Exclusive: Mitt and Ann Romney on campaign mistakes, life after presidential election loss and political future

Written by Chris Wallace / Published March 03, 2013 / Fox News Sunday

Special Guests: Mitt Romney, Ann Romney

The following is a rush transcript of the March 3, 2013, edition of "Fox News Sunday With Chris Wallace." This copy may not be in its final form and may be updated.

CHRIS WALLACE, HOST: I'm Chris Wallace.

Today, our exclusive interview with Mitt Romney and Ann Romney, speaking out for the first time since the campaign.

(BEGIN VIDEOTAPE)

WALLACE: We asked them to describe the drama of Election Day.

When did you know you had lost the presidency?

We find out how they are adjusting to a loss they say was a surprise.

Mrs. Romney as we sit here, right now have you gotten over the defeat or is it going to take more time?

And we talk with the governor about the mess in Washington and what he'd do differently.

How do you think the president has handled the sequester? The $85 billion in automatic spending cuts?

Mitt and Ann Romney, it's a "Fox News Sunday" exclusive.

Then, the sequester kicks in. Now, what happens? We'll ask our Sunday panel, has the White House hyped the impact of the cuts or are we on a slowing-motion slide to real pain?

All right now on "Fox News Sunday."

(END VIDEOTAPE)

WALLACE: And hello, again, from Fox News in Washington.

They were in the spotlight for years, speaking to big crowds and tracked by reporters. But, since their defeat, four months ago, Mitt and Ann Romney have gone silent. That is until now.

This week, we flew to San Diego to sit down with the Romneys for their first interview since the campaign. We talked about why they lost. What they make of the mess here in Washington. And, how they are dealing with a life they didn't expect to be leading now.

(BEGIN VIDEOTAPE)

WALLACE: Take me back to Election Day, November 6th. Is it true that you both thought, going in, you were going to win?

ANN ROMNEY: Well, I for sure did. I think Mitt intellectually was thinking it was possible we couldn't. He knew how close it was but my heart and whole soul was, we're going to win, I was there.

MITT ROMNEY: Yes, I think we were convinced that we'd win. We saw that the polls were very close. But we knew the energy and passion was with our voters and my heart said we were going to win.

(BEGIN VIDEO CLIP)

BRET BAIER, FOX NEWS ANCHOR: Crucial swing state of Virginia, the commonwealth where the race is excruciatingly close.

(END VIDEO CLIP)

WALLACE: As the returns started coming in and they were not what you expected, what were your thoughts?

MITT ROMNEY: The exit polls came out first, and, suggested that it was going to be very close in Florida and we thought we'd win solidly in Florida and it was increasingly clear that this was going to be with the best case scenario, a long night.

WALLACE: When did you know you had lost the presidential?

MITT ROMNEY: It was a slow recognition, until ultimately, when the Ohio numbers began coming in and they were disappointing. I said, look, this looks like we have lost. Wasn't certain. Some people said, oh, look, if this number here comes in, you could win, but, you know, by 8:00 or 9:00, it was pretty clear that we were not going to win. And --

WALLACE: And what was that moment like?

MITT ROMNEY: Well, it's hard. It's emotional. I mean, there was such passion in the people who were helping us, I just felt, you know, we have really let them down.

ANN ROMNEY: It was a crushing disappointment. Not for us. Our lives are going to be fine. It's for the country.

WALLACE: Is it true you began to cry?

ANN ROMNEY: I did, of course. Yes. Very disappointed.

WALLACE: Cry for what?

ANN ROMNEY: Cry -- it's not -- again, is not sorrow for, oh, my gosh, you know, our lives are, you know, this dream -- the dream was to make a difference. The dream was to serve.

WALLACE: And you called the president and came downstairs and delivered your formal concession.

(BEGIN VIDEO CLIP)

MITT ROMNEY: I so wish I had been able to fulfill your hopes to lead the country in a different direction. But the nation chose another leader and so, Ann and I join with you to earnestly pray for him and for this great nation.

(END VIDEO CLIP)

MITT ROMNEY: It was all the people, who had helped, that counted on us, that came to mind. As I got up to speak and I look around that room, and I saw the people who were there and I believe I could have made a difference for the people in this country and you think, gosh, I just hadn't been able to get the job done and it was very hard.

WALLACE: In a flash, it was all gone, Secret Service, the crowds, the intensity, the minute-by-minute schedule and suddenly, nothing. How tough was that?

ANN ROMNEY: It's an adjustment. You know, it's interesting; in our church, we're used to serving and you know, you can be in a very high position, but you recognize you're serving.

And now all of a sudden, you're released and you're nobody. And we're used to that. It's like we came and stepped forward to serve. But the good news is fortunately we like each other.

(LAUGHTER)

ANN ROMNEY: And we like being with each other.

MITT ROMNEY: That's our life.

I mean, our life is the life we have with each other and with five sons, five daughters-in-law, and 20 grandchildren. But that's our life. That's who we are.

WALLACE: But isn't it tough when suddenly the Secret Service --

MITT ROMNEY: Well, it's different. But it's like, you know, riding on a roller coaster. We were on a roller coaster, exciting and thrilling, ups and downs. But the ride ends. And then you get off. And it's not like, oh, can't we be on a roller coaster the rest of our life? It's like, no, the ride's over.

WALLACE: So let me ask you about the months from November until now, were there tears?

ANN ROMNEY: Oh, for me, yes. I cried. When you pour that much of your life and energy and passion into something and you're disappointed by the outcome, it's very -- it's sad. It's very hard.

WALLACE: Governor, second guessing? Anger? Depression?

MITT ROMNEY: No, you look back at the campaign and say, OK, what did the president do well and you acknowledge that his campaign did a number of things very effectively. Of course, you rehearse all the mistakes that you made. And I went through a number of my mistakes, I'm sure. And then you think about the things that were out of our control.

But you move on. I mean, I don't spend my life looking back. It's like, OK, what are we going to do next?

WALLACE: Governor, we begin to see random pictures of you, pumping your own gas with your hair messed up; hugging Ann in the kitchen, hanging out with the kids at Disneyland. Did you have a plan? Or were you just trying to get through the day?

MITT ROMNEY: No, we were just living our life. And obviously people would see us in various places, either walking along the beach or, in this case, getting gas for the car. And they'd take out their cell phones and take a picture. None of those were done by professional photographers or I might have, you know, combed my hair, seen them coming.

But, no, we're just living our life.

WALLACE: Mrs. Romney, as we sit here right now, have you gotten over the defeat? Or is that going to take more time?

ANN ROMNEY: I think it takes time. I think I'm mostly -- you know, the great "Princess Bride" line, "mostly dead."

I'm mostly over it. But not completely.

And you have moments where you, you know, go back and feel the sorrow of the loss. And so, yes, I think we're not mostly dead yet.

WALLACE: A week after the election, Governor, you had a conference call with top donors, in which you said that -- you blamed your defeat on the president giving away things.

(BEGIN AUDIO CLIP)

MITT ROMNEY: It's a proven political strategy which is, you have a bunch of money from the government to a group and, guess what, they'll vote for you.

(END AUDIO CLIP)

WALLACE: To some people, it sounded like the remark you made in your campaign about 47 percent of Americans looking for handouts.

MITT ROMNEY: The president had the power of incumbency. ObamaCare was very attractive, particularly to those without health insurance. And they came out in large numbers to vote. So that was part of a successful campaign.

WALLACE: But fairly or not, you know a lot of Republican leaders roasted you for those remarks. Iowa Governor Branstad, "My feeling is we need to turn the page." GOP strategist Ed Rogers, "He" -- you -- "can exit the stage anytime and no one will mourn."

Did that hurt? Did you feel, in a sense, you were being pushed out of the party?

MITT ROMNEY: I'm not going to second-guess what other people have to say. Look, I don't look back. I look forward.

ANN ROMNEY: You never like it. And I never like it. And I -- you know, I'm like a she-lion when it comes to defending Mitt. And I know -- I know his heart; I know his abilities. I know he would have been a fabulous president and I mourn the fact that he's not there.

And it would have been -- it would have been much better for America, I believe, in my heart if he had been there right now.   WALLACE: We're going to talk to your husband separately. You're going to have to just sit here for a minute. But I want to ask Mrs. Romney a few questions.

(CROSSTALK)

ANN ROMNEY: That's going to be hard.

WALLACE: All right. Well --

(LAUGHTER)

MITT ROMNEY: I'll say nothing.

WALLACE: Why do you think he lost?

ANN ROMNEY: I think they had a better ground game. And I think we were not aware -- you know, we certainly had the passion coming from our side, and I don't think we were as aware of the passion that was coming from the other side. I think we were a little blindsided by that.

WALLACE: Do you think that the two of you at all contributed to this image, which the other side certainly played up, that you were so wealthy that you were somehow out of touch with the concerns of the average American?

ANN ROMNEY: You know, that's -- that's a reality that, you know, you can't change. I mean, we are who we are. The thing that was frustrating to me is that people didn't really get to know Mitt for who he was.

WALLACE: Well, I want to pick up on that, because there were reports that you and your oldest son, Tag, were frustrated with the Romney campaign, that they didn't, quote, "let Mitt be Mitt," that they didn't let him show his more open, compassionate side. True?

ANN ROMNEY: Well, of course. It was partly -- it's true. But it was not just the campaign's fault. I believe it was the media's fault as well, is that he was not giving -- being given a fair shake, that people weren't allowed to really see him for who he was.

WALLACE: All right, what about the media?

(LAUGHTER)

ANN ROMNEY: I'm happy to blame the media.

(LAUGHTER)

WALLACE: Do you think the media was in the tank for Barack Obama?

(LAUGHTER)

ANN ROMNEY: I think that it's -- anytime you're running for office, you always think that you're being portrayed unfairly.

And, you know, we -- of course, on our side believe that there's more bias in favor of the other side. I think that that's a pretty universal -- universally-felt opinion.

WALLACE: What do you think of the campaign that Barack Obama ran?

ANN ROMNEY: I think, obviously, it was a winning campaign. It worked.

WALLACE: Do you think it was fair?

ANN ROMNEY: No.

WALLACE: In what way?

ANN ROMNEY: Portrayal of my husband. He is an exceptional, wonderful person.

(LAUGHTER)

MITT ROMNEY: She's not biased at all.

ANN ROMNEY: I'm not biased! And, you know, and he -- I mean, he really is a selfless person that really, truly cared about the American people. He truly cares about making a difference and about helping others. And for him to be portrayed in a very negative light in another way was very hard.

He has enormous skill set in dealing with difficult issues and I totally believe at this moment if Mitt were there in the office, that we would not be facing sequestration right now.

WALLACE: So, what is your life like now? What are you doing? How do you spend your days? Governor, you can -- now you can talk.

(LAUGHTER)

MITT ROMNEY: My turn again.

WALLACE: Yes.

MITT ROMNEY: We've renamed our foundation The Romney Foundation for Children. We're going to help the very poorest kids on the world. We're going to help kids in this country with disease and great difficulty. And that's taking more and more of our time.

We've got a chance to spend more time with the grandkids. We just had twins born, as you know, and being with them was a thrill.

WALLACE: I have to clear up a couple of rumors. Were you approached by "Dancing with the Stars"?

(LAUGHTER)

ANN ROMNEY: I was.

WALLACE: And did you consider it?

ANN ROMNEY: I did consider it. I was -- I love the show. I love the show.

WALLACE: And why aren't you going to be out there doing the Paso Doble?

ANN ROMNEY: Well, you know --

(LAUGHTER)

MITT ROMNEY: I'm impressed you know what that is.

(LAUGHTER)

ANN ROMNEY: I would've loved to have done it, and I am turning 64, and I started thinking about it. I'm not really as flexible as I should be.

(LAUGHTER)

ANN ROMNEY: And now I know -- I understand, Dorothy Hamill has been picked, and I thought, oh my gosh, am I glad I didn't do that! I wouldn't want to compete against Dorothy!

(LAUGHTER)

WALLACE: Did the Republican Party approach you about running for John Kerry's Senate seat?

ANN ROMNEY: No.

WALLACE: That's not true.

ANN ROMNEY: I'm sure -- no, they didn't approach me. I don't think -- I think there was a thought that, oh, wouldn't that be fun for Ann to do that. I'm like, did anyone want to consider how fun it would be for me to do that?

(LAUGHTER)

WALLACE: Not a chance?

ANN ROMNEY: Not a chance! I'm enjoying life.

WALLACE: Tell us about the grandchildren and your involvement with them.

ANN ROMNEY: We're with them constantly. It's our life.

MITT ROMNEY: I mean, it's virtually every day. We see the -- one grandchild or another every day.

ANN ROMNEY: Every day.

MITT ROMNEY: We took them to Disneyland. We took them snow skiing.

And then our son -- sons Matt and Craig live close to an open space area. We throw the ball for the dogs, we play sports with the kids. They like kicking balls, hitting baseballs. You know, we do the things that grandparents are expected to do with grandkids.

WALLACE: Looking back and now, how do you both feel about what you've been through and where you are now?

ANN ROMNEY: I wish everyone could have just been in our pockets, gone with us, and seen what we had seen. And what you see when you see that are the heart of the American people.

I leave discouraged by the outcome of the election, but also optimistic about America, because of the people that live here. It's an amazing place.

WALLACE: Governor?

MITT ROMNEY: It was an exciting, thrilling experience. And it didn't end the way we wanted it to, but the experience itself was magnificent.

Were there tough days? Absolutely. Were there exhilarating days? Yes, even more of them.

And so, I count it one of the great life experiences. Anybody would say, can you imagine anything more fantastic than being able to run for president of the United States? And to --

WALLACE: I think of one thing more exciting -- winning.

MITT ROMNEY: Yes, winning. But the experience -- but two years -- and we've done it twice. Two years of really seeing the American people.

It's a great, thrilling experience of a lifetime, that we will obviously cherish throughout our lifetime.

(END VIDEOTAPE)

WALLACE: When we come back, we'll ask Mitt Romney about his frustration as he sees Washington trapped in fiscal gridlock. And, he talks more openly than he ever has about why he thinks he lost the presidency.

(COMMERCIAL BREAK)

WALLACE: After our interview with both Romneys, we sat down alone with the governor. We talked about the campaign and how President Obama has dealt with the nation's problems since his re-election.

But we started with why anyone should listen to Mitt Romney.

(BEGIN VIDEOTAPE)

WALLACE: Before we get to current events, what role do you see for yourself? What part do you want to play in the Republican Party? What role do you want to have in the national debate?

ROMNEY: Well, I recognize that I lost, so I'm not going to be the -- the leader of the Republican Party. Other people will take that -- that mantle.

But I want to have influence on getting our party into a position where we can be successful in solving the problems the country has.

WALLACE: You must know that there are a lot of people in the party who still blame you for losing the race they think that the Republicans could have won in 2012.

To a certain degree, when you hear about the rebranding, aren't people saying they want to distance the party from you?

MITT ROMNEY: Well, I recognize that as the guy who lost the election, I'm not in a position to tell everybody else how to win, all right? They're not going to listen and I don't have the credibility to do that anyway.

I look at what's happening right now, I wish I were there. It kills me not to be there, not to be in the White House doing what needs to be done.

The president is the leader of the nation. The president brings people together, does the deals, does the trades, knocks the heads together. The president leads.

And -- and I don't see that kind of -- of leadership happening right now --

WALLACE: What is this president doing?

MITT ROMNEY: Well, he's campaigning.

He's the only one that can say to his own party, look, you guys, I need you on this and get some Republicans aside and say -- pull them off one by one.

We don't have to have these -- these gridlock settings, one after the other, on issue after issue. And it's going to take real leadership and people in both parties willing to put aside political victories and start fighting for national victories.

WALLACE: So let me ask you specifically, how do you think the president has handled the sequester, the $85 billion in automatic spending cuts?

MITT ROMNEY: Well, no one can think that that's been a success for the president. He didn't think the sequester would happen. It is happening.   To date, what we've seen is a -- the president out campaigning to the American people, doing rallies around the country, flying around the country and berating Republicans and blaming and pointing.

Now, what does that do?

That causes the Republicans to retrench and then put up a wall and to fight back. It's a very natural human emotion.

You know, when I was elected governor of my state, I had a legislature 87 percent Democrat. It was not lost on me that to get anything done, I couldn't be attacking them. I had to find ways to reach out to them.

The president has the opportunity to lead the nation and to bring Republicans and Democrats together. It's a job he's got to do and it's a job only the president can do.

WALLACE: During the last presidential debate, you brought up the effect that the sequester would have on the military. And the president said --

(BEGIN VIDEO CLIP)

PRESIDENT BARACK OBAMA: The sequester is not something that I proposed, it's something Congress has proposed. It will not happen.

(END VIDEO CLIP)

WALLACE: Your thoughts on that?

MITT ROMNEY: Yes, wrong on two fronts.

There should be a deal done here and it should be not just solving the short-term sequester issue, but dealing with the long-term fiscal challenge that America has.

This is an opportunity. I -- see, I look at this sequester and also the expiration of the Bush tax cuts as an almost once in generational opportunity for America to solve its fiscal problems. If we do that, we can become a more -- more competitive globally and America can lead the -- the world for the coming century.

I mean, I see this as this huge opportunity and it's being squandered by politics, by -- by people who are more interested in a political victory than they are in doing what's right for the country. And it's very frustrating, I have to tell you.

The hardest thing about losing is watching this -- this critical moment, this golden moment just slip away with politics.

WALLACE: The Obama administration is, right now, releasing hundreds of illegal immigrants who had been slated for deportation because they say they can't afford to hold them. What do you think of that?   MITT ROMNEY: I think the president has to act in the interests of the country and -- and that means if we need an aircraft carrier in the -- in the Gulf -- and I believe we -- we do, I thought we needed one more -- that he should do it.

I think if there are people who are incarcerated, he should make sure that we're able to keep them in jail.

And using the sequester as an excuse is, in my opinion, the wrong way to go.

Look, it's -- again, it's -- it's politics. It's, OK, how do we do something that will get a headline that will make it look like those terrible Republicans aren't willing to come together?

I understand from Paul Ryan -- I spoke with him just a day or two ago, that he's put forward a proposal to give the president flexibility in moving that money between accounts. So we're going to bring the spending down, but -- but we're -- you know, you're going to get, Mr. President, the chance to make sure that we don't have long lines at the airport or we don't --

WALLACE: The president says he doesn't want that flexibility.

MITT ROMNEY: And why? Why would you not want to have the flexibility to do what you think is right for the country?

The only answer that comes back is that there may be more interest in showing pain and saying, see, what the other guys did.

Look, this is the country. And -- and it's -- this is -- this is America we're talking about, at a critical time. And -- and, you know, Nero is fiddling. I mean, it's -- it's, come on, guys, focus on -- on getting America through a difficult time and on the track to remain the most powerful and strong nation on the history of the Earth and put people back to work.

WALLACE: The one issue in Washington where the president and Republicans seem to be coming together is immigration reform. And one big reason everybody agrees, because the president hammered you among Hispanic voters.

Did you make a political mistake in the campaign when you talked about self-deportation?

And what do you think of the idea that the Gang of Eight in the Senate is coming up with -- that would allow the 11 million illegals a provisional status, basically a legal status in this country, even before any increase in enforcement?

MITT ROMNEY: People who have come here illegally should not be given a special pathway to permanent residency or citizenship in this country merely because they've come here illegally.

So I have that position. But I understand others have different positions. Others in my party do. And to finally resolve this issue is going to require people of differing views to come together and see if there could be some compromise or some common ground.

And I hope that happens. I believe that will happen.

WALLACE: This brings me to the campaign and -- and I want to ask you about several issues and what role you think they played in your defeat.

(BEGIN VIDEO CLIP)

NEWT GINGRICH, FORMER PRESIDENTIAL CANDIDATE: It would be nice if Governor Romney would exercise leadership on his former staff and his major donors to take falsehoods off the air.

(END VIDEO CLIP)

WALLACE: Did the long, bitter primary fight force you to move further to the right and end up hurting you in the general election?

MITT ROMNEY: The idea that somehow it -- that the primary made me become more conservative than I was just isn't -- isn't accurate.

On the other hand, a long and blistering primary, where people are attacking one another and where the attacks sometimes are not on the mark but are creating an -- you know, unfavorable impression, those things are not helpful.

In some of the debates, for instance, you get asked questions that are kind of silly, that end up hurting you in the general.

So remember the famous question, you know, if you could get $10 of cost savings per with only $1 of tax increase, would you go along with that?

(BEGIN VIDEO CLIP)

BAIER: Raise your hand, if you feel strongly about not raising taxes, you would walk away on the 10-to-one deal.

(APPLAUSE)

(END VIDEO CLIP)

WALLACE: But now, that's a good question. Why not be the one who stands up there, raises your hand and said, of course, if it was 10 for one, I'd do it?

MITT ROMNEY: Again, because if you've said that you're not going to raise taxes, then they'd say Romney's changed his position. He said he wouldn't raise taxes, now he's saying he will. He's changed his position.

This is --

WALLACE: But you would have accepted $10 in spending cuts --

MITT ROMNEY: Well --

WALLACE: -- for $1 in revenue.

MITT ROMNEY: Yes, that's -- that's a fairy tale, because no one is going to give you $10 in spending cuts for $1 in revenue increase. You've got to -- if you're going into a negotiation, you've got to stand for your position, know they're going to stand for theirs and then recognize that there's going to be some compromise.

WALLACE: The 47 percent video.

(BEGIN VIDEO CLIP)

MITT ROMNEY: There are 47 percent who are with him, who are dependent upon government, who believe they are victims, who believe that government has a responsibility to care for them.

(END VIDEO CLIP)

WALLACE: George Will said you've got a problem when voters don't like you. You've got a real problem when voters think you don't like them.

MITT ROMNEY: Yes, it was a very unfortunate statement that I made. It's not what I meant. I didn't express myself as I wished I would have.

You know, when you speak in private, you don't spend as much time thinking about how something could be twisted and distorted and -- and it could come out wrong and be used.

But, you know, I did. And it was very harmful. What I said is not what I believe. Obviously, my whole campaign -- my whole life has been devoted to helping people, all of the people. I care about all the people of the country.

But that hurt. There's no question that hurt and did real damage to my campaign.

WALLACE: Just before the election, Hurricane Sandy and Chris Christie, the New Jersey governor's embrace, literally and figuratively, of President Obama -- how much did that hurt?

MITT ROMNEY: You know, I -- I don't think that's why the president won the election.

My campaign had to kind of stop. And we were in the last week and this was the time. We were -- you know, we were getting ready to hammer, hammer, hammer our message. We had to stop.

But as for Chris Christie -- Chris did what he thought was the best for the people of his state. And I respect that.

WALLACE: Honestly, as we sit here right now, do you wish he'd been a little less effusive in his support of Obama, which made him seem more presidential?   MITT ROMNEY: I'm not going to worry about how Chris was doing what he thought was best for the people of his state. I lost my election because of my campaign, not because of what anyone else did.

WALLACE: Looking back, how do you rate yourself as a presidential candidate?

MITT ROMNEY: Well, I see my mistakes and I see my flaws and I did better this time than I did the time before.

(LAUGHTER)

MITT ROMNEY: And -- and I won't get a third chance. I'm not doing it again.

The weakness that our campaign had and that I had is we weren't effective in taking my message primarily to minority voters, to Hispanic-Americans, African-Americans, other minorities. That was a real weakness.

We did very well with the majority population, but not with minority populations. And that was a -- that was a failing. That was a real mistake.

WALLACE: Why do you think that was?

MITT ROMNEY: Well, I think the ObamaCare attractiveness and feature was something we underestimated in a -- particularly among lower incomes. And we just didn't do as -- as good a job at connecting with that audience as we should have.

WALLACE: What does the Republican Party need to do to reach out and attract more voters?

MITT ROMNEY: Well, first of all, I lost and so, I'm not going to be telling the Republican Party, come listen to me, the guy who lost is going to tell you how to win.

WALLACE: But you must have -- you must have some ideas.

MITT ROMNEY: But -- of course. But among those ideas, clearly, we have to do a better job bringing minority voters in to vote for Republicans and that's Hispanic-Americans, African-Americans, other minorities. We've got to do a better job taking our message to them to help them understand why we're the party with the ideas that will make their life better.

WALLACE: Finally, this interview, in a sense, is your return to the national stage. After everything you've been through, why do you want to get back in the game?

MITT ROMNEY: Well, I'm not going to disappear. I'm not running for office. I don't have a big organization that's out speaking in my behalf.

But I care about America. I care about the people that can't find jobs. I care about the fact that we're wracking up larger deficits and -- and putting the peril of -- of -- of the future generation very much in play.

I really care about this country. I care about my 20 grandkids, the kind of America they're going to have. And sitting on the sidelines when so much is at stake is just not in my nature.

WALLACE: Governor, thank you.

MITT ROMNEY: Thanks, Chris. Good to be with you.

(END VIDEOTAPE)

WALLACE: Later in the show, the Romneys introduce us to the latest addition to their family. I promise, you won't want to miss it.

But, first, we'll bring our Sunday group to discuss what happens now that those automatic spending cuts have kicked in and to give us their reaction to Mitt Romney's return to public life.

(BEGIN VIDEO CLIP)

MITT ROMNEY: I suggest this is huge opportunity, and it is being squandered by politics. By people who are more interested in the political victory than they are in doing what is right for the country and it is very frustrating. I have to tell you, the hardest thing about losing is watching this critical moment, this golden moment just slip away with politics.

(END VIDEO CLIP)

WALLACE: Mitt Romney, talking about what he sees as the real chance for a grand bargain on our fiscal problems. And, his frustration he's not in power to make the deal.

And it is time now for our Sunday group, Bill Kristol of the Weekly Standard. Kirsten Powers from the Daily Beast Web site. Former Republican Senator and new Fox News contributor, Scott Brown -- excuse me -- he was actually coughing -- and Charles Lane of the Washington Post.

Bill, I think, it is fair to say, you were not a big fan of Romney during the campaign. What do you make of his return to the public stage, and, he's going to be speaking in a little over a week, week after next, to CPAC, the Conservative Political Action Conference. How much attention do you expect Republicans to pay to him?

BILL KRISTOL, THE WEEKLY STANDARD: Well, let's see what he says in the speech, whether he tries to lay out a forward looking, a forward agenda for the party. I thought watching your interview with him, I was reminded of his decency, and he's an impressive man and I'm proud to have voted for him, and I think he would have been a better president than Barack Obama is going to be in his second term, but I've also got to say, I had a sort of flashback to -- remember -- an interview I saw, I was in grad school in '77 or '78 with Gerald Ford who had lost the presidency to Jimmy Carter. I voted for Gerald Ford, many losing candidates I voted for, I thought he would be much better than Jimmy Carter. He would have been. But I also remember watching the -- you know, in grad school and thinking, you know, that is not the future of the Republican Party and I kind of had -- I must say, with all due respect to Governor Romney I sort of had that feeling watching him today, too.

WALLACE: Kirsten, the governor says, and we just turned that cliff, that President Obama had a golden moment, to make a deal and I think he's going back to the fiscal cliff, when all of the taxes were in play and then of course with the sequester. A golden moment to make a deal, to solve our problems on spending and taxes and entitlements and he says he wasted it on politics, on scoring points against the Republicans. One, does he have a point -- and two, with the confluence of him talking now just as Washington has never looked worse, do you think some voters may be looking at this interview today and saying, maybe he might have handled it better?

KIRSTEN POWERS, THE DAILY BEAST: Yes, definitely his critique, I think, of what is going on in Washington was on point and I think, you know, he and his wife are obviously incredibly classy people. I think they came off very well in this interview. It is just always easier from the outside of Washington to sort of point fingers and, say I would handle it differently. He left out of his critique the Republicans, there are two parties in this -- in this problem and the president, I think he's right could stand -- be more of a leader in this, but the Republicans also could stand to, you know, make some sort of deal with the president on revenues when they've already said in the past, that they were perfectly fine with closing these loopholes and now suddenly they can't close the loopholes. So I think both parties are to blame and that is the part, I think, if you -- when he is speaking at CPAC, if he wants to really be impactful, he needs to address both sides, not just the president.

WALLACE: Senator Brown.

SCOTT BROWN, FORMER U.S. SENATOR (R-MA): Well, sequestration, revenues were never part of the sequestration. With all due respect, I was there, I voted for it and it was told to us that hey, listen, we are going to make this draconian deal, that no one is going to want to see -- want to go forward and ultimately we're going to get a select committee, we're going to do our jobs and don't worry, we'll take care of it and they didn't. So, revenues were never part of it, it was strictly obviously finding the appropriate cuts and the problem is, that there is plenty of blame to go around. When ...

WALLACE: But in terms of Romney's critique.

BROWN: This is spot on -- spot on. There is no reason they should not have been here during that vacation up in Camp David in the room working things out. When the select committee failed, there should have been another one and another one and another one. That's the problem. They don't talk up there, there is a complete lack of attention to detail, putting the country first, versus the party and political interest first.

WALLACE: But what about Romney's -- he says it is because he was more interested in scoring political points against the Republicans.

BROWN: I agree.

WALLACE: I think the White House would say, look, we tried to do the back room deals, it never worked, first of all, we couldn't make the deal with Boehner, secondly, if we did make the deal with Boehner, he couldn't deliver.

BROWN: I have to disagree with you, I was there and voted for it. It was told to us that they were -- we already did the $1.2 trillion, the president has been out campaigning for the last two or three weeks, hammering. He didn't ask them to come to his office until the day the sequestration was going to come into effect. That is not negotiating, that's not coming together, that's not putting the country first, that is putting politics first and that is what we need to step back from.

WALLACE: On the other hand, Chuck, one of the things that I was struck by in the interview is that Romney continues to talk about the president giving things to people. Like, Obamacare.  And, saying that, I won among white voters ,but I didn't do it so well among minority voters and I had the feeling, sometimes during the interview, isn't that what got him into trouble in the campaign in the first place?

CHARLES LANE, THE WASHINGTON POST: Yes, but on the other hand there is some truth to it. If he had performed as well as his father, George Romney did among minority voters he'd probably be president of the United States right now. Like the others on the panel, though I have to say I was struck by the fact that after a campaign is over, when people have been brutalizing each other and have absorbed negative shocks and so forth and so on, candidates always look better when you get to sit down, in a more relaxed environment and you do see that Mitt Romney is a person with a lot of ability and a lot of energy. Who still has got a lot to contribute, and, you know, his hometown of Detroit, right now, has just been put into state receivership or it's about to be. I wonder if there is no role for him in the restructuring of Detroit.  He'd be the perfect person to do it. He has got the expertise, he's a hometown guy, and he is a kind of a political free agent at this point. That is the kind of thing that he could, I think, contribute in the future.  Because, I kind of agree with Bill.  His career as kind of a national Republican figure is pretty much over.

WALLACE: Bill, I want to pick up on this issue of immigration, because I asked him about it repeatedly, a lot of people think it was one of the keys to his loss, he has lost among Hispanic voters, 71 percent to 27 percent. He attributes it overwhelmingly to Obamacare and the fact that that was so attractive to lower income voters, especially, according to their polls, Hispanics. Do you think that is right?

KRISTOL: I don't, but that was the line the campaign took and they claimed the (inaudible) focus groups showed that lower income Hispanics were not put off by what Governor Romney said during the primaries about self-deportation, and his attacks on Gingrich and Perry for being a moderate on immigration, but that they liked the promise of Obamacare, and that even though people -- the national polls show Obamacare was unpopular among the majority of the public, that this helped him with lower income voters and especially Hispanics.

I personally think it is a bit of an excuse to explain away the damage he did to himself with what he said about immigration in the fall, and also on Obamacare, I mean, maybe he did lose votes on Obamacare, for those who didn't have health insurance and thought Obamacare provided, but there are a heck of lot of Americans who didn't like Obamacare. I think one could say that Governor Romney did not prosecute the case against Obamacare terribly aggressively, and, to be fair to the governor, the Republican Party as a whole didn't prosecute an alternative proposal for health care, to explain to the uninsured how we're going to - Republicans are going to take care of your problems, more effectively than the Democrats.  So it gets back to the lack of a positive reform agenda, I think on the part of the Republicans.

WALLACE: Senator Brown, finally on a human level, I was fascinated to see how the Romneys four months in are dealing with their defeat and I think it's fair to say, at least in a public sense, at least on camera, Governor Romney seemed in a better place than Mrs. Romney. You've just been through your own defeat, running for the senate in November, does that look familiar to you?

BROWN: Yeah, it's very familiar. I think the candidate - we are used to getting kind of the crap kicked out of us, to speak very frankly and as a result we have a thicker skin. My wife is obviously still angry. She's better. And, disappointed, and, frustrated. But, you know, life goes on. I agree with Mitt and Mrs. Romney, life goes on and he has a bright future, whether it's as a political leader, I don't know. If somebody wants his help, I'm sure he'd be willing to give it to them, but he does have a lot to offer, many businesses, his philanthropic causes are second to none and he has a bright future in whatever he decides to do.

WALLACE: All right. We have to take a break here. But when we come back, the sequester was supposed to be so painful it would never be triggered. What happens now that it has?

(COMMERCIAL BREAK)

WALLACE: Check out foxnewssunday.com for behind-the-scenes features, Panel Plus and our special Monday preview of the week ahead. You can find it at foxnewssunday.com and be sure to let us know what you think. Stay tuned, for more from our panel.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIPS)

OBAMA: This is not going to be a -- apocalypse I think as some people have said.  It is just dumb. And it is going to hurt.

SPEAKER OF THE HOUSE JOHN BOEHNER, R-OHIO: This discussion about revenue, in my view, is over. It is about taking on the spending problem here in Washington.

(END VIDEO CLIPS)

WALLACE: Well, it is ground hog day here in Washington as President Obama and Speaker Boehner dig in their heels again, about how to resolve the conflict over those $85 billion in automatic spending cuts and we're back now with the panel. The next step in all of this bill, is that the house is expected to pass a bill this week that will keep funding the government at these new sequestration levels. Minus the $85 billion cuts. Keep funding it through September, to avoid the government shut down, which we would get in March and, the president has indicated this week that if that kind of a bill comes to him, he's going to sign it. Question: how has the White House cried uncle on sequestration.

KRISTOL: Well, yeah, maybe to some degree. If you think that - getting a sequestration was their idea and the Republicans have convinced themselves, and the Republicans ...

WALLACE: I know. But they have been fighting it for the last few months.

KRISTOL: Well, they have, to be fair, I think to be fair to President Obama, one reason they are fighting it is that cuts in defense are just too deep and it's going to be terrible.

WALLACE: We're going to get to defense in a second ...

KRISTOL: But what I'm saying, so, I don't think - I mean yes, it could be a tactical victory for Republicans over the next three to four months, but then they need to look in the mirror and say that they are funding defense in totally inadequate levels for the rest of this year.

WALLACE: Kirsten, do you think that they are crying uncle - two questions, really, that the White House is crying uncle on sequestration with the president saying, yeah, I'm willing to sign a bill with these sequestration levels so we don't have a fight about a government shut down and secondly, part of the bill that the House is talking about putting in, is to give more flexibility to the Pentagon, so that the leaders there can say, well, this program shouldn't be cut and this program can be cut even more, the White House says, that they won't accept that. They don't want flexibility and, you just admit, Romney say, why on earth would a president not want flexibility to make the cuts smarter, the cuts he says are dumb.

POWERS: Yeah, it doesn't make any sense. I mean both sides have said this is dumb, and yet it is still happening and, the best case scenario in a bad situation would be to give the Defense Department and actually other agencies more latitude in how they do these cuts and so, why the president wouldn't do that, I don't know. I mean I think ...

WALLACE: But we know, because, supposedly they say that we want to show how painful they are. We don't want it to be ..

POWERS: That is disturbing. I find that very disturbing, actually. I mean, this is. You know, the CBO has projected this - we could lose 700,000 jobs and so, for them to play these games over politics, trying to make the Republicans look bad, I don't think is acceptable. I'm not saying the Republicans don't have -- play a role in this, but the White House -- and I also don't know how this benefits Obama in the long run, because the CBO also is basically saying it's going to affect unemployment rate, it's going to be a drag on the economy, so is Obama playing with the economy and playing with people's jobs to make the Republicans look bad? I mean it's just - this is not how you are supposed to lead.   WALLACE: Senator Brown, I want you to weigh in on all of this, but also, you have a special perspective, because you are a colonel in the Army National Guard and you spent much of the last five weeks inside the Pentagon. And, the question I have for you is, off camera, does the military think that they can live with these cuts? Or that it's really going to hurt national defense?

BROWN: It's a no-brainer. It's going to obviously hurt. You can't cut a half a trillion, which we've already done and then expect to cut another half a trillion. They need ....

WALLACE: Over 10 years.

BROWN: Yes, that's correct. They need to transfer authority. And there is no reason in the world, I think you hit it right on the head, it is about politics. It's about making the Republicans look back in the public's eye. The president should have the ability to delegate that authority to the Secretary Hagel. And - or any of the DOD chiefs to do their jobs. They should also - Harry Reid should also delegate the authority to his various committee chairs to say, listen, we need to come up with $1.2 trillion over ten years, do your jobs, you are responsible to come up with "X." There is nothing like that. There is no delegation, there is no transfer of authority, it is all about politics. It is very, very frustrating and the American people deserve better.

WALLACE: Now, with the transfer of authority could the Pentagon live with these cuts?

BROWN: Oh, obviously, I'm not in charge. It really depends on what the mission is. I think General Dempsey hit it.  Tell me the mission.

WALLACE: The chairman of the joint chiefs.

BROWN: What is the mission? He hit it right on the head. If you are going to have us win three or four conflicts around the world, and you're going to cut another half a trillion, no, they more than likely can't do it, but if you tell us what the mission is, give us the transfer authority, we can make it work in the short term, but then what we do next year, we're going to be in the same situation next year, and once again, our men and women, who are serving deserve better, the American people deserve better. It is time for leadership and the president - it is a dumb idea - it's his idea. You are right. It's his idea.  And we were told that, in fact, it would never happen. Remember in the election, sequestration is never going to happen. Well, it happened. So, what do we do now? We're going to continue to throw bombs at each other or we're going to actually get together and solve the problems? Go up to Camp David, grab some pizza and beers and let's figure it out.

WALLACE: Sounds like a good time. Chuck, your thoughts about sequestration going forward?

LANE: Well, you know, you asked, had the president cried uncle. Another question is, has he been crying wolf, in the sense that he painted, for a while, this very, very dire picture of the impact and thanks to reporting in our paper and others he has been I think forced to step back from just ...

WALLACE: I loved him saying, well, you know, it is not going to be the apocalypse, some people say.

LANE: Yes.

WALLACE: Some people, he's had Ray LaHood, he's Arne Duncan, he's had all of this cabinet secretary Janet Napolitano, saying it will be an apocalypse.

LANE: Yes. And I think if you look at the way this has played out, it's been -- I think -- I think they have gotten a little surprised at the fact that there was some push-back in the media and effective push-back from Republicans, about don't overdo how bad this is going to be, number one, and number two, you are a president, maybe you can do something to mitigate it. And so, that just tell me that there is still a lot of surprises left to go in terms of how sequestration plays out. People treat it as sort of this one-off event, OK, sequestration happens and then we know the results, not so fast. There is six months of process ahead of us, all kinds of little details, all kinds of little things that are going to happen. And, furthermore, as sequestration goes forward to the extent that it dominates the news, it is going to detract from the other things, he had in mind like gun control and immigration. So, the politics on this are, I think, turning out to be a lot more blurry than the president may have hoped.

WALLACE: Well, let's talk about that. Bill, because in his news conference, on Friday, the president was -- said, you know, look, I don't want this to paralyze us in Washington and we got -- we have a lot of other things to talk about, gun control, the immigration reform. Raising the minimum wage. Can he go on two tracks or is this so going to poison and so paralyze Washington that it is going to hurt the rest of his agenda?

KRISTOL: Well, he can try and, look, I -- I would be happy if Republicans came out of this, but I would say the evidence now is murky. I think that Obama is a little overconfident, on the other hand, last week, the Violence Against Women Act, which was passed by the Senate, the House brought up its version, it was defeated on the floor of the House, there were Republican defections, and then 80 Republicans joined almost all the Democrats to pass Democratic legislation in the House. If you are Barack Obama, all the media can say, (inaudible) to be very tough, not enough of this. He just got one of his pieces of legislation through the House and once again divided House Republicans. Speaker Boehner could not hold the majority on final passage. Couldn't -- the Republicans provided enough votes for Democrats to pass Democratic legislation. And he is sitting there thinking, I can do this on piece of legislation after legislation. He's weakening House Republicans quite a lot, and that is what he wants to do.

WALLACE: Well, let me ask you about that, Kirsten, because there's a story in the "Washington Post" today. I think it's the lead story which basically says that is Obama's game, he's less concerned about making deals now, than he is in positioning Republicans so they lose the 2014 midterm.

POWERS: Yeah, you know, it is starting to look that way. This is an accusation Republicans have been making for a while and I was a little skeptical about it. But it is starting to look like that is his highest priority and I'm much more concerned about the policy aspects of it than the political aspects. I really -- I think that it doesn't have to be the apocalypse, for the sequestration to be bad. It is bad. It's bad for all sorts of different reasons and it should be avoided and so the president really shouldn't be doing that. If that is his game it is a bad game.

WALLACE: And 30 -- a little over 30 seconds. Senator, see how you play the panel game. What do you think about this idea that he's more concerned about the midterm election than he is about the next two years?

BROWN: Well, listen, I'm not sure about that, but I know when you see a good piece of legislation, if it makes sense you vote for it. That's what I did in 50-50 with each side. That's a problem with Washington, they put the party and political interests first, not our country. And it is time to do so.

WALLACE: So do you think that he can move forward on gun control?

BROWN: Not until ...

WALLACE: I mean, not just you -- but I'm talking about ...

BROWN: Not until we deal with the economic issues, (inaudible) look those other issues up to avoid talking about the things that really matter, jobs, our deficit, taxes, we need to get a handle on those, right away.

WALLACE: All right. Thank you. You did that very well. You are invited back.

(LAUGHTER)

WALLACE: See you next week.

Don't forget to check out Panel Plus where our group picks right up with the discussion on our Web side, foxnewssunday.com and we'll post the video before noon, Eastern time and make sure to follow us on Twitter @FoxNewsSunday.

Up next, we meet the newest members of the Romney plan.

(COMMERCIAL BREAK)

WALLACE: As we've said, today's interview marks a return to the national stage for the Romneys. But it was really a coming-out for two other members of the family. Who were born on Valentine's Day.

(BEGIN VIDEO CLIP)

MITT ROMNEY: These are the latest additions to the Romney clan, these are number 19 and number 20. Although their real name ...

WALLACE: I was going to say ...

ROMNEY: Eleanor, this is Eleanor, over here and this is Winston. Do you want to pick one up?

ANN ROMNEY: I'm going to ...

MITT ROMNEY: Who are you going to get? You're going to get ...

ANN ROMNEY: Here I go ...

ROMNEY: You're going to get Win?

ANN ROMNEY: I do well with boys.

WALLACE: Here you go.

MITT ROMNEY: Exactly right.  And I will pick up this little sweetheart. Come here, Eleanor.  Come here, Ellie, look at her, isn't she a beautiful little girl?

WALLACE: Is it true that your son and daughter in law, Mary, didn't tell you that it was twins?

ANN ROMNEY: Now, how do you keep that a secret? They obviously knew they were having twins ...

MITT ROMNEY: Right.

ANN ROMNEY: And I think they decided early on, you know, that they didn't want to -- they were worried something might happen to one of them, so they didn't tell anybody and then they thought, wouldn't this be fun to just keep it a secret? And so the night we got called, I said, oh, Craig, what did you have and, he goes, well, we had a boy and I'm like, oh, darn! Another boy! And, then he goes, and a girl!

(LAUGHTER)

ANN ROMNEY: And I just started screaming, I'm like ...

MITT ROMNEY: She was screaming.

ANN ROMNEY: Just screaming.

MITT ROMNEY: I was just stunned.  We were both in bed, the call came at 6:00 a.m. in the morning, and we were like -- but this is just --

(CROSSTALK)

ANN ROMNEY: It was a thrill.  This is the joy part.

WALLACE: Governor, you've had some ups and downs in the last year, what does this mean to you?

MITT ROMNEY: This means everything. There is nothing more spectacular than seeing new life come into your family and to have these two arrive was just filled our hearts with joy, as you can imagine. So much fun! Look at this little guy!

(END VIDEOTAPE)

WALLACE: And some years from now, the Romneys will tell Ellie and Win about the great adventure their grandparents had way back in 2012.

We'll have much more of our interview with Mitt and Ann Romney tomorrow, on Fox News Channel, staring with "America's Newsroom." He talks about how he would handle the fiscal deadlock if he were in the White House, and it is very different from President Obama's approach.

That's it for today, have a great week and we'll see you next "Fox News Sunday."

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How will US respond to the hacking attack on Sony Pictures?

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Sunday December 21, 2014

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.

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).