemployment rate, which is up to 14.7 percent and unchanged, a very bad number indeed, I think that reflects what people see around them, and I don't think this -- this helps the president very much.
WALLACE: Mara, 7.8 percent, do you think that changes people's perception that, well, maybe the economy is getting better?
LIASSON: I think it can, but I agree with Brit it has to do with how people are feeling about their own situation. We have seen consumer confidence getting better. And I would say one of the reasons that the president had been doing a little bit better, recently, until the debate, was because not only did he have a good convention and the Republicans didn't have a great one but also because people are paying down their debt. More people are feeling confident about the future. Consumer spending is going up. There has been a little bit of an uptick in the way people feel about the economy, a little more optimistic.
Now, whether one month of jobs data is going to make a huge difference, I doubt it.
WALLACE: Kim, there was obviously also another piece of big news, and that was the debate. Which do you think has more resonance with voters, the new jobs numbers or what they watched on their TV Wednesday night?
STRASSEL: Seventy million people watched this debate and they got to see these candidates unfiltered. And people have said that Mitt Romney definitively won this, and he did because what he did is he did two important things. He went out and he talked about broad economic concepts. He said here are the ways that you can, for instance, reduce the deficit; here are the different options you have when it comes to raising taxes or not raising taxes. And then he laid out his own policies and he connected them to the voters that he was trying to talk to. And that's why he got the win on Tuesday.
POWERS: Well, between the two, definitely the debate is by far the most important, and I think the jobs numbers to a certain extent were baked in already, and the drop, while significant, isn't -- it's not like a drop to 5 percent or something. We still have a high unemployment number.
It has given the president something positive to say about the economy. He's already worked it into his stump speech, you know, that we're now at the lowest point since he came into office. So that's definitely a positive thing. But overcoming what happened in that debate is a much bigger problem for him.
WALLACE: Brit, there's not much disagreement, really -- in a town where everybody disagrees about everything, there's not much disagreement that Romney won the debate.
Take a look at the latest cover of Newsweek -- or, rather, of The New Yorker, which is just out. And it shows Romney debating an empty chair, much as Clint Eastwood did at the Republican Convention.
But the Obama camp is in overdrive trying to undercut Romney's victory, basically saying he lied about his positions. How's that working?
HUME: I don't think that's working very well. And what I would say about this is that this idea that Romney won the debate because Obama basically didn't show up -- I don't buy that.
The Barack Obama I heard on that debate stage was the Barack Obama I have been listening to now for four years. He sounded very much like himself. I don't think he was terribly bad. I think he has a very weak case. And I think that the circumstances in the country present the challenging candidate with all kinds of opportunities. Mitt Romney was on his game and he took advantage of those opportunities.
The president is saddled with weak circumstances and therefore a weak case. And it is not surprising to me that he didn't argue it very well. And the other thing is, despite the -- his reputation as being this world-class orator, well, maybe he is with a set piece speech, but there's not a lot of evidence in the past that he was ever a great debater.
So you put those things together and I don't think this thing is as big a shock as -- as the president's supporters on the left feel. I think they all thought he was 10 feet tall. He's not 10 feet tall and never has been.
WALLACE: But, Mara, about the specific issue of they're doing truth-squading, fact-checking of Romney and they continue to press -- I don't think it's a very accurate thing -- the $5 trillion tax cut. They talk about, well, in fact his plan would Pell grants and aid to students. Is that a way to go at it, to -- to say, well, he's misrepresenting who he is?
LIASSON: I think that that's pretty much all that they have coming out of this debate. I mean, Romney did something pretty extraordinary. He basically liberated himself from the modern Republican Party. And he'd felt quite bound to it during the primaries and in the convention. But he presented himself as this moderate, appealing businessman. He's not going to raise taxes on the middle class. He doesn't have a $5 trillion tax cut.
And I think that that was a huge, huge accomplishment. He didn't look like he was disconnected from ordinary people. Now, I think the difficulty for the president -- I think it's a reasonable thing to try to do, but the next debate is in a town hall format. That's going to be hard to attack somebody in front of a bunch of people who are asking him questions.
WALLACE: I -- I Kim, I want to pick up on this thing that Mara just mentioned, the idea, because you're -- Wall Street Journal had a big article about it this weekend, the idea that Romney is pivoting from the right to the center on issues like his tax cuts, on immigration, on bipartisanship.
Do you see him softening some of his conservative positions?
STRASSEL: Well, this has been driven by the presidency. I don't think if you asked a single conservative among those 70 million who were watching him and were absolutely very excited about his performance that they feel that they haven't his views at all. What's he's done is explain them better.
The -- the...
WALLACE: Yeah, but the tax cut is not quite a tax cut anymore and on immigration, well he's not going to end the waivers for the -- for young people, the so-called Dream Act light.
STRASSEL: I think a lot of this though is the press pivoting off of what Barack Obama has described his plans as being.
Mitt Romney has been fairly consistent about what he plans to do. He just went out there and said more clearly to everyone on Tuesday night.
And this actually does put the Obama team in a very difficult position because, this was the heart of their strategy, was to paint him as this sort of outrageous guy with failed ideas. That has not worked now. And so what do they do? They can't do a big change themselves, they can't go out propose their own big ideas.
And the other problem is, is now -- now they're going to get down and dirty. They're going to claim that he's a big liar, that he's a flip flopper, that he can't be trusted.
If the president goes out -- that this is why he did not do that in the first debate, President Obama, because he himself, a big part of his reelection bid is on looking likable and now that he's in this position of having to go out in a second debate and really take the gloves off.
That's how --
WALLACE: Briefly, Kirsten, you know somebody said to me a while ago, the problem with debates is that all Romney was going to have to do was change the way people perceive him, which is easier to do than change your record, and that's Obama's problem.
POWERS: Right, but it -- what -- but because he was painted as being something that was so outrageous this -- this person is -- in just a flip flopper, doesn't know what he stands for, this plutocrat, all these things, it's was kind of easy for him to show up and not be that person.
And I think that, yes, Obama has a difficult record, but I actually have to disagree a little bit with Brit in the sense that I think Obama did do spectacularly bad. I -- I don't think it was just -- I don't think I'm someone who's deeds and misdeeds ten feet tall.
I -- I but looking at him, I really felt this is a person who is not engaged, who seems like he doesn't want to be there. I mean he couldn't just do the basic threshold of, I'm at a debate and I'm just going to act like I care.
WALLACE: I mean there's an awful lot of stuff he left on the table, 47 percent...
WALLACE: ... Bain, tax returns...
POWERS: And it was -- it was bad -- they had a bad strategy. They went in to play it safe and he played it too safe. He didn't -- their attitude was we're going to let, you know, we don't benefit from a fight with Romney.
WALLACE: Well, they didn't have a fight with Romney. But all right.
Now we have to take a break here, but when we come back, round two, Biden and Ryan. Stay tuned.
(BEGIN VIDEO CLIP)
BIDEN: The thing about Congressman Ryan is he's been straightforward up until now about everything he is -- all -- all -- all the significant changes he wants to make.
WALLACE: He's fast on the cuff, he's a witty guy, he knows who he is and he's been doing this for 40 years. So you're not going to rattle Joe Biden.
(END VIDEO CLIP)
WALLACE: Vice President Biden and Congressman Paul Ryan, both trying to set expectations ahead of their debate on Thursday and we're back now with the panel.
Well, I don't know how important it is in terms of who's going to actually win, we'll deal with that in a few minutes.
But I've got to say, I am really looking forward to this Ryan-Biden debate. On the one hand, you've got an old-school liberal, on the other hand, you've got a young gun conservative. I think it's going to be a real culture clash.
Kim, what do you expect?
STRASSEL: I mean I think what you just said, what Joe Biden has going for him is that when Barak Obama went into his debate, expectations were huge that he was going to mop the floor with Romney. Now, as it happens, he didn't have a very good night.
Joe Biden does not have a high expectations problem. OK? People think of him as the gap guy and I think that underestimates Joe Biden. He's very good. What -- what Paul Ryan said there is true. He's been doing this for 40 years, he's going to be on message.
He's got something else, too. Barak Obama felt constrained, I think, to go after Mitt Romney with some of these lines, 47 percent, Bain Capital, he was going to look presidential.
Joe Biden does not have that problem. He is going to throw everything in the kitchen sink and Paul Ryan -- and Paul Ryan's job is going to have to be the not only meet that and turn it, but also consider -- continue to do this sort of positive message that Romney did in his debate.
WALLACE: You know, Kirsten, there is this perception that Biden is a loose cannon, that's a (inaudible). And I specifically asked Paul Ryan about that last week and he said, not in these highly visible, highly structured events that he's disciplined, that he doesn't make mistakes. He's obviously been studying all of his debates.
What do you expect from the vice president?
POWERS: Well I think that's true. And also, if -- remember, a lot of his gaffs, A, usually aren't covered by the media and B, are -- are often sort of humorous but not damaging in the sense that he's changing policy or, you know, putting something out there that is going to box the president in with the one exception of -- of gay marriage, of course. That would be a gaff that actually caused problems for the president.
So I expect him to -- to do a good job. I -- what I expect him mostly to do is to try to wrap Paul Ryan's plans around Mitt Romney's neck. So he's -- he has said, oh I've been spending a lot of time studying Paul Ryan's positions. And so he wants to basically --
WALLACE: And there's some difference between Paul Ryan --
POWERS: There are differences and he --
WALLACE: ... has proposed in the budget over the years --
POWERS: -- going to -- I think he's going to focus on it.
WALLACE: -- and what Romney's proposing now.
POWERS: He's going to focus on those differences, I think, and try to say, you know, this is -- this is what your plan -- plans are, you know, why are they different from Romney's and -- and really try to...
WALLACE: Or -- or say, hey that's just what you really believe and he'll do.
POWERS: Yeah, that's exactly.
WALLACE: Biden was in full roar this week, Brit, when it came to raising taxes. Let's take a look at what he had to say.
(BEGIN VIDEO CLIP)
VICE PRESIDENT JOE BIDEN: We're going to ask the wealthy to pay more. My heart breaks. Come on, man. You know the phrase you always use, Obama and Biden want to raise taxes by a trillion dollars. Guess what? Yes we do in one regard, we want to let that trillion dollar tax cut expire so the middle class doesn't have to bear the burden of all that money going to the super wealthy.
(END VIDEO CLIP)
WALLACE: Does that help or hurt the president.
HUME: I don't know. Look, I -- I think -- I think that - that there's an interesting strategic decision that has to be made by Team Obama for this debate.
If Biden spends his time attacking Paul Ryan's plan, Ryan will make it clear that that's not the plan they're running on. And if he spends a lot of his time attacking Paul Ryan, and it has a great doing that, it won't make any difference.
What I think Biden has to consider doing is using his time to attack Mitt Romney to take him down a peg after his performance in the first debate.
HUME: That's the most urgent need, it seems to me, the Obama campaign has, is to undo some of what -- what Mitt Romney achieved.
WALLACE: And where would you suggest that he go after Romney?
HUME: Well, who knows? I mean, you know, I'm not sure Romney is as vulnerable as the Obama team think, but, presumably, you know, you'd hit him on the 47 percent; you know, you'd hit him on flip-flops and so on. You'd -- you know, you'd attack -- you'd take all these things that the Obama camp has now noted were, quote, "lies" and try to make some hay out of them.
That's my guess what he would do. That would put -- then Ryan would have to spend time defending and so on. I don't think this debate's going to make all that much difference, but I think it will be interesting to see which way Biden goes, whether he goes after Ryan or whether he goes after Romney.
LIASSON: Yeah, I agree with Brit. That's the thing to do. Vice presidential debates usually don't matter, but there is a further difficulty now for Biden. Up until now, there hasn't been any Romney- ism. He's seemed, kind of, like a creature of the House Republicans, didn't have his own agenda, couldn't present a vision. Well, he changed that because he looked commanding and he looked like he was effective. And he really righted his campaign in the debate. So it's going to be harder to paint him as, kind of, a -- you know, a handmaiden of the House Republican, quote, "extreme agenda" that Paul Ryan epitomizes.
That's going to be a little tougher. It's going to be easy for Ryan to say, hey, "I'm running on the Romney ticket."
WALLACE: Let me bring you into this question about Ryan and his vulnerability, Kim.
Ryan, obviously, over the years, has taken some positions on budget cuts that Romney has moved away from. For instance, Ryan had the $716 billion cut in Medicare, which Romney has disavowed. How vulnerable is -- is Ryan?
And -- and, you know, and the argument which I suspect will be made, hey, if you want to know what Romney is really going to be like, just look at what Paul Ryan has been proposing?
STRASSEL: Look, I don't because I agree with Brit. I think he fundamentally says, "Look, it's not my plan; I'm running with Romney."
And one of the things that Paul Ryan has done remarkably well and he's gotten better at since he was picked is internalizing Romney's plans and explaining them just as well as he used to explain some of his old -- his positions, the way he ran.
I think the other problem, too, that the Barack Obama campaign has in doing this is they've got to make a decision. Are they going to paint Romney and Ryan as extremists? Or are they going to paint them as flip-floppers? Because they're not the same thing. And if he's going to go after Ryan and say "You're an extremist" and then go after Romney and say "You don't know what you think," I mean, those things are mutually exclusive.
WALLACE: The bottom line -- and you hinted at it -- is, does this really matter? You know, as entertaining as it may be, do people vote based on what the vice presidential candidates say?
And I think we'd all agree the most one-sided debate maybe ever was Lloyd Bentsen against Dan Quayle. Brit Hume, you were on the -- you were on the podium that night and -- or, rather, on the panel, and, you know, that was the one -- and we're seeing the moment right here -- where Bentsen says to Dan Quayle, you know, "You're no Jack Kennedy," and you can hear the roar from the crowd. But Bentsen was running with Dukakis. We didn't end up with President Dukakis. Does this matter?
HUME: I remember, after the debate was over -- I'd asked the question of Quayle, what would -- if something happened to the president, God forbid, what would be the first thing you'd do? And he fumbled the question. Bentsen then had a rather smooth answer to it. And I -- when I got a turn again, I asked the same question because I thought, you know, Bentsen had a chance to think about it while -- while -- while Quayle was fumbling; give him another crack at it to be fair, right? He fumbled it again.
And then Tom Brokaw asked him the third time and that was when he gave the answer mentioning Jack Kennedy that left the opening for Bentsen to say "You're no Jack Kennedy."
WALLACE: So it's all your fault is what you're basically saying.
HUME: No, what I'm saying is, I thought at the time, man, this -- that will turn this into a rout. That will be the sound bite that's played forever. This is a bad night for the ticket, for the GOP ticket. I went downstairs afterwards into the press room and I saw David Broder, whom -- of The Washington Post, longtime pretty fair-minded reporter, and I said what do you think about this?
He said -- well, he said, there may be some marginal effect from this, just slightly affect, but I don't think it will really make much difference, and he was absolutely right. It didn't make -- in the end, it didn't make any noticeable difference in the outcome of the election.
WALLACE: Fifteen seconds, Kirsten. Does it matter?
POWERS: I think it matters very little unless something super- dramatic happens, in terms of -- let's say Paul Ryan just announced, something -- some new policy or something, you know? And then, in that way, it would matter.
But, otherwise, I don't think it makes much difference.
WALLACE: We're going to invade Iran? All right. Thank you, panel.
See you next week.
Don't forget to check out "Panel Plus," where our group picks right up with the discussion on our website, foxnewssunday.com. We'll post the video before noon Eastern Time. And make sure to follow us on Twitter, @foxnewssunday.
Up next, we go on the trail.
WALLACE: It was the biggest week yet in the campaign, with the first presidential debate and surprising new jobs numbers. And, you could feel the new intensity on the trail.
JIM LEHRER, MODERATOR, FIRST 2012 PRESIDENTIAL DEBATE: Welcome President Obama and Governor Romney.
ROMNEY: Go to Congress, fight for it.
OBAMA: That's what we've done, made some adjustments to it, and we're putting it forward before Congress right now, a $4 trillion plan...
ROMNEY: But you've been -- but you've been president four years.
OBAMA: It's about balance.
ROMNEY: You've been president four years.
ROMNEY: You said you'd cut the deficit in half. It's now four years later. We still have trillion-dollar deficits.
SEN. MARCO RUBIO, R-FLA.: This president was -- you could see it in the body language. He was so uncomfortable talking about the economy.
JEN PSAKI, OBAMA CAMPAIGN PRESS SECRETARY: Mitt Romney proved that he's willing to say and do anything to become president. Fact-checkers are having a good day today.
BIDEN: Listen to Governor Romney last night? They discovered the middle class!
It's like, my God, there it is!
REP. PAUL RYAN, R-WIS., VICE PRESIDENTIAL CANDIDATE: Dubuque, Dubuque.
OBAMA: It is no coincidence that I'm stopping at Michelle's Bakery.
(UNKNOWN): Mitt Romney!
HARRIS FAULKNER, FOX NEWS CORRESPONDENT: We begin with news the U.S. unemployment rate has dropped to its lowest level in nearly four years.
OBAMA: This morning, we found out that the unemployment rate has fallen to its lowest level since I took office.
ROMNEY: If the same share of people were participating in the workforce today as on the day the president got elected, why, our unemployment rate would be around 11 percent.
OBAMA: Today's news certainly is not an excuse to try to talk down the economy to score a few political points.
ROMNEY: It's time to have someone who's elected president who actually has a plan -- and I do -- will create 12 million jobs and rising incomes.
BIDEN: Now, that -- that's a serious sandwich. That's a serious sandwich.
WALLACE: And there will be a lot more fireworks in these final 30 days of the campaign.
Now, a program note: Be sure to tune into this Fox station and Fox News Channel for full coverage of this week's vice presidential debate. That's Thursday night at 9 p.m. And that's it for today. Have a great week. And we'll see you next "Fox News Sunday."
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On the Show
U.S. contractor Alan Gross, who was a prisoner of the Cuban government since 2009, was freed this week in a deal many hope signals a new era in diplomatic relations between the two countries. President Obama announced plans to “normalize” ties with the Cuba, beginning with re-opening the U.S. embassy in Havana, easing travel restrictions and reviewing the country’s label as a state sponsor of terror. We’ll debate whether or not this is good policy with two members of the Senate Committee on Foreign Relations, Sen Ron Johnson (R-WI) and Sen Ben Cardin (D-MD).