The following is a partial transcript of the May 25, 2008, edition of "FOX News Sunday With Chris Wallace":
"FOX NEW SUNDAY" HOST CHRIS WALLACE: Fresh off defeats in three special House elections, Republicans are trying to regroup before November.
Joining us to discuss their strategies, Congressman Chris Van Hollen, who heads the Democrats' campaign committee, and Congressman Tom Cole, who's in charge of Republican efforts and comes to us from Oklahoma.
Well, let's start with the political landscape as we look toward November. As we said, Republicans lost three special House elections in the last few months in what were thought to be safe GOP districts.
The generic poll question — which party do you favor in your House district? — shows Democrats leading 50 percent to 32 percent, and the Democratic House Campaign Committee ended April with $45 million in the bank, while the Republicans have less than $7 million.
Congressman Cole, how bleak is the situation for the GOP right now?
REP. TOM COLE, R-OKLA.: Well, we've got a challenging landscape, no doubt about it, Chris. But I think the fall elections are fundamentally different than a series of specials.
We actually, if you'll recall, won all the special elections in 2006 and then got our clock cleaned pretty good at the end of the year. So I think once we're in a presidential year, the dynamic changes and we'll be in a lot stronger position.
WALLACE: Congressman Van Hollen, with all those advantages plus an unpopular war, an unpopular president, a faltering economy, the people who watch these things in Washington are saying the Democrats should win at least 10 more seats.
REP. CHRIS VAN HOLLEN, D-MD.: Well, I'm not going to put any particular number on it. It's premature. There are a lot of unknowns that are still out there.
But it is a rough environment for the Republicans, and it's a rough environment because of the mistakes that they've made and the fact that we, on the Democratic side, have been pushing an agenda for change and they've been trying to stand in the way of change.
They have really become the party of no, veto and the status quo. They've got no new ideas. They vetoed the provisions that the House has passed and sent to the president, or threatened to veto them, and they continue to represent the status quo at a time that people want to see a change in direction.
So I do think that they have some fundamental problems going forward.
WALLACE: Congressman Cole, I'm giving you an opportunity to respond to that, but do it, if you will, in the context of this question. There was a lot of talk this week about the GOP needing to rebrand, to have a coherent, positive, affirmative message going forward to November.
With a little more than five months left till the election, isn't it getting pretty late?
COLE: Well, I don't think it is too late. Actually, we did the Contract with America, if you'll recall, in October of 1994.
But I think there's another issue here, Chris, and that is the record of the Democratic Congress. It's the most unpopular Congress in American history. The American people gave the Democrats the majority for a reason, and yet they've lost popularity during their time of stewardship in the House.
So I think we've got a great opportunity to contrast with them. And we started rolling out our agenda a couple weeks ago — family agenda under Kay Granger. More recently an energy proposal last week. I think you'll see more of that in the fall.
And at the end of the day, the presidential campaign, I think, will shape a national agenda. It will be very much to our advantage, very much a contrast between conservative ideas and liberal ideas, and that's where we want to go in the fall.
WALLACE: Congressman Cole, I want to ask you another question.
Congressman Van Hollen, I'll give you a chance to fire back at that in a moment.
But, Congressman Cole, there's a consensus that the best thing that the GOP could do is to come out strongly against government spending, that that was one of your big problems in 2006, that you'd gotten away from tight discipline in the spending area.
And yet just this week, 100 members of the GOP voted for a farm bill — and that 100 members included you — for a farm bill that the president said was so outrageous in its overspending that he vetoed it, sent it back, and you and 99 of your colleagues in the Republican caucus voted to override the president's veto.
How does that send a message of fiscal discipline?
COLE: Well, first of all, Chris, every spending fight we've had this Congress with the Democrats has been because they wanted to spend more, not less. So I think we're on the right side of the spending battle.
WALLACE: But you voted with them to spend more this time in the farm bill.
COLE: Well, if you'll let me finish my answer, on the farm bill, it actually came back spending less money than the farm bill that all of us had voted against a few weeks earlier, and without the tax increase provisions in it.
The president holding tough, frankly, made it a much better bill than it would have been. But at the end of the day, we thought getting something done — at least those of my colleagues who voted with me thought getting something done for farm country was extraordinarily important.
And this bill actually costs less, had put income limitations for the first time and, frankly, had no tax increases in it, which the earlier bills did. So we thought it was a marked improvement.
WALLACE: But, Congressman, the president still thought this bill was way over the line. He wanted to limit — at a time when we've got record food prices, he wanted...
COLE: I appreciate the president's...
WALLACE: If I may ask my question, sir.
WALLACE: He wanted to limit farm subsidies to families making no more than $200,000 a year. The bill that you voted for and the veto that you overrode gives subsidies, government taxpayer subsidies, to families making more than $2 million a year.
Again, how is that fiscal discipline?
COLE: Well, most of — of course, most of the money in the farm bill, Chris, goes for nutrition programs, which were increased pretty dramatically, and I think with pretty good cause.
Again, we've got some limitations in here. The question always is are you going to do better by cutting the deal now or going forward. Having lowered the price, gotten rid of the tax increases, gotten the first limitations in, we made the judgment this was the right time to do it.
All we would have done otherwise would have extended the current farm program which actually pays much more and has none of those advantages in it. So we thought this was the appropriate time to make a deal.
WALLACE: Congressman Van Hollen, I want to bring you into this, because as Congressman Cole pointed out, you've got your own vulnerabilities.
If you get a Democratic president, you intend to let the Bush tax cuts expire, which, in the words of the Republicans, would create the largest tax increase in history.
You've blocked the government's authority to conduct surveillance of terrorists, suspected terrorists, for months now, the Protect America Act.
As Congressman Cole pointed out, your approval ratings are even lower since you came in in 2007 than the president's. Don't you have your own problems?
VAN HOLLEN: Well, we have not blocked the president's authority to listen in on terrorists. Everybody wants to know when Al Qaida is calling. We believe we can protect the national security interests of the United States...
WALLACE: Haven't you blocked the Protect America Act for months now?
VAN HOLLEN: Absolutely. The provisions that we have in place are the ones that the president asked for. What they're asking for now is to essentially give amnesty to telecommunication companies that collaborated with the Bush administration.
We don't think that's part of looking forward in providing for national security and in making sure that we can listen in to those phone calls with Al Qaida.
When it comes to tax issues, we have a middle class tax program. What we don't want to see is continuing tax breaks going to the wealthiest Americans at the expense of middle class Americans.
When it comes to congressional ratings, we have moved forward on some key issues. The old Congress was the Congress that essentially turned the people's house into an auction house. One of the first things we did was pass lobbying ethics reform legislation.
We passed legislation to reduce the costs of going to college. We passed legislation to finally require better fuel economy standards for our cars.
Now, are people frustrated? Yes. They're frustrated because our Republican colleagues keep blocking things the American people support.
They're voting no for a G.I. bill of rights that would give our veterans returning from Iraq and Afghanistan a college education.
They're voting no on legislation to stabilize the housing market, even though they rushed to help Bear Stearns.
And they're voting no on legislation to provide more tax credits and incentives for renewable energy and energy efficiency while the president is over in Saudi Arabia having tea saying, "You guys pump more oil," instead of really addressing the fundamental issues.
WALLACE: Congressman Cole, how do you respond to that?
COLE: Well, Chris is just flat wrong on energy issues. Frankly, this Congress has done absolutely nothing while energy issues — or energy prices have skyrocketed in this country.
At the end of the day, you have to have more supply. And we haven't passed any legislation to do any of that at all.
In terms of blocking things, it's amazing to me. We were able to get things done with a majority about the same size as the Democrats, really significant legislation.
This Congress hasn't done anything. And frankly, it's in a stall mode. It basically wants to tiptoe past the election and be in a position to raise taxes, increase the size of government, and lead us down a course of defeat and retreat in Iraq.
I think that's a huge mistake. And the stakes in this election, I think, will be very apparent in the fall, and I think that's going to work to our advantage.
WALLACE: Congressman Cole, it's not my position to give you advice, but let me suggest one idea that you — that the Republican Party could embrace that would send a message, "We're going to do things differently."
A complete ban on all congressional earmarks. Are Republicans prepared to campaign for November banning all earmarks?
COLE: I think your advice is good, and we've actually taken that position as a conference and offered that to our Democratic colleagues.
WALLACE: You're saying the position — wait a minute. You're saying the position — you're saying the position of the Republican Party in the House is no earmarks?
COLE: We have taken that position. There's actually a piece of legislation — and we've said — we've challenged the Democrats to join us in that. That is, let's have a ban on all earmarks, let's have a special committee set up to examine the problem and then let's come to a common agreement on it.
So far, we haven't heard a word from the other side. So you know, we're not in a position to unilaterally make these decisions anymore. We're not the majority. So frankly, I think that ball rests with them. When they respond to our challenge, I think we could have a really fruitful dialogue.
WALLACE: And I want to bring Congressman Van Hollen in. But you could unilaterally decide each Republican member of Congress not to put in any earmarks.
COLE: You don't unilaterally decide anything. That's like unilaterally deciding term limits or something of that nature. Congress has to work together on common solutions.
We've put forward a ban. We've asked the Democrats to respond. Last time I looked, we hadn't even had the courtesy of an official response, even though we'd sent a letter to the speaker on this issue.
WALLACE: Congressman Van Hollen, you get the last word.
VAN HOLLEN: Well, look. First of all, under the Republican Congress, you saw earmarks quadruple. They just went through the ceiling.
The first thing the Democrats did was require transparency and accountability under earmark reforms, making sure that everybody had to take responsibility for what they were asking for.
We're more than happy to explore a greater earmark reform going forward. But the fact of the matter is it skyrocketed under the Republican Congress and has come down under the Democrats.
If we really want to move forward on reform, I think that my colleague Tom Cole and I should agree to follow the lead of Senator McCain and Senator Obama when it comes to these outside shadowy groups, these 527 attack groups, that come to play in these elections.
And I hope he will agree with me today that we should call upon those groups not to run ads in these different races and call upon our supporters not to give to those shadowy attack groups. That's reform that the presidential candidates have called for, and I think that we should join in that effort.
WALLACE: We are going to have to leave it there. Congressman Van Hollen, Congressman Cole, thank you both so much for coming in today and talking with us. We hope we'll have you back many times between now and November.
VAN HOLLEN: It's good to be with you.
COLE: Thank you, Chris.