John Brennan on Mail Bomb Plot; Sarah Palin and Chris Van Hollen Preview Elections

The following is a rush transcript of the October 31, 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: I'm Chris Wallace, reporting from Fox News election quarterbacks in New York. The latest on the midterms and the terror plot on "Fox News Sunday."

Just two days to go until America votes. Is a Republican wave about to sweep over the political landscape? We'll ask one of the party's leading voices, Sarah Palin.

Democrats fight to keep their majority in the House. We'll ask the man leading the charge, Congressman Chris Van Hollen.

Palin and Van Hollen, both "Fox News Sunday" exclusives.

Then, Bill Clinton puts the arm on a fellow Democrat to drop out of the Florida Senate race. We'll ask our Sunday panel what's behind the move.

And we'll hear the closing arguments from both parties "On the Trail," all right now on "Fox News Sunday."

And hello again, this time from New York City. We are in America's election headquarters where on Tuesday night Fox News Channel will bring you the results of the midterms.

But before we get to politics, first an update on the terror plot involving explosive devices that were shipped by cargo planes and intended for the United States. On Saturday, two women were taken into custody in Yemen.

Joining us now from Washington is John Brennan, President Obama's top counterterrorism advisor.

Mr. Brennan, let's start with the detention of those two women. Do you believe that they are part of Al Qaeda? And have there been any other arrests we haven't heard about?

JOHN BRENNAN, PRESIDENT OBAMA'S TOP TERRORISM ADVISER: Well, I think the Yemenis and we are confident that these individuals were the ones who delivered the packages to the FedEx and UPS offices in Sana'a, and so now there's an investigation ongoing. The Yemenis are questioning these individuals and we're hoping to learn more about this plot very soon.

WALLACE: And do you believe they have links to Al Qaeda, that Al

Qaeda was behind this plot?

BRENNAN: Well, when I look at the information that we received from the Emirati and British authorities about the IEDs and the sophistication and construction of them, it has all the hallmarks of Al Qaeda in the Arabian Peninsula.

And we know that AQAP has been quite vocal in threatening attacks against U.S. interests, and they've tried to attack the homeland, and these two packages were destined for the homeland.

WALLACE: We should point out, obviously, AQAP is Al Qaeda in the Arabian Peninsula. I want to ask about several stories that are out there and you can tell us if they're true or not. There's a report this morning that the British, with a tip that there was a bomb on one of these cargo planes, searched the plane, missed the bomb, and it was only after the other bomb was found in Dubai that they did another search and found this first bomb, that it was that sophisticated. Is that true, sir?

BRENNAN: The British identified the bomb first. That was the first one that was discovered. And as a result of that, they worked very closely with the Emirati authorities and so they were able to do some additional tests and then were able to find it.

But it was done in a very coordinated fashion. But what we need to do is to make sure that we have those screening technologies and screening procedures that are going to be able to identify such packages early.

WALLACE: There is a report that there were as many as 15 bombs. Is that true? And are you confident that you have gotten all the bombs that have been sent out?

BRENNAN: Well, only two have been found. That was the information that we had, and we have been able to successfully locate and then neutralize them. We cannot presume, though, that there are none other that are out there, and so we are looking at all the packages that originated in Yemen.

We've been able to identify all of them, and we are now putting them through some very thorough screening. We have suspended those cargo shipments to the United States that originate in Yemen. So reports about 15 bombs that are out there -- that's not something that I'm aware of.

WALLACE: There has also -- there have also been reports that these bombs may have been components of a much bigger bomb. Any reason to believe that's true?

BRENNAN: Well, I guess you could always put one bomb or one device with another. But I'm relying on the British and the Emiratis at this point of the investigation because they've done the forensics analysis.

And according to the British and Prime Minister Cameron himself, these were self-contained devices. This was something that could have been detonated on that aircraft. In fact, Prime Minister Cameron has said that the British believe that it was designed to detonate on the aircraft, although the terrorists would not have known the location of the aircraft.

So it didn't require any additional components or didn't require somebody to go in and sort of manually sort of press a syringe or something else. This was something that could have been detonated en route here to the United States or at the destination.

WALLACE: That's what I was going to ask you. Is it your belief that these bombs were destined to go -- to actually arrive at the synagogues in Chicago and to be exploded there, or that the real idea here was to take out those airplanes?

BRENNAN: Well, they were addressed to two locations in Chicago that have been associated with synagogues. The names on those labels, though, were fictitious, as far as who the -- who the recipients were going to be.

But again, talking with the British, it seems as though that these devices were designed at least to be capable to be detonated on the aircraft while they were en route to the United States.

WALLACE: Is it your belief, as the president's top counterterrorism advisor, that this plot is over, or do you and do the president regard this plot as ongoing?

BRENNAN: Every day we are exceptionally vigilant and focused on the threat that Al Qaeda presents to us, whether it's Al Qaeda in the

Arabian Peninsula, whether it's Al Qaeda that exists within Afghanistan-Pakistan region or other areas.

We cannot presume that the -- that there are other components to this plot that we have already destructed. What we have to do is to continue to investigate this, see what else might be out there. Are there other IEDs like this? Is this part of a broader effort?

Al Qaeda in the Arabian Peninsula has been quite vocal in their threats against us. And there are individuals there who are very dangerous. The individual or individuals who constructed this IED is very, very dangerous. And we're working with the Yemeni officials to bring these individuals to justice one way or another.

WALLACE: So you regard this plot as ongoing, sir?

BRENNAN: I believe the threat is certainly ongoing. And we're not going to rest until we find the people who are responsible for this and to find whatever other devices might be out there.

We just need to stay on top of this and work it diligently, because we cannot rest while Al Qaeda is out there plotting and scheming to carry out their murderous attacks.

WALLACE: Do we have to do more about Al Qaeda in Yemen? They have been behind several attempts to attack the U.S. homeland.

BRENNAN: We have stepped up our assistance to the Yemeni authorities, working very closely with the Yemenis. I spoke to President Saleh yesterday as well as the day before.

We're being more aggressive and I think this just demonstrates that we have to be as aggressive as possible, because they are looking to find vulnerabilities or opportunities to carry out these attacks.

So we need to find the individuals. We need to bring them to justice. We need to do it sooner rather than later. And we're going to do it with our partners. Intelligence, law enforcement, homeland security officials here in the United States are working very closely with the Yemenis, the Saudis, the Emiratis, the Brits and others.

This is a full court press. We're going to step it up now.

WALLACE: And one last quick question, if I may, sir. We've got about 30 seconds left. A lot of us are getting the sense that there is a lapse in security, a gap in security. We didn't realize that only a few packages on cargo planes are checked. The vast majority are not checked. Is that a gap you're going to have to do something about?

BRENNAN: We have a multi-layer defense, and we consider all cargo packages coming to the United States as potentially subject to very intensive screening.

What we try to do is based on the intelligence, based on the types of packages that are coming in, where they're coming from, we're able to zero in on some packages of greater concern.

We will take stock of this experience. We will make adjustments as necessary. And we will continue to rely on a whole host of capabilities, intelligence, law enforcement, screening procedures, techniques as well as technology.

WALLACE: Mr. Brennan, we're going to have to leave it there. We want to thank you so much for coming in today and bringing us the latest on this new terror threat. And good luck, sir.

BRENNAN: Thank you, Chris.

WALLACE: Now the midterms. And even before voting ends, experts are predicting a Republican takeover of the House, the GOP closing the big gap in the Senate and many governors' races up for grabs.

For a look at where we stand two days out, we begin with one of the leading conservative voices this year, former vice presidential candidate Sarah Palin.

And, Governor, welcome back to "Fox News Sunday."

FORMER GOV. SARAH PALIN: Thank you so much. I'm thrilled.

WALLACE: Do you think this is going to be a historic election? Do you think this is going to mark a real turning point for the country?

PALIN: I do. I think it's going to be a political earthquake and the message will have been sent to the left that they blew it and

Americans are waking up and they're saying, "No, smaller, smarter government is the only way that the country can get back on the right track."

Making sure that we have candidates who believe in that mission -- shrinking the federal government, allowing states' right, individual rights, private sector progress.

WALLACE: More specifically, what is the message that you think the electorate on Tuesday is going to send to President Obama?

PALIN: They're going to say, "You blew it, President Obama. We gave you the two years to fulfill your promise of making sure that our economy starts roaring back to life again."

And instead I believe things are getting worse. We have still this jobless recovery. We know that the stimulus, the nearly trillion dollars that were spent that just created more debt, did not work. And yet he still talks about more bailouts, more stimulus.

The path that he has put us on is a path towards insolvency. The message sent to the president will be no more, no more business as usual. The last two years have not been good for our country.

WALLACE: And what is the message that voters, especially if we see a bunch of your tea party candidates elected -- what is the message that voters will be sending to the Republican establishment in Washington?

PALIN: No more business as usual, establishment politicians. You know, you, too -- those in the establishment have had opportunity to make sure that the government was going to rein itself in and let the private sector grow and thrive and prosper, as it should.

So those within the establishment who have kind of perpetuated the problem by going along just to get along, including some who've been wishy-washy on the Obama-Pelosi-Reid agenda -- the message sent to them is no more.

That's why you're going to see this freshman class come in with a lot of passion, a lot of commitment to turning things around, putting government back on the side of the people.

WALLACE: You know, but if Republicans gain control of the House and, in effect, control or the effect to block in the Senate...

PALIN: Right.

WALLACE: ... they've got to govern. So question: Should they be willing to compromise some of their first principles that they talk about on the campaign trail in order to get things done?

PALIN: No. They should not compromise on principle. Absolutely not. That's been part of the problem -- is those who have decided to go along to get along and make these compromises, not when the results have been a woeful economy, and not when the results have been a lessening of our national security, those things that are foremost on American voters' minds today.

We want to make sure that the fundamentals are there, the fundamentals, the principles, that can allow this base of security and economic prosperity for this nation. We can't afford to compromise on principle thinking that we're ever going to reach those goals.

WALLACE: Let me rephrase that. Maybe the question shouldn't be are they going to compromise on principle. Should they compromise on policy? Let me give you an example.

In England, the conservative government has just announced a new austerity package, spending cuts and tax increases, three to one spending cuts over tax increases, because they're trying to get both sides to buy into it.

Would you accept something like that, with massive spending cuts but also some tax increases, if that's what you need to address the national debt, which you're concerned about, and to fix entitlements?

PALIN: No. We don't have to compromise on that, because the premise there is false, that you have to increase taxes in order to balance the budget.

The first thing they need to look at is the spending cuts and the hiring freezes and the zero-base budgeting. Those principles, those practices -- is they haven't even begun to incorporate yet in order to start balancing budgets.

It's a false premise there to believe that we have to increase taxes on the American people to balance out the budgets when we haven't done the things that just make a whole lot of common sense first in cutting budgets.

Yeah, you know, look at the Laffer curve, look at the other studies that have shown that increased revenue is not necessarily derived from increased taxes, because that's going to lessen productivity in this nation.

WALLACE: But if you -- and I know you support extending all of the

Bush tax cuts.

PALIN: I do.

WALLACE: That's $4 trillion, according to the bean counters, that are going to be added to the deficit. And you know, you can cut a lot of spending. You can't cut $4 trillion worth of spending.

PALIN: It's odd that people -- they paint that picture, though, that the money is there and it would be cut out of our economy, that the money isn't there to start with, the $4 trillion.

No. If we were to increase taxes -- which is what will happen, because Pelosi and Reid skipped town before allowing Congress to even take a vote on extending the tax cuts from '01 and '03. If those tax cuts are going to expire, we're going to see an increased tax on January

1st, that's a disincentive for production, and for industry, and for people getting out there and working in this country, for the job creators to be able to expand and hire more people.

So, no, it's not a given that allowing those tax increases to come forth -- that's not a guarantee that the economy's going to get back on the right track. It's a ridiculous premise, really, that we should look at these tax increases before we should look at anything else, including the spending cuts.

WALLACE: So no tax increases.


WALLACE: No how.

PALIN: No. And that's what the American public is saying, and that's what tea party Americans are rising up and saying, "We're taxed enough already." That's the point. We don't have a taxing problem. We have a spending problem in this country.

WALLACE: OK. You have endorsed more than 50 candidates, a lot of them in competitive primaries, who are going to be on the ballot on

November 2nd. Many of them are running very strong races, but I want to talk to you about two who some would say are not.

In the Delaware Senate race, your candidate, Christine O'Donnell, has turned what looked like a sure Republican pickup into a likely loss. In the Alaska Senate race, your candidate, Joe Miller, is in free-fall when it turned out that he misused government computers and lied...

PALIN: Because -- because...

WALLACE: ... and lied about it. Let me finish my question.

PALIN: OK. All right. Well, hurry up, then, because I have a lot to say, so...

WALLACE: OK. But haven't some of your tea party endorsees, your tea party candidates, shown they're not ready for prime time?

PALIN: Oh, that's -- OK. First, with Christine O'Donnell, when given a choice, "Why in the world would I have supported the liberal, the RINO, the pro-cap-and-tax, wishy-washy..."

WALLACE: Mike Castle?

PALIN: "... on "Obamacare" Mike Castle if given a choice?" Of course I'm going to support the conservative in that. So you know, there again...


WALLACE: But what if she loses?

PALIN: Well, who was going to guarantee that Castle was going to win anyway? As you're saying, it's a blue state. It's a liberal state. So given the choice, yeah, give it the old college try and allow the conservative in the race to have the message, the voice heard.

And that's what -- my endorsement allowed a little bit of a boost, at least to get some people to pay attention to what she is saying. So given a choice, I'm always going to go with the commonsense conservative in a race. As for Joe Miller, the things that this fellow has had to put up with up against the GOP machine and the Democrats and the liberal media in Alaska, it's no wonder that the numbers are tightening in that race.

Just last night it was revealed that the rally that I had for Joe

Miller on Thursday -- it was revealed -- and we have the tape that proves it -- that the CBS reporters, the affiliate in Alaska, conspired to make up stories about Joe Miller.

We have the tape, Chris, and I can't wait till it busts out all over the nation to show what it is that we -- kind of what I put up with for two years now with the media -- but what Joe Miller is faced with in dealing with somebody who feels -- Lisa Murkowski -- so entitled to that seat that she and some of her people, including some complicits in the media, will do anything. They will stop at nothing...

WALLACE: You're saying -- you're saying -- wait a minute. You're saying...

PALIN: ... to allow Lisa Murkowski to get back elected.

WALLACE: ... and I must say, you're bringing this story -- you're saying that local reporters in Alaska conspired with the Murkowski campaign to put out false information...

PALIN: I am saying...

WALLACE: ... about Joe Miller?

PALIN: I am saying -- and we have it on tape -- that CBS reporters of -- in the affiliate up there in Alaska on tape are saying, Let's find a child molester in the crowd as a supporter for Joe Miller. Let's blast that. Let's concoct a Ron Paul moment there, let's find any kind of chaos so that we can tweet an alert saying, ooh, there is chaos.

Joe Miller got punched, or by -- that's sick.

Those are corrupt bastards, Chris. That's what is wrong with the media today, when they have their chosen one, and nine times out of 10 -- heck, 10 times out of 10 in the liberal media -- it's going to be the liberal is the chosen one. So we have a problem there with what Joe

Miller has had to face.

Now, another thing. Lisa Murkowski and her hired guns got the conservative talk show host in Alaska kicked off the air the other day because they did not like his support that he was articulating for Joe Miller.

Now, stuff like that -- it is corrupt. It is frustrating. It is why Americans are saying no more, enough is enough. We're going to turn this thing around.

WALLACE: All right.

PALIN: We're going to fight corruption in the media. We're going to fight corruption in politics.

WALLACE: You told me to get on with it. I'm telling you to get on with it.

PALIN: Go ahead.

WALLACE: All right. 2012.

PALIN: Yeah.

WALLACE: The race for the -- I think it's fair to say the race for the GOP presidential nomination starts November 3rd, the day after this election is over. How and when -- how and when -- will you decide whether to run?

PALIN: I would decide after discussing it with my family, and just checking out the lay of the land and seeing who else is interested in doing it, because I don't need to run for office. I know that I don't need a title.

In fact, I love the freedom that I have, that I can sit here and I can tell you anything that I want to tell you and not have to worry so much about how it will affect my future political career, or my relationship with senators or congressmen.

No, I'll say what I want to say, and that's freeing. So I love the position that I'm in now. I would weigh that, the freedom that I have now, against those constraints that you would have as a candidate.

WALLACE: You said the other day, you know, if there's somebody else out there...

PALIN: Yeah.

WALLACE: So is there anyone in the Republican Party that you could

say right now, "If he or she gets in, I'm out?"

PALIN: There are many he or shes out there who have the time-tested truthful principles within them that they want to allow America to grow upon. I so respect these folks...

WALLACE: Do you want to name a couple?

PALIN: No, I don't want to name a couple, because then that just opens more doors to whatever. But yeah, there are a lot of folks out there, Chris, who if they were willing to run, willing to sacrifice, and their families having to be willing to sacrifice what they have to put up with as a candidate, then I'll be their biggest supporters and, you know...

WALLACE: OK. Two other questions.

PALIN: ... I'll root for them.

WALLACE: Karl Rove...

PALIN: Yeah.

WALLACE: ... said the other day you did a great job as the vice presidential candidate in '08 -- you know where I'm going to go with this. But he added this, and let's put it up on the screen, "With all due candor, appearing on your own reality show on Discovery Channel" -- he had that wrong -- "I am not certain how that fits in the American calculus of 'that helps me see you in the Oval Office.' There are high standards that the American people have for it, the presidency, and they require a certain level of gravitas."

PALIN: You know, I agree with that, that those standards have to be high for someone who would ever want to run for president, like, umm, wasn't Ronald Reagan an actor? Wasn't he in Bedtime for Bonzo, Bozo?

So that Ronald Reagan was an actor.

Now, look it -- I'm not in a reality show. I have eight episodes documenting Alaska's resources, what it is that we can contribute to the rest of the U.S. to economically and physically secure our union. And my family comes along on the ride because I am family. Family is -- and my family comes along on the ride to document these eight episodes for The Learning Channel and Discovery Channel.

WALLACE: All right. But wait a minute.

PALIN: So Karl...

WALLACE: No, wait a minute.

PALIN: He's wrong right there in calling it a reality show, for one.

WALLACE: OK. Your series, "Sarah Palin's Alaska," starts on the cable channel TLC November 14th. Here's a brief clip.


(UNKNOWN): Use your legs. Look for footholds. You've always wanted to be a rock climber, Sarah.

PALIN: Was it a rock climber or rock star? Hmm.

About halfway up the rock, I did not know if I was going to be able to finish the task.

A couple more inches and I can have my knee on it. A little bit more.

(UNKNOWN): You're almost there, honey.

PALIN: Oh, God.


WALLACE: Now, that's a cliff hanger. I don't want to know what happened. Did you make it out alive or not? But here's what I think.

PALIN: Yeah.

WALLACE: I'm going to tell you what I think now. I'm going to play

Bill O'Reilly.

PALIN: Yeah.

WALLACE: I think you're having too much fun. I think you're making too much money. You're still a big player in national politics. You don't have 100 people like me chasing you around saying, "What does she read in the morning?" I don't think you're going to run.

PALIN: You know, the country is worth it, though, to make those sacrifices, when we talk about making money today, having a lot of fun today, having all this freedom.

If the country needed me -- and I'm not saying that the country does and that the country would ever necessarily want to choose me over anyone else, but I would be willing to make the sacrifices if need be for America.

WALLACE: Thank you.

PALIN: Thank you, sir.

WALLACE: Always a pleasure.

PALIN: Thanks for keeping your questions short.

WALLACE: I wish -- I wish I could say the same for your answers, Governor Palin.


WALLACE: All right. Thank you so much for talking with us. We look forward to your analysis here on Fox...

PALIN: Can't wait.

WALLACE: ... Tuesday night. And keep your answers short.

PALIN: Yeah.

WALLACE: Up next, the man in charge of Democratic efforts to hold onto the House tells us if that's still possible.


WALLACE: Now we turn to the Democrats and their effort to hold onto the House despite all the predictions that it's a lost cause. Joining us from Washington, Congressman Chris Van Hollen, head of the Democratic Congressional Campaign Committee.

Congressman, welcome back to "Fox News Sunday."

REP. CHRIS VAN HOLLEN, D-MD.: It's good to be with you, Chris.

WALLACE: As I said, all the independent experts now say, quite frankly, that you, Democrats, are going to lose the House. Let's put them up on the screen.

The Cook Political Report predicts a Democratic net loss of 48 to 60 seats, with 39 turning over control to Republicans. The Rothenberg

Political Report predicts a loss of 55 to 65 seats, with the possibility of even higher losses, 70.

Isn't holding the House a lost cause?

VAN HOLLEN: No, it's not a lost cause. And the one thing the

American people don't like is Washington pundits telling them in advance what they're going to do.

I think all these Washington pundits are going to be surprised, just like many of them were surprised very recently in a special election that we had in Pennsylvania, where everybody predicted the Republican win. Didn't happen.

We're seeing strong early votes, Chris, for Democrats, which means that this idea that the Democrats are not energized is just not true.

And then you've got large pools of undecided voters, voters that

Republicans and other pundits had predicted would already have decided to vote against the Democratic incumbents, when, in fact, what they're now doing is taking a very close look at these Republican candidates, recognizing that they're way off on the right extreme.

Many of them are these candidates that have been recruited and blessed by Sarah Palin. And they're saying, "We don't want someone way off on the right. We don't want to go back to the days when special interests..."

WALLACE: Congressman?

VAN HOLLEN: "... ran Washington." Yeah?

WALLACE: Are you willing to predict -- are you willing to say right now, two days before, Democrats are going to hold onto the House?

VAN HOLLEN: Yes. I believe Democrats are going to hold onto the

House, for the reasons I said. And the early vote indicates that, as well as the fact that these undecided voters that all the pundits have predicted are going to break two to one for Republicans -- it's not happening, because they are doing what voters should do, which is finally taking a very close look at where these Republican candidates stand on issues, and they don't like what they see.

WALLACE: But, Congressman, I've got to tell you that an awful lot of the polls indicate exactly the opposite, that a lot of the voting groups are breaking away from you. Let's put a couple up on the screen that were key pillars to the Obama base.

In 2008, women supported Obama over McCain by 13 points. Now, according to a New York Times poll, they favor Republicans by four. That's a swing of 17 points.

In 2008, independents preferred Obama by eight points. Now they favor Republicans by 15. That's a swing of 23 points.

VAN HOLLEN: Chris, the major difference between now and 1994, which is what a lot of pundits want to compare this to, is that voters -- when they're asked whether the Republicans represent a viable governing alternative, they say no.

And it's pretty clear why they say no, because they've lived under that Republican alternative for eight years, and they don't want to return to a set of policies that got this country into a total mess, and they don't want to go back to the days when big money special interests ran the show in Washington, and...

WALLACE: But how do you explain -- how do you explain that women, who were voting for the Democrats two years ago, are now voting against them? And independents -- as I say, a swing of 23 points.

VAN HOLLEN: Well, Chris, look.

WALLACE: How do you explain that, sir?

VAN HOLLEN: Look. We're going to know the answer to this question two days from now. Why don't we let the American people answer that question? Because the data you're showing is all national data. We're running in specific battleground congressional districts.

And in those congressional districts, we're seeing early vote returns that show that Democrats are energized. We're seeing large numbers of undecided voters that all these pundits predicted would have already decided to vote against Democratic incumbents taking a much closer look, and they don't like what they see, because they don't want to go back to the days when these big money special interests ran the show in Washington.

And these tens of millions of dollars that are flooding in from these interest groups that have had their power reined in over the past

22 months just reinforces the point that we've been making, which is why go back to the days when Wall Street ran the show, a lot of big oil companies...


VAN HOLLEN: ... had their way, and that -- but that's the kind of thing that's...


VAN HOLLEN: ... happening right now.

WALLACE: But, Congressman Van Hollen, let's talk about money. If you add up everything that has been spent by all of the outside committees, all the party committees, according to the non-partisan Center for Responsive Politics, Democrats beat Republicans $856 million to $677 million. Democrats have not been out-spent in this election cycle.

And I want to put up another graphic, if I may. If you look at the biggest spenders in this election cycle, it's AFSCME, the public employees union, that has spent the most, $87.5 million. The Chamber of

Commerce is second at $75 million. American Crossroads, a conservative group, $65 million. And then two other unions, the Service Employees, $44 million; the National Education Association, $40 million.

You're exactly right, there's a lot of special interest money that's being spent in this campaign, Congressman Van Hollen, but a lot is being spent for Democrats.

VAN HOLLEN: The issue, Chris, is the secret money. I mean, the issue is the folks who apparently are so embarrassed or don't want voters to know that they're putting money into these races that they seek to hide it.

And the important thing, I think, for the American voters is, whether their group's on the left, the center or the right, that they should be required to disclose to the voter who's paying for it.

Unfortunately, every Republican except Mike Castle in the Congress denied voters that opportunity to find out who's behind them. Look,

AFSCME isn't trying to pretend that they're someone else. They're not hiding under some front group...

WALLACE: But one -- wait a minute.

VAN HOLLEN: ... and being secretly funded...

WALLACE: One -- if I may, Congressman...


WALLACE: ... one, they're a special interest just as much as the Chamber of Commerce is. A union is a special interest.

And two, the fact is that in your Disclose Act, you were going to set a limit of $600. But the average annual dues of all these unions is $377. So none of their annual dues would have had to go in and be disclosed under your legislation.

VAN HOLLEN: Actually, Chris, there was a slightly different threshold. But the idea was that -- look.

WALLACE: It was over the annual dues, sir.

VAN HOLLEN: Chris, if you want -- if you want every union member to disclose the $300 that they're contributing to the union, I think that's fine.

The big issue here, and I think most voters would agree, is not the

-- a working person who's contributing 300 bucks. It's the people who are spending millions of dollars of secret money.

There's no doubt that AFSCME has an agenda. Look, you've got policemen. You've got firefighters. You've got other public employees. And they want to represent their rights.

Let's look at who's on the other side of the equation. You've got a lot of big Wall Street firms...

WALLACE: Business men, the people who hire...

VAN HOLLEN: Chris...

WALLACE: ... I mean, they -- you know, I mean, you can -- you can spin this any way you want, but...


WALLACE: ... a lot of people would say that big business, the people that drive the economic engine of this country, are not villains and certainly are at least as virtuous as the people who work in unions.

VAN HOLLEN: Of course they're not villains. But look, the big...

WALLACE: Well, a lot of people would say the Democrats are painting them as villains, sir.

VAN HOLLEN: That's not true. But multinational corporations -- when we eliminated the subsidies, the subsidies that taxpayers pay that actually reward multinational corporations that ship jobs overseas, they didn't -- they didn't like that. They didn't like having that power reined in.

The oil companies don't like being held accountable. And you know

Joe Barton, who would be the Republican chair of the Energy and Commerce Committee, apologized to B.P. when the president wanted to hold them accountable.

And then you've got -- you've got banks that used to get a big cut out of the...

WALLACE: Congressman...

VAN HOLLEN: ... college student loan program...

WALLACE: ... Van Hollen, I don't...

VAN HOLLEN: Well, look...

WALLACE: ... I don't -- I don't mean to interrupt you, but I do have only a minute left and I want to ask one more question.

You're acting as if everything is great. I mean, everybody seems to think -- and maybe we're all wrong -- that this is going to be a good night for Republicans and a bad night for Democrats. Do you not see any message from voters of a dissatisfaction with what the president and you Democrats in control of Congress have done the last two years?

VAN HOLLEN: Chris, I'm not -- I'm not acting as if everything is great. What I'm saying is we know the economy remains pretty slow in terms of the recovery.

But we also know that voters don't want to return to the policies that got us into this mess. The night before the president was sworn in, we were losing 700,000 jobs every month in this country.

So while why we haven't seen the kick-in in the recovery to the extent we want, I don't think voters want to go back to the old policies, especially those that empowered these special interests.

And these special interests have had their power reined in over the past 22 months, and they're fighting back. And you can -- and that -- and that's what's happening.

So that's why I think you see this large pool of undecided voters.

The economy...

WALLACE: Congressman Van Hollen?


WALLACE: Excuse me. I mean, we're just out of time. But I -- listen, I want to thank you so much for coming on and answering our questions. And let me just say -- I'll say it right now -- if you're right, a lot of the so-called experts are going to have plenty of egg on their faces Wednesday morning.

VAN HOLLEN: You're right about that, and they've been proven wrong many times before, as you know, Chris.

WALLACE: Absolutely. We'll know what to eat for breakfast. Thank

you very much.

VAN HOLLEN: Thank you.

WALLACE: And good to talk to you, as always, Congressman.

VAN HOLLEN: Likewise.

WALLACE: Coming up, our Sunday regulars have made the big trip to

New York. Do they see a GOP sweep? And how are the next two years going to be different? We'll get some answers when we come right back.



WILLIAM JEFFERSON CLINTON, FMR. PRESIDENT OF THE UNITED STATES: You don't have much choice. You need to elect Kendrick Meek.

Thank you, and God bless you.



WALLACE: Well, leave it to Bill Clinton. At the same moment that he was telling Florida voters they had to elect Kendrick Meek to the

U.S. Senate, behind the scenes he was pushing Meek to quit and clear the way for Governor Charlie Crist.

And it's time now for our Sunday group: Brit Hume, Fox News senior political analyst; and contributors Mara Liasson of National Public

Radio; Bill Kristol of "The Weekly Standard"; and Fox News contributor,

Juan Williams.

Well, Brit, I thought I'd seen everything in politics, but here we have a former president of the United States pushing an African-

American Democratic congressman to get out of a race, to clear the way for a guy who was a Republican about 20 minutes ago.

What does that tell you, first of all, about politics? And secondly, about how worried Democrats are that they're going to lose control of the Senate?

HUME: It tells you the Democrats are very worried. It also tells you about the limitless flexibility of that former Republican Charlie

Crist-turned-Independent, who, having said at one time, not very long ago, that he was a Reagan Republican and he is now prepared to get into the Senate and caucus with the Democrats if they support him and they can get Meek out of the race. So, it's been a remarkable year. But, look, this is a year when the former governor of Alaska came on one of the Sunday programs -- I can't remember which one -- and referred to people as corrupt bastards.


WALLACE: Imagine.

HUME: Imagine.

WALLACE: Mara, is this a rogue operation by Bill Clinton, or do you see the White House's fingerprints on this?

LIASSON: No, I think that the White House was aware of what he was doing. Bill Clinton has played this role before, trying to clear the field for Democrats.

WALLACE: Yes, but usually in the primaries trying to get a candidate out, not in the middle of the general election.

LIASSON: Yes. But you know what? This was an unusual situation, and no one has worked harder for Kendrick Meek than Bill Clinton. He's been down there many, many times.

This wasn't some plot all along to kind of pull the rug out from under him. The Democrats wanted to see if Meek could close the gap. He couldn't. They are facing a situation where Meek is trading badly, widespread feeling he doesn't have a prayer to win. The only way to block Rubio in the Democrats' analysis was to throw Democratic support to Crist.

There was a moment early on if Meek had been defeated by this billionaire, Jeff Greene -- remember that? -- that might have changed things. But that didn't happen.

And I think that the big question now is, what is the fallout from this story? Will African-American voters in Florida be angry that Meek was encouraged to drop out, and will they stay home, therefore hurting the prospects of Alex Sink, who is the Democrat gubernatorial candidate locked in a very tight race there with Rick Scott? Or will Democrats feel free to vote for Crist?

WALLACE: Let's look at a bigger -- slightly bigger picture, Bill.

We have been talking about this Republican wave for months, like it's an iceberg headed for the Titanic. And I think all of us thought something is going to change, it always does. But the wave keeps getting bigger and bigger, and now we're two days away and it's bigger than ever.

KRISTOL: It is. They want change in Washington, and they're going to get it. And they're going to get it with a lot of interesting Republican candidates.

I mean, on the Meek part of the -- Kendrick Meek story, if you're a

Democrat around the country, Kendrick Meek is a sitting Democratic congressman who won the gubernatorial nomination in Florida -- I mean

Senate nomination in Florida against a self-financier who spent millions of dollars against him. He's an impressive young guy, he's got a future in politics, even if he doesn't win this year.

For Bill Clinton, with the blessing of the White House, to try and force him out of the race one week out for this opportunistic governor of Florida who's been a Republican, who's embarrassed himself this year, who's going to lose anyway, even if Meek got out of the race, I'm convinced, I think it's pathetic. And I think it's demoralizing for Democrats.

Conversely, for conservatives like myself, seeing Marco Rubio as the face of the future of the Republican Party, as opposed to Charlie Crist, four years ago Charlie Crist was being heralded by the Republican establishment. He was the new governor of Florida, he was a VP possibility for John McCain. Everyone fought for his endorsement in

2008. The replacement of Charlie Crist by Marco Rubio for me is what's so heartening about the future of the Republican Party.

WALLACE: And Juan, what do you make of these remarkable numbers which, understandably, Chris Van Hollen challenged in "The New York

Times" poll which indicate since 2008, that women have swung away from Democrats by 17 points and Independents by 23 points? What do you make of that?

WILLIAMS: That's bad news for Democrats. But, I mean, that is the story of this election. I think women in specific. The idea that -- I think it was -- they said the first time in the history of the poll that women would favor Republicans over Democrats in the House.

WALLACE: It's a gender gap in reverse.

WILLIAMS: It's unbelievable. And I think it's telling about the times.

I think people who were once soccer moms have now -- and security moms after 9/11 -- are now suddenly, you know, mortgage moms. And they're worried about the economy, about their kids getting a job, about their husband holding a job.

But let me just say, I think your premise is wrong. I don't think that -- I don't think that, in fact, we are looking at an iceberg headed towards us Tuesday night. I think Chris Van Hollen is closer to the truth.

I think the Republican energy, which is about turnout, really crested earlier. And what you're seeing now is more Democrats getting engaged.

And I think you're going to see possibly Republicans take control of the House. I don't think the Senate is in play anymore. But I do think it will be much narrower. This talk about 70, 80, 90 seats --


WALLACE: Well, let's say it's 55.


WALLACE: Let's say it's 55.

WILLIAMS: Well, even so, it's going to be very narrow.

WALLACE: Do you realize that 55 would be the most in half a century?

WILLIAMS: Well, I'm saying to you it will be very narrow. It might be the most in a half a century. It will be -- that's very narrow. They need 39.

UNIDENTIFIED MALE: What's narrow about that?

WILLIAMS: What's narrow about it?

UNIDENTIFIED MALE: What's narrow about 55 seats?

KRISTOL: I will buy you lunch if it's 55 or below.


KRISTOL: It's going to be 65 to 70.

WILLIAMS: Well, I would be delighted.

KRISTOL: The Senate is in play. How can the Senate not be in play?


KRISTOL: Washington is dead even.

WILLIAMS: Oh, yes.

KRISTOL: I'll buy you a second lunch if -- I'll buy you a nicer lunch if Patty Murray wins in Washington. I'm going to be eating out on Juan for weeks here.

WALLACE: Juan's got a big new contract.


WALLACE: We have to take a break here. But when we come back, we're going to take a look at the big picture. And we'll talk about this margin, what Tuesday night could mean for the next two years.

Stay tuned.


WALLACE: And we're back now at America's election headquarters with our Sunday group.

When we talk about -- and we're going to pick up on just what you were talking about, Juan -- possible Republican gains in the House

Tuesday, we need to put this in historical perspective. Take a look at this.

When Newt Gingrich and the Republicans scored their big victory in

1994, they picked up 52 seats. When Reagan took a beating in his first term, Democrats gained 26. And the big number out there is 1948, when

Harry Truman and the Democrats picked up 75 seats. So, Brit, when experts talk about -- and you've got very respected people like Stu

Rothenberg and Charlie Cook talking about right now 55 seats, we're in historic territory.

HUME: And when they say that, they say 55 and it could go higher.


HUME: They're not saying 55 and it might be lower. So those are really fairly conservative estimates.

And the important thing about this, the practical effect of

Republican control of the House will be that any major new Obama initiative will be stopped, stalled. They won't be able to pass it.

The political effect is more interesting, and that's really not about the Republicans so much as it is about how the Democrats in the

White House and on Capitol Hill react to the message from the electorate. And at the moment, my sense is that a lot of that will depend on how high the margin goes.

If it's 55, they may say as Juan just did that, well, it's still basically close, we had a bad economy, you lose a lot of seats, stuff happens, we're going to fight on as much as before. If it's 65, 70, 75, it seems to me -- and they try that -- they will be laughed out of town. I mean, it will just be unthinkable. So, the margin may tell us a lot about how the losers respond.

LIASSON: Well, I think that the margin would have to be much slimmer than 55 for them to be able to say we're just going to soldier on. I think that losing the House by a historic number -- and 55 is a historic number. If it beats 52, which was the last Republican takeover, I think that what President Obama says on Wednesday and

Thursday, and then again what he says in the "State of the Union" are going to be two of the most important moments in his presidency.

He's going to have to explain to the country what he thinks happened, how he was responsible or not, what it means going forward. I mean, this is really, really important for the future of his presidency.

And maybe he'll choose --

WALLACE: And what do you think? You're at the White House all the time, Mara. I mean, do they think it's just, well, the economy took longer, or do they understand we really have lost women, Independents, we've lost our base?

LIASSON: Yes, I think they understand what's happening. Of course if the unemployment rate was at 7 percent now, everything would be completely different. It's the most important fact. But I do think --

HUME: Seven percent, completely different? I don't think so.

LIASSON: Well, it would be a lot different. But I do think -- first of all, then their prediction would have been true, that the stimulus would have gotten it down.

But I do think they are considering a kind of two-track strategy, not unlike Bill Clinton, where you say certain things -- I'm going to fight to defend -- like health care reform and financial reform, but on other things like the deficit and education and energy, and some other issues, I can compromise. I think they are considering that.

WALLACE: Bill, I mean, there is a message -- again, assuming that everything we think is going to happen does happen -- there is also a message to the GOP establishment, particularly if you see a bunch of these Tea Party candidates like Marco Rubio elected. And they are going to be feeling their oats if they're elected.

What is the message and what's the challenge to the Republicans in


KRISTOL: Well, it's a huge challenge, because these conservatives who are elected don't want to be in the business of going back to the previous Republican Party that, in their view, spent too much and compromised too much. And I rather agree with that.

On the other hand, if you have a majority in the House and perhaps in the Senate, you are partly responsible for improving the situation in the country. They need to extend the current tax rate, they need to work with the president on foreign policy, where they agree with him.

They can't simply be in the position of saying we're going to everything bad the president wants to do for the next two years. They don't need to do that and then defeat him in 2012. They'll want to do that.

They need also to say we're going to try to improve people's lives here and now. Now, one way to do that is to insist on the current tax rates right away. Another way to do that is to take on some of the regulatory excesses of the Obama presidency. But it's going to be --

WALLACE: But that's not a lot of compromise there. I mean, you're basically talking about them pursuing their agenda. You know, when I asked Governor Palin that, she looked at me like I was crazy.


KRISTOL: Well, what if the president does (INAUDIBLE) budget that has, I think, probably some domestic spending, restraint, and maybe cuts, the Republicans will want to go further. And at the end of the day, there will be a budget for the United States on October 1, 2011.

And I think that budget, Republicans may have to not quite go as far as they want to go.

I think they need to be strong, they need to be militant in advancing their cause. But they also need to try to be able to say two years from now, you know what? We both stood by our principles and we improved things for Americans out there, and they gave us the majority and we did some good.


WILLIAMS: Militant? Do they want to be militant?

Let me tell you, governing is about compromise. And the Republicans will start to feel the fury and the force of this Tea Party movement now that -- if they, in fact, gain control of the House, because the establishment Republicans are not comfortable with the Tea Party Republicans.

And the Tea Party Republicans are going to have to say here is how we would govern and be effective. It's going to be a challenge.

Now, I think, though, the key here, as we look towards this wave election, as you guys are describing it, is to understand, you know what? Americans want government that works. They want things done.

And so when it comes to areas of compromise, they are going to hold

Republicans responsible and not -- they don't want extremists like

Christine O'Donnell. In fact, that's the only Democratic message that's worked in this election, is that some of these Republican candidates are a little over the top.

HUME: When is the last time we saw the House taken over by the party that didn't hold it? 2006.

Did you notice, Juan, that things got better between 2006 and 2008?

They didn't get better. They obviously they got worse. That's what elected Barack Obama.

Were House Democrats held accountable in any way for that in the 2008 election? Absolutely not.

WILLIAMS: Well, that's a wonderful argument. You mean we should elect people and not hold them accountable?

HUME: I'm not saying that we should. I'm saying what happened.

And I think a lot of this talk about Republicans controlling one house of Congress, being held to parallel level of accountability with the president and the Democrats, it just isn't how things work. It doesn't happen that way.

WILLIAMS: Well, it seems to me that, you know what? There is this expectation attached to saying throw out the bums, throw out the incumbent, the economy is terrible.

People want real change. That's what Barack Obama is being held accountable for. And you're saying don't hold House Republicans responsible.

HUME: Juan, I'm not urging that. I'm talking about the reality of how things actually work.

The only time that I can recall when a congressional leader, having newly gotten his party -- gotten control of one house, was ever treated to accountability similar to a president, was Newt Gingrich after 1994.

But that was such an historic earthquake, and Bill Clinton appeared to be so weakened, that Newt Gingrich --


HUME: Well, we will see. But what I'm saying about that is, remember, they held on to power for what, 12 years? And, you know, through good times and bad. So I wouldn't get to far out on this limb about how tough it's going to be in two years for House Republicans.

WALLACE: Well, nobody is going to get too far out on a limb, because the time clock says we're going to cut it off.

Thank you, panel. See you next week.

Don't forget to check out "Panel Plus," where our group picks up right up with the discussion on our Web site, We'll all get out on a limb there. We promise we'll post the video before noon Eastern Time.

Up next, it's down to the wire "On the Trail."


WALLACE: It's come down to the final two days. Candidates are working for every last vote, while the big names from both parties crisscross the country and make their closing arguments.

Here is a taste of the homestretch "On the Trail."


OBAMA: Hello, Rhode Island!

UNIDENTIFIED FEMALE: Vote for me, pray for me. God bless --

AUDIENCE: Harry! Harry! Harry!

PALIN: The only way that we can get this car out of the ditch, moving on the right track, is to change the way that business is done in


OBAMA: We don't mind the Republicans joining us. They can go come for the ride, but they have got to sit in the back.

UNIDENTIFIED FEMALE: It's going to phone calls like crazy for votes. It's going to be from now until Tuesday.


CLINTON: I love Kendrick Meek. I'd be here for him if I was the only vote he had in the entire country.

REP. KENDRICK MEEK (D), FLORIDA SENATE CANDIDATE: He didn't ask me to get out. I didn't tell him I was going to get out. We were just talking about the race in General.

GOV. CHARLIE CRIST (I), FLORIDA SENATE CANDIDATE: Those conversations did take place.

UNIDENTIFIED FEMALE: Ringing doorbells.

OBAMA: In fairness, Larry Summers did a heck of a job trying to figure out how to --

STEWART: You don't want to use that phrase, dude.


OBAMA: Pun intended.

UNIDENTIFIED GROUP: Fire Pelosi! Fire Pelosi! Fire Pelosi!

OBAMA: In these last four days, I need you to knock on doors and make phone calls and talk to your neighbors and vote.

REP. JOHN BOEHNER (R), MINORITY LEADER: Your government is out of control. Do you have to accept it?


BOEHNER: Do you have to take it?


BOEHNER: Hell no, you don't!


WALLACE: And to see how it all turns out, be sure to watch Fox News

Tuesday night for the final results and the best analysis of what it all means for you on your local Fox television station, our news and business channels, radio and online.

And that's it for today. Have a great week. And we'll see you next "Fox News Sunday."

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