"FOX NEWS SUNDAY" HOST CHRIS WALLACE: Now we turn to the never-ending campaign trail, and joining us is FOX News analyst Karl Rove.

And, Karl, welcome back.

FOX NEWS ANALYST KARL ROVE: Great to be here.

WALLACE: Let's start with the brand-new electoral map you have prepared for us based on public polls.

It shows Obama leading in states with 245 electoral votes, McCain in states with 222 votes, and 71 electoral votes still toss-ups — of course, 270 needed to win the presidency.

Inside those numbers, though, you say that Obama has expanded his lead in several states and also that the number of undecided is growing. So what does that tell you about the overall state of the race?

ROVE: Well, first of all, the bounce that Obama has received thus far is about half what the average is. And what happened in the math that was interesting was Obama strengthened in many states, but so did, apparently, McCain in his base states.

The only states that really sort of changed in the last couple of weeks have been a handful of states, primarily in the industrial Midwest. Wisconsin in the last week has been the state that's flipped from being up for grabs to being in the Obama column.

What I think this means is that people know a lot about both of these candidates, but there is going to be a lot of volatility in this, because they know a lot, but the number of undecideds ought to be shrinking, not growing, at this point.

WALLACE: I notice Obama is leading in Pennsylvania and is slightly — within your margin of error, you still have it as an undecided state, but slightly leading in Ohio, two states that he lost badly to Hillary Clinton.

Is that any indication at all, or do you see from the polling, that he's starting to pick up the Clinton voters?

ROVE: Well, the one thing we do know is that if you look at the national polls — and Gallup did a pretty extensive analysis of this — his bump has come primarily from older white women, which was his problem in Pennsylvania and Ohio.

Now, I have to say the McCain people dispute where I put Pennsylvania. They think that he's ahead there, which is — they're entitled to that. But there has been some movement among one important element of the Clinton coalition into his camp.

And the movement that Obama received was in the aftermath of Clinton's endorsement, not before.

Between the Tuesday and the Saturday — between the Tuesday victory and the Saturday announcement by Clinton, there's very little movement, but there's good movement after the Saturday announcement by Clinton, primarily among older white women.

WALLACE: Perhaps the biggest news this week was that Obama was forced to dump Jim Johnson, the head of his vice presidential search team, after reports came out that Johnson got more than $5 million in favorable mortgages from Countrywide Financial, a company that Obama had gone after for being part of the subprime mess.

How does Obama walk — I'm going to talk about the bigger issue, not just Johnson. How does Obama walk the tightrope between, on the one hand, trying to say, "I represent change, I'm going to clean up the way business is done in Washington," while on the other hand having to rely on people who do know how this town works?

ROVE: Yes. Well, it's one of the real problems he's going to have, because he — this "I'm a different kind of politician" raises the standards for all of your activities.

And making the clean break with Jim Johnson was part of supporting this claim that "I'm a different kind of politician." But that problem still remains because the other two members of his vice presidential search committee are Eric Holder, who was the White House attorney under Clinton who green-lighted and...

WALLACE: Well, no, he was working in the Justice Department.

ROVE: Oh, I'm sorry, yes, right — who green-lighted the Marc Rich pardon — in fact, played an active role in helping make certain in the final days of the Clinton administration that this happened. That seems to me to present a problem.

In fact, you know, stepping back for just a minute, there are two ways to go about picking a vice president. You can do so with a committee of high visibility people who get you some publicity, which is what Obama chose, or you can go the McCain model, which is to choose the person who, while they're known to the political community, are much less visible, and pick one person rather than a group of three.

Clearly, Obama's attitude was I'm going to get some oomph by having a guy who's respected by the Democratic political establishment — Jim Johnson; I want to get profile for Eric Holder, who's purportedly on a list for a big appointment inside an Obama administration. And then Caroline Kennedy, who gives him a tie to the Kennedy name.

WALLACE: We asked you to give us what you think — not what they think, but what you think — the vice presidential short lists are for each of these candidates, and let's present them, starting with the McCain short list according to the gospel of Karl Rove.

ROVE: Well, let me say one thing.

WALLACE: Well, let me get them out first before you go ahead.

ROVE: Yes, OK. OK.

WALLACE: I'll get them out, and then you can say why — you said Mitt Romney, Governors Tim Pawlenty of Minnesota, Charlie Crist of Florida, and independent senator Joe Lieberman.

So give us all your caveats and handicap those four for us.

ROVE: Well, first of all, we are way before they get down to a short list. You know, most of the nominees are named either at the convention or the week before the convention, so we've got two months to go on this.

What I tried to do here is choose types of people. You've got the — in Mitt Romney, you've got the defeated primary opponent.

In Pawlenty, you've got the — you know, you've got a blue state Republican.

In Charlie Crist, you've got a strong advocate and ally from the primary process.

And then in Joe Lieberman, you've got the choice way out of left field — you know, the real excitement.

Each one of these has their strengths and weaknesses, but each one of them ought to be thought of as an archetype rather than just an individual, because we are months away from them getting down to a short list.

WALLACE: I know, but what do we have to talk about for all those months? If you were today — and I understand that — if you were going to pick one of those four as the frontrunner, who would you pick?

ROVE: I'd pick Romney. Romney is already vetted by the media, strong executive experience both in business and in government, has an interesting story to tell with the saving the U.S. Olympics, and also helps McCain deal with the economy, because he can speak with the economy with a fluency that McCain doesn't have.

On the downside, he's been a little uneven in his performance. In fact, that's being charitable. I mean, this is the guy who talked about varmits and marching with Martin Luther King and so forth. And there's also the Mormon problem, which was really sort of astonishing to me.

When his father ran for president in 1967, there was not a single story on the front page of the Washington Post, New York Times, or a cover article in any of the major news magazines about George Romney's Mormonism.

And yet we've been subjected to a lot of that kind of coverage this time around, and as a result, there is — and particularly in sort of evangelical and Baptist communities — a problem with his Mormonism.

WALLACE: All right. Let's turn to the Democrats. And with the same caveats, here's your Obama short list — Joe Biden, obviously, the head of the Senate Foreign Relations Committee; Governor Kathleen Sebelius of Kansas; Senator Jim Webb of Virginia; and Republican senator Chuck Hagel. Handicap those for us.

ROVE: Yes. Again, Biden is the — fills the role of the person who ran against him. He's got foreign policy experience, which is turning out to be a weakness for Senator Obama, and has gravitas in Washington.

Governor Sebelius is the governor of a red state, Kansas, likely to be a Republican state in a fall but nonetheless an interesting choice.

Webb has been talked about. He's been the recent sort of "buzz du jour" in Washington. And he's got military credentials, crossover credentials, having served in the Reagan administration, and strong antiwar credentials, which helps Obama on his left.

And then, of course, Chuck Hagel, which is the sort of out-of- left-field choice. Senator Hagel's wife Lilibet has been an Obama contributor, and obviously Hagel has been a critic of the Iraq war. Despite his longstanding personal friendship with McCain, he has yet to endorse McCain.

WALLACE: And who would you say is the frontrunner in that field right now?

ROVE: Out of those four, I'd say Biden. But look. I think the Democrat field of vice presidential candidates is far more opaque than the Republican side, because I think it is — this really comes down to — when you make a decision about vice president, you've got to make one of two decisions — who's going to help me politically or who's going to help me govern.

And this really gets to be a personal decision of the candidate. And the mix between the two — how much of my decision is based on how much they can do for me politically, and how much has to do with the chemistry and their background and their abilities that I think will help complement me in governing — these are intensely personal.

And as a result, you know, those of us now sitting on the outside watching it are not going to know how the candidates are going to go about doing this, particularly with Obama, who doesn't have a track record of these kind of relationships and having played in high stakes politics.

WALLACE: Finally, McCain and Obama have started this process of the debate over debates, and McCain wants 10 town hall meetings this summer, even before we get to the convention. Obama wants five debates through the entire process, through the election, with only one town hall meeting.

ROVE: On the 4th of July when we're all out at our picnics.

WALLACE: Well, we're not sure about that. That's what McCain said. But in any case, the point is — what's the strategy behind the two of them? Why is each angling for what they're pushing for?

ROVE: Yes. Well, McCain is behind, and he's the challenger. And what he's looking for is what kind of venues can he excel at.

And look. Obama gives a great set piece speech, but he's done less well in debates and is not as fluid in town hall meetings.

McCain — that's his comfortable — that's his comfortable venue. Loves doing them. Does them a lot. Wants to get there.

So the debate about the debates is a way for each one of them to sort of force the other into their favorable turf. McCain wants to get Obama in the town hall meetings earlier rather than later. Obama wants to have a shorter campaign and to force it into more formal and lengthy presentations.

In fact, he talked about recreating the Lincoln-Douglas debate where somebody would get 60 minutes, and then somebody would get 90 minutes, then somebody would get...

WALLACE: I don't know that he knows what Lincoln-Douglas was, because that would kill viewing in America.

What do you think we end up with?

ROVE: I think we end up with probably more debates and more public venues than Obama wants, but not 10 town hall meetings like McCain wants.

I, frankly, think Obama's making a mistake not by saying to McCain, "Yes, let's do 10 town hall meetings and let's do five." This thing about 4th of July and Soul Planet (ph) is not making Obama look confident and strong, which is what he needs to look at right now.

WALLACE: All right. We're going to have to leave it there. Thank you for coming in. We'll bring you back in a few weeks to see where things stand then.

ROVE: Great. Thank you.