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Gibbs: Ryan should 'thank President Obama'; Gillespie: Obama running 'fear and smear' campaign
Written by Chris Wallace / Published August 19, 2012 / Fox News Sunday
Special Guests: Robert Gibbs, Ed Gillespie
This is a rush transcript from "Fox News Sunday," August 19, 2012. This copy may not be in its final form and may be updated.
CHRIS WALLACE, HOST: I'm Chris Wallace.
A fierce debate over a major entitlement show cases the sharp differences between the presidential candidates.
How does each side plan to protect the future of Medicare? What about those verbal stumbles by the vice president? We'll sit down with Obama campaign adviser Robert Gibbs.
And Mitt Romney talks taxes, his income taxes. What does the GOP candidate need to do to put the issue behind him? We'll talk to Romney senior adviser Ed Gillespie.
That's Gibbs and Gillespie only on "Fox News Sunday."
Plus, week one of the Romney-Ryan ticket. We'll ask our Sunday panel how the running mate is doing so far. And our Power Player of the Week, from Hollywood to extreme sports. He may be Romney's top adviser.
All right now on "Fox News Sunday."
WALLACE: And hello, again, from Fox News in Washington.
With Paul Ryan joining the Republican ticket, the presidential campaign took on a new intensity this week, especially over who has the best plan to preserve Medicare.
We'll hear from a top Romney strategist in a few minutes. But, first, Obama campaign senior adviser and former White House Press Secretary Robert Gibbs.
Robert, welcome back to "Fox News Sunday."
ROBERT GIBBS, OBAMA CAMPAIGN ADVISER: Thanks for having me.
WALLACE: Romney running mate Paul Ryan campaigned in The Villages retirement community with 78-year-old mother Betty yesterday. He said the Republicans want to protect Medicare, while the president is turning it into a piggy bank.
(BEGIN VIDEO CLIP)
REP. PAUL RYAN, VICE PRESIDENTIAL CANDIDATE: When I think about Medicare, it's not just a program, it is not just a bunch of numbers, it's what my mom relies on. The president raids $716 billion from the Medicare program to pay for the Obamacare program.
(END VIDEO CLIP)
WALLACE: Your reaction.
GIBBS: Well, I think if he wants to protect Medicare for his mother, then he should thank -- first of all, he should thank President Obama for what he's done in the past few years to extend the life of the Medicare trust fund, to help seniors with their prescription drug costs, to help seniors get free preventive care.
Chris, what President Obama did was strengthen the Medicare -- the Medicare benefits to help Medicare beneficiaries and to extend the life of the Medicare trust fund by more than eight years.
WALLACE: OK. Let's talk about the $716 billion cut to Medicare, because it is -- if I may, let me ask the question -- under the Obama plan, Obamacare, there is a $716 cut.
GIBBS: There is a $716 billion -- we found $716 in efficiency and savings primarily by reducing the subsidy that the government was paying to Medicare Advantage through private insurance companies, something that was costing Medicare, not saving Medicare money as it was originally designed to do, but in fact, costing Medicare about 16 percent more than traditional Medicare.
We took those subsidies out and lo and behold, the enrollment for Medicare Advantage is actually up this year. We strengthened the benefit by adding, again, as I said, preventative services. The best way to tackle health care cost is to work with seniors to make sure that we prevent illnesses, rather than simply treat them once they have them.
WALLACE: OK. That is the argument that Obama campaign makes, that the $716 billion is all in cuts to providers and insurance companies and it will have no effect on benefits or services to the beneficiaries.
Let me ask my question. Medicare's own actuary, own actuary of Medicare, not of the Romney campaign, says that's impossible. That you can't have the same services for $716 billion less. And let's put up some of what the Medicare actuary says. They say it's 15 percent of the Medicare providers will be unprofitable by 2019, 25 percent of Medicare providers will be unprofitable by 2030.
And the Medicare actuary concludes, this was his quote, "In practice, Medicare providers could not sustain continuing negative margins and absent legislative changes would have to withdraw from providing services to Medicare beneficiaries, merge with other provider groups or shift substantial portions of Medicare costs to their non-Medicare, non-Medicaid providers."
In other words, according to the actuary, Medicare patients, millions of them, will lose access to Medicare benefits.
GIBBS: If Medicare companies that are involved in the program continue doing what they're doing -- which is inefficient. Let's take for instance --
WALLACE: Wait a minute, the actuary says, in practice, Medicare providers could not sustain continuing negative margins.
GIBBS: If Medicare providers continue to do what they are doing. Right now, under the old program, Chris, if a senior got readmitted over and over and over to the hospital for the same illness, they got paid every single time, the senior got admitted into the hospital. Why not strengthen the benefit by adding preventive health care to it and trying to insure that this patient gets accountable care and treated before they get that disease?
WALLACE: And if the providers don't do it, then what happens is, under your plan, this unelected board, 15 bureaucrats, come in and they decide, what -- you are laughing at it, but that is it. The IPAB --
GIBBS: I guess I'm laughing at your characterization of it.
WALLACE: Are they not an unelected -- are they an elected board?
GIBBS: They are medical professionals. They are people that we trust to make medical decisions.
WALLACE: Are they elected by anybody? They are unaccountable, unelected board that comes and will make decisions on what the providers and the hospitals have to do, and Congress has to vote it all up or all down.
GIBBS: Yes. Well, look, we are trying to get efficiencies out of the Medicare program. We are trying to provide some much needed enhancements to the benefits that Medicare beneficiaries have. And most importantly, we're trying to sustain the hospital trust fund.
Let's talk about this, Chris, if all of what you describe was so amazingly egregious, why in not one but two Paul Ryan budgets, does he never seek to roll back the so-called cost from the unelected bureaucrats that you discuss? Post that to Ed Gillespie.
WALLACE: We're going to talk to Ed Gillespie. Part of it is he has to accept current law and what's in the base line.
GIBBS: No, he does not. He has a budget proposal.
WALLACE: I get to ask the questions. If -- I mean, you're contention is take $716 billion out of Medicare, is a lot of the money, $716 billion, and it will have no impact on benefits.
GIBBS: We strengthen the Medicare beneficiary.
WALLACE: No impact on benefits. GIBBS: Do you think the AARP would have endorsed what we did if it hurts seniors?
WALLACE: Do you think the Medicare actuary would say that this isn't going to have an impact -- I mean, if they say 15 percent of the providers unprofitable --
GIBBS: Again, if they don't change the way they currently do business, that's what we're talking about -- getting greater inefficiency out of the Medicare, strengthening the Medicare beneficiary.
Again, if all of this was so egregious, Chris, why did Paul Ryan seek never to undo these cuts?
WALLACE: These are good questions. And when I have Ed Gillespie, I promise I will ask some of that.
GIBBS: I'll sit in the room and wait.
On Friday, Obama campaign manager Jim Messina offered the Romney campaign a deal, release five years of tax returns and we won't ask for anymore. Isn't that a distraction from the major issues of the economy and jobs and national debt, and foreign policy that the president says he wants this campaign to be about?
GIBBS: I think taxes are in any way a distraction from this campaign. I think they are very simple to this campaign.
WALLACE: And we're talking about Mitt Romney's personal tax returns. We're not talking about tax policy for all of Americans.
GIBBS: Oh, but we are talking about tax policy for all Americans.
WALLACE: You can have that argument without having his tax returns.
GIBBS: Well, we're going to have that argument and we should see his tax returns. His father said you shouldn't put out just one or two years. You should put out a series of tax returns, 12 to 13 years. Mitt Romney provided 23 years to John McCain. We are about to have a very fundamentally important debate about the direction of tax reform in this country.
And I think if Mitt Romney proposes to be president of the United States and lead us through tax reform, shouldn't the American people understand the offshoring and the outsourcing, and the tax havens that he takes advantage of in his tax return and understand how those values would govern the tax reform decisions he might make as president?
I think what is really stunning, Chris, is that -- look, Mitt Romney is a highly educated man and he's clearly made a decision that what is in those tax returns is far more damaging to him than to do what every presidential candidate has done, which is show the American people your personal finances, he's clearly decided that it's far too damaging.
WALLACE: If the president is so interested in transparency, as you indicate, why is it that he has not -- he's held one news conference at the White House this year and that was back in March, more than five months ago? And why is it that he refused to release documents to Congress and invoked executive privilege on Operation Fast and Furious?
GIBBS: Well, let's talk about, I -- the situation of interviewing the president. The president, let me just give you some statistics. I wrote them down so I wouldn't get them wrong. In the month of August, 19 days into August, the president has done 13 local TV interviews.
WALLACE: Yes, that includes "Entertainment Tonight" and being asked what his favorite song -- workout song was.
GIBBS: Do I get to answer the questions, too?
WALLACE: Were that not some of the interviews?
GIBBS: Eleven radio interviews and five roundtable interviews with 15 journalists.
WALLACE: Why not sit down with the White House press corps?
GIBBS: Look, I think the president -- and the president did take a question from the White House press corps regarding the shooting that happened in Wisconsin.
WALLACE: A question?
GIBBS: Look, Chris, I think the White House press corps spend a little bit of time in the press room. The White House press corps has good questions, so do local TV stations in Ohio and in Colorado, in Iowa, who regularly get to ask the president question. The notion that this president is somehow not doing interviews is ridiculous. Not long ago, we were answering questions and charges that somehow Obama was over-exposed.
WALLACE: We are looking for his interview on "Fox News Sunday."
GIBBS: Well, I know that the president has spent time with Bret Baier. I know, I believed you interviewed the president at the White House when I was there. Is that correct?
WALLACE: That's true. Back in February -- one month into his presidency.
GIBBS: Not too bad.
WALLACE: Really? But never on "Fox News Sunday." In any case, enough special pleading.
This week, Vice President Biden spoke in Virginia to a crowd, including a large number of African-American.
Here's what he said.
(BEGIN VIDEO CLIP)
JOE BIDEN, VICE PRESIDENT OF THE UNITED STATES: He's going to let the big banks once again write their own rules. Unchain Wall Street. They are going to put y' all back in chains.
(END VIDEO CLIP)
WALLACE: Wasn't that race-baiting?
GIBBS: No more race-baiting than when John Boehner says let's unshackle Wall Street. Let's unshackle big business.
WALLACE: No, no, please? He says, "They're going to put y'all," to a crowd of African-Americans, they're not going to put y'all, to a large number of African-Americans in the audience --
WALLACE: No, not exclusively. Of course not.
GIBBS: Be fair, Chris. This was --
WALLACE: I am being fair. He said, "They're going to put y' all back in chains."
GIBBS: This is more racial comment than when Speaker Boehner talks about unshackling Wall Street and unshackling big business. And I think the vice president was correct in exactly how he explained what happens when we unshackle Wall Street and let Wall Street go back to writing its rules.
Mitt Romney thinks it's OK to repeal Wall Street reform and let big banks on Wall Street go back to writing their own rules. We know what happens. That's what got us into this mess. That's what happened with mortgage-backed securities went bust. That's what happens when millions of people lost their jobs. That's what got us into his mess and I think Vice President Biden, President Obama, and millions of others don't want to go back to that again.
WALLACE: Is Joe Biden a drag on the ticket?
GIBBS: Absolutely not. I'm happy to have Joe Biden out campaigning, telling his story to the American people, putting in front of people the choice that's going to happen in this election.
I'm happy and proud of Joe Biden and I'm happy and proud to have him out on the trail every day.
WALLACE: One last question, we got a minute left. This week, Mitt Romney has repeatedly criticized the tone of the president's conduct of this campaign. Let's watch.
(BEGIN VIDEO CLIP)
MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: Mr. President, take your campaign of division and anger and hate back to Chicago, and let us get about rebuilding and reuniting America.
(END VIDEO CLIP)
WALLACE: What did you make of all of the talk of this talk about how angry the president is?
GIBBS: You know, Chris, you should interview the reporters out with the president this week.
The president was in Iowa, first talking about how we pass a farm bill to help farmers and ranchers that are dealing with the worst droughts in our history. The next day, he talked about how we continue to add clean energy jobs to our economy by extending the tax cut for wind energy. The president yesterday was talking about taxes and our budget.
Nobody that's been with the president or seen the president thinks he's running anything other than a campaign on the issues that are important to the American people. I'm not going to be lectured by Mitt Romney or anybody on the Romney campaign about the tone of this campaign. This is a guy who's flown all over the country saying he's not sure the president believes in president, were auctioning off dinners with the birther in chief, right wing nut job Donald Trump who still questions whether or not the president was born in the United States of America.
I'm happy to listen to charges and counter-charges. But the notion that we're going to get lectured by Mitt Romney and his campaign about running a positive campaign, that's a pill far too big to swallow.
WALLACE: Robert, thank you.
GIBBS: Thank you, Chris.
WALLACE: Thanks for coming on in. Always good to talk to you, sir.
GIBBS: Thank you.
WALLACE: Up next: The Mitt Romney team response. We'll sit down with senior adviser Ed Gillespie, next.
WALLACE: Now we want to get the Romney campaign's perspective on where things stand. We are joined by Ed Gillespie, senior adviser to Governor Romney.
And, Ed, welcome back.
ED GILLESPIE, ROMNEY CAMPAIGN SENIOR ADVISER: Good to be back. Thank you, Chris.
WALLACE: You just heard my conversation with Robert Gibbs. And I want to follow up on one of the points he made.
Under their plan, with the Obamacare and the $716 billion Medicare Part A, which is the hospital insurance part of Medicare, stays solvent until 2024. But if Governor Romney is elected and follows through and repeals Obamacare and takes away the spending cuts and takes away the tax increases, the Medicare trustees say that Part A then becomes insolvent in 2016 -- only four years from now and eight years earlier.
What's Governor Romney going to do about that?
GILLESPIE: Well, he's going to reform Medicare. That estimate does not assume that there will be any other reforms and the Romney- Ryan plan is to save the Medicare plan for future generations by allowing for different options for people if you're, by the way, below the age of 55. There would be no change for anyone who's currently on Medicare, or 55 and above.
And the reform that they would put in place would make Medicare, put it on a sustainable footing for as far as the eye can see. And that's the important distinction.
WALLACE: But the problem is, that those reforms don't kick in -- that's one of your selling points -- until 2023. It doesn't affect any seniors or anybody close to being a senior. But that doesn't solve the Medicare Part A problem which kicks in in 2016.
So, what are you going to do to keep Part A solvent between 2016 after you repealed Obamacare in 2023?
GILLESPIE: Well, Chris, there are other reforms as well. As you know, Governor Romney supports increasing gradually increasing over time, bringing the Medicare eligibility age in line with the Social Security retirement age.
Secondly, this Congressional Budget Office notes, the assumption --
WALLACE: -- by 2016? Because I thought that was also only --
GILLESPIE: It's phased in, but it would extend the solvency. The Congressional Budget Office says that assumptions about the Medicare trust fund Part A being solvent through 2024 under the Obamacare proposal is unrealistic, and that's a fact.
What we do know is that the -- as we heard Robert Gibbs say, they are funding Obamacare by taking $716 billion out of Medicare now, current beneficiaries affected by it, and people who paid into that program for guaranteed health insurance are now seeing that money go to other purposes. And that's wrong.
GILLESPIE: And we welcome this debate.
And I think that's why you can see Governor Romney and Paul Ryan in Florida yesterday talking about the need to save this for future generations, to repeal Obamacare, and restore those cuts and reform it to save it.
WALLACE: Now, let's talk about the governor's long-term solution. And that's what you're talking about, turning it into a premium support plan. But that doesn't start, again, I want to point out, until 2023, for people who are now under the age of 55.
The nonpartisan Congressional Budget Office says this -- let's put it up on the screen -- "Under the proposal, the gradually increasing number of Medicare beneficiaries participating in the new premium support program would bear a much larger share of their health care costs than they would under the traditional or existing program."
According to one estimate, Ed, $6,400 in added cost because the premium supports are not going to cover all of their health care cost.
GILLESPIE: Yes, that $6,400 estimate I think it's like an assumption. It reminds me a little bit of Steve Martin's book "How to Become a Millionaire." First get $1 million.
And, you know, this is an assumption of saying, well, we think that -- we assume that people are going to pay more. If you look at the fact is that allowing for greater competition -- by the way, the first choice and first option in those options for those again age -- below 55, would be to stay in the current Medicare system as is.
But the fact is, when you look at where this comes from, the origin of this dates back to Bill Clinton appointed Medicare saving commission that was bipartisan, brought forward and in fact was put in a proposal by Ron Wyden and Paul Ryan because people understand these reform will make the program more efficient and save it for future generations.
WALLACE: But, again, the Congressional Budget Office -- nonpartisan, they are the score keeper in Capitol Hill -- says that under the premium support plan, that Medicare beneficiaries will bear a much larger share of their health care cost.
GILLESPIE: Yes. We reject that in our analysis, Chris, and don't believe that that is accurate. WALLACE: What about the argument -- this is more of a campaign, political issue, that you hear from some Republicans now, that with all of this focus on the budget and Medicare, that your campaign is getting away from your best issue which is Obama, economy and jobs.
GILLESPIE: Well, as we saw yesterday, in 44 out of 50 states unemployment went up and the economy, jobs is very part of this campaign and we are going to continue to talk about the Romney-Ryan plan for a stronger middle class, more jobs, more take-home pay.
But we also need to do some things in terms of changing business as usual in Washington and trying to get control of our budget and trying to save Medicare for future generations rather than allowing it to go bankrupt. And we want to make sure the voters have a clear understanding of the choices here. We need them to understand -- you know, Nancy Pelosi said we need to pass Obamacare in order to learn what's in it. And part of what's in it is this $716 billion in Medicare cuts.
So, we're going to have a debate about all of these issues, and we think a more fulsome debate about the future of Medicare and Romney-Ryan approach is good for us.
WALLACE: This week, Governor Romney pushed on the allegations by Senator Harry Reid that he had heard from some unnamed source that Romney had not paid any federal taxes for 10 years.
Let's take a look at what Governor Romney said.
(BEGIN VIDEO CLIP)
ROMNEY: Over the past 10 years, I never paid less than 13 percent. I think the most recent year is 13.6 percent or something like that.
(END VIDEO CLIP)
WALLACE: Question, 13 percent of what? His gross income or his taxable income?
GILLESPIE: Adjusted gross income I believe is what that was. We said this is his federal income tax, effective federal income tax rate.
WALLACE: Of the gross income, because if it's just taxable income, then that doesn't tell us how much he was shelter in the Cayman Islands of Swiss bank accounts.
GILLESPIE: I believe it's what on the adjusted gross income ,which is what the tax returns for most people is, is what the rate is based on.
WALLACE: OK. Governor Romney has promised to release his 20l1 tax returns, this year's tax returns before the election, as soon as they are completed and the dead line is October 15th. When should we expect them? GILLESPIE: You know, I'm not sure, Chris. They are being finalized. There's a lot of forms that have to come in from other entities that the governor doesn't have control over. But people have ample information, as they have last year's tax return, they'll have the most recent tax return for this year as well. And by the way, you can go on to the Web site and see personal financial disclosures going back to 2002.
WALLACE: But he is going to release this year's tax returns.
GILLESPIE: Yes, that'd be two years of full tax returns, which by the way is consistent with what John McCain did in 2008. It wasn't an issue in 2008 because President Obama was not trying to distract from a four-year-long record of failed policies.
WALLACE: All right. The deadline is October 15th. That would be three weeks before the election. That would seem to me to be a crazy time to release tax returns.
So, strategically, you got to make a decision when you want to release these tax returns because you know it will be at least a distraction, if not an attack point for Democrats.
GILLESPIE: Sure. Look, October 15th is the deadline for the IRS on an extension. We have said, as soon as they are ready, we're going to release them. And I believe they'll be ready before that.
WALLACE: The Friday after the Democratic Convention.
GILLESPIE: I'm not sure when it will be ready. That's up to certified public accountants. Not me.
WALLACE: The president went after the Romney-Ryan tax plan yesterday in his speech I New Hampshire, which he said would cut taxes on the wealthy and raise taxes on the middle class.
(BEGIN VIDEO CLIP)
PRESIDENT BARACK OBAMA: His new running mate, Congressman Ryan, he put forward --
OBAMA: -- he put forward a plan that would let Governor Romney pay less than 1 percent in taxes each year.
Now -- and here is the kicker: he expects you to pick up the tab.
(END VIDEO CLIP)
WALLACE: Now, the Obama campaign says that under the Ryan plan, Romney would pay 1 percent of taxes because under the Ryan plan, and this is true, it would eliminate all taxes on capital gains, on dividends and interest. GILLESPIE: Yes. I mean, the Romney-Ryan plan, which is Governor Romney's proposal for tax relief, would allow for households with incomes less than $200,000 to not pay on capital gains and dividends because we believe that would help foster job creation and would help middle class Americans have higher take-home pay. That's important need in our economy right now is to spur job creation and allow for middle class workers who are living pay check to pay check to have higher take-home pay.
WALLACE: But for people like Mitt Romney?
GILLESPIE: No, it would not change.
WALLACE: So, taxes on capital gains.
GILLESPIE: Current rate.
WALLACE: So the president, when he talks about the Ryan plan, that part of the plan is inoperative.
GILLESPIE: Because Mitt Romney is the nominee and Paul Ryan has joined him on the ticket, which we're very glad about. We think it's had a very beneficial effect on the debate and one the ticket. But Paul Ryan is running on Governor Mitt Romney's proposals that he put forward in getting and winning the Republican Party nomination.
And the fact is, those are his proposals are to lower capital gains only with incomes below $200,000.
WALLACE: So this talk of 1 percent tax?
GILLESPIE: Like everything else, Chris, it's just trying to distract from the reality and the real debate.
Look, we had Paul Ryan in Florida yesterday talking about saving Medicare and stopping the raid, the piggy bank, and not treating it like a piggy bank. You had Mitt Romney in Ohio, in coal county talking about the importance of domestic energy for our economy and for jobs.
And what do we have from them? You had Joe Biden in Virginia thinking he was in North Carolina, talking about putting y'all back in chains. We had President Obama doing an interview on a morning zoo disc jockeys talk about what super power he would have if he were a super hero.
We want a serious campaign about real issues that are facing this country. It is time for that. We will win that debate and that's why they are trying to avoid that debate.
WALLACE: OK. Finally, a couple of questions on running mates. You really think you can make Joe Biden an issue in this campaign?
GILLESPIE: I think the Obama/Biden ticket and their approach.
WALLACE: I am talking about Joe Biden. GILLESPIE: Well, I think Joe Biden makes himself an issue. You know, the fact is that when you look at his rhetoric, when you look at the stream of attacks from Joe Biden versus the serious proposals that are being put forward by Mitt Romney and Paul Ryan, I think there's a very informative contrast there between the two tickets and two approaches.
WALLACE: And looking back -- and it's only the first week, but looking back to this first week, what specifically do you think that Paul Ryan has done for your campaign?
GILLESPIE: I think he has helped reinforce what Mitt Romney wanted, which is a big debate about big issues, elevated the debate.
Now, the Obama-Biden campaign is going to continue to try to make this about little things and distractions. But I think the American people realize that we are inviting a serious discussion of the challenges that confront us as a country, putting forward positive solutions. And I think they're going to reject, you know, the fear and smear, the chain, you know, the campaign of hope and change has denigrated to one of fear and smear.
But I think the American people want to have the bigger debate about the big issues. And look, you know, Paul Ryan has given a real jolt in terms of the number of volunteers who have signed up and contributions coming in online.
And, you know, he has a relationship with governor Romney that I think is a very positive one. I think, you know, they are very good together and I think people see that.
WALLACE: Ed, thank you. Always a pleasure to talk with you. Thanks for coming in.
GILLESPIE: Thank you. Thanks for having me.
WALLACE: Up next, Paul Ryan ends week one as Mitt Romney's running mate. We'll ask our Sunday group how much of an affect has he had on the campaign so far.
(BEGIN VIDEO CLIP)
RYAN: This is a defining moment. This is our generation's time. And you know what? We can do this. We can turn this thing around.
(END VIDEO CLIP)
WALLACE: GOP vice presidential candidate Paul Ryan campaigning in Florida Saturday at the end of a week in which both sides say he has had a big impact on the campaign.
And it's time now for our Sunday group Bill Kristol of the Weekly Standard, Democratic strategist Joe Trippi, Karl Rove, founder of the Republican super PAC American Crossroads, and former Democratic Senator Evan Bayh.
Well Bill, you pushed hard for Paul Ryan for his to run for president himself. Then you pushed hard for Romney to pick him as his running mate. I have a question to ask you, but before I do, Karl?
KARL ROVE, REPUBLICAN STRATEGIST: He writes an editorial saying pick Romney and Romney pick Ryan -- and Romney picks Ryan. So either Bill is the most powerful man in Washington or more likely Bill has the ability to foresee the future. There you go Kristol, there's your crystal ball and...
WALLACE: There is money in your future if you will take the swami hat and put it on you.
BILL KRISTOL, WEEKLY STANDARD: I think I'll pass. But that's OK. It's a beautiful hat.
You think I should put it on?
WALLACE: Yes, I think absolutely should put it on.
KRISTOL: How does it work? I don't really wear...
WALLACE: No, no, the other way around.
KRISTOL: The other way around?
WALLACE: Yes. There you go.
JOE TRIPPI, DEMOCRATIC STRATEGIST: This is going to be around for a long time.
WALLACE: All right. Wait a minute. No you look like Carnac the Magnificent. There you go. All right. Now you can answer your question.
KRISTOL: OK. Now you guys have had your fun.
I did not know this was coming .
WALLACE: No Really, you're extreme...
KRISTOL: I could have arranged for other things to do this morning.
WALLACE: All right, how has Paul Ryan done this week?
KRISTOL: I'm fine.
He's done great. No, he's done very well, I think. And no he's really changed the nature of the campaign I think. And changed -- really made it a different campaign than it was a couple of weeks ago. A couple of weeks ago it was a boring conventional campaign, a tough campaign, an uphill climb. Now I really feel that the Romney-Ryan ticket potentially could have the wind at its back. It feels more like a movement and less like a campaign. It feels like less like a couple of hundred people in Boston working very hard to kind of push the boulder up the hill and more like a genuine exciting cause for which people all around the country -- to which people all around the country are rallying.
WALLACE: Joe, I want you to pick up on that. How has Paul Ryan done? And what about the argument you hear even from some Republicans, this is the question I asked Ed Gillespie, that maybe he's moved the campaign away from the economy and jobs, moved it to budgets and Medicare and all of that?
TRIPPI: Well, it -- pick clearly moved the election. Look, there were things going wrong for Romney, I think the Midwest in particular was starting to slip away in a lot of the polls. And I think he needed to do something, I think, to reset it. And I think Ryan has done that.
I think the one thing I'd agree with Bill on is the energy that's happened now. A lot of folks in the base I think weren't as excited about Romney, now they are. And in an election where it is going to be very close in places like Florida and Ohio and getting out the vote is going to be important, that -- we are talking about Medicare and all of these other things that are definitely going to affect the outcome, but the one thing maybe that energy on the ground, that get out the vote, both sides are going to depend on that to make the difference on Florida, in Wisconsin and in Ohio. And I think Ryan does bring that to them.
WALLACE: Karl, pick up on that generally and specifically let's turn this now to the debate over Medicare. Because I think a lot of Democrats thought, hey, Medicare, social issues, sure winner for us but this week the Romney campaign has been making the argument about the raiding of Medicare, the $716 billion to pay for Obamacare and that they can at -- if not win, at least neutralize the issue. Your thoughts on that.
ROVE: There was going to be a battle about Medicare no matter what. The question was, was it going to be left to what the Democrats traditionally do, which is late night phone calls in the final weeks of the campaign to seniors and scary mail pieces were we going to have a full-out honest debate. And we're having a -- you know, for what passes in politics, a full-out, honest debate about it.
There are moments of sort of unreality. I loved Robert Gibbs saying, well, this -- these are not cuts in Medicare, we're merely taking -- we're merely cutting the subsidies to insurance companies.
Well, wait a minute, you're cutting the subsidies to insurance companies for a program called Medicare Advantage in order to take and fund subsidies to insurance companies in the exchanges and boring it from a program that's already going broke.
So as Republicans are on the offense by depicting this as Obamacare as a raid on the piggy bank of Medicare in order to pay Obamacare, taking money from programs for seniors in order to pay for healthcare for non-seniors.
WALLACE: Senator Bayh, on the other hand, you heard the argument that Robert Gibbs made. And it is also true that because of Obamacare, which has the spending cuts and the tax increases it extends the hospital insurance part of the Medicare from 2026 to 2024, for eight years. If you undo all of that, then we are facing insolvency in that part of Medicare in four years.
So how do you see the Medicare debate playing out at this point?
EVAN BAYH, FRM. DEMOCRATIC SENATOR: That's a great question, Chris. I listened to Karl, I listened to your previous guests, and I think it's going to play out to probably about a draw, which favors the Democrats. Because -- your viewers are going to watch your guests today and their eyes are glaze over and they're going to say I don't know who to believe. I assume all of these guys are spinning, or some of them are dissembling. So I'm going to go with my gut, who do I really trust to preserve Medicare for me and that's playing on the Democrats home field.
So I think Democrats on this issue get the benefit of the doubt. That's why I think the sooner the Republicans can pin it back to jobs and the economy, the better off they're going to be.
The last two things I'd say, Chris, number one the real question is are the American people ready, as Karl is suggesting, as an honest detailed discussion about Medicare? Is this 1992 when Ross Perot could hold up his charts again? I wish that were the case. I'm a little skeptical that's the case. That's number one.
Number two, all I know is all this debate, all the attacks back and forth are going to make it harder to ultimately make the changes that we have to to save this program for the long-term.
WALLACE: You know, Bill, it's interesting what Senator Bayh just said, because I think most people well thought, well, if it's a draw that favors the Republicans. But he does make a somewhat convincing argument that...
BAYH: For a time for everything, Chris.
WALLACE: That if it's a draw in a sense people go back to their kind of gut feelings. Social programs, Democrats.
KRISTOL: Well, the people also remember Obamacare. That is what has changed everything. In the old days there was a Medicare debate in which Democrats could demagogue Medicare and Republicans had to say, well, gee, these changes are awfully important.
President Obama, they passed Obamacare on a partisan vote. And now that is front and center in this election, which is something that the Obama campaign desperately does not want. So I don't really agree that with the conventional wisdom that oh, the quicker we get back to the economy and jobs the better for Republicans.
The voters know the economy is pretty bad, that's why President Obama's approval rating is only 47 percent.
But to clinch the deal against President Obama, the Romney-Ryan ticket has to explain that they have solution to the problems ahead. One of those solutions is to the debt. And the only way to solve the debt is to reform Medicare responsibly and not do to it in the way Obamacare does it. So I think having Obamacare debate is very good for Romney-Ryan.
WALLACE: I was going to say that, Joe, you know the one thing that's happened is instead of the Obamacare debate being just about access or just about the individual mandate, now it's about this taking of money out of Medicare to pay for Obamacare and that does bring Obamacare, which is not a popular program, back into the debate.
TRIPPI: It does, but the other thing, Chris, is if you're going to -- you have to reform the entire health care system to lower costs for Medicare, too. It's in the health care system. So the problem is if you're going to repeal Obamacare and do the -- take the $716 billion and don't do what the Obama -- what Ryan wanted to do when he passed his -- when he tried to pass his budget, what you're going to end up with is an insolvent Medicare in 2016, four years from now.
And as you saw, Ed Gillespie really didn't have a good answer for how they're going to fill that gap from 2016 to 2024 which Obama's plan does. And that's -- if you're a senior, that's going to register out there. I think they've got problems. They've got to come out with more details.
WALLACE: OK. We have to take a break here, but when we come back, where the race for president stands now. We'll get a first look at Karl Rove's latest electoral vote map.
(BEGIN VIDEO CLIP)
OBAMA: It's not just a choice between two candidates or two political parties, it is a choice between two fundamentally different visions about where to take the country.
(END VIDEO CLIP)
WALLACE: President Obama in New Hampshire Saturday making his case for four more years in office. And we're back now with the panel.
Karl, let's take a look at your new electoral vote map. Let's put it up on the screen with a drum roll. This is based, of course, on the latest polls in each of those states. So makes sense of the (inaudible), the various shades of blue are Obama states, the red and pink are Romney states, the yellow are toss-ups. Karl -- and if you look up at the top there, you'll see at this point, if you look at the numbers at the top above the map, you have states with 257 electoral votes safe or leaning Obama. States with 182 electoral votes safe or leading Romney. Now I understand all of this can change, and that these are just the latest and we've got two more months, but according to that map at this point Obama is only 13 votes away from having the majority.
ROVE: Well, yes. But first of all he's now got the lowest number of solid Obama states since we began putting the map out in April. There's been a steady decline. And this week we saw a decline again. He -- New Hampshire moved from lean -- from toss-up to lean Obama, but Ohio moved the other way from lean Obama to toss-up.
And there's evidence, Joe and I were talking about this last week when we did the map last week, there's evidence that Wisconsin with the choice of Ryan is now moving to toss-up. And I suspect by next week with new polls will be in the toss-up category.
So this race is very much up in the air. The president's advantage has declined significantly since the beginning of this poll in late April in terms of a solid Obama states and Romney has been firming up his position. We're in for a barn burner here in the next 80 days.
WALLACE: All right. But Joe, let me ask you -- and let's put up the map again if we can -- the control room is going crazy -- there we go -- because when I look at this map, one of the things I notice is that with the exception of Evan Bayh's state of Indiana, Romney has not built a solid lead yet in any of the swing states that Obama won four years ago.
So, yes, maybe it's tightening up a little bit, but how steep a hill does Romney have to climb?
TRIPPI: Well, first of all it was going to tighten up. I mean, in April we were looking at Romney just getting out of really rough primaries so the states were going to fall into place here. The one I agree with, with Karl on is that Wisconsin I would put in the toss-up category. I think Ryan brings that into play, or at least we should all assume so. I would assume that if I was in the Obama campaign.
But yeah, in all these other states they're either a dead heat or in most of them Obama is slightly ahead. So he's very close to taking this thing. He only needs -- if he can keep Ohio in his column it would be the -- there's pretty much no way Romney can get there. I know Karl has got some sets of states that would make up for Ohio, but it's -- Ohio now -- Ohio and I think Virginia become very critical.
WALLACE: Bill, there's a lot of talk, and you heard it especially this week among pollsters, that when you drill down into the numbers there's less than 5 percent, some people say 3 percent of voters who are truly undecided, truly up for grabs. And the argument goes that they're just not going to end up being that important, that the swing voter is going to be less important and this is going to be more of a base election, more of you getting your supporters out than the other side gets of their supporters out. Do you buy that
/KRISTOL: No, not really. I think people overdue that. You can say right now to a pollster I'm inclined to be for Obama or for Romney and you could change your mind over the next two-and-a-half months. And I think that's why the Ryan pick is important. It does change -- I may end up being an inflection point that changes the dynamic of the race enough that you probably lose some of those voters who were lightly pro-Obama. You know, I'm not committed, but tending that way.
And I'd say that's especially true about young voters. In 2008, President Obama owned -- candidate Obama only beat McCain by one point among voters 30 and over. Romney is going to beat Obama this time among voters 30 and over. The question is how many voters 18 to 30 can he move? There are more voters 18 to 30 than -- everyone talks about the seniors, people over 65. There's many voters 30 and under as there are 65 and over.
So there are a lot of these voters. They are by definition less committed, I think, they've only voted once or twice. Obama took them 2 to 1 in 2008. This is where the Ryan pick can make a bigger difference than people understand. The Romney-Ryan ticket is now younger than the Obama-Biden ticket.
When Paul Ryan, the clip we showed at the beginning of the first panel says this is a defining moment, this is our generation's time, suddenly you could feel if you're 27 years old that, gee, you know, the Republican Party is speaking for me and for the future whereas in 2008, of course, it was entirely the other way with Obama running against McCain.
So I really think among young voters, there are more swing voters among young voters. And I think Ryan can make a big difference among them.
WALLACE: Senator Bayh.
BAYH: Chris, in an election that is going to be decided by 2, 3, maybe 4 percent, if there are 4 or 5 percent undecides that decides the election. Now you've got to energize your base as well. The Obama team has had four year to invest in a get out the vote operation. Maybe the Ryan pick helps to neutralize that some.
But I think this eventually comes down to a very close race. And at a strategic level what the president's team has done masterfully over the last couple of months is the real question was is this going to be a referendum on the last four years of Barack Obama as president?
BAYH: But I think this eventually comes down to a very close race.
And at a strategic level what the president's team has done masterfully over the last couple months is, the real question was is this going to be a referendum on the last four years of Barack Obama as president or is it going to be a choice between two people? They very successfully made it a choice. Mitt Romney's personal favorability is very low. The president does much better on the dimension of who is going to stand up for the middle class. To me that means that unless Mitt Romney can be reintroduced at the Republican convention or can do really well in the debates, it's uphill for him going into November.
WALLACE: OK. Karl, I want to throw one more thing into the hopper here and that is money, because you say that could play a big roll in the last, what, 10, 11 weeks of this campaign. Let's put up some numbers.
In April, when Romney wrapped up the primaries, the president's campaign and the Democratic Party, all of them together had $139 million cash on hand, that's what really matters. What -- after you've raised it and spent it, that's how much you've got in the bank. While Romney and the Republicans had just $44 million, because they've obviously spent it on a very tough campaign in the primaries.
But at the end of July, just a couple of weeks ago, Romney and the Republicans had $186 million in the bank while the Democrats have not yet announced what they have. They have to announce it by tomorrow. You seem to think that Obama could have some money problems.
ROVE: No, look, Obama and the DNC raise $75 million in July. I bet they bank no more -- they set aside -- I bet they spent $65 million to $70 million of that, which means the advantage they had at the end of June -- at the end of June of $26 million was erased in July. And I bet you the Romney campaign has a $30 million or $40 million cash advantage.
Now they spent a lot of it on this sort of vaunted grass roots game. And I know I've got to disagree with the senator and with my pal Joe Trippi on this, you know, if -- the indications we have thus far is it ain't working, because Democratic registration in the battleground states has declined precipitously. The Democrats have not been able to replace them with new registrants. And there's every bit of evidence that the Republican electorate is far more energized and more likely to turn out to vote.
Joe -- Bill mad the point about young voters. Young voters are supporting President Obama 13 percentage points less today than they were four years ago. Remember, he wins this election by 7. You run among a key voter group like that 13 points behind your performance four years ago and you're in deep trouble.
WALLACE: And in 20 seconds, can't Obama then go at the last minute say, look, we're losing the money race. Here it is. Come...
ROVE: He's been doing that for a couple of months. I'm on his email list. I mean, he keeps trying to get money from me. So he's desperate. And it ain't working.
And, look, he is 205 presidential fundraisers. He has set an all-time record, more than the last four presidential candidates combined.
BAYH: How'd you get on his list Karl?
ROVE: Damned if I know.
WALLACE: That's an expense that's not going to be paid back.
Thank you, panel. See you next week.
Don't forget to check out Panel Plus where our group picks right up with the discussion on our website FoxNewsSunday.com. We'll post the video before noon eastern time. And make sure to follow us on Twitter @FoxNewsSunday.
Up next, our power player of the week.
WALLACE: He very seldom appears on television, but he's one of the central figures in the Romney campaign. Despite big differences in personal style, he and the governor are charting the campaign's course together. Here's our power player of the week.
STUART STEVENS, ROMNEY CAMPAIGN SENIOR STRATEGIST: Two people that have more different backgrounds and two people that have more different world views.
WALLACE: Stuart Stevens is chief strategist for the Romney campaign. And while he rarely does interviews, he may be the governor's most influential adviser. He is behind the decision to focus relentlessly on the big picture, what he says is the dramatic contrast between the candidates.
STEVENS: The theory of the campaign is that you've got someone who is uniquely qualified to turn around the economic mess that the country is in. And very different views of where this country should be led. WALLACE: Stevens likes to say the key is winning the election, not winning the day. He does the ads for the campaign. And to the consternation of some Republicans, he has focused on Romney's agenda.
ANNOUNCER: What would a Romney presidency be like? Day one...
WALLACE: Sometimes letting charges about the candidate's taxes or business record go unanswered.
STEVENS: The majority of the country has decided that Barack Obama should not be re-elected, it's why he can't get about 50 percent. And with Mitt Romney, it's someone that they're getting to know better. This is a long process that builds to an election and hopefully the convention is going to be a positive part of that.
WALLACE: The critics say that you guys are not as tough as the Obama campaign.
STEVENS: Listen, I think there's always in these campaigns all this macho, chest pounding of who is tougher and who is this. It's a bunch of sort of locker room trash talk that's got nothing to do with the greatest economic crisis since the Depression. And I think it's probably a quality that people hate about people that do campaigns.
WALLACE: Stuart Stevens has an unusual background for a political operative: a Mississippi native, he was a writer for TV shows like Northern Exposure.
UNIDENTIFIED MALE: Well, while pocketing a gold-leaf band and a silver humidore, came across the book that completely and irrevocably changed my life...
WALLACE: He's also into extreme sports like endurance cycling and skiing the last 100 miles to the North Pole. His office at Romney headquarters is filled with exercise equipment.
Is that what you like about political campaigns, testing yourself?
STEVENS: I like competition and I like the focus that it brings. And I like that they are over at a certain point and that you know if you were successful or not.
WALLACE: Stevens is not big on ideology. He's worked on campaigns for Haley Barbour and Chris Christie. He tends to be cautious, staying away from bold policy strokes and trying to make the campaign about the opponent. When asked what's special about this race, he remembers meeting people at Romney rallies in Iowa back in January.
STEVENS: And they'd say, you know, I want to see the next president of the United States, I want to see someone who is going to change this country. That's an extraordinary moment. And to feel that maybe you can contribute something to that is a very rare opportunity. And it doesn't come along very often.
WALLACE: For all the excitement about Paul Ryan, Romney advisers say their central message at the Republican convention will be why the president has failed and their man can do better, which sounds like a contrast right out of Stuart Stevens playbook.
Now, this program note. Next Sunday on the eve of the convention our exclusive guests will be Mitt and Ann Romney. We'll sit down with them at their summer home in New Hampshire and on the campaign trail. Be sure to tune in.
And that's it for today. Have a great week. And we'll see you next "Fox News Sunday" reporting from Tampa.
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On the Show
This Sunday marks the deadline to reach a long-term agreement with Iran over the country’s nuclear program. According to President Obama, progress has been made, but there are still “significant gaps between the international community and Iran.” We’ll talk with the leaders of the Senate Committee on Foreign Relations, Chairman Robert Menendez (D-NJ) who has been wary of extending the July 20th deadline, and Ranking Member Bob Corker (R-TN).
As the immigration debate heats up, Sen Ted Cruz (R-TX) is working on legislation that would prevent the expansion of, and potentially repeal, President Obama’s Deferred Action for Childhood Arrivals. The DACA, created in 2012 by executive action and aimed at protecting minors who entered the U.S. from deportation, is being tied by critics to the current crisis. We’ll talk exclusively with Sen Ted Cruz about the border crisis, this week on Fox News Sunday.