Mike Huckabee Explains 2012 Decision; Rep. Ron Paul on His Presidential Bid; Sens. Durbin, Kyl Talk Immigration Reform, Debt Ceiling

Written by Chris Wallace / Published May 15, 2011 / Fox News Sunday

Special Guests: Mike Huckabee, Rep. Ron Paul, Sen. Dick Durbin, Sen. Jon Kyl

The following is a rush transcript of the May 15, 2011 edition of "Fox News Sunday With Chris Wallace." This copy may not be in its final form and may be updated.

CHRIS WALLACE, ANCHOR: I'm Chris Wallace.

The latest on the Republican race for president -- next on "Fox News Sunday."

(MUSIC)

WALLACE: Former Governor Mike Huckabee fresh off his announcement of his presidential plans.

(BEGIN VIDEO CLIP)

FORMER GOV. MIKE HUCKABEE, R-ARK.: All the factors say go; but my heart says no.

(END VIDEO CLIP)

WALLACE: And Congressman Ron Paul makes it official. He's running for president again. We'll ask him about his controversial libertarian stand on the size and scope of government and American foreign policy.

Huckabee and Paul -- only on "Fox News Sunday."

Then, the president pushes immigration reform and the need to raise the debt limit. We'll have a fair and balanced debate between two Senate leaders, Illinois Democrat Dick Durbin and Arizona Republican Jon Kyl.

Plus, the GOP presidential race heats up, as candidates get in and deal with possible problems. We'll ask our Sunday panel to sort out the fast-changing field.

All right now on "Fox News Sunday."

And hello, again, from Fox News in Washington.

The Republican race for president became a little clearer last night, as former Governor Mike Huckabee announced he is not running. On Friday, Congressman Ron Paul said he is.

Today, we continue our series of interviews with GOP contenders "2012 One on One." And we begin with a man who made big news by staying out of the race, Mike Huckabee, who joins us from New York.

Governor, welcome back to "Fox News Sunday."

HUCKABEE: Thank you, Chris. Great to be here.

WALLACE: You had a good chance to win the Republican nomination. The fact that you've done nothing to promote your candidacy and you were either first or second in all the polls, didn't you want to be president?

HUCKABEE: Absolutely, Chris. And I think that I would have made a fine president. But it really came down for me to a very personal, a very intimate and -- as I explained last night in the announcement -- a spiritual decision. You know, you look at all the political possibilities. And, frankly, I don't think that I'll have a better chance, but I don't rule anything out for the long-term future. But I just somehow believe deep within me that it wasn't the right time and it wasn't to be. And whether it was a lack of sort of detailed preparation, it's not going to happen this time.

WALLACE: I'm a little curious when you say "spiritual decision." I mean, is it -- and I know you're a man of great faith. But are you saying that you didn't have the fire in your belly to go this time?

HUCKABEE: Well, I think, sometimes, people mistake fire in the belly for too much pepperoni pizza the night before. They make a great speech and people come up to them and tell them, "You could be president." And the next thing you know, they're running, not because they really ought to or have any shot at doing it, but because they have, you know, a handful of people that tell them they are looking at the next president.

For me, it was a little more introspective than that. You know, sometimes, people ask me does God speak to me in an audible voice. And the truth is, no. It's a lot louder than that.

But I do believe that for those of us who are believers, there is a sense of peace. And I'll put it this way, Chris -- last night, I laid my head on the pillow and had a very good night's sleep. And I was at peace with the decision. And I am today.

WALLACE: Will you endorse a candidate for president?

HUCKABEE: Not immediately. Frankly, my feelings and my whole emotions are still a little raw from the process, because up until just a few days ago, Chris, I honestly I thought I would be in it. And more and more, the signs were pointing that way, the objections were moved out of the way, and I could see a pathway to getting the money that I never thought perhaps I could. And, you know, things began to unfold.

But it was almost as if the more that all of the external things began to materialize, the less the internal things began to crystallize for me. So, I need to kind of process my own feelings.

There are some great candidates. Most of them are very dear friends of mine. That would have made it a little difficult in the primary, because I would have found it hard to challenge some of them in some maybe significant way personally. There may be a point in which I endorse, but right now, I'll see how the race unfolds and listen carefully to how they develop their message.

WALLACE: Well, since you are staying at Fox, I'm going to ask you to do your job as a political analyst. You're getting out of the race leaves a big hole, especially in Iowa, and especially among social conservatives. Who do you think fills that void? Who do you think benefits most from your staying out of the race?

HUCKABEE: Chris, I think there are a number of people who probably maybe jump for joy last night. I don't know. But I think there are a number of people who are similar to me in terms of point of view. Rick Santorum, for example, a strong social conservative, but he's also strong fiscal and I think defense conservative, and foreign policy conservative as well. Tim Pawlenty, another person. Newt Gingrich. Michele Bachmann.

I think all of these folks, very clearly might benefit from it. Sarah Palin, should she decide to get in. And, you know, I think people are awaiting her decision like they were mine.

But those are some folks immediately, because of their strong positions on issues like life and traditional marriage, as well as fiscal conservativism. The truth is, most fiscal -- in fact, all social conservatives I know are also fiscal conservatives. Not necessarily the other way around.

WALLACE: Now, you didn't mention Mitt Romney.

HUCKABEE: No, but let me tell you something. I've got a wonderful voice mail from Mitt Romney last night, which I thought was gracious on his part. You know, there has been a lot of talk about Mitt Romney and me. And we don't socialize together. We're not close, you know, in personal ways.

But I want to make it very clear today, if Mitt Romney is the nominee for our party, I will support him because I believe that Mitt Romney would be better president of the United States than Barack Obama on any day. And whether he is my first choice, I will support him if he is our nominee. And he very well may be.

WALLACE: Now, immediately after your statement last night, Donald Trump suddenly appears. It was kind of funny. But could you support him for president?

HUCKABEE: You know, I'm going to support the Republican nominee. I'm a Republican. And unless a person is way out there and is not clear on issues that to me are non-negotiable like the sanctity of life. I believe Donald Trump would be better for America than Barack Obama, because he understands business. Donald Trump has taken a pro- life position. He believes that we're getting shanghaied by China, which I agree with.

By the way, a little insight here. Donald Trump takes two versions of the sort of end of the show -- one that I was running, one that I wasn't. And Donald Trump did not know which one would be used, nor did my executive producer, nor did my staff, right up until the moments before the show when I finally, of course, had to tell them.

WALLACE: Well, that's interesting. It's good they ran the right tape.

Governor Huckabee, we're going to miss you on the campaign trail. But I'm delighted you will remain our colleague at Fox News. Thank you, Governor.

HUCKABEE: Chris, it's a pleasure. Look forward to being with you again.

WALLACE: Our next guest has joined the Republican race for president. He's also written a new book, "Liberty Defined," in which he sets out his controversial views on the role of the federal government.

Congressman Ron Paul, welcome to "Fox News Sunday."

REP. RON PAUL, R-TEXAS: Thank you. It's nice to be here.

WALLACE: You are a member of the House Financial Services Committee. I got to ask you first about the stunning arrest of the head of the IMF, Dominique Strauss-Kahn, for alleged sexual assault in a hotel room in New York, dragged off an airplane yesterday. Your reaction, sir.

PAUL: I think it's a bit ironic, because the IMF is not my friend. The IMF is a threat to us, because now that we have a financial crisis here and the dollar is threatened, others besides myself -- I would like to go to a sound American currency -- but others want to go to the world currency and they want to use the IMF. And I think that these are the kind of people who are running the IMF, and we want to turn over world finances and the control of a money supply to them?

So, I think it's rather interesting that we have that kind of an individual. And I think that should awaken everybody to the fact that they ought to look into the IMF and find out why we shouldn't be sacrificing more sovereignty to organization like that and individuals like he was.

WALLACE: You are being taken, I think it's fair to say, more seriously by the media time this time -- frankly, including me -- because your issues, limiting the size and scope of government, adhering to constitutional principles, are center stage for the Republican Party this time around.

But, do you really believe that you are equipped and ready to be president? And if you were elected, what's the first thing you'd do?

PAUL: I would say nobody is perfect. I don't know all the answers. I have don't want to run people's lives and run the world and run the economy. So, my qualifications are a little bit different.

But compared to others, I would say I'm pretty well-equipped. I've had a fair amount of experience. I've been in the military. I was in the military five years. That gives me a little bit of experience.

So, I would say I'm pretty well-equipped. But to brag that I can run things, I don't do that, because that's not what a president is supposed to do. A president is supposed to guarantee and work for the protection of liberty and allow people to take care of their problems.

WALLACE: All right. Let's talk about that, because this gets right to the heart of your view about the role, but also the limits of government. The flooding of the Mississippi has caused terrible destruction in the heartland of America. But you said the other day that the government should play no role in bailing out people who live in hurricane zones or flood zones. Let's watch.

(BEGIN VIDEO CLIP)

PAUL: If it's too dangerous, why dump the responsibility on the taxpayer? You know, it doesn't make economic sense. It doesn't make good moral sense. It doesn't make constitutional sense.

(END VIDEO CLIP)

WALLACE: Question -- President Paul would tell those folks, you're on your own?

PAUL: Well, you can't change laws overnight. The president isn't a dictator, but you would work for certain goals. The principle of ultimate insurance by government is moral hazard because people do things they shouldn't do.

But I have opposed, you know, flood insurance since I've been in Congress for 30 years, since 1976. And I have a coastal district, so I don't support FEMA. I get a lot more complaints about FEMA than I get support.

Of course, if it's a program -- you know, there are a lot of programs I would do away with, but in the meantime, I'd work to manage them responsibly. As a matter of fact, I have introduced legislation that would make Social Security more an insurance program, make it responsible, even though those things aren't technically proper.

So, no, FEMA is a problem. You brought up the subject, you know, of the Mississippi. FEMA is more or less in charge. But their decision now, because of government levees, because of the flood and no natural result and taking care of this flood, they have a decision to make. OK, down the Mississippi and flood this city, or down here and flood some innocent farmers.

I mean, this is the kind of dilemma that wouldn't happen in a society that didn't expect the government to solve our problems. But to expect the government and people who aren't benefiting to pay for me to live on the beach and get my house blown down, that's not morally correct and it's not in the Constitution, if that's what we're supposed to be doing.

WALLACE: But I want to drill down on this. Critics say that's the problem with your libertarian views. And they say it extends to your belief -- and we discussed it in the South Carolina debate -- that heroin and even prostitution should be legal if states decide to allow it.

Michael Gerson, who was the chief speechwriter for George W. Bush wrote this, this week, "It is social Darwinism. It is the arrogance of the strong. It is contempt for the vulnerable and suffering."

PAUL: I have no idea what he's talking about. Anyway, it makes no sense. But the question --

WALLACE: Oh, he's basically saying --

PAUL: Wait --

(CROSSTALK)

WALLACE: All right. This is I think what he's trying to say. The government has a role to enforce social norms and to protect people.

PAUL: And if you accept that, they can accept everything you do with your life. And everything you do, that justifies the economic intervention, that justifies the intervention in freedom of speech, and it subjects interference on the religious value. But to take my philosophy of freedom and the Constitution, property rights and contract, and turn it in to a cliche and say, "Oh, we're legalizing marijuana" -- that is so grossly distorting my views.

I want a legalized freedom of choice. I want to enforce states' rights. I have don't like prohibitions. Prohibition of alcohol was horrible. States control this as one thing. We had 150 years where heroin and cocaine weren't legal.

At the same time, if you regulate those values, you can regulate home schooling, you can regulate private schooling. You justify all these regulations.

And if you are for freedom, this whole idea we can't be responsible -- you remember the reaction that, "Oh, we're safe and secure and smart, because we need the government to tell us what to do." But history shows that individual choice, most people make good choices. And the big important here is as a physician and one that has studied this issue very well, drug usage and drug addiction should be a disease like we treat alcoholism.

And what we have done to these people in filling our prisons with nonviolent crimes, that whole thing is being reassessed. And I think the politicians and the pundits are way behind the people on this issue.

WALLACE: You talk a lot about the Constitution. You say Social Security, Medicare, Medicaid, are all unconstitutional.

PAUL: Technically they are.

WALLACE: Why? Why?

PAUL: There's no authority. Article 1, Section 8 doesn't say I can set up insurance program for people. What part of the Constitution --

(CROSSTALK)

PAUL: The liberals are the ones that use the general welfare.

(CROSSTALK)

WALLACE: OK. All right. Well, I don't know that I'm a liberal, but let's put it up on the screen, because that's exactly the point. Article 1, Section 8 of the Constitution: "The Congress shall have the power to lay and collect taxes -- to pay the debts and provide for the common defense and general welfare of the United States." Doesn't Social Security come under promoting --

PAUL: No. Absolutely --

WALLACE: -- promoting the general welfare?

PAUL: Absolutely not.

WALLACE: Why not?

PAUL: General welfare is a general condition -- maybe sound currency is general welfare, maybe markets, maybe judicial system, maybe a national defense, but this is specific welfare. This justifies the whole welfare state -- the military industrial complex, the welfare to foreigners, the welfare state that imprisons our people and impoverishes our people and gives us our recession.

So, no. Why would you have Article 1, Section 8? And why would you have the Amendment number 9 and 10? That means there is no reason for article 1, number 10 if you believe that? Revenue clause?

That is such an extreme liberal view point that has been mis-taught in our schools for so long. And that's what we have to reverse, that very notion that you're presenting.

WALLACE: Congressman, it's not just a liberal view. It was the decision of the Supreme Court in 1937 when they said that Social Security was constitutional under Article 1, section 8 of the Constitution.

PAUL: Yes. And the Constitution and the court said slavery was legal, too. And we had to reverse that.

So, I'll tell you, just because a court in '37 went very liberal on us and expanded the role of government -- no, I think the original intent is not a bad idea. I think limitation of government power.

If we aren't clear on this, we're going to get into a mess. Our government is going to get very big -- and we're going to have a very big deficit and we're going to have a financial crisis. And it's type of thinking that is leading to us to that very problem that we're facing today.

WALLACE: You caused a stir this week when you told an Iowa radio station that President Obama was wrong -- wrong to order a secret raid to get bin Laden without telling the Pakistani government first. Let's listen.

(BEGIN VIDEO CLIP)

PAUL: I don't think it was necessary, no. No.

UNIDENTIFIED MALE: No. It wasn't necessary to do?

PAUL: It was absolutely not necessary. And I think respect for the rule of law and world law, international law.

(END VIDEO CLIP)

WALLACE: You really believe that we could have trusted -- let me just ask the question. You really believe we could have trusted the Pakistanis not to warn bin Laden?

PAUL: Not on today's circumstance is the big problem. But you distorted that. You said it was wrong. I never used the word "wrong." I said it could have been done differently and it should have been. How about Khalid --

WALLACE: You said it was not necessary. It was absolutely not necessary. And then you talked about the rule of law.

PAUL: OK, but I'm not saying it's wrong. I'm just saying there was another way of doing it. So, let me explain it.

WALLACE: Well, I know. But I'm asking you -- do you think if we have told the Pakistanis, that they wouldn't -- they would have kept our secret?

PAUL: Well, go by history. Did they help us arrest about 15 other vicious criminals and deliver them -- the people responsible for the bombing in 1993? They had helped capture them and bring them to us. Khalid Sheikh Mohammed, they helped us capture him.

You know, why are we having trouble with the government? Why are we stirring up a civil war in Pakistan? It's because we've been bombing them.

This emphasizes so clearly when I'm talking about my foreign policy. I'm saying that when you bomb a country, you violate their security, their national security and their sovereignty. We're doing that. At the same time, we're giving them billions of dollars, and you wonder why the government gets in trouble with their people.

So, I would say that why didn't we do it like we did with George Bush? He did it and he used the Pakistani government. We arrested these people and they've been convicted --

WALLACE: We've got a minute left and I've got to ask you -- I just want to ask you one more question in this regard, sir. Some of your biggest supporters are from the Tea Party. Judson Phillips, who was the head of the Tea Party Nation, says you're re flat wrong about warning the Pakistanis first and getting their permission.

He said this: "If there is any doubt Ron Paul should not etch get near the Oval Office, even on a tour of the White House, he has just revealed it."

That's from the Tea Party.

PAUL: If you use him as spokesman for the Tea Party, then he's a Johnny-come-lately, he doesn't have the vaguest idea about the people who rally around me and what the young people are thinking, the people from 18 to 25. They're sick of this. They're sick of this spending. They want someone to stand up and say no to spending, no to our foreign policy, and yes to liberty and yes to the Constitution.

When we have that, we will have reforms and we will have our true revolution that we need.

WALLACE: Congressman Paul, we want to thank you so much for coming in today. Good luck on the campaign trail. Please come back, sir.

PAUL: You're welcome.

WALLACE: Up next: two Senate leaders debate what to do about the nation's debt, gas prices and immigration. Stay tuned.

(COMMERCIAL BREAK)

WALLACE: Congress' plate is full of tough issues and getting fuller.

Joining us now: the Senate's number two leaders from both parties. From Springfield, Illinois, Democrat Dick Durbin. And from Phoenix, Republican Jon Kyl.

Senator Kyl, you are a member of the bipartisan congressional group that is meeting with Vice President Biden trying to work out raising the debt limit, cutting the deficit. Have you made any real progress yet, sir?

SEN. JON KYL, R-ARIZ.: We're focused right now on things we agree on. And there are some things, but it's pretty small ball compared to the overall job that we're going to have to do. We're talking maybe about, optimistically, a couple hundred billion dollars when there's probably $2 trillion in savings that we've got to achieve in order to really get a handle on our out-of-control spending.

WALLACE: Senator Durbin, Republicans laid down some conditions this week for voting to raise the debt limit. Speaker John Boehner said that whatever the size that you increase the debt limit, you've got to cut spending even more. Senator McConnell talked about needing not only big long-term cuts, but also big immediate cuts.

Are you on board with both of those?

SEN. DICK DURBIN, D-ILL.: Chris, let me tell you. We better be careful. This debt ceiling is a critical decision. It's about the reputation of the United States and the economy. And if we play games with it or play politics with it, and default on our national debt, we could plunge this country back in a recession with even deeper unemployment. Nobody wants the see that happen.

So, we better take care as politicians when we set up all the scenarios. I believe that we need to address our budget deficit responsibly, put everything on the table. And move us toward a time when we are less dependent on borrowing money from China and other nations to fund our government.

WALLACE: You didn't quite answer the question, though, which is: can you live with these conditions the Republicans are putting on it? Especially the idea however much you raise the debt limit, you got to cut spending even more.

DURBIN: Well, I do think we do have to cut spending. But we also have to look at revenue and the entitlement programs. It didn't understand Senator McConnell's statement that he made. He said that he didn't agree with the Paul Ryan and John Boehner's approach to Medicare. But he wants us to cut Medicare benefits and address eligibility.

I want to hear more. I don't want to privatize Medicare any more than I want to privatize Social Security. There are ways to reform the systems responsibly. And I'm in favor of that.

WALLACE: Senator Kyl, you know, I think a lot of people are looking to see is there going to be give from both sides, which I think most outside observers would think there is going to have to be to get a deal. We do have a divided government.

Question -- is there a single tax of any significance that you would be wiling to raise as part of a deal?

KYL: No. In terms of tax rates, Republicans agree with the president that we need tax reform in order to eliminate loopholes so that we can reduce rates. But you don't want to raise tax rates in order to try to raise revenues. That simply relieves the burden from Congress to affect the spending, savings, that we need to do and puts the burden back on the taxpayers again.

When I talked about a couple of hundred -- trillion dollars in savings, that's the down payment. Over 10 years, we'll have to do probably double that, if not more. In order to get back to the historic level of spending that we've had in this country of a little bit over 20 percent.

The Paul Ryan budget gets us under 20 percent of GDP over 10 years. The Obama budget keeps us at levels above 23 percent of GDP. It's about 25 percent right now. Spending is the problem. Not revenue.

So, no, we will not agree to raise tax rates in order to generate revenues to prevent us from making the savings that we need to achieve.

WALLACE: Senator Durbin, let me ask you a flip of the same question. Is there a single social program -- social spending program -- of significance that you are willing to eliminate as part of the deal?

DURBIN: Well, elimination is not necessary for the critical programs, but reform is necessary. I just listened very carefully to what Jon Kyl said. And I believe he has set the stage for us to enter into a meaningful conversation. And it has to be a conversation where Democrats are prepared to talk about the future of major entitlement programs, reform that is not going to deny the basic protections, which we put in the programs, but acknowledges the fact that we have serious economic problems ahead of us if we don't have some reform in both Medicare and Social Security.

WALLACE: Gentlemen, let me turn to another subject. Senator Kyl, President Obama announced this weekend that he wants to increase domestic oil production both in Alaska and in the Gulf of Mexico. Meanwhile, at a time of record profits, Democrats want to eliminate $21 billion in tax breaks for the big oil companies over the next decade.

What do you think of both of those ideas?

KYL: I haven't seen the granularity on the president's announcement about increasing our exploration, but that's the key -- more production of domestic resources so we don't have to be so reliant on foreign sources of our oil and gas. We can do that in the Gulf of Mexico, of the coast of Virginia for example, Alaska.

The Republican legislation actually requires the president to extent these leases and to make decisions within a reasonable period of time. Like 60 days, for example. Or if they are going to deny drilling permits, explain in writing why not so they can be appealed.

What the Democrat legislation does will not reduce gas prices one dime. In fact, the congressional research service notes that it will increase the cost of gas at the pump and make us more reliant on foreign sources of oil. So, I think we do need to increase production. That's the way to get gas prices down.

WALLACE: Senator Durbin, I'd like you briefly to respond to what Senator Kyl said and particularly his point at the end about focusing on the tax breaks. We are talking about $2 billion a year with a deficit of $1.5 trillion a year. And the fact is all the political realists I think would say there's no chance you're going to be able to get that through Congress anyway.

Why -- I mean, I understand it's good politics -- but why focus on tax breaks for the oil companies?

DURBIN: Well, I would just say this. Some critics of President Obama said he threw in his cards with his announcement on Saturday. I think it was a call on a raise. He has said let's go forward with permits and exploration in safe and responsible manner.

But even at the end of it, you can get up every morning and shout "drill, baby, drill," and say it again at night. We still have 2 percent of the world's oil reserve and we use 25 percent of the world's oil production each year. We can't drill our way out of it.

But I do think the president believes and I share this belief, that if we cannot agree on a bipartisan basis to take the $4 billion annual subsidy that we're giving to the most profitable companies, the oil companies, in America and dedicate it to deficit reduction, we'll never have a serious conversation about reducing the deficit. Bringing the deficit down by $21 billion over 10 years at the expense of oil companies that are making billions of dollars in profits off of families and small businesses ought to be an agreeable bipartisan starting point.

WALLACE: Gentlemen, we are running out of time. I want to get into one last subject.

Senator Kyl, President Obama went to the Texas border with Mexico this week to talk about immigration and he said that they've made real progress on enforcing the border. He noted that the border patrol has doubled from 10,000 agents in 2004 to more than 20,000 last year. He noted the number of deportations has risen from 358,000 in 2008 to 392,000 last year. But he said Republicans keep moving the goalposts.

(BEGIN VIDEO CLIP)

PRESIDENT BARACK OBAMA: Maybe they'll need a moat. Maybe they'll want alligators in the moat. They'll never be satisfied.

(END VIDEO CLIP)

WALLACE: Question -- why not support comprehensive immigration? Yes, more border security, but in addition, finding a way to deal with the 11 million illegals who are already here.

KYL: Chris, first of all, that kind of mocking, demagoguery does not help to get a bipartisan solution. Maybe the president forgets that I was one of the authors with Ted Kennedy and a couple of other senators of the legislation that he helped to kill that would have provided comprehensive immigration about five years ago.

WALLACE: But let me ask a question, sir. Senator Kyl, would you support that bill today?

KYL: Not today I wouldn't, because it's clear that the effort to secure the border was never a realistic effort. That is to say, when the president talks about the progress that's been made, it's because of legislation that I introduced to increase the number of border patrol and provide technology and fencing on the border.

And when the president suggests that that's enough, we have been trying to tell him for a long time, come to the boarder in Arizona and you will see that it's not enough. There is still some to go. And if the president says we're done, we are not going to do anymore, we will never stop illegal immigration into the country so that we can then get on to solving the problems of those who are here illegally.

Let me just make one quick point, Chris.

WALLACE: Well, we're running out of time.

KYL: Just real quickly.

WALLACE: OK. Real quick.

KYL: Good. The analogy is this -- you get every faucet on your house is -- on your tub is overflowing, your sinks are overflowing, your toilets are overflowing. What do you do first, go get the towels and start to sop up the water, or do you turn off the faucets? We have got to turn of the faucets of illegal immigration, and then we can turn to these other issues.

WALLACE: OK.

Senator Durbin, we have got less than a minute left. The GAO says -- the GAO, a nonpartisan organization in the government -- that the government -- that we have only 44 percent of the border is under our operational control. There is no chance that you are going to get immigration reform, comprehensive immigration reform through this Congress.

Isn't this really about trying to mobilize the Hispanic vote for 2012?

DURBIN: No. Here is the offer I'll make to Jon Kyl and John McCain. I will sit down with you, I will work with you to have border security beyond what the president has done. And I think we have done an enormous -- made enormous investment there.

I will go even further to make sure that our border is safe, and to stop, as much as humanly possible, illegal immigration, if you will join with us in comprehensive immigration reform so that we can identify those living in this country, we can give the children under the DREAM Act an opportunity to have a good life in this country, and we can finally fix this broken system in good faith. Let's put both on the table and let's agree to get it done before the end of these two years.

WALLACE: Real quickly, 15 seconds. Senator Kyl, you willing to sit down with Senator Durbin on that?

KYL: Dick Durbin and I sat down before to talk about things, and I'm very happy to do it on this very important issue. But I will say, we have got to secure the border in order to achieve these other results as well.

But thank you, Dick. I'll be happy to sit down. And you know we can visit together about these things.

WALLACE: Well, we have a little television diplomacy here.

Senator Kyl, Senator Durbin, we want to thank you both so much for coming in and talking with us today.

Gentlemen, please come back.

DURBIN: Thank you.

KYL: You bet.

WALLACE: Up next, two are in, one is out, and there is a definite maybe. Our Sunday panel tries to make sense of where Republican presidential field stands now when we come right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

FORMER GOV. MITT ROMNEY, R-MASS.: A lot of pundits around the nation are saying that I should just stand up and say this whole thing was a mistake. But there's only one problem with that. It wouldn't be honest. I in fact did what I believed was right for the people of my state.

(END VIDEO CLIP)

WALLACE: Mitt Romney, this week, refusing to disavow the health care plan he signed into law in Massachusetts, even as he proposes a very different plan for the nation in 2012.

And it's time now for our Sunday group: Brit Hume, Fox News senior political analyst; Nina East of Fortune magazine; Kimberly Strassel of The Wall Street Journal; and Mort Zuckerman, publisher of The New York Daily News.

Well, Brit, did Governor Romney do anything this week to solve his problem with Republicans who think that Romneycare is way too close to Obamacare?

BRIT HUME, FOX NEWS SR. POLITICAL ANALYST: No. When he said that about, you know, he couldn't repudiate the program or disavow it because it wouldn't be honest, he also could have said, because it's true, that he couldn't disavow that and flip his position on it because he's already flipped on several issues and has something of a reputation -- he flipped on abortion, he flipped, arguably, on gun control. Critics of his will list others that could be seen as flip-flops.

I don't think he could do it. He was too far out on this limb for too long to then saw the thing off. So he did the best he could.

But the conceptual similarities between what we call Obamacare and the program that he guided into law in Massachusetts are too clear, too obvious for everyone. And I just think it remains around his neck as a millstone.

WALLACE: Nina, The Wall Street Journal had an editorial this week that certainly roasted Mitt Romney. Let's put it up on the screen.

"The debate over Obamacare and the larger entitlement state may be the central question of the 2012 election. On that question, Mr. Romney is compromised and not credible."

They certainly weren't persuaded by his speech.

NINA EASTON, FORTUNE MAGAZINE: Yes, Kimberly. You'll have to address that.

WALLACE: She will. Don't worry.

EASTON: I have to do my requisite. My husband is an Obama -- excuse me -- a Romney adviser.

When I look at this issue with Romney -- and I said this before and I'll say it again -- elections are about choices. And this primary election is about a choice. And I think health care is a problem for Romney and will remain a problem for him.

But you look at somebody like Mitch Daniels, who is the flavor of the month, and there's problems with him. He's been criticized by fiscal conservative for blowing the budget, as they say, under George Bush. I mean, that's the criticism for him. He has got problems as well. Tim Pawlenty, supporting cap and trade and so forth.

What I would say is, with all of this hand-wringing about the Republican field right now, another piece of news happened this week, which was the unemployment rate ticked up to 9 percent again. The Congressional Budget Office says that on Election Day, 8.2 percent will be the unemployment rate.

We haven't had a president re-elected with an unemployment rate that high since Franklin Delano Roosevelt. And the last three that were booted out with unemployment in the mid 7s were Gerald Ford, Jimmy Carter and George H. W. Bush. So this is important for Republicans to keep this in mind.

WALLACE: Kimberly, you're happily employed at The Wall Street Journal, which we should note is owned by our parent company, the parent company of Fox News as well.

To get to Nina's point, can Republicans get over Romney and his health care plan? And with Huckabee out, is he now the best chance that Republicans have to beat Barack Obama?

KIMBERLY STRASSEL, WALL STREET JOURNAL: I don't think they can get over it. Look, you step back, and this debate that we're having this year in 2012 -- or we're going to be having for the election is over the role of government -- its size and its involvement in people's life. Health care is central to that.

Now, Romneycare was the prototype to the president's health care plan. And Mr. Romney's obligation this week to come out and say that was a mistake. We were out there, maybe it wasn't the beginning of this health care debate. We were trying to do some things, but it didn't work out this way. Here is my new plan, here's how we're going forward, this is why the other one didn't work.

He didn't do that. And so people are saying we don't want a debate over the minor bureaucratic details over why your plan is different than the president's. We want a debate about a leader who's going to say here is what our philosophical principles are and we're going ahead. And he didn't do that.

That's why people are looking to Mitch Daniels and are a little interested in him, because, actually, I disagree. I think in terms of all the candidates that are out there, he probably has fewer -- less of some of his baggage. He doesn't have the health care issue that Romney has. He doesn't necessarily have some of the issues that Newt Gingrich does with ethanol, for instance, or climate change.

WALLACE: Mort?

MORT ZUCKERMAN, PUBLISHER, THE NEW YORK DAILY NEWS: Well, I think as Brit says, I think Romney does have a problem. Shall we say the variation in his views on various issues? And I don't think he has gotten over that problem.

I can understand why he couldn't possibly say that he was going to renounce the signature piece of legislation while he was governor. I have different issues with that. In particular, that it didn't save the kind of money that he had hoped for and had the individual mandate that was so controversial in Obama's program.

But I think he's a serious candidate. He's a talented man. He was an effective governor in Massachusetts. But he does have this tendency to go from one state to another and have different views.

The one that I remember the best was on fuel efficiency, which he supported in Massachusetts and, shall we say, walked away from when he got to Michigan? I don't know why he would have done that in Michigan, but these are things that he is going to have to find some way to deal with.

But I do think it is way too early to think that he is the only viable candidate. We're going to have to see some primaries. There are some terrific candidates in the Republican Party like Jon Huntsman, who is just an unknown figure at this point. When he gets a chance to be exposed to the American public, I think he's going to do very well.

WALLACE: I've got a couple of minutes left and I want to go to a new subject.

Brit, on this -- a new candidate. There was a big speech this week by Daniels of Indiana, not Governor Mitch Daniels, but his wife, Cheri Daniels, who spoke to the party.

It turns out -- and I must say, I didn't know this -- she divorced her husband back in the '90s, left him with their four daughters to marry someone else, then remarried him three years later. And here is what she had to say this week about the process of deciding whether her husband will run for president --

(BEGIN VIDEO CLIP)

CHERI DANIELS, INDIANA FIRST LADY: I don't think it can be done without everybody's support. And so it's something that of course we're talking about a lot. Our whole family is involved, and our whole family will remain involved.

(END VIDEO CLIP)

WALLACE: What do you make of the Daniels soap opera?

HUME: Well, I think he may genuinely be undecided. And Mitch Daniels is the kind of man whose entire sense of himself is not dependent on how high an office he holds. My guess is if he decides to get in, he will be a pretty fierce competitor, but I'm not sure the decision is yet made.

I do think that the speech made by his wife, so conspicuously, with people believing that she may be resisting his running, is perhaps a sign that she's behind him. But I think, you know, we don't know yet. And I'm not sure he knows yet.

WALLACE: Do you think this soap opera of their marriage on and off, do you think that matters?

HUME: I think a lot of people, conservatives, would say if they got back together and their marriage is now strong, that that's a good thing. So that -- you know, the soap opera is interesting, but in the end, they seem to be happily remarried.

WALLACE: I was going to say he says it's a love story with a happy ending.

All right. We're going to have to take a break here.

But when we come back, new developments in the debate here in Washington over what to do about the nation's debt. The panel tackles that after this quick break.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SPEAKER OF THE HOUSE JOHN BOEHNER, R-OHIO: The cuts should be greater than the accompanying increase in the debt limit that the president has given. We're not talk about billions here, we should be talking about cuts in trillions.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

SENATE MAJORITY LEADER HARRY REID, D-NEV.: Let's not lay down the gauntlet. Let's not draw a line in the sand.

(END VIDEO CLIP)

WALLACE: Republican House Speaker John Boehner and Democrat Senate Leader Harry Reid making it clear they have got a long way to go before solving the debt ceiling stalemate.

And we're back now with the panel.

Mort, you have a vantage point from New York that none of the rest of us have. How does Wall Street view the continuing flailing around about the debt limit? And what do they think of these mostly freshmen or younger Republicans in the House who are saying, you know, we cannot raise the debt limit and everything will be just fine?

ZUCKERMAN: Well, I think the financial world is absolutely concerned about the debt limit. You have seen where Standard & Poor's issued a credit warning on the credit of the United States. The IMF really came out publicly and said that we do not have a credible plan to deal with the deficit.

You have the owner of -- or the leader of the most important financial service firm in the world managing trillions of dollars of debt money, a company called PIMCO, led by Bill Gross, a very famous man in the world of fixed income securities. He has not only sold all of his U.S. securities, but he is selling them short on top of that. So you have a lot of indications that something might happen if we don't do anything about it.

Everybody believes that we are running out of gas. We have been running on an empty tank fiscally for a decade now. We have to address the problem, because sooner or later, it's going to blow up in our faces. Nobody knows exactly when, but this is not a saga that we can just continue going as if we can run up and continue these debts.

HUME: Mort has got it absolutely right. But it's not Wall Street that's concerned over the specific vote over raising the debt limit, they were concerned about the debt.

UNIDENTIFIED FEMALE: Exactly.

HUME: And this effort by Republicans to try to use the leverage provided by the certain urgency that's involved in the raising of the debt limit I think is probably going to be broadly supported by the public. And it may be the only way to get anything big done at a time of divided government, because it creates a powerful incentive to do something.

And my sense is Republicans, if they hold out for a lot and let it go down to the wire -- first of all, this idea that we're going to default on our obligations is nonsense, because there is plenty of tax money coming in that would cover the debt payments we need to make. Now, it would mean that a lot of the rest of the government could go unfunded, and that would be regrettable, perhaps, but there is no way we will ever need to default on our debt. No way we ever need to default on our debt.

This is scare talk from the administration. And I have to be suspicious that what they're scared of is not a default on the debt. They're scared of the kind of spending cuts that they feel they might have to make in order to get the debt limit raised.

WALLACE: Nina, as I discussed with the two senators, Republicans, though, are putting new conditions on what they will have to have to agree to increase the debt limit. You heard John Boehner talking about we need trillions in cuts and we need more in cuts than how much we raise the debt limit. McConnell is talking about immediate cuts, as well as long-term cuts.

Are we getting closer to a deal or further away?

EASTON: Well, I thought Senator Kyl saying "a small ball" in your interview was not a good sign.

WALLACE: He was talking about the Biden discussion. He's talking about a couple of hundred billion dollars.

EASTON: The Biden discussion. Yes, that was not a good sign.

On the other hand, in the Senate there is that proposal by Senator Corker and Senator Claire McCaskill, a Democrat, to reduce spending from 25 percent of GDP, 24 percent of GDP, down -- a glide path down to 20 percent. And what that buys into is the idea that the problem is a spending problem, it is not a revenue problem.

And there are Democrats -- witness that, Claire McCaskill -- who agree with that. And she is under attack now by MoveOn.org, by the left. I think it's going to be a tough road for those kind of Democrats to make that case. I don't think they're going to have the backing of the administration on that one.

STRASSEL: And I'd actually argue we got great clarity this week. John Boehner came out and gave a speech in which he reframed. And what he basically said is we'll go dollar for dollar with you guys.

You know, you want a $300 billion increase in the debt limit? We want $300 billion in spending cuts somewhere. So the ball is in your court. And that actually frames this issue.

The other thing he did is talk about the mechanism of this, which is important. What the White House has been saying is we want a debt cap. If you go above the debt, a certain level, then automatically, new tax increases come in. That's kind of like saying if we can't help ourselves and spend too much, you the public, pay.

Instead, Boehner said no, what we are going to do is having spending caps. We go above the spending level, we, Congress, have to cut somewhere else.

And what that does, again, is reframe this issue and it says no new taxes. And that has been important as well, too, because it would be deadly for the economy.

WALLACE: But let me bring in Mort again.

And you are the voice, in this group, at least, of the financial community in New York. How do they view all of this? Do they buy in solely to the Republican plan? Is it that they want to see a compromise? How do they view all the flailing around?

ZUCKERMAN: Look, with deep suspicion and concern, without question. They're all nervous about this.

Everybody understands that you have to have a bipartisan effort so that neither party really gets totally blamed if you're going to do enough to really make a difference to the fiscal imbalances in this country. And that's what we don't see and what -- you have a dysfunctional government. It is not working on many, many levels. That is what is seen in the financial world, not only in New York, but all around the world.

And this is something that is going to undermine the ability of the United States to do a lot of things at once. The problem is, we do not have the kind of leadership in Washington.

What is it that Harry Truman said? We need a leader who can tell the American people what they don't want to do and have them like it when they do it. Somebody has got to be that kind of a leader, and these people need that kind of leadership to get this thing done on a bipartisan basis.

WALLACE: You know, Brit, we also had a report on Friday from the trustees for the Social Security and Medicare trust funds that both of those trust funds are running out of money faster than had been believed, partly because of the recession, partly because we obviously have the baby boomers starting to take -- to need those services, and that the trust fund -- the main trust fund for Medicare -- will run out five years sooner.

What does that do to this discussion?

HUME: Well, I think it makes it encouraging, then, to hear Senator Durbin say we have got to get into the entitlements and reform the entitlement programs. And I think that is going to have to come out of this at some point. And I think this adds new urgency to that.

I might add another point about all of this. Senator Kyl -- when they start talking about taxes and revenues, and saying we don't have a revenue problem, that's wrong. We do have a revenue problem. But the reason for is it that the economy is growing so sluggishly.

A blooming economy produces a gusher of tax receipts with tax rates remaining as low as they are now, or no higher. The problem with trying to raise revenue by raising tax rates at a time of a weak economy is that it's likely to prevent the growth if you need to really get anything out of it. You never get the money.

We need both. We need more revenues from growth, and we need to cut the cost of these programs.

WALLACE: So, Nina, how do you see this playing --

EASTON: I would just add on the tax side, it's not that taxes shouldn't be addressed. We need tax reform.

So what you saw this week was going after a piece of -- you know, it's politically viable for the Democrats to go after the oil executives, for example. OK, plug those tax benefits that they're getting and reduce rates, and that will help start growth. But you do have to address tax reforms. That has to be part of this as well.

WALLACE: But the Republicans are saying we are never going to get tax reform before this debt deal has to be made.

EASTON: But the debt deal becomes a false -- you know, it just becomes a false deadline, when, in fact, they need to do a bigger -- I'm told to wrap -- they need to do a bigger deal.

(LAUGHTER)

WALLACE: Continue that thought.

Thank you, panel. See you next week.

And this is why they invented "Panel Plus," because -- check it out. And our group will pick right up with this great discussion. You'll hear the great thought that Nina had in her head, the unexpressed thought.

Check out our Web site, FoxNewsSunday.com. And we'll post the video before noon Eastern Time.

Up next, we hear from you.

(COMMERCIAL BREAK)

WALLACE: Time now for some comments you posted to our blog, "Wallace Watch." And you flooded us with e-mails objecting to Juan Williams' comment last Sunday about the murder of Usama bin Laden.

Dave Phelps sent this -- "If I heard correctly, Mr. Williams said, 'the murder' of bin Laden. Murder is a criminal act. Was he accusing the SEALs of a criminal act? Was he saying President Obama ordered a murder? What a choice of words!"

Pete McCrary agreed. "There is a great moral distinction between 'murder' and the killing of a legitimate military target. Did our American boys murder German soldiers on D-Day? Bin Laden murdered 3,000 people on September 11. Our Navy SEALs killed a legitimate military target."

Please keep your comments coming. You can find us at FoxNewsSunday.com.

Now a quick program note. Next week, our "2012 One on One" series continues when we sit down with potential presidential candidate, businessman Herman Cain.

And that's it for today.

Have a great week, and we'll see you next "Fox News Sunday."

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Sunday August 24, 2014

The execution of American journalist James Foley has heightened concerns over the threat posed by ISIS militants. U.S. airstrikes targeting ISIS in northern Iraq continue, but according to Defense Secretary Chuck Hagel, the terrorist organization is well-funded and highly sophisticated, making it “beyond anything that we’ve seen.” We’ll discuss the ISIS threat with Sen John McCain (R-AZ), a member of the Senate Armed Services Committee.