The following is a rush transcript of the August 15, 2010, edition of "Fox News Sunday With Chris Wallace." This copy may not be in its final form and may be updated.

BRET BAIER, ANCHOR: With the president stepping into the Ground Zero mosque controversy, the partisan battle over how to deal with illegal immigration, and the U.S. fighting two wars, there is plenty to discuss with our first guests, Senator John Cornyn, chairman of the Republican Senatorial Committee, and Senator Jack Reed, a leading Democrat on national security.

Senators, welcome back.

SEN. JACK REED, D-R.I.: Thanks, Chris.

SEN, JOHN CORNYN, R-TEXAS: Good morning.

BAIER: First, I'd like to get you to weigh in, if you would, on the president's statement Friday night at this dinner celebrating Ramadan at the White House in which he appeared to defend the effort to build that community center and mosque near Ground Zero.

But then yesterday he issued a clarification, saying, quote, "I was not commenting and I will not comment on the wisdom of making the decision to put a mosque there. I was commenting very specifically on the right people have that dates back to our founding." There was even an elaboration on that clarification by the White House a little later.

There seems to be some confusion on the president's stance. How do you senators read it?

Senator Reed?

REED: Well, the president, I think, is right to point out that our traditions do embrace tolerance for religions, all religions. And in fact, I think he also recognized that this debate is quite painful to the victims, the families, because it again brings back the terrible moments of 9/11.

But the issue here is one that's going to be decided by local authorities, and that issue is whether the operation -- this facility is really one that is designed to provide interfaith communication, dialogue, to not in some way try to repeal the reality of 9/11, which was an attack by fanatical Muslims against the United States, but to try to find those common ground between all the religious communities.

And just another point. I recently got back from Afghanistan and, you know, we're sending young majors in Army, Marines, Special Forces people, into villages to try to find common ground with Muslims to try to put aside the obvious differences that might superficially appear.

And if we can't do that here in the United States, then we're going to have a very difficult time over there.

BAIER: Do you think the mosque should be there?

REED: I think it's a decision -- I know it's a decision that the local authorities have made. It can be there if it is -- operates to foster dialogue, to recognize the commonality of religious principles.

But it can't be there, and I don't think it should be allowed to be there, if it's going to be some type of way to undercut the truth, the reality, of 9/11. I think the local officials have made the decision that it's going to operate as a -- as a place of religion discourse, not of argumentation.

BAIER: Senator Cornyn?

CORNYN: Well, this is not about freedom of religion, because we all respect the right of anyone to worship according to the dictates of their conscience.

It's nice that folks on the left now are sensitized to the importance of freedom of religion. I think we all should be.

But I do think it's unwise, and it -- to build a mosque at the site where 3,000 Americans lost their lives as a result of a terrorist attack.  And I think to me it demonstrates that the -- that Washington, the White House, the administration, the president himself seems to be disconnected from the mainstream of America. And I think that's one of the reasons people are so frustrated.

BAIER: Senator Reed, some 9/11 family members are now speaking out.  Sally Reneguard (ph), whose firefighter son was killed in the World Trade Center on 9/11, said the president doesn't get it. Quote, "As an Obama supporter, I really feel that he's lost sight of the germane issue, which is not about freedom of religion. It's about a gross lack of sensitivity to the 9/11 families and to the people who were lost."

Do you think statements like this are what forced the president to clarify what he said Friday night?

REED: Well, I think the understanding that this issue, long before the president spoke out, has caused pain to the family members is something that we all have to recognize.

And part of the problem, too, is that we haven't moved aggressively enough in New York City to rebuild the site and to create appropriate honors for the victims. That would, I think, go a long way to help and assuage some of the difficulties.

But I think the president recognized that his position of trying to reinforce a principle that we all share, which is that this is a nation of tolerance who are fighting religion fanatics -- that position automatically doesn't translate into a facility down there in lower Manhattan unless that facility is contributing to this tolerance, to this communication between different religious groups.

BAIER: Right, but he didn't make the distinction Friday night in his comments.

REED: He did not, and I think he felt he had to make the decision or reinforce the fact that he was speaking about basic constitutional principles.

BAIER: As a Democrat, is it disappointing that he jumped into this fray?

REED: I don't think it's disappointing. I think at some point the president is called upon to make these pronouncements about issues, many, many different issues.

I think he emphasized appropriately and, again, not without, I think, a uniform position we have in the United States, that religious tolerance is what makes this country different than a lot of countries, particularly some of the countries that are sponsoring these terrorists.

BAIER: Senator Cornyn, the latest polls on this issue show that almost two-thirds of those surveyed say the mosque should not be built near Ground Zero. Thirty percent approve of the plan.

With emotions, as we've talked about, so high on this issue, do you think that this becomes an election issue 79 days to go before the midterms? Will you be telling your candidates to make sure what the Democratic opponents -- how they stand on this particular issue?

CORNYN: Well, I think it does speak to the lack of connection between the administration and Washington and folks inside the Beltway and mainstream America. And I think this is what aggravates people so much.

I agree with Jack, this is going to be a local decision. I'd like to hear what other elected officials in New York -- the two United States senators and other local officials -- think about this. And the American people will render their verdict.

BAIER: So yes, it becomes an election issue?

CORNYN: I think -- I think whether you're connected with people, whether you're listening or whether you're lecturing to them, I think this is sort of the dichotomy that people sense, that they're being lectured to, not listened to, and I think that's the reason why a lot of people are very upset with Washington. So I think in that -- to that extent, yes.

BAIER: Last thing on this topic, Senator Reed. Do you worry that this sucked up a lot of oxygen in a news cycle where, you know, in August the Democrats really wanted to talk about Social Security and the 75th anniversary this weekend, and perhaps the gulf oil spill and the cleanup down there?

REED: It's the nature of current affairs and of politics that issues arise. They're dealt with. I think the overriding issue remains the economy, and that issue will be the most dominant one as we go forward into the election.

BAIER: On the issue of immigration, Senator Cornyn, the president signed a $600 million border security bill this week, adding resources to the southern border. Homeland Security Secretary Janet Napolitano was asked is this enough. Here's what she said.