Sens. Dick Durbin and Bob Corker on chances of budget compromise; battle over GOP's future

Written by Chris Wallace / Published March 17, 2013 / Fox News Sunday

Special Guests: Sen. Bob Corker, Sen. Dick Durbin, Matt Kibbe, Former Rep. Steve LaTourette

The following is a rush transcript of the March 17, 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.

Will charm be enough to bridge the differences in the battle of the budget?

(BEGIN VIDEOTAPE)

WALLACE: President Obama reaches out to all members of Congress, just as House Republicans and Senate Democrats come out with dramatically different blueprints for our fiscal future. What are the chances for a compromise? We'll ask two senators leading the debate, Democrat Dick Durbin and Republican Bob Corker.

Then, Republicans at a crossroads. As conservative activists gather in Washington, GOP leaders argue about the future of the party. We'll discuss differences within the GOP, with Matt Kibbe of FreedomWorks and former Congressman Steve LaTourette of the Republican main street partnership.

Plus, the U.S. response to North Korean threats by beefing up its missile defense as the president heads to Israel. We'll ask our Sunday panel whether Mr. Obama has the right answers to foreign policy challenges around the world.

And, our Power Player of the Week -- a celebrity chef combines the classics with the cutting-edge.

All, right now, on "Fox News Sunday."

(END VIDEOTAPE)

WALLACE: Hello, again and happy St. Patrick's Day from Fox News in Washington.

The president met with Republicans and Democrats, in both the House and Senate this week. But, for all the talk of a grand bargain, there was no sign the two parties are any closer to bridging the divide over our nation's debt.

We want to discuss the chances for a deal with two key senators. Dick Durbin, the Senate's number two Democrat, joins us from Chicago. Tennessee Republican Bob Corker is in Chattanooga.

So, gentlemen, while the president was meeting with members of Congress, House Republicans and Senate Democrats put out their budget plans, which had dramatic differences.

Let's look at them.

The GOP plan would cut the deficit $4.6 trillion over 10 years, all through spending cuts. The Democratic plan would cut the deficit $1.8 trillion. Half through spending cuts and half through tax hikes. Senator Corker, let me start with you: will Senate Republicans accept a tax increase, if you get serious entitlement reform and cuts?

SEN. BOB CORKER, R-TENN.: Well, I think Senate Republicans and all Republicans want to see a 75-year solution to entitlements. And, I think Republicans are joined in wanting to see tax reform. So, to the extent that generates revenues and how that's scored, obviously, that will be debated as we move ahead.

But I think all of us understand the real issue driving the deficits that we have in our country are the entitlements, and that's what we want to see solved. We want to see these available for generations -- generations to come.

WALLACE: But just real quickly, you understand the price for entitlement reform in any deal would be a tax increase. Would you buy that and what do you think the prospects is there will be a deal sometime before this summer?

CORKER: Well, again, I think -- I think, there, by the way, is a chance on a deal. I know the president is saying the right things, and we have an opportunity over the next four to five months, I think, that, you know, we'll know when the president is serious by virtue of a process that's set up where he is actually at the table and whether he has a designee, and whether he begins to say publicly to the American people, to all Americans, that he understands that Americans are only paying 1/3 of the costs of Medicare, and that has to change for the program to be here down the road.

But, look, Chris, I think Republicans, if they saw true entitlement reform, would be glad to look at tax reform that generates additional revenue. And that doesn't mean increasing rates. That means closing loopholes.

It also means arranging our tax system so that we have economic growth. And I think we have been saying that from day one.

WALLACE: Well, Senator Durbin, I heard some give there from Senator Corker. Let me ask you: are Senate Democrats willing to make serious cuts, reforms to entitlements, if you get added tax revenue? And what do you think of the prospects for a grand bargain.

SEN. DICK DURBIN, D-ILL.: Well, Chris, let me tell you, I think Bob just gave an honest and constructive answer. Really, what he articulated is what he did in the Bowles-Simpson commission and what we've done ever since. We've said, let's put everything on the table. And I want to thank Bob for saying that.

We've got to, of course, pass this budget resolution in the Senate. Patty Murray has done an extraordinarily good job. And then we're going to move to the next stage, and that is the grand bargain stage.    That's what the president is trying to set that up -- both sides sitting down on a bipartisan basis, not eliminating Medicare -- as I'm afraid the Paul Ryan budget would do -- but making sure it's going to survive for generations to come, putting revenues on the table that are fair and won't penalize the working people across America and making sure it's a balanced approach.

I think what Bob Corker just said from his side is a basic set of principles that both parties can rally around.

WALLACE: And just real specifically because I want to pin you done on this -- are you saying that you would accept structural changes -- as you say, not doing away with Medicare -- but structural changes and cuts to entitlements.

DURBIN: Let me just tell you what we are facing. In 10, 12 years, Medicare goes broke. That's unacceptable. We want to make sure that Medicare is there for generations to come. And, that means making some reforms and some constructive changes.

The Paul Ryan voucher approach is destructive of Medicare. It will not survive. Millions of Americans will lose their benefits.

But, there are ways to approach it -- to reduce the cost of medical care, and still keep our promise to seniors across America.

WALLACE: Part of the problem in this debate is that the parties seem to be disagreeing about the importance of dealing with our national debt. I want to play what President Obama said this week, and, also, what he said back as a candidate in 2008. Take a look.

(BEGIN VIDEO CLIPS)

PRESIDENT BARACK OBAMA: We don't have an immediate crisis in terms of debt. In fact, for the next 10 years, it's going to be in a sustainable place.

We now have over $9 trillion of debt that we are going to have to pay back -- $30,000, for every man, woman and child. That's irresponsible. It is unpatriotic.

(END VIDEO CLIPS)

WALLACE: Senator Durbin, when candidate Obama said that, our national debt was $9 trillion. It's now $16 trillion.

So, the question is -- if it was unpatriotic at $9 trillion, is it sustainable at $16 trillion?

DURBIN: Chris, here's the good news. We have reduced the long term deficit by about $2.4 trillion. That's included almost (ph) $600 billion in new revenue as part of the fiscal cliff. We still have to do more but we have taken the edge off the crisis, I'll concede that.

What the president is pointing to is this -- we need strong economic recovery. We need to put Americans back to work. That's our first priority.

Deficit reduction, I would put, as the second priority, and, one that is coupled with economic growth.

So, I think we can do both. Make sure we have deficit reduction but don't cut too much, too fast. Take, for example, the sequestration. Seven hundred thousand American jobs will be lost.

This is not the right thing to do. Not the right time to do it. We've got to phase it in and sequence it so we can have economic growth and Americans paying taxes. That really helps us recover.

WALLACE: Senator Corker, some Democrats -- and you just heard this, sort of, from Dick Durbin, but I've heard it in more extreme forms from other Democrats, say, it's more important to have national growth than to deal with the national debt. Your response?

CORKER: Well, I think we should have economic growth and, obviously, we'd like to see that happen. And I think reducing the debt helps create economic growth.

So, look, I think it's ridiculous to say that cutting $1.2 trillion over the next decade, when we're going to spend $47 trillion of your money is a step too far. Of course, we need to do that.

And on top of that, we need to build towards these entitlement reforms which obviously are creating the huge debt down the road. But, look, I think it was disappointing to all of us to have the president come in and talking the way that he is.

And, by the way, I've attended the dinner. I've been on the phone calls, I've met with the White House, and I appreciate the outreach.

But in the midst of that, to act as if this deficit issue is not that important was a little disheartening. But I do think, Chris, again, I think we've got the best opportunity we're going to have under this president over the next four months to solve this problem.

And I look forward to working with Dick Durbin and others as we kind of build on the commonalities that we have. We have a lot of things that separate us. But there is enough commonality here, I think, to build off of that. It's the most important thing we can do for our nation's economic growth and our long term security, and that's what we need to be focused on.

WALLACE: Before we move on, because, you know, I am getting a kind of hopeful sense from both of you -- and I just want to pick up and button it up quickly with you, Senator Durbin.

Do you agree it is the last best chance for a big deal? And how optimistic are you that you're going to be able to pull it off between now and, let's say, midsummer?

DURBIN: Listen, if you are a senator, you have to be patient but I've been at this for years and this is an excellent opportunity. But, both sides have to come together. And I think what Bob has said and what I've tried to say this morning is: there are elements of this that we can all agree on, on a bipartisan basis.

I think what the president is trying to do is not a charm offensive, but basically to say to the Republicans, I'm serious about this. I will sit down with you, and honestly work to come up with a grand bargain. Let's not miss this opportunity.

WALLACE: Before you deal --

CORKER: Chris, Chris --

WALLACE: Go ahead, Senator.

CORKER: If I could say one thing -- I think we are all going to know, again, when the president is serious, will be when he begins using the podium to explain to the American people that the average American family is only paying 1/3 of the cost of Medicare. When he begins to lay that out from his podium -- I have been saying that for years, and Dick Durbin has been saying it for some time -- but when the president uses the bully pulpit to explain to the American people the families are only paying 1/3 of the cost of Medicare, we will know that we have begun the process of trying to solve this problem. I hope that happens as soon as he gets back from Israel.

WALLACE: All right. Gentlemen, before you deal with budget, you've got a more pressing problem and that is that you have to pass a continuing resolution before March 27th and you are going on recess at the end of this week to keep the government running, otherwise, it shuts down.

And the question, Senator Durbin, is -- will the Senate pass a C.R., a continuing resolution, that keeps spending at $984 billion, which is what the spending level is of the House C.R., including the sequester cuts?

DURBIN: Chris, when I left Washington on Thursday, we had 99 amendments pending to this continuing resolution, the budget for the federal government, 99 amendments. Six of the amendments were on the issue of our relationship with Egypt.

This is all very important, I understand. But, we have work to be done in just a short period of time. I urge my Senate colleagues, let's be sparing in the amendments. Let's get the C.R. passed. We can do it and do it quickly, this coming week.

WALLACE: Direct question: would you accept -- will you pass a C.R. at $984 billion, which is the House level that includes the sequester cuts?

DURBIN: Listen, we have put together a C.R. that is acceptable in its dollar terms to the House of Representatives and I think we can agree on what they'll be.

WALLACE: All right. Gentlemen, we're running out of time, I want to ask you each about a question of something you are involved in.

Senator Durbin, you are part of this bipartisan Senate group that is working on immigration reform. Are you going to be able to come up with a plan that creates a pathway to citizenship, for the 11 million illegals who are now in this country? And if so, when are you going to put the plan on the table?

DURBIN: We are working, literally, hours every week, four Democrats, four Republicans. And, we're making progress. There are still some tough, tough issues out there. But I feel good about it.

There is a feeling in the room we have a responsibility to this nation after 25 years to write an immigration law, that we can live with for generations to come.

WALLACE: What's the biggest problem?

DURBIN: Well, there are several problems. You know, we are dealing with border enforcement, which is very important on the Republican side of the table. We are dealing with the question of the 11 million people paying their taxes, having a path to legalization and, then, ultimately, to citizenship.

Tough issues but we are coming together and I think we can do it. I have a positive feeling.

WALLACE: And, finally, Senator Corker, you are the top Republican on the Senate Foreign Relations Committee. This week, on Friday, the Pentagon announced they are going to deploy 14 additional missile interceptors to Alaska to deal with the potential nuclear threat from North Korea.

What do you think of the idea and how serious do you think the threat is from the North Korean regime? And are we paying a price for the fact that President Obama scaled back on missile defense when he came into office?

CORKER: Well, look, I applaud the efforts. I talked to Senator Kerry and I know we have a group heading of you to Poland on Monday to talk about this further. I applaud it as I mentioned. I do hope we'll focus on a base on the eastern side with radar facilities.

And I think the question is, Chris, how does the non-deployment of the fourth base of our European base system affect us over time? So there are some technical issues that we're going to be getting into this week with the Pentagon and the State Department. But, certainly, I think most all of us applaud the efforts to beef up our missile defense on the West Coast.

WALLACE: Do you think that Kim Jong Un and the North Koreans are a real threat to the U.S.?

CORKER: I don't think that threat is imminent and, I don't think they have the delivery mechanisms that are necessary to really harm us. But I think it's really good that we are taking those precautionary measures to make sure that they cannot do damage. I think it puts us in a place -- a different place as it relates to negotiating with them.

And, at the end of the day, Chris, I know there's a lot of talk, six-party talks, and all kind of things that are occurring -- I think all of us understand the key to this is going to be China. They are the ones that can actually affect the behavior in North Korea because of the trade issues and certainly the support issues coming from China into North Korea.

Hopefully, China sees the threat to -- for nuclear proliferation in that part of the world, in the event they are not able to stop what North Korea is doing.

WALLACE: Senator Corker, Senator Durbin, thank you both. We're going to have to leave it there. And thank you for talking with us and, no doubt, there's some tough bargaining ahead on the budget.

Thank you, gentlemen.

CORKER: Thank you.

DURBIN: Thanks.

WALLACE: Up next, the battle inside the GOP over how to grow the party.

(COMMERCIAL BREAK)

WALLACE: The Conservative Political Action Conference held its annual meeting this eke and if you can believe it, a presidential straw poll for 2016.

Here are the results -- Tea Party favorite, Kentucky Senator Rand Paul, won with 25 percent. Senator Marco Rubio was a close second at 23 percent. And former presidential candidate Rick Santorum, a distant third, at 8 percent.

The CPAC meeting highlighted the disagreement over the best way for the party to broaden its base.

Matt Kibbe is president of FreedomWorks, a leader of the Tea Party movement.

Former Congressman Steve LaTourette is head of the Republican Main Street Partnership.

And, gentlemen, welcome to "Fox News Sunday."

LATOURETTE: Thanks.

MATT KIBBE, FREEDOMWORKS: Thanks for having me.

WALLACE: Congressman LaTourette, during the lame duck session in December, you talked about the 40 to 50 chuckleheads -- your phrase -- in the House, who are blocking senator -- rather, Speaker Boehner, from making a budget deal with the president.

What is it about the Tea Party freshmen that make them chuckleheads?

FORMER REP. STEVE LATOURETTE: I don't think I would say it's all of Tea Party freshmen. I'd say it's 40 or 50 in 112th Congress that seemed more interested in voting no and going home than governing and that comment was made after "Plan B." And you have to recognize, Chris --

WALLACE: And "Plan B" was to just raise taxes on people making over a million dollars.

LATOURETTE: Yes. And it was the opening gambit and would have given the speaker the opportunity to go to the White House and over to the Senate and say, "Here, I have a package, and, let's continue our negotiations."

When you take it down, as the speaker said in our meeting after that, you send him to the White House naked. He's got no armor. He's got no tools.

WALLACE: Well, looking forward, Mr. Kibbe, what is it about the Tea Party and its views on spending and taxes that members of the Republican establishment, like Congressman LaTourette, don't get?

KIBBE: Well, you have to take a step back and understand the only reason we are talking about a balanced budget, the only reason that we're having a serious debate about $16-plus trillion in debt, is because of the Tea Party class in 2010 and, the folks we had in 2012. You have to stop this process, this bipartisan process, of just kicking the can down the road, creating these artificial crises on New Year's Eve and say, let's put ideas on the table, let's stop playing this game.

And that's what we have done.

And we're never going to fix the problem just by pretending that the process of bipartisanship somehow gets to real problems, because that's how we got here. This crisis was created by both Republicans and Democrats not willing to make tough choices.

LATOURETTE: I'll tell you, that flies in the face of what we did in the 1990s, Bill Clinton was the president, John Kasich was the budget chair, and, Newt Gingrich was the speaker, and we created the Balanced Budget Act in 1997.

And quite frankly, it was during the Bush years of spending, multiplied now by the Obama years that we have this mess.

And at the end of the day, my difficulty with the Tea Party freshmen is not the true passion that they bring to this. They are an important part of the Republican Party. My difficulty is at the end of the day, you have to govern. Just saying no doesn't get you anything, and it creates these false crises.

And you can get past the false crises if you work something out. And it doesn't mean surrendering principle. It doesn't mean becoming a Democrat or a RINO or a DINO. It means working together in a way you get 60 percent of what you want.    KIBBE: Well, you've got to go back, because I don't think the Tea Party has created the budget crisis. We came in with our members, and tried to do something about it. I remember a day when April 15th is when the House and Senate had to pass the budget resolution.

I remember when they had to reconcile the 13 appropriations bills, I remember a day when the president actually had to introduce his budget, and today we don't do any of that stuff. And that's how we got to the $16 trillion.

And there is something rational about standing on the tracks and saying, you know, we can't do it this way anymore, we have to do it some other way.

LATOURETTE: Listen, if that was -- if that was the way these guys were operating, I'd be all for that.

But for instance, we couldn't get even -- I was an appropriator. We couldn't get our labor, health and human services bill, the biggest of the bills besides defense out, because three of our members would not support the chairman's mark. Now, that's not trying to solve the problem.

KIBBE: We'll get too weeds in here.

LATOURETTE: Sorry. But I'm telling you, you can't get it done. And, just voting no and then holding your nose and saying, boy, if it passes, then I can go home to my local Tea Party groups and say, "I voted no," that's ridiculous. That's what makes them chuckleheads.

WALLACE: Let me switch to another subject.

Mr. Kibbe, one of the recent splits in the party -- and we saw it in the last week, has been over national security. You backed Rand Paul's filibuster of the president's drone policy in the Senate. You also backed the sequester of across the board cuts even in the Pentagon.

But isn't one of the GOP's strengths with the American people that it's tough on national security?

KIBBE: Well, you can be fiscally responsible and tough on national security. I think it would be --

WALLACE: Well, the drone has nothing to do with fiscal issues. That's a --

(CROSSTALK)

KIBBE: Certainly. So there's two issues. One is about basic civil liberties and I think the new GOP reflected by Rand Paul's willingness to challenge the status quo in both the Republican and Democratic Parties, that's a healthy thing.

And, young people in particular, they are looking for leadership that's willing to challenge the idea that the government is always right. I think that's where we are, as well.

But on defense, and on, frankly, any budget, any program, any department of the federal government, let's all acknowledge that there is waste and things that need to be eliminated. And, a trimming of defense would be a very healthy thing.

And you have to put everything on the table. You can't say that this sacred cow cannot be touched. I think the GOP has made that mistake.

WALLACE: Congressman LaTourette, Rand Paul in his speech at CPAC talked about defense hawks like John McCain and Lindsey Graham, as stale and moss-covered. There is a war-weariness in the country. Should the Republican Party, and it's trying to grow the party and appeal to new voters, should it be pulling back on national defense?

LATOURETTE: Well, you know, I grew up in the era of the $800 hammer and $600 toilet seat. So, yes, there are efficiencies there.

But if you're looking to the Constitution for something that government is supposed to be involved in, it is defending the country.

And the sequestration was the most ham-handed way of dealing with things and we only got there because of the dysfunctions that exist, because the Democrats won't give an inch, and, you know, it's incumbent upon us to find the sweet spot. Boehner tried to do it with the president and the president isn't willing. But, we've got to find that sweet spot that includes the Pentagon.

WALLACE: But you said dysfunction and you kind of motioned in Mr. Kibbe's direction. Do you think the Tea Party is adding to the dysfunction in Washington?

LATOURETTE: No, not at all. I think the Tea Party is an important part of the coalition that is the Republican Party. But my difficulty with not necessarily Mr. Kibbe's group but others like his, is that there is some -- now some kind of litmus test what makes a good Republican or a bad Republican.

And the reason that we don't have a Republican president, today, in my opinion, is that we don't represent the whole country. We don't have one member of congress who is a Republican from the entire eastern sea coast. You get down to the Carolinas and Virginia. You can't govern the country unless you look like the country.

And so, I think they are an important part of the coalition but they are not the Republican Party. They are part of the Republican Party.

WALLACE: How do you respond to that? In a sense you may have energized the party, but you've also narrowed it?

KIBBE: Oh, I don't think so. If you look at CPAC, you look at the rock stars of the GOP, the next generation, the people we are excited about, these are Tea Party freshmen -- Rand Paul, Ron Johnson from a very purple, maybe blue state.

WALLACE: Ron Johnson?

KIBBE: Pat Toomey from Pennsylvania and, of course, Marco Rubio. We have brought diversity, we have brought energy and, most important, I think we brought ideas because we are color blind about all of this stuff.

But if you want to come to the Senate, come to the Congress and offer a plan to balance the budget, we're going to support you. Put your ideas on the table. That's what's lacking in the whole debate.

LATOURETTE: Well, I've got to say, that sadly what they've also got is Harry Reid as the majority leader continuing in the Senate. If you look at the Nevada race, Sharron Angle, if you look at Richard Mourdock in Indiana, if you look at -- I forget her name, the witch in Delaware.

WALLACE: Christine O'Donnell.

LATOURETTE: Thank you.

You -- we can have functional today, but for this litmus test that exists today --

WALLACE: There were a lot of establishment candidates, Republican candidates, who went down in this last election, too.

LATOURETTE: But they went down from the standpoint that they lost to Democrats. Unlike some of these -- Mr. Mourdock, for instance. I mean, we are supposed to wonder --

WALLACE: Richard Murdoch in Indiana.

LATOURETTE: Indiana. Why we don't have the women's vote in this country when we have a candidate suggesting that a child born as a result of rape is a gift from God? I'm not wondering why we don't have more women voting for Republicans.

WALLACE: But let me ask you about that and that's the last thing we're going to get into here, Karl Rove -- and he's going to be on the panel -- started something called the Conservative Victory Project to try to get into the primaries, to make sure that there are more electable Republicans, people that can win the primaries and that go on and win the general election.

Congressman LaTourette, you're about to start your own super PAC to promote electable candidates in Republican primaries.

LATOURETTE: Right.

WALLACE: Do you have any problem with that because I -- well, what do you -- first of all, why do you think that's wrong?

KIBBE: Well, I think the definition of electable is what we're debating and you look at who has been winning elections, it's been interesting, exciting, young, energetic people like Ted Cruz, like Marco Rubio. And I think if you apply this sort of establishment litmus test which tends to be biased for people that are already in office, you're not going to get that new energy. Would we have gotten Pat Toomey?

Remember, Karl Rove supported Arlen Specter as far back as 2004, against Pat Toomey, because the logic was Pat Toomey can't possibly win. Arlen Specter later flips party when it was convenient for him and became the 60th vote for Obamacare. So, I think we need to be careful about what it means to be electable.

Certainly, the Tea Party doesn't bat a thousand, but at least we're winning elections. We're bringing new people into the party. And we're not in a position where the Democrats can jam something through 60 votes in the Senate because of the Tea Party.

LATOURETTE: So, I've got to tell you, there is no litmus test at the Republican mainstream. I'm happy to have anybody who labels him or herself as a Republican and wants to represent the entire country.

We're not talking about electing the governor of South Carolina, or the governor of Texas, the governor of Utah. If we want to be a national party, we have to look like America. Today, we look like a bunch of we were a bunch of guys, white guys, from below the Mason- Dixon line.

WALLACE: So, how do you look more like America?

LATOURETTE: You have to begin to talk about issues in the way that I have to talk about issues.

For instance, I never read anything in my Republican playbook and I have been a Republican since the day I was born, that says that Republicans and trade unionists can't get along together, the carpenter, the operating engineer. But, somehow, this whole war on prevailing wages is now become a plank of the Republican Party? No, it's not.

And the same thing with the environment. I live on Lake Erie, we don't have to be opposed to everything that helps us get clean air and clean water. That's not a Republican test.

But if you look at the key votes that some of these groups are scoring, and 18 votes was scored by Mr. Kibbe's group out of a thousand that took place, last year. It's not -- you can make -- it's like a poll, you can make it look any way you want to.

WALLACE: All right. You get the last word.

KIBBE: I think if you look at the new Republican Party, the party that stands for something, you look at names like Tim Scott, and Ted Cruz and Marco Rubio and Raul Labrador and Justin Amash. Mia Love almost got through.

This is the new future and it's based on ideas. We don't care about the color of your skin.

WALLACE: We're going to have to leave it there. But, to be continued.

Mr. Kibbe, Congressman LaTourette, thank you both for coming in.

We'll stay on top of this debate. And, in addition, up next, we'll continue this conversation with our Sunday group. What does the GOP need to do to attract more voters?

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIPS)

SEN. JOHN MCCAIN, R-ARIZ.: If Mr. Paul wants to be taken seriously, he needs to do more than pull political stunts that fire up impressionable libertarian kids in their college dorms.

SEN. RAND PAUL, R-KY.: The GOP of old has grown stale and moss-covered.

[CHEERS AND APPLAUSE]

PAUL: And I don't think we need to name any names, do we?

(END VIDEO CLIPS)

WALLACE: Republican Senators John McCain and Rand Paul, trading some pretty tough shots about Paul's recent filibuster over the president's drone policy. And, it is time now for our Sunday group. Bill Kristol of the Weekly Standard, Nina Easton from Fortune magazine, the founder of American Crossroads, Karl Rove and Democratic strategist Joe Trippi.

Bill, you have an editorial in the latest issue of the Weekly Standard in which you say that Rand Paul is wrong on national security as a matter of policy and politics. Why? Especially is he wrong on a matter of politics?

BILL KRISTOL, THE WEEKLY STANDARD: I think it is the Republican Party, to the degree that it has been a successful party and an important party and a contributor to American well being over the last 50, 60 years, has been so in large part because it has been the party of strong national security. Republicans were not (ph) -- you can say they are moss-covered, but some of us are proud to have come to Washington to work in a very minor role for Ronald Reagan, and some of us are proud to have supported the Bush administration after 9/11, and fighting our enemies. And the problem with the Obama administration is not that it is too assertive in the war on terror. The problem with the Obama administration is that we are retreating all around the world, and unfortunately, emboldening our enemies.

So if Rand Paul wants to run to the left of the Obama administration, he's free to try that in the Republican primary, and maybe there is more support for that than I think, but I'm pretty doubtful that there really is.

WALLACE: Nina, the president clearly thinks that, quote, "bringing our troops home," not in a rush, but steadily, and eventually is a winning message. And in the last campaign, frankly, Republicans were not talking a lot about open-ended foreign commitments. So, does the GOP need to recognize and respond to a war- weariness in the country?

NINA EASTON, FORTUNE MAGAZINE: I think the drone issue and war-weariness are two totally different issues, and Rand Paul's war on drones is a sort of a war on a pretty successful fight against terrorism right now, so I'm not sure where that gets us.

I agree with Bill. You know, the GOP doesn't lose by being a strong party of national security. What we -- what the Republicans lost were moderates in the election. 56 percent of moderates went to -- self-described moderates went to Barack Obama, not to the party. Those are the people you need to get back.

You are not going to do it by a drone -- going after drones, you are going to do it by not making comments about, quote, "legitimate rape" or you need to appeal to single women, you need to appeal to the people at the bottom of the economic ladder, which by the way we heard a lot at CPAC, you heard that from a number of the speakers there.

WALLACE: Look, everybody agrees legitimate rape was stupid, and if there is a child out of a rape, that is what God intended. But in a more subtle way, Rand Paul talks about the need to embrace liberty in the personal sphere, and he even talked about, you know, maybe we don't enforce the drug laws entirely. You know, that gets to be a more ticklish issue, and the fact is, the social conservatives are a big part of the Republican base.

EASTON: But he didn't go down the road of, for example, gay marriage, which there really is a sea change in this country over, and some change within the Republican Party over. He I think --

WALLACE: And what do you think would happen if he went -- if you became more accepting of gay marriage in the Republican Party?

EASTON: I think if you included people who were accepting of gay marriage in the Republican Party -- that is not necessarily the platform of the Republican Party -- then I think it helps the Republican Party. The party needs to be more inclusive of people of different views.

WALLACE: Karl, I want to pick up on that, but I want to ask you, specifically, because you kind of have a dog in this fight. As we mentioned earlier, you are one of the founders of American Crossroads and you are also starting this group that was discussed in the last segment, Conservative Victory Project. And the idea is to help Republicans in their primaries, back people who could actually get elected in general elections. Sarah Palin went after you at CPAC yesterday. Let's take a look.

(BEGIN VIDEO CLIP)

FORMER GOV. SARAH PALIN, R-ALASKA: These experts, who keep losing elections and keep getting rehired, raking in millions, if they feel that strongly about who gets to run in the party, then they should buck up or stay in the truck. Buck up and run.

(END VIDEO CLIP)

WALLACE: So, are you bucking up? I'm not quite sure I got that. But bucking up, staying in the truck or running, Palin says, basically, her first line in that was that the last thing the party needs is people from the Washington establishment -- didn't mention your name but I think she was -- you are who she was talking about -- vetting Republican candidates.

KARL ROVE, AMERICAN CROSSROADS: Well, first of all, I live in Texas and I don't live in Washington. Second--

WALLACE: Yes, but you are a little dirty here now.

ROVE: Second of all, look, Sarah Palin should be agreeing with this. She didn't support Todd Akin, and when he said the reprehensible things he said, she wisely came out and said he ought to get out of the race.

WALLACE: This is the "legitimate rape" candidate in Missouri.

ROVE: The "legitimate rape" candidate in Missouri. If she can play in primaries, other people can play in primaries.

Now, I do have to set the record straight on two things. First of all, raking in millions. I'm a volunteer. I don't take a dime from my work with American Crossroads. I even pay my own travel expenses, out of my own pocket. I thought Sarah Palin was about encouraging volunteer, grassroots activity, I'm a volunteer.

Second of all, look, I appreciate her encouragement that I ought to go home to Texas and run for office. I would be enthused if I ran for office to have her support. I will say this, though, I don't think I'm a particularly good candidate. Sort of a balding, fat guy. And second of all, I'd say if I did run for office and win, I would serve out my term. I wouldn't leave office midterm.

(LAUGHTER)

(CROSSTALK)

WALLACE: I wonder who he was referring to. Which brings me to you.  How much are you enjoying this?

JOE TRIPPI, DEMOCRATIC STRATEGIST: You just hate to see this kind of fighting inside a party, especially the other party. It is great stuff, but, I mean, look, you've got wackle-birds, chuckleheads, moss-covered and stale. I mean, these are the -- that's like three wings of the party right now -- the stale and moss-covered are apologizing to the wacko-birds, which is what McCain actually did in this (inaudible)?

ROVE: This coming from a guy who ran a campaign as a screamer.

TRIPPI: Come on --

(CROSSTALK)

ROVE: The party that does not have the White House tends to have these difficulties. This is nothing new and nothing exceptional.

TRIPPI: But the issue here is, I think, look, you are going to have these fights inside a party, but every time you had one, the -- that party tends to lose, we have already seen it on the Senate, in the Senate races, that Bill Kristol -- have talked about it earlier, you know, you give up something when you have these fights and we have had them in the Democratic Party, but it doesn't bode well for 2014 or 2016 because it's going to be settled in those primaries, it's not going to be settled in this intervening time right now, this is going to be a fight that goes down in those House races, Senate races in 2014 and, in the end, these two or three wings are going to have a fight for the presidency in 2016.

WALLACE: Karl, what do you make of this fight that's going on in the party on national security, on social issues? I mean, there does seem to be something going on here.

ROVE: Well, there is ...

WALLACE: ... a pretty serious ...

ROVE: There is from people who are watching it closely, I'm not certain how many people are watching it closely. Rand Paul smartly took advantage of a huge mistake by Eric Holder. Eric Holder was asked a simple question by Rand Paul and Senator Ted Cruz of Texas, if a U.S. citizen, who is a suspected terrorist is sitting in a coffee shop, having a cup of coffee, no imminent threat, does the president have the power to take him out with a drone strike? Now, virtually everybody in the Republican Party -- and I suspect that a lot of Democrats would say, no the president does not have authority to take out somebody who is sitting there having a cup of coffee, he is not an imminent threat.

WALLACE: But real quickly, because we're running out of time. Bill Kristol says, it ends up looking like he's running for the left of Barack Obama.

ROVE: He is to the left of Barack Obama in this regard. And it is not the thing Rand Paul talked about. Rand Paul believes that Anwar Awlaki, the U.S.-born cleric, who led al-Qaeda in Yemen should not have been taken out by a drone strike, and instead, he is on the record saying he's, quote, "should have been given -- should have been arrested and given legal representation and tried in a court of law. Virtually all Republicans, I think, would disagree with Rand Paul on that. But that is where the division comes, that Rand Paul took the -- emphasized where Republicans agreed with him, not where Republicans disagreed.

WALLACE: All right, we have to take a break here, but I'm just going to say, right now, this is what we're going to talk about in panel-plus, because there is obviously a lot more to discuss. But when we come back, the U.S. builds up its missile defense responding to North Korea's threat of a nuclear attack.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BRYAN VOLTAGGIO, CELEBRITY CHEF: It is the blend of how we first started cooking, over fire and wood and smoke.

WALLACE: Bryan Voltaggio now has his own take on modern American cuisine.

VOLTAGGIO: ... to the precision of what we have now in the modern kitchen.

(END VIDEO CLIP)

WALLACE: Stay tuned, we'll be right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

CHUCK HAGEL, DEFENSE SECRETARY: The United States has missile defense systems in place to protect us from limited ICBM attacks. But North Korea in particular has recently made advances in its capabilities and is engaged in a series of irresponsible and reckless provocations.

(END VIDEO CLIP)

WALLACE: Defense Secretary Hagel announcing the U.S. will deploy 14 more missile interceptors in Alaska to deter a threatened attack by North Korea and we're back now with the panel. Well, the Pentagon said the expansion is in response to recent threats by the new North Korean leader, Kim Jong-un. And, the vice chairman of the Joint Chiefs of Staff at the Pentagon, said this: "We believe that this young lad -- I love that, this young lad, ought to be deterred by that, and if he's not, we'll be ready. " Bill, how seriously do we really take a threat of a nuclear strike on North Korea and what is this all about?

KRISTOL: These missile interceptors, of course, were planned by the Bush administration and one of the first things the Obama administration did, was cancel them. It was exactly four years ago and now they are deploying them. So I guess it's better late than never, but it is a little late. North Korea of course (ph) moved ahead with nuclear weapons tests in the last couple of years, and tested delivery systems, and there were Iranian observers at the most recent nuclear North Korean tests, apparently, and they are very close to Pakistan. So, is there a serious problem that North Korean has become a nuclear weapons state and is talking to other states that are nuclear weapons states or are on the verge of becoming that? Yes, I'm for missile defense, but it doesn't substitute for a robust foreign policy, to get back to the Rand Paul question, which deals with these states before they become nuclear states, and I think this really raises the question of what happens with Iran. I mean, Tom Donilon, the president's national security adviser, said this week, can you believe this? The United States will not accept North Korea as a nuclear state. Well, isn't that nice? But they are a nuclear state, and how seriously can one then take the president when he says we won't accept Iran as a nuclear state?

WALLACE: In fairness, George W. Bush kept talking about nuclear strikes and tests and things in Iran -- rather in North Korea as being unacceptable and then it happened and we'd accepted.

KRISTOL: Agreed.

WALLACE: You agree?

KRISTOL: Yes.

(LAUGHTER)

KRISTOL: In fact, bipartisan failure in North Korea.

WALLACE: Nina, let's talk about the fact that this is a big change for President Obama, who was scaling back on missile defense when he came into office as Bill pointed out.

EASTON: And it's an acknowledgment of a couple of things. One is so -- this little lad has declared that he wants to issue a preemptive ...

WALLACE: Kim Jong-un.

(LAUGHTER)

EASTON: Right, a preemptive nuclear strike against the U.S. and the threats have gone up, but what is also frightening is that China seems less able to control North Korea. They tried to block this latest nuclear test and were unable to do so. So, that is, I think, that's going on, then we have to wean ourselves off that whole cycle of, they issue these provocations and then we come forward or someone comes forward with economic aid. So, those are two issues. The other thing, just speaking of Iran, the chief of the strategic command said this week, we may need those missile defenses on the east coast for Iran. So, these are -- this is a -- something that we've got -- we are going to have to be dealing with on both fronts with both countries, but, the missile defense, they have a limited ability, they -- what are they, like 50 percent of accuracy, the effectiveness, so you do have to keep pushing on all fronts.

WALLACE: Karl, all this comes as the president heads to Israel this week for his first visit as president and in an interview with Israeli television, this week, he was asked about the threat from Iran. Take a look.

(BEGIN VIDEO CLIP)

OBAMA: Now, we think that it would take over a year or so, for Iran to actually develop a nuclear weapon. But obviously, we don't want to cut it too close.

(END VIDEO CLIP)

WALLACE: How do you think President Obama is handling the threats from North Korea and from Iran, and I think it is only fair to point out, both of which continued their nuclear build-up under President Bush?

ROVE: Well, first of all, in North Korea, I think, after ten years of trying to experiment with sanctions that are loosened in the aftermath when North Korea agrees to do something, we have now learned painfully, that North Korea never does what it says it is going to do. But, this is a tough thing to deal with. In part, self made. The United States has a policy calling for reunification of both north and south Vietnam -- actually, North and South Korea. China doesn't want them reunified, because it doesn't want a -- it doesn't want a capitalist democracy on its border. And the South Koreans, let's be honest, they don't want reunification either, there are 50 million South Koreans, prosperous country, and 25 million people in the north, in one of the most abject states of poverty one can imagine.

So, until we sort of forgo a unification we are not going to necessarily get the cooperation we need from China. So maybe what we ought to do is not be provoked by this guy into giving any kind of concessions and we ought to reexamine whether or not we really ought to step back from a policy of reunification with a hope that that will, as he -- as North Korea misbehaves more it will draw the Chinese to help them step in.

WALLACE: And Iran?

ROVE: Well, Iran is it, you know, the president is -- misplayed this almost from the beginning. He had a chance to destabilize and undermine the regime. And he missed it, starting ...

WALLACE: During the election in 2009.

ROVE: During 2009. We get hints that the administration has been -- that the U.S. government has been actively taking steps behind the scenes with computer viruses and so forth, to undermine -- to slow this up, but, look, one year to get a nuclear weapon is really not a lot of time and there will be one moment of vulnerability when all this materials are brought together in one place to begin to make a weapon and I hope to God the United States and the Israelis have the ability to know when that moment is and to deal with it.

WALLACE: Yeah, it was interesting -- the president saying, we don't want to cut it too close, it seems to be we are pretty close right now ...

ROVE: We're close.   WALLACE: The interesting thing, Joe about all this, is that when American presidents go to Israel and as again, this would be Obama's first trip there as president, the top issue is always the prospects for peace between the Israelis and the Palestinians. Nobody is talking about that in any serious way now.

TRIPPI: No, and I don't think the president -- the White House made it pretty clear that there is not going to be some announcement of a new peace initiative as he visits the two parties. But, the -- look, I want to get back to Korea for a second here, because I think one of the things that is more important than just the Obama administration, changing its policy, putting the missile defense system in, is that China, now, looks like it has changed. That their inability to stop the nuclear test and now with these threats from North Korea, China seems to really now be changing its policy, actually getting involved, with the latest rounds of sanctions and pushing harder. That may be the most critical thing that comes from this in terms of -- with China and the Obama administration now working in concert, we might actually get North Korea to stand down.

WALLACE: In the about the 30 seconds or so we have left, Bill, what do you expect? What is the most we can expect from the president on his trip to Israel?

KRISTOL: Well, one can expect, and I think he will offer, we try to offer reassurances to Israel that, as he likes to put it, he has Israel's back, I think that will be met with some skepticism by the Netanyahu government and I think if you're looking at U.S. foreign policy honestly, and cold eyes, or clear eyes, and a cold mind, if you're the Netanyahu government, your think that your security depends on yourself and you don't trust President Obama to act.

WALLACE: 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 about the future of the Republican Party on our Web site, FoxnewsSunday.com and we'll post the video before noon Eastern time and make sure to follow us on Twitter @FoxnewsSunday.

Up next, our Power Player of the Week.

(COMMERCIAL BREAK)

WALLACE: One of the favorite past times in Washington is to pick out the rising stars. In politics, and the media, and now, in food. Someone who qualifies in that last area, is our Power Player of the Week.

(BEGIN VIDEO CLIP)

VOLTAGGIO: We open up the reservation books a month ahead and, you know, typically, especially on the weekends it's booked within minutes.

WALLACE: Bryan Voltaggio is one of the country's celebrity chefs. At his restaurant, Volt, in Frederick, Maryland, 45 minutes from Washington, folks are happy to pay $100 a person for the privilege of eating his food.

VOLTAGGIO: Great satisfaction I get as a chef is when a diner tries something new for the first time and they are convinced or change in mind of something that you had as a child and didn't like and I see the glow in their face, I know I've done my job.

UNIDENTIFIED MALE: The winner of tonight's elimination challenge is Bryan.

UNIDENTIFIED FEMALE: Congratulations.

WALLACE: Bryan put himself on the food map in 2009, when he competed on "Top Chef," one of the other contestants, his brother, Michael and the finalists came down to the Voltaggio brothers.

UNIDENTIFIED FEMALE: Michael you are top chef.

UNIDENTIFIED MALE: Congratulations, man.

UNIDENTIFIED MALE: Congratulations.

WALLACE (on camera): How did it feel when your brother beat you?

VOLTAGGIO: I wasn't upset or mad. Or, you know, I was really proud of the fact that he won and the fact that we were both staying there together.

WALLACE (voice over): Since then, Bryan has taken off. He has written a cookbook with Michael. Done a public television series.

UNIDENTIFIED MALE: Obsessed with everything food ...

WALLACE: And opened three more restaurants. His latest, a spectacular place in Washington, called Rage. With nine food stations, featuring pasta and pizza, raw seafood, and a wood oven.

VOLTAGGIO: Roasting a pizza and fish in a pan is a beautiful thing and my staff is classically trained and based in those fundamentals, but then also we have always other new tools in our bag.

WALLACE (on camera): And we take like what?

VOLTAGGIO: Little tools that are typically used in science labs.

WALLACE: In this device called sous-vide, they put a cut of meat in a vacuum-sealed bag, cook it in water within a tenth of a degree Celsius to a perfect medium rare, then put it on a grill to finish it.

VOLTAGGIO: It's the blend of how we first started cooking. Over fire and wood and smoke. To the precision of what we have now in the modern kitchen. I started cooking when I was five years old, I started cooking with my grandfather.

WALLACE: The family grew vegetables in their garden.

VOLTAGGIO: And I saw it grow from the ground and we ate it, you know, as it was coming out of the ground and so, I think that's where my respect for ingredients came from.

WALLACE: At 15 Bryan started working at a local Holiday Inn. He went on to the Culinary Institute and top restaurants in New York and France.

VOLTAGGIO: It was chefs that were, you know, clean, pristine and, you know, ironed jackets, it was a different level of professionalism.

WALLACE: At age 36, Bryan Voltaggio now has his own take on modern American cuisine. With an emphasis on ingredients that are local, sustainable and organic. He uses his celebrity for support Share Our Strength, a charity that seeks to end childhood hunger, but his passion is much simpler.

VOLTAGGIO: I'm a cook at heart. I love being at the stove, I love being the cook. That is what gets me going every day.

(END VIDEOTAPE)

WALLACE: Bryan Voltaggio says he has more projects at the works including some new restaurants. You can be sure they will be good and tough to get into.

And 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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On the Show

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).