Transcript: Top Governors Evaluate '08 Candidate Field on 'FNS'

WASHINGTON – The following is a partial transcript of the Feb. 24, 2008, edition of "FOX News Sunday With Chris Wallace":

"FOX NEWS SUNDAY" HOST CHRIS WALLACE: While the presidential candidates are campaigning for the next Super Tuesday, most of the nation's governors are here in D.C. discussing the problems facing their states.

Joining us now to talk about those issues and the presidential race are four leading governors — Tim Pawlenty, Republican from Minnesota; Mark Sanford, Republican from South Carolina; Tim Kaine, Democrat from Virginia; and Jon Corzine, Democrat from New Jersey.

Governors, welcome to "FOX News Sunday." Good to have you here. Let's start with a look at your states and how they may vote in November.

Governor Pawlenty, Minnesota has the longest streak in the nation of going for a Democrat. The last Republican to win in Minnesota was Richard Nixon back in 1972, but in 2004 Kerry beat Bush by only 51-48. So, question: What are the chances that Minnesota finally goes Republican this year?

MINNESOTA GOV. TIM PAWLENTY (R): Well, in the land of Humphrey, Mondale, Wellstone, McCarthy, what you're seeing is a drift toward a competitive political state.

And it's certainly not conservative yet, but it's been moving in that direction, so instead of being blue, I'd say it's a purple state and it's going to be a competitive state come November.

WALLACE: Governor Sanford, South Carolina — and let's do a little history with you — has only gone for one Democrat since 1964. That was Jimmy Carter back in '76.

Would Barack Obama, with his appeal to the African American community, have any chance in your state?

SOUTH CAROLINA GOV. MARK SANFORD (R): Despite record turnouts — and he's done a fabulous job of getting people energized in our state — the answer is still no. If you look at the numbers, whether in the presidential races or, frankly, the midterm races, the Republican numbers are just overwhelming.

WALLACE: Governor Kaine, the Republicans have carried Virginia every election since 1964. And for all the talk about it becoming a purple state, Bush won by 9 points last time.

How much of a chance, if he were the nominee, would Obama have in November?

VIRGINIA GOV. TIM KAINE (D): Chris, I think Barack would have a great chance of winning. And what we saw in our primary on February 12th was he got more votes in an open primary than all of the Republican candidates combined.

One-third of his voters were first-time voters, and it was truly a mammoth turnout in his favor. And that suggests that just as the Democrat, Mark Warner, won the governorship in '01, I won in '05, Jim Webb won the Senate race in '06, we're going to see Virginia's votes in play for the first time in 44 years.

WALLACE: Governor Corzine, New Jersey tilted Republican during the '80s but has swung back to the Democrats since then. Does John McCain have a chance in New Jersey in November?

NEW JERSEY GOV. JON CORZINE (D): Well, he plays to a centrist element in our state, which is pretty consistent whether you're a Republican or Democrat.

On the other hand, we had 1.1 million voters in the primary this year, which is the largest turnout in the Democratic primary since 1928. There's a lot of enthusiasm about both candidates in our state, and I think Democrats are going to do very, very well in New Jersey in the fall.

WALLACE: All right. Let's focus for a moment — Republican governors, we'll get back to you in a second — on the Democratic race.

Governor Kaine, you support Barack Obama.

KAINE: Yes.

WALLACE: If Hillary Clinton fails to win both Ohio and Texas on March 4th, should she drop out for the good of the party?

KAINE: I'm not going to presume to tell the Clinton campaign what they should do, but I think you've asked a precise question. I think it's very challenging for her if she does not win both states.

She's the leader in both states in the polling now, but what we see in the Obama campaign is really strong momentum in both Ohio and Texas. And if she's not able to win both, I think it makes it mathematically very difficult for her because of the way the Democrats use the proportional system for allocating delegates.

So again, I wouldn't presume to give advice to that campaign. They'll make their own decision. But I think it's a must win, that they must win both, and probably need to win convincingly to have the momentum to go forward.

WALLACE: If you're not giving advice, at some point for the good of the party, would the trailing candidate, whoever it is, need to get out to allow the Democrats to do what the Republicans are doing right now, which is to unite?

KAINE: I think that would be smart for either candidate. At some point it will be clear to both sides — when, again, you just look at the basic rules of math about how the delegates are counted and how many you need, at some point it will be clear what the outcome will be.

And I would expect in that circumstance that whoever is the trailing candidate would drop at that point.

WALLACE: Senator Corzine, you support Senator...

CORZINE: Senator.

WALLACE: I mean, sorry, I did say that — yes, old habits die hard.

CORZINE: Right.

WALLACE: Governor Corzine, you support Hillary Clinton, but she has lost 11 straight contests. At some point, does she, for the good of the party, have to consider dropping out?

CORZINE: Chris, those of us who are supporters of Senator Clinton believe and feel pretty positive about what's going to happen in Ohio and Texas. Our read is that she's doing well. She turns that momentum around if she does well there.

If she doesn't, I think she'll have to review where she stands, and that's what the former president talked about this week.

I do think it is important that we get on to coalescing around a candidate, but I think it ought to be the one that will serve the nation best, the one that actually has the talent and the ability to make sure that we lead the country in the proper direction.

I think that's Hillary Clinton, but if the voters speak differently in Ohio and Texas, then I think it's — I think the time to move on probably is at hand.

WALLACE: Let me ask you both one more question before we get to the Republicans. Superdelegates, party big wigs, elected officials — I assume the both of you are superdelegates.

CORZINE: Are you one of those guys?

WALLACE: Should they use their own judgment, or should they follow the popular will and vote for whoever at the end of the process is ahead in pledged delegates and popular vote?

KAINE: My sense, Chris, really, is kind of practically they will end up following the popular will. I've never been that worried about the superdelegate issue because I felt like there would be a momentum to this campaign, that the momentum by early March will be pretty clear.

My sense has been in talking to uncommitted superdelegates that they are going to follow that momentum. And so at the end of the day, you know, there's been a lot of speculation — could this be a brokered convention with superdelegates? — but you know, again, on the Obama side, we're seeing a very strong momentum in these last 11 contests beginning on Super Tuesday.

We continue to believe that there's likely to be good momentum into early March. And I think the superdelegates will follow the will of the electorate.

WALLACE: Governor Corzine?

CORZINE: On that issue, I agree with Tim. The fact is we'll see how March 4th comes out. I'm a lot more upbeat about Senator Clinton's chances in that period.

We have big state in Pennsylvania still to vote, still to sort out two very important elements or states in our system, and that is Florida and Michigan — how that ends up being decided, how those votes are taken into consideration.

So I think this race is still on. And I feel superdelegates will end up trailing along with the conclusions that I think the voters express.

WALLACE: All right.

Let's turn now to the Republicans, because both of you have been mentioned as possible running mates for John McCain.

Governor Pawlenty, a column in the Wall Street Journal just yesterday — and I suspect that you read it — said this about you, "If the Arizona senator wants to unite conservative Republicans behind him, there are better choices."

The writer said that you're too liberal on spending, on government mandates and the environment. How do you respond?

PAWLENTY: Well, I think that was written by one of our local talk radio show hosts in Minnesota who's had some differences with me on things like being friendly toward the environment.

But I think if you look at my record overall, it's been a fiscally conservative record and a socially conservative record. This particular writer, I think, has taken issue with a few things.

But more importantly and beyond all of that, I support Senator McCain not because I need some other job or want some other job, because I believe he's going to be a fantastic president for this country.

He's a main of great courage, patriotism, valor. He's going to unite the Republican conservative base. But he can also appeal to independents and conservative Democrats. He's going to give us our best shot to win.

WALLACE: Would you be interested in running with him if he asked you? And do you think you could add something to a ticket both politically in terms of policy and also in terms of perhaps putting the Upper Mississippi Valley into play?

PAWLENTY: You know, I have a day job, and I support him because I think he'd be a great president, not because I want to be vice president.

And he'll have a lot of great choices when it comes to that down the road to pick a vice presidential candidate. And I wish him well in that regard, but I'm trying to do my job and being focused on being governor of the state.

WALLACE: Now, you're considerably tougher than McCain on illegal immigration. You have signed an executive order that would allow state officers to go after some illegal immigrants. You also want to ban sanctuary cities.

Would that be a problem running with John McCain, who has taken a more comprehensive approach?

PAWLENTY: Senator McCain has said that he has heard the message and he wants to secure the borders first, and so that's where we're going to have a focus on immigration. He and I agree on that, and there are many other aspects of the immigration issue that we agree on as well.

However, you know, there are some differences between the bill that he had proposed earlier and what he envisions as a future immigration plan for the future. He said the bill that he proposed earlier probably won't get to his desk, probably won't get through Congress, so he's focused on securing the border.

I agree with him on that and I support him on that, but I don't support sanctuary cities. I don't think it's a good idea to have law enforcement, local or state or federal, be prohibited from asking people about their immigration status if the circumstances warrant.

I suspect a majority of Americans would agree with that as well.

WALLACE: Governor Sanford, no one ever said you were too liberal, but some have complained about your style.

Back in 2004 when you were in a spending battle with your state legislature — and yes, we have the pictures; let's put them up — you brought two live pigs into the house that you called "Pork" and "Barrel."

The Republican speaker of the house called it insulting and childish, and you still have fairly testy relations with your own legislature.

SANFORD: Well, what's forgotten in that story was — you know, everybody remembers sort of the headline with the pigs at the end, but...

WALLACE: People don't forget the pigs.

SANFORD: Yes. Well, what was forgotten was the policy part, which is we were in a year-long debate on an unconstitutional $155 million deficit.

And we tried every cerebral, intellectual, thoughtful approach under the book, and it hadn't worked. And so we found ourselves $16 million short, and the question was were we going to commit that $16 million literally to pork or — pork is always viewed in the eyes of the beholder, but to things in different people's districts, or were we going to close off that deficit and, as a consequence, set precedent for the next 50 years or 100 years on the sanctity of our balanced budget requirement in South Carolina.

And so ultimately that was our last resort, and what is forgotten is that it worked. Two weeks later the senate found the money, closed off the $16 million and closed off that unconstitutional deficit.

WALLACE: Would you be interested in running with John McCain?

SANFORD: I go right back to what Tim was saying just a moment ago. I mean, any of us have awfully busy day jobs, and add to that we've got four young boys back at the house.

So you know, you worry about these kinds of lightning strikes if they come your way, but you don't worry about them until then. I mean, you focus on the job at hand. And as I say, a number of us have small kids around the house as well. And the two of those things keep us awfully busy.

WALLACE: Governor Kaine, on the Democratic side, you've been mentioned as a possible running mate for either Obama, who — you're one of his main supporters, or for Clinton, because you might be able to put red states into play. What do you think about that?

KAINE: Well, I mean, these guys are giving me a good guide. Look, it's nice to be on a list. My mom likes it if I'm on a list. But I do have a very important job at hand, which is governing Virginia, and I want to do everything I can to help Barack win Virginia, and I think I can do that as governor.

You know, what we showed in the primary on February 12th — he won men voters overwhelmingly, women voters. He nearly won the white vote, won urban, rural, won the Latino vote.

There's an awful lot I can do in Virginia to help him be successful, and that's where I really want to focus.

WALLACE: Let me ask you all — and we have just a brief time before we go to a commercial. I want to ask you all to react to the fact that Ralph Nader has announced that he is going to run again for president.

Governor Pawlenty, let's go down the line here. I guess the conventional wisdom would be that that would help the Republicans and hurt the Democrats as it did back in 2000. Your reaction to Nader getting in?

PAWLENTY: Well, it's a free country. If people want to run for office, they should be able to do that. And you know, I don't think any one party has a monopoly on who should be able to run or why they should be able to run.

WALLACE: Governor Sanford?

SANFORD: I suspect that Ralph suspects that it helps him more than anybody else. I don't think it affects the race materially.

WALLACE: Either side.

SANFORD: Right.

WALLACE: Governor Kaine, let me ask you, because, you know, it certainly wasn't a difference in 2004. It was in 2000 for Al Gore.

KAINE: Right. Well, I think it's kind of declining interest to the American public what Ralph says he's going to do. I mean, he's the Harold Stassen, you know, the great perennial candidate.

I mean, when you get into running for your third or fourth time, I don't think people will pay that much attention to it, and I wouldn't see it having any effect on the race.

WALLACE: Governor Corzine?

CORZINE: I agree with that 100 percent. I think the more interesting question is whether Michael Bloomberg gets in.

WALLACE: And?

CORZINE: Well, I think that would have major impact on the outcome of the race, and I think it's unpredictable which side would hurt the most on that.

But that's a question that's much more relevant, I think, to the end game of who the next president of the U.S. is.

WALLACE: All right. We need to take a break here.

But when we come back, we'll talk about some of the key issues facing all of these governors' states that may also decide the presidential election. Back in a moment.

(COMMERCIAL BREAK)

WALLACE: And we're back now with Governors Tim Pawlenty from Minnesota, Mark Sanford from South Carolina, Tim Kaine from Virginia, and Jon Corzine from New Jersey.

Gentlemen, you're all in town for the winter meeting of the National Governors Association.

Governor Pawlenty, you're the chairman of that august group. I want to talk about what may be the biggest issue right now, and that's the economy and the effect it is having in your states and states across the country — huge deficits.

Governor, how bad is the situation at the state level, and what would you like the federal government to do about it?

PAWLENTY: Chris, the National Governors Association estimates that 19 states currently are in deficit. They estimate that number will be around 40 a year from now.

So the economy's weakness is now being reflected in the revenues coming in to the states. It affects different states differently. It depends on what part of the country you're in.

If you're an energy producing state or a state that has a big defense contracting industry, those states are tending to do a little better than other states.

Mostly we have to solve these problems at the state level. We have balanced budget requirements at the state. The federal government has its own financial problems, obviously.

But we have an important financial relationship with the federal government on Medicaid and a variety of other programs. And so as they try to retool and refinance some of those programs, we need to do it in a way that gives the state at least flexibility, if not more money.

We'll be looking to partner with them as they're going to be making some budget cuts or budget restraints as well.

WALLACE: Governor Kaine, let me pick up on that. I understand that some of you are thinking about pressing Congress and the president for a second stimulus package to help with some of the state shortfalls.

KAINE: That's some of the discussion that we're having. I think, you know, from our standpoint, stimulus that would focus upon infrastructure would be both great for jobs but also would really speak to a need that we're seeing around the country, transportation infrastructure and others.

So those are some of the points that we'll be talking about here over the next couple of days.

WALLACE: Governor Sanford, let's pivot to the debate over taxes and spending that certainly will be one of the dominant issues in the November election.

The Democrats say roll back the Bush tax cuts for the wealthy and instead focus and target on helping the middle class. What's wrong with that idea?

SANFORD: Well, I think a lot of folks — and there's a lot of economic data to support this — don't believe that you can tax your way to prosperity.

And so I think that come this fall, there's going to be a tremendous debate between where Senator McCain will be and whoever the Democratic nominee might be on where we go next as a country.

And I think it goes straight to — you know, Thomas Friedman visited yesterday with the nation's governors...

WALLACE: The New York Times columnist.

SANFORD: ... and talked about competitiveness. And I think that if you really look at an agenda of competitiveness, one of its absolute foundations has to be being competitive with the rest of the world with regard to tax and spending policy.

WALLACE: Governor Corzine, if this does become — and you know the Republicans are going to try to make it a debate about who's going to raise your taxes and who's going to keep them low. Democrats generally lose that debate, at least politically.

CORZINE: The middle class in this country is under enormous pressure, under health care, education costs, energy costs, and now their jobs are at risk.

And I think that there is a sense that we have made certain sectors of our society better served by the tax system than others, and now we're talking about cutting Medicaid through regulation rules, a whole series of things that are going to put even more pressure.

And so I think politically there is a real opportunity to say that we're not — we're not looking after the needs of the middle class, and I think that's the argument Democrats are going to have to make. I hear it in New Jersey all the time.

WALLACE: Let me pick up on that.

Governor Pawlenty, you came up with the phrase "Sam's Club Republicans," as opposed to country club Republicans, and the idea is that the Republicans have to be seen as trying to find some way to reach out and to help working families.

But if you've got Obama or Clinton, whoever the nominee is, going out in the fall and talking about vastly expanding health insurance and other social programs, how do you compete in terms of reaching out to the working men and women of America?

PAWLENTY: Well, and we'll see who the Democratic candidate is, but one of the questions I'll have for — and I think the country will have for Senator Obama if he's the candidate is when he says, "Yes, we can," we also have to ask the rest of the question, which is, "Do what?"

And when you go down the list of things that he's proposing, I think it's going to be quite expensive. And so when you go to American families, middle class families, and you say, "When you're struggling to pay fuel costs or gasoline costs, and you're struggling to pay your health care costs, and you're struggling to pay more for groceries, do you really want the federal government to rack up a big bill and visit tax increases upon you," and I think the answer for most Americans, including middle income and moderate income Americans, is going to be, "No, we don't."

WALLACE: Governor Kaine, as the Obama surrogate on this panel, answer Governor Pawlenty.

KAINE: Sure, I'd be glad to. I mean, I think the issue is not how we're going to spend money, but where we're going to spend it. And what Senator Obama has said is, "Look, we made a fundamental error when we took our eye off the ball in the war on terror and Al Qaida and went to Iraq and the expense of that is a crusher."

And you combine that with waging that war while cutting taxes — no wonder the federal government is in such a deep challenge in terms of its revenues.

What Senator Obama would do as president is redirect an awful lot of that expenditure, which he does not believe is wise, to winning the war in Afghanistan and then engaging again in the domestic priorities that working men and women care about.

And so that is where he's going to find the funds for health care reform, and for middle class tax relief, and for the supplement that he would give to those who are sending their kids to college.

We're just spending the money in the wrong place.

WALLACE: Governor Sanford, does the math add up? If you pull back from Iraq, that you now get money that you can have a windfall for social programs, domestic spending?

SANFORD: Yes, I'd say, with all due respect to my friend Tim from Virginia, in this instance — I mean, you know, the New York Times is hardly the bedrock of the conservative movement, but you can look at — whether reporting from them or a whole host of different outlets — what you're really looking at is about a $300 billion tab in proposed new spending over the next four years, some of which could be offset by differentiating funds with regard to war on terror, but absolutely not all of it.

And that seems to be a consistent refrain across a number of different reports. So from my end, from what I've seen, the math does not add up. And it goes right back to what we were talking about just a moment ago.

We have got to go back to looking at do Americans want a second mortgage. They're already struggling to pay the mortgage on the house. Do you want to add yet another mortgage in paying for Washington new programs?

WALLACE: Let's let Governor Corzine...

CORZINE: Neither Senator Clinton nor Senator Obama are talking about raising taxes on the middle class. And in fact, if anything, they're talking about actually reducing those burdens.

And they are, clearly, both of them, suggesting that we need to do things about higher education, we need to do things about health care, we need to do something about the economy to get it going so that people can be earning incomes that they can then actually have the ability to pay taxes on.

The reality is that we have to cut back on the spending on our war and redirect it to our domestic economy.

WALLACE: All right. Just one last area I want to get into with all of you, which is — and I know another thing that you're all interested in and the governors are going to make a big push on this week here in Washington — clean energy.

Governor Pawlenty, you've imposed some of the most aggressive renewable energy mandates in the country. Minnesota's biggest utility — I think I've got this right — must get 30 percent of its power from renewable energy sources by the year 2020. Is that a conservative solution?

PAWLENTY: Well, in fact, when we put that requirement in law that we're going to get 25 percent of our energy by the year 2025, our major utility in Minnesota, Excel Electric, came forward and said, "You know what? We'll do 30 percent by 2020."

They raised their hand and cooperated with the — trying to meet that benchmark and are excited about moving to more wind, more solar, more forms of renewable energy.

And so they're our partner in this discussion, and they're actually now a leader in the movement toward renewable energy in Minnesota.

And we're seeing more and more business leaders, private sector leaders — yesterday we had Jeff Immelt, the CEO of General Electric, come forward and say, "We can do this. Give us a goal. Give us a benchmark. We'll meet it and we'll manage to it and lead toward it."

So the private sector now is responding in very positive ways toward those kinds of approaches in Minnesota and other parts of the country.

WALLACE: Governor Sanford, you call yourself a conservative conservationist. I've been practicing that all day to get that out right. Do you support government mandates like that, government forced mandates for clean energy?

SANFORD: Well, that's part of a longer debate. We had a very heated governors-only lunch yesterday.

WALLACE: I guess the answer means no, then?

SANFORD: Well, no, it means it's worth a whole lot more conversation in coming up with something that works.

WALLACE: Governor Kaine, you've just issued a plan to cut greenhouse gases in the state of Virginia by 30 percent. How much can states accomplish in the absence of more action by the federal government?

KAINE: This is something that we're really talking a lot about here at the NGA. There are things that we can do and there are things that we should do both because we want to be smart in our own states, but we're also, many of us, acting to try to inspire the federal government to act as well, because the climate change issues — they don't know the dotted line boundaries between states or even between countries.

And unless there's a national policy on this, we can't accomplish what we need to do for the environment. So states like Virginia, all the states represented here, we're pushing in our own ways trying to do things that we think will serve our citizens, but I think all of us hope that our efforts lead into significant action at the federal level.

WALLACE: Governor Corzine, we've got just a few seconds left — your final thoughts on this subject.

CORZINE: Well, we have to work more than just in our states. Certainly, at national level, the northeast governors are putting together a cap and trade program. We have targeted mandates to reduce greenhouse gases in New Jersey.

But states surrounding us — if we work together, we can actually make a real in-road on it. This is a bipartisan consensus that we need to move forward on this area. I think we need mandates.

WALLACE: Gentlemen, thank you all. Thanks so much for, during your brief time here in Washington, coming in and sharing your thoughts with us. We very much appreciate it.