The following is a rush transcript of the May 23, 2010, edition of "Fox News Sunday With Chris Wallace." This copy may not be in its final form and may be updated.

CHRIS WALLACE, ANCHOR: With the political season heating up, we want to focus on the mid-term elections, and we begin with one of the campaign's key players, former Alaska governor Sarah Palin.

Governor, welcome back to "Fox News Sunday."

SARAH PALIN, FORMER GOVERNOR OF ALASKA: Thank you so much, Chris.

WALLACE: Let's start with the controversy over Rand Paul, who, of course, just won the Republican nomination for the U.S. Senate seat in Kentucky. You were a big early supporter of Mr. Paul.

As you know, he's now under fire for criticizing the 1964 Civil Rights Act for banning discrimination in private establishments. First of all, do you think that Rand Paul is right or wrong about that? And secondly, what do you think of this whole controversy?

PALIN: I think Rand Paul is right in his clarifications about what he means and his interpretation of the impacts of the Civil Rights Act. He — he's right on when he says he is a supporter of civil rights. He's a supporter of the Civil Rights Act and equal rights. He would have marched with Martin Luther King Jr., he said.

And he will oppose any efforts to diminish or erode away any aspect of the Civil Rights Act, so he's supportive. And I think there is certainly a double standard at play here.

When Rand Paul had anticipated that he'd be able to engage in a discussion, he being a libertarian-leaning constitutional conservative, being able to engage in a discussion with a TV character, a media personality, who perhaps had an agenda in asking the question and then interpreting his answer the way that she did, he wanted to talk about, evidently, some hypotheticals as it applies to impacts on the Civil Rights Act, as it impacts our Constitution.

So he was given the opportunity finally to clarify, and unequivocally he has stated that he supports the Civil Rights Act.

WALLACE: Do you see some similarities to what politicians and the press did to you in the fall of 2008?

PALIN: Yeah, absolutely. So you know, one thing that we can learn in this lesson that I have learned and Rand Paul is learning now is don't assume that you can engage in a hypothetical discussion about constitutional impacts with a reporter or a media personality who has an agenda, who may be prejudiced before they even get into the interview in regards to what your answer may be — and then the opportunity that they seize to get you.

You know, they're looking for that "gotcha" moment. And that's what it evidently appears to be that they did with Rand Paul, but I'm thankful that he was able to clarify his answer about his support for the Civil Rights Act.

WALLACE: Having said all that, Governor, Rand Paul is a strong libertarian, and even some conservatives have doubts about some of his positions. Let's put them up on the screen.

He wants to close the U.S. facility at Guantanamo Bay. He wants to repeal the Patriot Act. He wants to abolish the Department of Education and he wants to end subsidiaries for farmers.

Does he carry his political philosophy too far? Should he tone it down, particularly in a campaign for the U.S. Senate?

PALIN: Well, I won't speak to each one of Rand Paul's positions because no candidate is going to be the ideal or the perfect candidate in any voter's mind. Rand Paul is not a perfect, always-to-be-agreed- with candidate. Nobody is.

But Rand Paul is a libertarian. He's clear in his libertarian leanings. He asks questions about implications as it applies to our Constitution, our economy, our society when a law is proposed and a law is enacted.

And I think that more of those who serve in the Senate, and Rand we anticipate will be serving in the Senate, should ask questions about the constitutionality of policies that are proposed. I think more questions should be asked as to the impacts. And Rand isn't going to be shy about asking the questions.

WALLACE: Let's turn to another subject. Millions of gallons of oil are continuing to spill into the Gulf of Mexico. You, of course, are a big supporter of offshore drilling. You popularized the phrase "drill, baby, drill." Does this disaster give you any pause, Governor?

PALIN: I am a big supporter of domestic extraction of the resources that we are so reliant on, versus relying on foreign sources of energy, relying and beholden upon regimes that can use energy as a weapon and have less stringent environmental standards than we have. I am still a strong supporter of domestic energy supplies being extracted.

Having said that, these oil companies have got to be held accountable when there is any kind of lax and preventative measures to result in a tragedy like we're seeing right now in the gulf.

Alaska has been through that. I've live and worked through that Exxon Valdez oil spill. I know what it takes to hold these oil companies accountable, and we need to see more of that. But we are still reliant on petroleum products and oil and gas.

And I'm a supporter of offshore drilling but also onshore drilling. Maybe this is a lesson, too, for those who oppose safe, domestic supplies being extracted on our shores and on the land, like in ANWR and NPRA, other areas of Alaska. Let us drill there where it is even safer than way offshore.

WALLACE: Governor, I want to pick up on the point that you just made, which is that you did, as governor of Alaska, go after oil companies, including B.P. in several cases. How do you think the Obama administration has handled the oil spill so far?

PALIN: Well, I think that there is perhaps a hesitancy to — I don't really know how to put this, Chris, except to say that the oil companies who have so supported President Obama in his campaign and are supportive of him now — I don't know why the question isn't asked by the mainstream media and by others if there's any connection with the contributions made to President Obama and his administration and the support by the oil companies to the administration.

If there's any connection there to President Obama taking so doggone long to get in there, to dive in there, and grasp the complexity and the potential tragedy that we are seeing here in the Gulf of Mexico — now, if this was President Bush or if this were a Republican in office who hadn't received as much support even as President Obama has from B.P. and other oil companies, you know the mainstream media would be all over his case in terms of asking questions why the administration didn't get in there, didn't get in there and make sure that the regulatory agencies were doing what they were doing with the oversight to make sure that things like this don't happen.

WALLACE: Let's turn to Tuesday's elections and what, if anything, they tell us about the midterm elections coming up in November. In Pennsylvania, Senator Arlen Specter lost, even though he had the support of President Obama and Pennsylvania governor Ed Rendell.

In Kentucky, Trey Grayson lost to Rand Paul, even though he, Grayson, had the support of Senate Republican leader Mitch McConnell.

Governor, what do you think voters in both parties were saying on Tuesday?

PALIN: I think both parties were saying, especially as reflected in PA-12, where they — where the anti-Obama candidate...

WALLACE: We should say that's Pennsylvania 12...

PALIN: ... registered as a Democrat.

WALLACE: ... Pennsylvania 12, the...

PALIN: Pennsylvania 12, right, where the anti-Obama candidate registered as a Democrat. He won. He was pro-life, pro-gun, anti- "Obamacare" and he won there in a district where Democrats outnumber Republicans two to one. That's a reflection of the voters' mood right now.

And that mood is, "We do not want to see that Obama-Pelosi-Reid agenda, that transformation of America continue, and we need to take some steps to stop it." It's also a message, though, with that victory there in Pennsylvania 12 of the Democrat, for Republicans, for commonsense constitutional conservatives to ride the momentum of the voters' desire for a change away from what Obama is doing to the country, but not to take anything for granted, not just assume that everyone on board, even those Democrats who are quite conservative — a Reagan Democrat type who — in Critz, who just won — are not necessarily on board with all the changes that need to take place to stop this Obama administration's agenda and Pelosi's and Reid's agenda that will harm this country.

WALLACE: But I do have to ask you, because, you know, you're quite right. Mark Critz, the Democrat in the special election in western Pennsylvania, did run against the health care, did run against cap and trade, but the fact was a lot of people thought, including you, it would be a Republican pick-up.

Why wasn't it? And doesn't that raise questions as to whether or not all this talk of a big GOP sweep in November is overblown?

PALIN: Well, remember in Pennsylvania, too, though, in that district, two to one registration of Democrats outnumbering Republicans. Why wouldn't a lifetime Democrat vote for the Democrat who was anti-Obama in the race? That just makes sense.

But no, this again speaks to the commonsense conservative who wants to see changes in our country to put government back on the side, to not take any race for granted.

Now, of course, this is essentially a temporary seat to be held there in replace of Murtha. We'll see in November who will permanently take that seat. But yeah, it's a — it's a wake-up call in terms of anybody assuming that you can just take it for granted that the voters' mood will just, I guess, usher in all the Republicans. That's not — that's not the case.

Ann Coulter wrote a really good piece on this recently where she said, quite candidly, quite dramatically, that Republicans had better wake up and work their butts off if they want to see changes this midterm election and not just assume that Republicans are going to get swept in there.

WALLACE: Governor, we only got a couple of minutes left. I just want to ask you a little bit about Sarah Palin. So far, you've endorsed 15 candidates. You're traveling around the country, to Republican events, to Tea Party events.

What's your game plan between now and November? What are you going to do? What do you hope to accomplish?

PALIN: I'm going to keep this up. I'm going to keep out there talking to people, hearing from people, those who desire a less intrusive government in our businesses, in our lives and in our family matters.

I'm going to keep speaking with them and helping to empower them to effect this change that is so needed in the midterms. It's a fun gig. It's a great thing to get to do, to be across the country with my family, speaking to these awesome Americans who are quite concerned about our country.

WALLACE: Finally, the last time we talked with you back in February you said honestly you will consider running for president depending on what you think is best for the country and what's best for the Palin family.

Assuming that Republicans do well in November, and that your kind of Republican does well, would that push you more in the direction of making the run?

PALIN: You know, it really comes down to it not being about me or what I want or what I predict is going to happen. This is all about what the voters of America are in the mood for.

And if the voters of America are in the mood for a kind of unconventional, candid, honest public servant, and it doesn't necessarily have to be me, but if that's what they're in the mood for, they're going to let that be known and they're going to help really propel and push that candidate forward. And then that candidate, of course, will make the decision whether to run or not. Don't know if that's going to be me, Chris.

WALLACE: But it could be you?

PALIN: As I've always said, I'm not going to close any door that perhaps would be open. But you know, this is not about me. But I do appreciate the platform that I've been given, the opportunities that I have to be out there speaking to these good, hard-working, average, everyday, patriotic Americans who want to see the positive change in our country that they deserve.

WALLACE: Governor Palin, we want to thank you. It's always a pleasure to talk with you. And please come back.

PALIN: Thank you so much, Chris. Appreciate it.

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