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Transcript: Ed Rendell, Rob Portman on 'FOX News Sunday'

The following is a partial transcript of the June 29, 2008, edition of "FOX News Sunday With Chris Wallace":

"FOX NEWS SUNDAY" HOST CHRIS WALLACE: I'm Chris Wallace, and this is "FOX News Sunday."

From energy prices to the right to bear arms, to stopping North Korea's nuclear program, we'll tackle the big issues as we continue our vice presidential auditions.

Today, two men on all the short lists -- Democratic Governor Ed Rendell of Pennsylvania and former Republican Congressman Rob Portman of Ohio.

Then, a third-party run in November. Can he win? Will he block McCain? We'll ask the Libertarian Party nominee Bob Barr.

Also, Obama and Clinton make a show of unity. But just how much will she help him? We'll ask our Sunday regulars -- Brit Hume, Mara Liasson, Bill Kristol and Juan Williams.

And our Power Player of the Week runs a talk show out of a saloon, all right now on "Fox News Sunday."

And hello again from Fox News in Washington. John McCain and Barack Obama battled over new issues this week, and we've got two key advisers and possible running mates to continue that debate -- Democratic Governor Ed Rendell of Pennsylvania, who comes to us from there, and former Republican Congressman and Bush cabinet official Rob Portman, who joins us from his home state of Ohio.

Click here to see Part 2 of the transcript, featuring former Rep. Bob Barr, who is the Libertarian party nominee for president.

Gentlemen, let's start with the Clinton-Obama unity push this week. According to the latest Washington Post poll, 24 percent of Democrats who voted for Clinton in the primaries now say they'll vote for McCain and another 14 percent say either they may not vote or they have no opinion.

Governor Rendell, in the primary in Pennsylvania, voters from white union households went for Clinton over Obama 72 percent to 28 percent. What makes you think that they will now vote for Obama in the fall election?

GOV. ED RENDELL, D-PA: Well, because of his economic message. Actually, the polls in Pennsylvania are very good right now. Senator Obama's up by double digits, and the reason is his economic message is starting to come through.

Pennsylvanians care about their budget even more than the budget in Washington, and people are starting to learn, for example, that the Obama tax cut will give them three times as much money as the McCain tax cut if they're ordinary working families.

So things like that -- Senator Obama's position on the home mortgage crisis -- those things are starting to resonate with those blue-collar voters who are feeling the pinch more than anybody in this country.

WALLACE: Congressman Portman, speaking directly to those kinds of economic issues, explain how John McCain is to make inroads among Democratic voters in Pennsylvania and other states who voted for Clinton in the primaries.

ROB PORTMAN, FORMER REPUBLICAN CONGRESSMAN AND BUSH CABINET OFFICIAL: Well, Chris, first of all, Ohio and Pennsylvania are very similar in that regard. Senator Clinton did very well in Pennsylvania, partly thanks to Ed Rendell, partly thanks to a lot of those voters feel much more comfortable with the position she took than Senator Obama, who, among other things, does want to raise taxes.

He wants to raise taxes on everything from Social Security to investment income. Remember, there are 100 million people out there, including a lot of those working-class Pennsylvanians and Ohioans, who do have capital gain income.

In fact, about 25 percent of those folks make less than $50,000 a year, so they do care. Their taxes are going to go up. They're worried about that. Seniors disproportionately have dividend income. They're going to see their taxes go up under Senator Obama.

This is a fragile time in our economy and people are nervous about it, and for a lot of good reasons. This is not the time to put in place the biggest tax increase we've ever seen.

So I think people are nervous, and they're worried, and I think a lot of those voters are likely to stick with Senator McCain as the polls are showing now.

This week we had a town meeting in Cincinnati. Senator McCain showed up.

WALLACE: Wait, but let me -- I want to -- Congressman, let me jump in because I want to keep this conversation going.

Respond to that, if you will, Governor Rendell.

PORTMAN: I was going to say Hillary Clinton supporters showed up.

WALLACE: Governor Rendell, respond to that, if you will, and bring the trade issue in, NAFTA, which has been a controversial issue for both candidates.

RENDELL: Well, let me start out by saying that the Tax Policy Center, an independent, bipartisan institution, said that if you make less than $250,000 a year in this country, if you're in the 80 percent down in terms of income, Senator Obama's tax cuts will put more money in your pocket than Senator McCain's. That's number one.

Number two, Senator Obama has a good position on trade. He wants to see fair trade -- not just free trade, but fair trade. He wants to see the WTO enforced and Americans and American workers given a fair shake. So he's going to be a good president on trade.

We're going to keep international trade going, but we're going to make sure that it's fair to the American worker.

WALLACE: Congressman Portman, let's pick up on trade. Senator McCain is for the NAFTA agreement. You were one of the big supporters of the NAFTA agreement.

Isn't that going to be a tough sell to a lot of working-class voters in states like Pennsylvania and Ohio who may feel that NAFTA has cost them jobs?

PORTMAN: Well, no, not when it's explained as to what NAFTA's done. By the way, it's a 14-year-old agreement that Senator Clinton supported previously and President Clinton signed.

Exports are one of the few bright spots in our economy right now. It's true in Pennsylvania. It's true in Ohio. Ohio, actually, for the last eight years has led the country in terms of export growth. And it's created an enormous number of jobs, including to Canada, which is our biggest trading partner.

And when that message gets out there, it makes it look a little silly that you have someone going around the state of Pennsylvania and Ohio blaming NAFTA for anything from high energy prices to the common cold.

I mean, you know, NAFTA became the cause of every economic woe that our states face, instead of facing the real problems, and the real problems are that people's paychecks aren't going as far because gas prices are up -- Senator McCain has a comprehensive proposal there -- because housing prices have gone down. Again, Senator McCain has a comprehensive proposal there.

And finally, on taxes, as we mentioned earlier, you know, to raise taxes right now when this economy is so fragile is just not a good idea. People get that.

So you know, I think when it's explained, when people understand that this has become sort of a convenient whipping boy for every other problem in America, and it's really not straight talk, and it's really not the kind of new politics that Senator Obama is talking about, I think people understand that we need to be able to be traders.

We need to be able to increase our exports. They create good jobs, high paying jobs and jobs with good benefits.

WALLACE: Governor Rendell, I want to move on to another subject, but before we leave the whole issue of the Clintons, have you spoken to your good friend, former President Clinton, since the primaries ended?

And do you have any sense when or if he'll come out and start campaigning for Barack Obama?

RENDELL: Well, I'm going to answer that question, but first I've got to say this is the typical Republican mantra, to call Democrats tax and spend.

In fact, let me repeat again in case everybody's listening, the Tax Policy Center, an independent body, said the Obama tax cuts will mean more to you, three times as much, if you're one of those Americans who are in the lower 80 percent of wage earners in this country -- three times as much tax cuts, not tax increase.

In terms of President Clinton, President Clinton's going to do every single thing that Barack Obama asks him to do. He's disappointed, just like I am, but he knows the stakes are so high for this country. He's going to get out there in typical Bill Clinton fashion and make a great case for Senator Obama as our next president.

WALLACE: All right. I want to move to the issue of guns, which was in the news this week after the Supreme Court ruled that there is a constitutional right for individuals to have guns. Here's how Obama and McCain reacted to that decision.

(BEGIN VIDEO CLIP)

OBAMA: I have said consistently that I believe the Second Amendment is an individual right. And that was the essential decision that the Supreme Court came down on.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

MCCAIN: Whether it be on his pledge on public financing, or his position on the Second Amendment or any other issues, he is changing his positions.

(END VIDEO CLIP)

WALLACE: Congressman Portman, McCain has also flipped on gun control. Back in 2002, he supported a criminal background check in gun shows. Now he doesn't.

And with Obama saying that he supports the Supreme Court's ruling mandating or saying that there is a constitutional right to bear arms, has he basically taken the gun issue off the table?

PORTMAN: No, I don't think so. What Senator McCain was talking about is that late last year and again this year, Senator Obama did support the gun ban in D.C., and now he seems to have changed his position on that.

And as Senator McCain indicated, he's changed his opinion on a few other things, including public financing.

Senator McCain's got a few decades of experience in being pro- gun, voting for that individual right, for the right to bear arms. So I think there's a big distinction here between the two candidates.

And I think, you know, people in Pennsylvania and Ohio and other key states like that will be looking at that as one of the issues.

WALLACE: Governor Rendell, help me out here. Can you explain how Obama on the one hand can support, as he says he did this week, the individual right to bear arms, but on the other hand, he also supported earlier the D.C. total ban on handguns?

RENDELL: Well, let me begin by saying it comes with ill grace for Rob to call Senator Obama a flip-flopper. Senator McCain was against the Bush tax cuts.

PORTMAN: I actually didn't say that.

RENDELL: Now he's for them. Senator McCain earlier this year in California says he was against offshore drilling. Now he's for it.

Senator Obama's position is very clear. The Second Amendment is an individual right. There's no question about that. Does it have limitations? Sure, it does. As Justice Scalia said in his opinion, this opinion doesn't mean that governments can't restrict the flow and distribution of guns.

It's a limited right, like every one of our rights are. The First Amendment doesn't say you can go into a crowded movie theater and yell, "Fire," and be protected by the First Amendment.

So he is in favor of common sense rules that will regulate the flow and distribution of guns, but he supports individual Americans' right to have both long guns and handguns.

WALLACE: Well, I knew at some point we would get to the issue of flip-flop, so let's address it fully, because both candidates have accused the other of flip-flops, and from our reading of the record, both of them are right.

Take a look at this. In the campaign, Obama has changed positions on wiretapping, the NAFTA trade deal, public campaign financing, and unconditional meetings with hostile foreign leaders.

Meanwhile, McCain has changed positions on the Bush tax cuts, drilling for oil -- let's put up the McCain -- there you go -- the Bush tax cuts, drilling for oil, immigration reform, and interrogation of terror suspects.

Governor Rendell, explain. Why are McCain's flip-flops worse than Obama's?

RENDELL: Well, first of all, John McCain has switched positions on all of the things that made independents and moderates and even some Democrats like myself think that he was a new type of Republican. These are core issues.

The tax cuts -- who could expand on the Bush tax cuts given the economy we have today? But John McCain has, for political advantage.

Barack Obama -- if you take, for example, wiretapping, he hasn't changed his mind. He believes there should be sanctions against the private companies who allowed individual Americans to be wiretapped.

He just voted for that bill because he thought the bill did other things. He's going to seek those sanctions later on in the Senate.

So a couple of things that you say are change of positions are, in my judgment, things where Senator Obama has a reasonable explanation for what he's done.

WALLACE: Well, I mean, just on the one example of FISA, several months ago he said he would lead the filibuster if there was an effort to strip the -- to allow immunity for the telecom companies. Now he's voting for the bill that gives them that immunity. That's a pretty big switch, isn't it?

RENDELL: But remember, when you're in the Senate, you have to weigh the entire bill. The bill on FISA restored court supervision of wiretaps. That's a huge victory for individual rights in America.

Senator Obama believed that was more important, that he had to go along and vote for it even though it didn't have the immunity provision -- or did have the immunity provision, but he has pledged later on in the Senate to try to strip the immunity position.

WALLACE: Congressman Portman, as we just showed, it's pretty clear that John McCain has flipped on a variety of issues such as the Bush tax cuts. Why are Obama's flip-flops worse than his?

PORTMAN: Well, first of all, when you look at Senator Obama's changes recently, including accepting -- saying he would accept public financing and then changing his mind on that, which is really a core issue in terms of the new politics that he's talked about, this really -- it goes to more than just changes in facts and circumstances. It goes to sort of changing your approach to politics.

And I think when Senator McCain looks at some of these issues like immigration, which you mentioned, he's still for comprehensive immigration reform, but he believes enforcement first is necessary based on the change in facts and circumstances. We couldn't get comprehensive immigration reform through the United States Congress.

So I think there's some differences here in terms of why changes are made. And I think that's what voters ought to look at. I think they ought to look at the character and the judgment of these two people who are saying that they'd like to lead this country in a principled way.

You know, who's really doing it on the basis of principle? Changed circumstances sometimes lead to the reconsideration of your position. That's not a bad thing. The question is whether it's being done for good policy reasons or not.

WALLACE: And a real quick response from Ed Rendell on that.

RENDELL: Well, even on campaign financing, Senator Obama never pledged that he would absolutely not do it. He said he would seek agreement with the candidate, the other candidate.

Senator McCain opted out of the campaign finance reform bill in the primaries and, in fact, got rebuked by the head of the FEC. So if he was out of it, Senator Obama was going to get out of it as well. So I think Senator McCain was the first person...

PORTMAN: But, Ed, we're talking about the...

RENDELL: ... who opted out.

WALLACE: All right. All right. All right. We're getting a little bit -- I do have one last issue.

PORTMAN: The issue is the general election.

WALLACE: I do have one last issue I want to get into with both of you gentlemen, and that's...

PORTMAN: The issue is the general election.

RENDELL: No, the issue is the finance...

WALLACE: Guys? Gentlemen? Let me move on. And that is -- I want to ask you both about the possibility that one or both of you could end up as the running mate for McCain and/or Obama.

Governor Rendell, you've been talking down very consistently your interest in being vice president, but last Friday you said that you'd be very interested in being a member of the Obama cabinet. What's the difference?

RENDELL: Well, the national media didn't listen. I said in 2011, it's my intention to walk out the door of the capital, the Lord willing, in January of 2011. I know that disappoints some people in the capital, but that's my intention.

And if there was a position open that I was interested in, like energy or transportation, I'd be honored to serve in an Obama administration, but not at the beginning, not until my time is finished.

Let me say just from an American standpoint, I'd love to see someone like Rob on the other ticket in case they win, because he was a great congressman and someone who I have a lot of respect for. But not me this time, by no means.

WALLACE: All right.

Congressman Portman, with that endorsement, which may be the kiss of death...

RENDELL: I've finished his chances, right. I probably ruined him.

WALLACE: Honestly, what will you...

PORTMAN: I was I was going to say the same thing about Rendell. You're getting me in trouble here.

WALLACE: All right. Real quickly, Congressman, what will you say if John McCain asks you? And is your connection to the Bush administration on economic policy, on NAFTA -- is that a political negative at this point?

PORTMAN: I don't know, and I don't expect to be asked, honestly. I'm also, as you know, Chris, home after 15 years of commuting when I was in Congress and in the administration, and I've got three teenagers. It's time to be home. I love being home.

So I'm not eager to go back to Washington right now. I do love public service, and I heard Ed's comments the other day, actually, on a radio program where he said he'd be interested in being secretary of energy, perhaps, or secretary of transportation. Those are substantive jobs where you can make a difference.

And public service is an incredible privilege and honor. And I hope some day to be able to get back and do something that's substantive to help people.

And you know, this election has been interesting, because we're finally getting into the policy issues, and this is what matters, you know. It's not about the rhetoric.

Senator Obama's an eloquent speaker. The question is, you know, what's he going to do for the country and what's Senator McCain going to do for the country. And I think if you look at the record and the experience Senator McCain has and, frankly, his ability and willingness...

WALLACE: Congressman Portman?

PORTMAN: ... to take on some of these tough issues, that's what we're looking for.

WALLACE: In the interest of fairness, I can't allow closing statements.

But I want to thank you both so much for joining us today. Thanks for coming in. Please come back, both of you, and let's continue the policy debate.

PORTMAN: Thank you, Chris.

Thanks, Ed.

WALLACE: Up next, Obama is not the only one who has to deal with an independent candidate siphoning off votes. We'll hear from the Libertarian nominee for president, Bob Barr, when we return. ...

Click here to see Part 2 of the transcript, featuring former Rep. Bob Barr, who is the Libertarian party nominee for president.