The following is a rush transcript of the May 31, 2009, edition of "FOX News Sunday With Chris Wallace." This copy may not be in its final form and may be updated.
CHRIS WALLACE, HOST: Today we begin new series called "Right Now" in which, from time to time, we'll bring in the leading lights and best thinkers in the Republican Party to discuss the future of the GOP.
And our first guest qualifies on both counts, former governor Mitt Romney.
And, Governor, welcome back to "FOX News Sunday."
MITT ROMNEY, FORMER GOP PRESIDENTIAL CANDIDATE: Thanks, Chris. Good to be with you.
WALLACE: You're making a major speech tomorrow criticizing President Obama for cutting $1.2 billion for missile defense from the next Pentagon budget. Why is that a mistake?
ROMNEY: Well, with what's happening right now in Iran and particularly in North Korea, I think every American recognizes that the best tool we have to rein in North Korea and Iran, and to protect the American people, is to have a very robust missile defense system.
And the president is cutting by 15 percent the funding of our Missile Defense Agency. He's pulling back on the number of interceptors that we're going to have in Alaska, which is where we desperately need them. And at the same time, he's cutting back on our funding for European missile defense by 80 percent.
It is simply the wrong way to go, and I know that there are some liberals who have always been opposed to the fact that Ronald Reagan was the author of this idea of defending ourselves from a nuclear attack.
But with rogue nations like North Korea and Iran headlong in their course to have intercontinental ballistic missiles tipped with nuclear warheads, America needs to protect itself.
WALLACE: But Defense Secretary Gates says that his budget still devotes over $9 billion to missile defense and it includes 30 interceptors up there in Alaska for those North Korean missiles, which he says is more than enough to protect this country against the North Koreans for years.
ROMNEY: This isn't a time to be cutting back on missile defense. And so taking from 45, which was the original plan for the missile defense in Alaska, down to 30 is not the right direction to go, particularly as North Korea is developing this technology.
North Korea is in contempt of the world and the United States. On the very day the president gives a speech about nuclear nonproliferation, North Korea carries out a missile test. And then on our Memorial Day, they carried out an underground nuclear explosion.
They're making it very clear that they're thumbing their nose at the world. And with a rogue nation like that, you have to be very aggressive in defending ourselves with missile defense. And that's why I would be adding to our expenditures, not cutting back on the budget.
We have — we have a president who added trillions of dollars to federal spending. We just put almost $800 billion into a stimulus plan. Not one dollar of that is going to modernize our military. It is a course which I find very difficult to understand.
WALLACE: You have taken a middle ground, I think it would be fair to say, on the nomination of Judge Sotomayor. You called it, quote, "troubling," but unlike some others you haven't opposed her.
What do you think of Newt Gingrich and Rush Limbaugh calling her a racist?
ROMNEY: Well, I disagree with them. I think this is a process where you have an individual who's intelligent, well educated, with an extensive record. She deserves a full and fair hearing. And I listened to the prior senators on your show. They intend to give her that.
I think in the final analysis we'll make a decision based upon her clarification of some very troubling comments, and also her discussion of some cases that are troubling. The Ricci case, the Maloney case — both of those are very troubling.
But we'll have a chance to hear what she has to say, and we'll — I'm not a senator. I don't get to vote in that regard. But those that are senators I hope give a thorough examination to her judicial philosophy which, quite apparently, is a philosophy of saying, "Look, we're not going to follow the law. We're instead going to bend the law to do what we think empathetically is the right thing to do."
And I don't think a judge who tries to assess which person more deserves the right conclusion, as opposed to what does the law demand, is the kind of judge America wants.
WALLACE: Let's step back for a minute and take a bigger picture, because that's what this whole series is about. How do you think President Obama is doing? And what do you think the Republican approach should be in dealing with him?
ROMNEY: Well, first of all, I think the Republican approach should be to hold true to the principles that we know are right for America and our future.
Fundamentally, Republicans believe that individuals and individual freedom are what built America and will build a more prosperous future.
And Barack Obama and his team have made it very clear they have a very different view. They believe that an all-powerful, growing government is the right course for America's future. It is a very dramatic difference between the two.
So when Barack Obama has a stimulus plan, it includes a lot more money from government. When the Republicans put forward our stimulus plan, it said put the individuals in charge, help small business.
When they look at health care, the Democrats say, "Look, we want government to take over health care because it's not working well." Republicans say, "How can we give individuals more authority and responsibility for the health care system so they can have better care under their direction?"
It's a very stark difference, and I think you're going to find philosophically the American people will recognize that the bailouts, that the growth of government, is the wrong course for America and instead the principles of the Republican Party will keep America stronger with a brighter future.
WALLACE: Let's talk about one of the president's big initiatives in an area that you have a lot of personal and even family history in, and that, of course, is the auto business.
It looks like General Motors will file for bankruptcy tomorrow, with the government putting up a total — what they did in the past and what they're going to do now — of $50 billion, and taking roughly a 70 percent ownership stake.
Back in November, you wrote an article in which you said — this is before there had been any bailouts by President Bush — "no bailouts, let's go to a managed bankruptcy." Looking back, wouldn't that, at time when we were in the depths of the recession, when we were really right in the midst of what looked like a financial crisis — wouldn't that have been disastrous for the economy?
ROMNEY: It would have been precisely the right thing to do for the economy. To help General Motors at that point, before it had received tens of billions of dollars from the government, go through a structured process, either in court or out of court, to rid itself of its excessive union contract obligations would have been the right course.
And at that point, the government could have helped with warranty guarantees and so forth, with debtor-in-possession financing, to get the company back on its feet.
We wouldn't have closed the business down or liquidated. We instead would have helped it restructure at time when government funding was not going to add billions of dollars to the American taxpayers' burden. It was the right course to take.
It's being taken now, too late, unfortunately. And as a result, the government ends up with over 70 percent of G.M. and the UAW some 17 percent.
Look, let me — let me talk about going forward. The right thing going forward for General Motors and for our government is to get government out of the direction of General Motors.
President Obama should indicate that immediately upon this bankruptcy all of the shares held by government will be distributed to the American taxpayers and therefore that the public will be able to vote just like shareholders, and likewise that the UAW — the head of the UAW ought to to indicate all of our shares are going to our members, not to the head of the UAW.
We don't want a president and a head of the UAW running General Motors. The American public ought to own that enterprise.
WALLACE: So who would run General Motors?
ROMNEY: Well, the shareholders, the shareholders that — and you'll see Americans trade shares, buy and sell amongst themselves. They'll probably consolidate. There'll be shareholder meetings. They can elect their board of directors.
And the company will be run to create products that Americans want, that can be competitive globally. They can hire and fire the CEO as they want. You don't want politicians in Washington saying, "OK, we want to you build this kind of car," and, "Oh, that factory over here — it's in Senator So-and-So's district and you can't close that one, even though it's the high-cost factory. You have to open another one over here."
You don't want politics directing American corporations. That whole approach, which obviously is one that Barack Obama is wedded to, is the wrong approach for America. Americans recognize it. Individuals, the free market system, is what has built America to the nation we are, and that's how we ought to go forward.
WALLACE: But, Governor, for all the doomsayers — Chrysler got a bailout. Now it's gone through bankruptcy, seems to be speeding through bankruptcy court. They're going to basically be bought by Fiat and they're going to, it looks like, be a viable company within some period of time, of many weeks.
ROMNEY: Precisely my view. That's why I wrote, as I did in November, that these companies need to go through a process of shedding their excess costs, hopefully outside the bankruptcy court, but in fact both of them look like they'll go into bankruptcy court.
But let me underscore one thing, Chris, and that is this is a real sad day. I mean, I'm a son of Detroit. My dad was an auto executive. You know, I drive American cars. I love American cars. My heart bleeds for the people in Michigan and Detroit, for all those auto workers.
This is a very, very sad circumstance for this country. And it represents bad decisions by management, overreaching by the UAW. It's really — it's really tragic in a lot of respects. And it has not been well played either, in my view, by the Bush administration or by the Obama administration.
WALLACE: When you look — and I want to switch to the — to the main subject here, which is the future of the GOP — since — if you look at the GOP since 2004, you've lost ground in the West and the Southwest. You have lost ground in the mid-Atlantic states, like Virginia and North Carolina.
And in your home region, north — New England, not a single Republican congressman any more. Aren't you in danger of becoming a mostly white, mostly southern regional party?
ROMNEY: You know, there have been other times when our party has been written off. And there have been times when Democratic Party has been written off. And what typically happens is that the party that gets all the power starts thinking good about themselves and overreaches, and the American people say they've gone too far.
That happened to us. I think we made mistakes when we had the leadership of Congress, and I think you're seeing the president and Democratic leaders in the House and the Senate making mistakes that will make them far more vulnerable to a correction, a mid-course correction.
And I think you'll see Republican Party come charging back. I was just in Virginia — Bob McDonald there running for governor. I think he's going to win. Chris Christie in New Jersey — I think you're going to see that two governors' races this year both go to Republicans, because people recognize that this Democratic administration is taking us far too far to the left.
And America is fundamentally a center-right nation. And if we hold true to our principles and do a better job communicating those principles and holding true to them, acting as we speak, I think the American people will put us back in a position of leadership.
WALLACE: But is it enough to just say we're going to hold true to — and a lot of people say — the Reagan principles? Don't you have to have new answers for the new problems that people face?
ROMNEY: Oh, sure. Sure. And as the world changes, you have to make sure that those principles are applied to the — to the new reality. So for instance, our health care challenge today is 47 million people without health insurance.
And we know our principles. We believe in markets and individuals. So we look at that problem and say, "How can we get individuals to have more control over their health care?"
And one way that's been proposed is to let people buy their own private insurance plan, be able to own it, change — as they change jobs they still own that insurance plan. It's a Republican free- market- oriented plan. The Democrats have a different plan. It's not working, so we're going to have government give folks a government insurance product.
And that, in my view, is putting us on a course to become like Canada or Great Britain, which have far inferior health care systems.
WALLACE: We've got a couple of minutes left, and I want to talk a little bit about Mitt Romney's future, not the GOP's future, although they may be linked, for all we know.
You say it's far too early to think about running for president, but you've got a very active political action committee. You just pointed out you're campaigning all over the country, in New Jersey, Virginia, Ohio this week. Fair to say that you're keep your options open to running again for president?
ROMNEY: Yeah, I'm not going to close that door, but I'm not going to walk through it, either. And the action that I'm going through right now is trying to help people who I think would make a difference for the country and, frankly, also help some people who helped me.
You know, when I ran for office, I had a lot of folks come out and do a lot of work for me, and they call and say, "OK, it's now your turn to help me," and so I'm going out and helping some of those, and I think it's an important thing.
But you know, we'll — we have plenty of time to decide what the future holds. It's very early, five months into the president's term. We'll see how he does, and we as party I think are going to come back stronger, more vibrant and more committed to following the principles that have always been at the base of our party.
WALLACE: Well, there is one decision that you have to make pretty soon. You sold your house — and I don't know how lucky you were to be able to do that in this market. You sold your house in Massachusetts.
ROMNEY: (inaudible) I imagine.
WALLACE: That's right, the price was too low.
WALLACE: And the question is where you're going to establish your legal residence. And one possibility, because you have a vacation home there, is New Hampshire. Are you going to establish legal residence in New Hampshire?
ROMNEY: No, my residence is still in Massachusetts. That is my home. It's where I vote. And I'm going to continue to be a Massachusetts resident. I can't tell you how many years that's the case, but for the indefinite future.
WALLACE: Any possibility that you by 2012 could be running in New Hampshire as the favored son?
ROMNEY: I don't think so. Massachusetts is my home, and I'm not looking forward to any particular race. But my residence continues to be Massachusetts and will be.
WALLACE: Governor Romney, we want to thank you so much for coming in and kicking off this new series, and sir, please come back.
ROMNEY: Thanks, Chris. Good to be with you.
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