Sen. Cornyn on Debt Talks; Sens. Graham, Lieberman Talk Afghanistan; Gary Sinise on Helping Wounded Warriors

Key GOP senator on 'Fox News Sunday'


The following is a rush transcript of the July 3, 2011 edition of "Fox News Sunday With Chris Wallace." This copy may not be in its final form and may be updated.

SHANNON BREAM, GUEST HOST: I'm Shannon Bream, in for Chris Wallace.

As the default deadline approaches, the political pressure increases.

Republicans and Democrats are talking tough. With just a month ago in the debt ceiling negotiations, is a deal still possible? We'll ask John Cornyn, one of the GOP's Senate leaders.

Also, with the terror attack rocks Afghanistan, should the U.S. rethink its drawdown plan? We'll get an on-the-ground account from two influential Washington voices on foreign policy: Senators Lindsey Graham and Joe Lieberman.

Plus, what do the fundraising numbers tell us about the Republican presidential field. We'll ask our Sunday panel, which candidates are making a move and which ones are stalled.

And on this Fourth of July weekend, actor Gary Sinise tells us how he wants to help our veterans and the wounded warriors.

All right now on "Fox News Sunday."

And, hello again, from Fox News in Washington.

As the nation celebrates the Fourth of July holiday weekend, it is getting to be crunch time in the Capitol, in a high-stakes battle over increasing the debt ceiling.

Here to discuss where the negotiations stand is a member of the Senate Republican leadership, John Cornyn.

Senator, welcome back to "Fox News Sunday."

SEN. JOHN CORNYN, R-TEXAS: Good morning.

BREAM: All right. On Friday, the Treasury Department reiterated what it had already told us. August 2nd is the date we exhaust our borrowing authority under the current debt ceiling. So, let's recap what the president had to say this week about Capitol Hill, whether they're doing their job -- and a bit of your response as well.


PRESIDENT BARACK OBAMA: When they decide they're not happy with the fact that at some point, you got to make a choice, they'd just all step back and say, "Well, you know, the president needs to get this done." They need to do their job.

CORNYN: Instead of going to Philadelphia tonight and raising money, why didn't he call Senator McConnell, Speaker Boehner, Minority Leader Pelosi and Majority Leader Reid into his office and sit down and do his job?


BREAM: Well, at that Philadelphia fundraiser that you mentioned there, the president said this deal could get done, quote, "on the back of an envelope." But he said there's no political will. So, who's not doing their job?

CORNYN: Well, let's see his envelope. I haven't seen it. The president's own fiscal commission -- bipartisan fiscal commission made what I thought was a sobering but important report back in the last December called "moment of truth." The president ignored it in his "State of the Union." His own budget grows the debt by trillions of dollars over the next 10 years and all he seems to do is to attack those who are trying to make responsible proposals to solve this problem.

So, the only way this is going to get done is with the president of the United States and fortunately, now, it's been kicked upstairs to the only guy who can make the deal. And that's the president, along with Speaker Boehner and Mitch McConnell.

BREAM: Let me ask you -- you're here because, of course, the Senate cut its Fourth of July recess short. There have been some skeptics about whether that's going to make any difference. One of them is your Democratic colleague, Senator Barbara Mikulski. Here's a bit of what she had to say.

She said, just being here to, quote, "huff and puff and hope we can blow the deficit away is posturing." Now, even you have express doubts that this is going to make a difference.

Are you feeling any more optimistic?

CORNYN: Well, the only people who can cut a deal, at least initially, are the president, Speaker Boehner and Mitch McConnell, our Republican leader in the Senate. But, you know, Shannon, it's got to pass the House of Representatives, and then it has to get at least 60 votes in the Senate. And we're running out of time.

But, this, what we -- what I'm concerned about is the president by not seriously putting a proposal forward but rather just criticizing those who have, we are running up against this deadline. And they're going to try to present it as a fait accompli, nobody is going to have time to read it or consider the implications of it and it's going to say you have to pass it or the economy is going down the tubes. That's just irresponsible.

BREAM: All right. Some on Capitol Hill had said, absolutely, no way they will vote for anything that involves a tax hike. The top Republican in the Senate, Mitch McConnell, has said that. House Speaker John Boehner has said that.

You have phrased it a little bit differently. When we talk about tax expenditures, things like loopholes and breaks, you say it would be a fruitful area for discussion.

So, would you consider that a tax hike or raising taxes? How do you define what we're talking about when we're talking about revenue?

CORNYN: Well, I think it's clear that the Republicans are opposed to any tax hikes; particularly, during a fragile economic recovery. The last thing that employers need is further disincentives to not hire people. And that's what hire taxes would mean.

Now, do we believe that tax reform is necessary? I would say absolutely. There's not enough time to get it this done between now and August 2nd. But it ought to be the first thing we turn to, try to make our tax code more rational. We could bring down rates, eliminate the tax, a lot of tax expenditures or loopholes and actually make our nation more competitive internationally.

BREAM: All right. So, just to be clear, talking about closing some of those tax loopholes, making changes to the tax code, you don't consider that raising taxes?

CORNYN: Well, it's not raising rates. I don't mean to be cute about the language. But what I think we ought to do is bring the rates down to make it revenue-neutral.

So, as you eliminate these tax expenditures, if you bring the top rates down, that's revenue neutral. That's not raising taxes.

BREAM: Do you think you will get other rank-and-file Republicans on board with that way of viewing the issue of revenue?

CORNYN: Well, I think so. I mean, I think again, the president's own fiscal commission recognizes that our tax code is riddled with a lot of special interest loopholes and provisions that really don't make any sense anymore. We just had a very important vote about the ethanol subsidy, which we voted overwhelmingly to repeal that. And I think there's now a deal being worked out to phase it out maybe in a more sensible way.

But, yes, this is a fruitful area for us to work on in a bipartisan way.

BREAM: What about def spending? How far would Republicans be willing to go in that arena?

CORNYN: Well, the main reason the federal government exists in my view is protect the national security. And so, when Leon Panetta was confirmed as the defense secretary, I asked him about the Clinton era tax -- excuse me, the spending cuts in defense -- worried, of course, that there would be those who want to cash a peace dividend in a time America is still at war in at least three places. He seemed to say he was sensitive to that.

Now, there are things we can do to make the Defense Department, the Pentagon more, run more like a business. For example, better financial management procedures. Actually, the Pentagon is incapable of producing an audible financial statement, Congress said they have to do it by 2017, but they're not on a path to do it now.

That's the kind of thing we can do to make it more efficient to eliminate waste. But we can't weaken our national security.BREAM: Let's talk about comments that former President Clinton made last night about this. He's urging President Obama not to blink on the issue of compromise with Republicans and he also said, if you won't move on issues of revenue, that what should come together sort of a mini-deal. Maybe debt ceiling extension that gets us through six or eight months.

Is there an appetite on the Republican side to do that?

CORNYN: Well, the problem with a mini deal is we have a maxi problem. And these -- the big problems aren't going to go away if you cut a mini deal. All it does is delay the moment of truth.

And so, I'd say better now than then. But if we can't, then we'll take the savings we can get now and we will relitigate this as we get closer to the election.

BREAM: All right. And in addition to dealing with the content of negotiating this deal, there is a bit of a PR battle that's involved here as well. Senate Majority Leader Harry Reid has had a lot to say about what is standing in the way of getting something done. Let's take a listen.


SENATE MAJORITY LEADER HARRY REID, D-NEV.: The main obstacle, and I want to be very clear, to finding common ground is Republicans' stubborn insistence on protecting taxpayer funding and giveaways to corporations and individuals who don't need the giveaways.


BREAM: The president has also framed this choice, earlier this week, as kids going to college, or tax breaks for corporate jets. I mean, it's something he said, the American public, it's an easy choice for them. So, what is the GOP planning to do with their strategy for dealing with that PR side of this battle?

CORNYN: Well, Senator Reid has newfound religion when it comes to tax reform. And we're willing to work with him and Democrats to do that. Again, the problem is, I don't know whether we can get it done between now and August 2nd. But it should be something we do.

I think the American people understand that raising taxes grows the size of the federal government. If there's one thing that I think they told us on November 2010, is that they want government to get smaller, not bigger -- that they feel the government is far too intrusive in their lives, whether it's Obamacare, whether it's the Dodd-Frank financial regulatory so-called reform bill. They just feel like the government has grown too big.

So, the only way to get government smaller, more rational is to cut spending, not to raise taxes. So, I think we win that.

BREAM: All right. How much has this turned into a political debate? Senator Chuck Schumer has some words to say about that the GOP may be using the economy and the struggle of average American out there to their benefit, simply for 2012.

Here's his accusation.


SEN. CHUCK SCHUMER, D-N.Y.: It's becoming clear that insisting on a slash and burn approach may be part of this plan. It has a double benefit for Republicans. It's ideologically tidy and it undermines economic recovery, which they think only helps them in 2012.


BREAM: Playing politics with it?

CORNYN: That's certainly false. There's just no basis to it.

You know, the president and his party are doing a pretty good job of undermining the economy as it is, with the unemployment at 9.1 percent -- much higher than the other parts of the country. People with capital on the sidelines because they don't know whether the taxes are going to get increased, whether regulators are going to overreach, or what the cost of Obamacare are going to be to their business.

So, look, we're Americans first, not members of any political party. We want to do what's right for the country. But that kind of rhetoric doesn't particularly advance the ball.

BREAM: Senator Schumer also was asked about a very interesting concept that's bubbled up with some in the academic world and on the Hill as well, this idea that the president may be constitutionally allowed to ignore the debt limit and continue issuing debt because of phrase in the 14th Amendment.

Here's what he said when asked about it. Quote, "It's certainly worth exploring. I think it needs a little more exploration and study."

You're not only a lawyer, but you've been a judge who sits on the bench as well. How would you rule on the legal debate?

CORNYN: That's crazy talk. It's not acceptable for Congress and the president not to do their job and to say somehow the president has the authority then to basically do this by himself. We ought to sit down and work together.

And it shouldn't take the form of press conferences like the president gave last week, where he was essentially this cool mom (ph) scolding Congress for not getting its job done when, in fact, he is the one who has not stepped up and giving us a proposal. We'd like to see what his proposal is. Let's do it in the light of day, not in secret behind closed door negotiation. Only to spring it on the American people at the last moment to say, you know what, it's this, take or leave it, or else there's financial calamity.

BREAM: While we have you have, I want to ask you one quick foreign policy question as well. This week, the Senate will likely vote on the bipartisan resolution that authorizes what the president has done in Libya. There are some caveats there. It comes to vote I believe on Tuesday.

Will you vote in favor of it?

CORNYN: I'm going to vote against proceeding to this particular resolution, but I have an alternative resolution that I think we need to consider. First of all, we need to consider what's the goal of the mission in Libya? I think the goal should be to depose Qaddafi. The president likes to say, well, that's our political goal but not our military goal. Well, those ought to be unified.

And then weed a plan from the president, not just a handoff to NATO and say it's their problem, not mine. And then we need to once the American people understand what the goal is and the means to achieve that goal, then I think we'll become unified behind this effort.

BREAM: All right, Senator Cornyn, thank you for your time. Thanks for spending part of your Fourth of July weekend with us.

CORNYN: Thanks, Shannon.

BREAM: Up next, Senator Graham and Lieberman from Afghanistan on the U.S. war efforts there and Iran's meddling across that region.


BREAM: Joining us now from Kabul, Afghanistan, are two key members of the Senate Armed Services Committee: independent Joe Lieberman and Republican Lindsey Graham.

Senators, welcome back to "Fox News Sunday."

SEN. JOE LIEBERMAN, I-CONN.: Good to be with you, Shannon. Thank you.

BREAM: I want to start with disturbing reports in "The Wall Street Journal" that concern Iran.

Senator Graham, this question for you. They say that Iran has, quote, "smuggled rocket-assisted exploding projectiles to its militia allies in Iraq, weapons that have already resulted in the deaths of American troops, and have also given long-range rockets to the Taliban in Afghanistan, increasing the insurgents' ability to hit U.S. and other coalition positions from a safer distance."

In June, 14 U.S. service members were killed in combat in Iraq. Officials are also attributing those deaths to militias that were trained by the Iran's revolutionary guard.

Senator, what do we do about Iran?

SEN. LINDSEY GRAHAM, R-S.C.: Well, I think people need to understand why Iran is doing this. The biggest nightmare for the ayatollahs in Iran is to have a democracy in Iraq and Afghanistan on their borders. So, yes, they are helping the Taliban. They're trying to reactivate the Shias to bring down Iraqi democracy. They're trying to undermine our efforts here. They're responsible for material coming in both countries that are killing not only American soldiers but the Iraqi and Afghan people. They are also helping Assad in Syria.

I hope people understand what Iran is up to. Their biggest nightmare is that the Arab Spring is successful, that we can pull off Iraq and Afghanistan in terms of representative democracy. And they are going to fight to the bitter end.

And I hope we will be pushing back strong. I hope the president will condemn this. And put the Iranians on notice that you're not going to undermine your two neighbors who are trying to be democracies without some push-back here.

BREAM: Senator Lieberman, your colleague there mentioned their involvement, Iran's involvement in Syria. How concerned are you about that?

LIEBERMAN: Well, I'm very concerned about Iran's involvement in Iraq, Afghanistan, and Syria. And the fact is, as Senator Graham said, they've got the blood of a lot of people on their hands, including hundreds of Americans who have been killed in Iraq, as a result of Iranian training and equipping of extremists militias.

But today, in Syria, we know that the Iranian revolutionary guard corps is there helping the dictator Bashar Assad murder his own people. And it's why some of us are, Senator Graham and I and others, are cosponsoring legislation to impose additional economic sanctions on people within leadership of government in Iran, including particularly the Iranian revolutionary guard corps.

You know, this is after all a Fourth of July weekend. We're celebrating freedom -- not just for Americans but the ideal of freedom. And, right now, people in Arab world, including Syria, are fighting for their freedom. And Iran is doing everything it can, not only to suppress this freedom fighter uprising in Syria, but, of course, they have murdered and suppressed their own people in Iran.

So, I would say that a day of reckoning is coming for this extremist regime in Iran when the majority of Iranians who really yearn for freedom see that dream come true. And I hope we'll do everything we can to make it happen as soon as possible.

BREAM: Senator Graham, let's talk now specifically about Afghanistan. We think about the attack earlier this week at the Intercontinental Hotel -- 12 victims there. There has been a roadside bombing that killed 13 others.

Are you convinced that Afghanistan would be ready as we begin to make significant troop draw-downs?

GRAHAM: My concern about the president's speech last week is that he may have undercut the momentum we achieved in the last year. The last year has been phenomenal progress in terms of building the Afghanistan security forces -- 90,000 additional Afghan army and police forces, 6,000 a month are joining the armies now. In September of 2009, there were 1,200 a month. So, things were moving in the right direction. The enemy can mount spectacular attacks and we had them on their heels.

Here's what I fear, that this he announcement of accelerated withdrawal, which was not recommended by the generals, this is now the Obama-Biden strategy. No military leader recommended the decision the president chose. So, it is now the Obama-Biden strategy.

And my fear is that people are going to look this as a withdrawal, not a transition. And we're hearing that all over the country, uncertainty creeping back in about America and what we're up to.

So, I really do worry this may have undercut the momentum. I hope I'm wrong. Time will tell. BREAM: Senator Graham, you mentioned the president's decision- making process. I want to delve into that a little bit more with you because he's e announced, of course, 30,000-plus troops will be withdrawn from Afghanistan by the end of next year.

Now, hours before he announced that decision, there was a conference call with reporters with a senior administration official, unnamed.

BREAM: And here's what they said. Quote, "The president's decision was fully within the range of options that were presented to him."

You asked Lieutenant General John Allen about that, the man who's been tasked to lead the war effort for the president in Afghanistan.

Here was your exchange.


GRAHAM: Is it fair to say, General Allen, that was not one of the options presented to the president by General Petraeus?

LT. GEN. JOHN R. ALLEN, INCOMING CMDR. U.S. FORCES AFGHANISTAN: It is a more aggressive option than that which was presented.

GRAHAM: My question is -- was that a option?

ALLEN: It was not.

GRAHAM: So I just want the country to understand that this is not the Petraeus strategy any longer.


BREAM: In addition to those comments from General Allen, you also note, of course, that General Petraeus and -- in addition to that, Admiral Mike Mullen, both used those words that what the president chose to do was more aggressive than the options he was presented.

So, has the White House been honest with us about how the decision was made? He is the commander-in-chief. The president can make the decision.

Do you think it was the right one?

GRAHAM: The commander-in-chief can make any decision he would like. He should listen to his military commanders.

I am confident that the decision made by President Obama was not one of the options given to him by the military commanders. He has chosen a different course, 10,000 out by the end of this year. All surge forces out by September. It's undercut the ability to have a second fighting season. All generals say that they will stand by the decision. That's their job. But it creates unnecessary risk and it has created risk. It has changed the momentum. People wondering what we're up to.

The difference between transitioning and withdrawal is huge. It is seen now as an effort to withdrawal rather than transition. And I just hope and pray that this works out well. It came at a very critical time. And we will see what the future holds.

BREAM: All right. Senator Lieberman, I want to talk to you about Libya. Let's turn to that topic now.

Here's what the president said earlier this week about what's going on there.


OBAMA: I said to the American people, here's our narrow mission. We have carried out that narrow mission in exemplary fashion.


BREAM: So, the president says he's laid out a mission to the American people. But in an op-ed that you co-authored this week in "The Wall Street Journal," Senator Lieberman, you wrote, quote, "The Obama administration has not done an adequate job making a public case for our intervention and its objective."

What kind of clarity, Senator, would you like to see from the president?

LIEBERMAN: Well, you know, when you commit the American military -- whether it's on the ground or in the kind of supportive role we play with our NATO allies in Libya -- you got to have a reason. And our reason was that we were trying to stop Qaddafi from massacring his own people and stopping the movement of democracy through the Arab world in the so-called Arab Spring.

So, I think what I'd like to see is the president making the case again for why we're doing this, and why it's important to our security, which I believe it is.

Secondly, I think that we've got to be clear about what our goals are. Even though different times the administration has said that we're not interested in overturning Qaddafi, clearly, we are. This is all about regime change and freeing the people of Libya from another brutal -- another time period when they'll be suffering brutal dictatorship.

So -- I know it's complicated. And I think, frankly, there wouldn't as much opposition in Congress to our action in Libya if there was a strong argument being made on behalf of why we are there.

The truth is, if we use our strength with our NATO allies, when you go in a fight, you can't be uncertain about it. If we use that strength, I think Qaddafi will go and it will be a tremendous step forward for the Arab world and the cause of freedom there and throughout the world, and, obviously, better for the United States.

Talk about blood on somebody's hands -- Qaddafi has a lot of American blood on his hands from the terrorist attacks that he sponsored against us going back to the 1980s. It's time for him to go.

BREAM: Well, Senator Lieberman, I want to follow up with you, because you said our mission now essentially does include overthrowing his regime. Does it also possibly include killing Qaddafi?

LIEBERMAN: Well, look, if Qaddafi is killed, so be it. I'm not saying that we are targeting him. But when you think about the thousands of people, including Americans, who have died because of Qaddafi's decisions, then one way or another, it's time for him to leave power in Libya.

BREAM: All right, Senator Graham, I want to ask about the bipartisan --

GRAHAM: Shannon?

BREAM: Yes, sir? Go ahead, Senator Graham.

GRAHAM: I think everyone in the world believes that if Qaddafi were taken out, this would be over. And if the goal is to protect the Libyan people and their human rights, the best way to do that is to break Qaddafi's inner circle and get rid of Qaddafi himself. So, I'm glad NATO has taken the fight to Tripoli. We should be going after the inner circle, trying to cut the head of the snake off.

And back to Afghanistan, perception is reality. The difference between transitioning to Afghan control in a reasoned way and withdrawing from the fight as Americans is hugely important. The perception that I'm finding on the ground is that the announcement by the president is more of a withdrawal than it is transition. And that has to be corrected or it could jeopardize our whole operations.

And remember what Iran is up to. Remember what Syria is up to. Remember what the Taliban and our al Qaeda want. They want to dominate this region. They want to destroy what we're fighting for, which is basic freedom.

So, we are in a titanic struggle with some very unsavory characters. And to the American people, the outcome does matter to us. If we win and help the people who can live in peace with us, we're all safer. If the people are willing to fight back here in the region are overtaken by these forces, then we're all going to pay a price back home. A lot is at stake.

LIEBERMAN: Yes. I agree. And I just want to add on the Fourth of July weekend, we're here because we were attacked from here on 9/11.And if we don't succeed here, and the Taliban comes back in to power, we'll be attacked again. And there could be no greater threat to our security and our freedom, the freedom that we celebrate on July 4th.

BREAM: Senator Lieberman, Senator Graham -- we thank you so for your time. Safe travels to you both.

Coming up, our Sunday panel talks campaign cash and what it means for the GOP field.

Back in a moment.


MITT ROMNEY, PRESIDENTIAL CANDIDATE: Now, the president says just give me more time, and it could have been worse. It could have been worse for the people who worked here at this plant. For them, it's as bad as it gets.


BREAM: Republican presidential frontrunner Mitt Romney excoriating the Obama administration over his signature issue, the economy.

Time now for our Sunday group -- Bill Kristol of "The Weekly Standard"; Nina Easton of "Fortune" magazine; Fox News Digital Politics Editor Chris Stirewalt; and "New York Post" Columnist Kirsten Powers.

Welcome to all of you.

All right. Let's take a look, first of all, at the numbers that we have in so far from the latest quarter of GOP 2012 contenders, what we're looking at for fund-raising for them. It's the place we find Mitt Romney again at the top, with an estimate of $15 million to $20 million. Pawlenty and Huntsman, pretty much neck and neck, in the $4 million range. Ron Paul says more than $4.5 million. We've got Herman Cain at $2.5 million. No reports though yet from Bachmann, Gingrich or Santorum.

Chris, what do you make of these numbers? Who are the winners and losers so far?

CHRIS STIREWALT, FOX NEWS DIGITAL POLITICS EDITOR: Well, look, you know, the big winner obviously is President Obama, because he's going to have tens and tens of millions of dollars. They're projecting half a million donors total, a broad base. They're going to have all this money. They're making a financial argument.

Romney has enough. He's bringing in enough dough that he can make an inevitability argument that he's got the cash to see this through and get it done. Pawlenty is the interesting one. He's right on the bubble. He raised just enough to stay viable, but his numbers aren't good enough. But he's got enough cash now, he's going to be able to stay in through Ames Straw Poll, the next debate, and try and make one more argument. BREAM: Why not more traction for him or for Rick Santorum, people who -- I mean, Pawlenty is working very hard in key states like Iowa.

But, Nina, in the polls, it doesn't seem like he's catching on.

NINA EASTON, "FORTUNE" MAGAZINE: He is having trouble catching on, and it's clear. The numbers become the race. They become the poll numbers. They start substituting for that at this point in the race.

I have to say that my husband is a Romney adviser, full disclosure right out. But, yes, I think that this is definitely bad news for Pawlenty.

I would agree with Chris, going back to the real -- to me, the real news this week is the Obama numbers. I mean, we should talk about the Republicans, but the Obama number is at $60 million. We're going to see a race like we did in 2008, where the -- Obama had over $700 million he spent to McCain's over $300 million, twice as much.

And I think the sort of conventional wisdom is the Republicans always outspend Democrats. But I think once again, Republicans are really far behind in this race going into 2012.

BREAM: Kirsten, why are Democrats and why are the president -- Bill, if you want to tackle the question.

BILL KRISTOL, "THE WEEKLY STANDARD": First of all, I think money is overrated. You know what? John McCain --

BREAM: You do?


KRISTOL: In general and in light (ph), needless to say --

BREAM: Signing over his paycheck to us.

KRISTOL: In 2008, John McCain could have had $7 billion and he would not have defeated Barack Obama once the economy crashed in mid- September. Obama can -- he's the incumbent president. Voters are not going to be swayed by some clever 30-second ad.

He will have the economy. He will have his foreign policy record. Any competent Republican will make it a referendum on Obama.

That doesn't mean -- so the character of the Republican nominee is important, but I don't think pure money is going to make that much difference. And I would make the obvious point. In 2007, at this time, four years ago, Hillary Clinton had out-raised Barack Obama. And Mitt Romney and Rudy Giuliani had both out-raised John McCain. And last I looked, Hillary Clinton was not the Democratic nominee in 2008, and neither Romney nor Giuliani were the Republican nominees.

So I think especially in a mood of Tea Party activism, citizen activism, Internet ability to discover things beyond 30-second ads, I just think this focus on the money race, of course it matters. You can't be broke and run a good campaign, but you can raise a lot of money very fast money if you're a Michele Bachmann, if you're a Rick Perry, if you're a Paul Ryan, all these people who have not gotten in or, in Bachmann's case, just gotten in. And I think our obsession on who has raised a little more money than someone else is overdone.

BREAM: Do you agree?

KIRSTEN POWERS, "NEW YORK POST": Well, I think money doesn't matter if you are somebody like John McCain, who had run before and people knew who he was. I think it does matter for people who have to raise their profile. So if somebody was one of the lesser candidates -- right now, who isn't getting -- like, if Pawlenty had been able to raise a lot of money, I think it would make a difference for him in terms of raising his recognition.

A lot of the money that Obama has raised recently actually is -- a lot of that is going to go to the DNC. But I think in the end, he will end up raising a ton of money, and I think that it's always better to have money than not have money. But you're right, he's an incumbent, and he has that advantage, or disadvantage, however you see it.

EASTON: The other piece of money though is ground troops. And I think what the Obama administration has is labor, which they've got to keep happy. They've got labor potentially on the ground. But you have labor leaders now saying look, you haven't come through for us. Hard-tech legislation has not passed. We're not happy.

So what are we seeing? We're seeing this administration end-run Congress. And through agency action, whether it's stopping the Boeing building a non-union plant in South Carolina, or the latest case, which is Delta Air Lines voted three times not to unionize, and is now under investigation, agency under investigation because of that vote.

These are pro-union actions that the White House has taken because labor leaders have made it clear, you haven't come through for us in Congress, you better come through for us on the agency level.

BREAM: And let's hear real quickly from Vice President Joe Biden, because he was speaking to a union group in Las Vegas. I believe it was on Friday, kind of hinting at the relationship that they have.

Take a listen.


VICE PRESIDENT JOSEPH BIDEN: And by the way, any of you guys vote Republican -- this isn't political. I'm not supposed to say this.


BIDEN: Let me put it this way -- don't come to me if you do. You're on your own, Jack!


BREAM: Kirsten, I don't know if he's truly worried that those throngs of union employees are going to suddenly start voting for the GOP.

POWERS: No. I mean, I think he was referring to the fact that the unions have been under assault by these Republican governors, and I think that was sort of a reference to that.

I think what Nina was talking about though, I don't think the administration is doing any of this stuff because they're worried about the unions not supporting them. I think they're worried about the unions not supporting Democrats who are running for Congress.

The reality is, if you look back, Barack Obama built his own organization. And he really did not rely on other people. I mean, he was not -- if the unions that support him don't support him, it really wouldn't have made that much of a difference.

STIREWALT: That's the point of all of this. The point of all of this is he does not have the organic enthusiasm that he had when he ran in 2008.

In 2008, it was a happening. This occurred. He beat Hillary Clinton. And he was also a blank slate onto which people projected their hopes and dreams and aspirations.

He was a moderate. No, he was a liberal. No, he was this. He was antiwar. He was a smart defense guy.

He was all of these things. Now he has to run as Barack Obama, who everybody knows, and that sort of base support is not going to be there. Replicating that is hugely expensive, so he's going to need every nickel of that money to try to gin up an organization across the board.

BREAM: All right.

KRISTOL: Joe Biden spoke more truth than he realized when he made this joke that, well, you guys, it's out of the question that you union members could vote Republican. A lot of union members vote Republican.I think a third -- what is it, 40 percent, even of union members voted Republican even in 2008?

And, in fact, the union leadership -- it's a real question how much the union leadership speaks for the members. And I do think it's very important for the Republican candidate in 2012 to be able to win over what we used to call Reagan Democrats, many of whom are who have been union members.

STIREWALT: Especially in the remaining private sector unions.

BREAM: And to that point, here's Richard Trumka, the president of the AFL-CIO, talking about loyalties. Take a listen.


RICHARD TRUMKA, PRESIDENT, AFL-CIO: It doesn't matter if candidates and parties are controlling the wrecking ball or simply standing aside to let it happen. The outcome is the same either way to us. If leaders aren't blocking the wrecking ball and advancing working families' interests, then working people will not support them.


BREAM: All right.

So, Bill, you have the argument that there may be an opening for Republicans with unions.

Anybody else agree?

EASTON: Well, not with union leaders, obviously.

BREAM: Union members.

EASTON: Union members, I think, definitely, they're paying millions of dollars in dues that go to -- in 2008, it was something like $200 million into these Democratic campaign coffers. And so, again, what you're seeing is the administration -- or its allies, more to the point, on these agencies at the National Labor Relations Board, at the -- something called the National Mediation Board literally changing the rules to make it easier for unions to organize workplaces.

Unions are in trouble right now. Their membership is down. Their membership is down particularly in the private sector, where they're only, like, seven percent of the private sector, compared to 20 percent just as recently in the '80s.

And they need to organize. They need more members. And they need those dues, which they need to use, which they use in political campaigns, and Kirsten (INAUDIBLE).

BREAM: All right.

Panel, thanks so much on that topic. We've got to take a break.

But when we come back, the politics of the debt debate. With both parties drawing a line in the sand, is it all just political posturing?

Stay tuned for some answers.



OBAMA: I'm confident that the Democrats and Republicans in Congress can find a way to give some ground, make some tough choices, and put their shoulders to the wheel to get this done for the sake of the country.



SEN. DAN COATS, R-IND.: The president and Democrats in Congress must recognize that their game plan is not working.


BREAM: That's President Obama and Republican Senator Dan Coats laying out the deep divide over solving the country's debt crisis.

We're now back with the panel to talk about it.

And Bill, let's start with you. It seems, at least on the outside, that we're at a stalemate right now.

KRISTOL: I think we are. The president says he's confident that they can get a deal done. I'm pretty confident they won't get a big deal done, and that is not a bad thing.

I mean, look, we had a huge election in 2008 which President Obama and the Democrats won pretty handily, and they thought -- had some reason to think they had a mandate for a new New Deal, for a very different approach from the Reagan/Bush years to addressing our problems. The Republicans won a big election in 2010, when they think now, with some justification, that they have a mandate for going in the opposite direction.

It's pretty hard to expect the Democrats, who elected President Obama, and the Republicans elected in 2010, to compromise when they have fundamentally different visions about the size and scope of government. And I honestly think, just from standing back a little, the best thing that could happen would be to find enough to agree on, some moderate spending cuts, to kick the can down the road past 2012, and let's have the 2012 election as the debate about whether the 2008 vision is correct or the 2010 vision is correct.

BREAM: Well, you know, this week, I believe it was Senator Schumer who said Republicans are trying to leverage this for 2012. I mean, he's blatantly accusing them of using this for election purposes.

EASTON: Oh, and Obama's not? I mean, you know --

BREAM: Anything that happens right now is going to be viewed through a political prism.

EASTON: It's through a political prism. And I have to say, aside from the philosophical divide, which is real, this president has this MO in which he's always scolding people. So we go back to he's scolding Supreme Court justices at the State of the Union. He was scolding his own colleagues as sanctimonious when they didn't like extending the tax breaks. He invited Republicans to that speech earlier this spring about the budget and scolded them right to their face after extending an invitation. And then, this week, we hear him scold them because they are not like his daughters since they're not able to complete their homework assignment on time.

There's something about that mannerism that doesn't scream, come to me, let's make a deal, let's see where we can hammer things out. It's very un-Clintonian, I have to say.


EASTON: And I do think, speaking of Clinton, I think he's probably right and Bill's right, that there's going to be a mini deal that kicks the can down the road. They're more divided now than I think they were Monday.

BREAM: Chris, you had sort of a visceral reaction when Bill said they won't reach a deal.

STIREWALT: Well, look, the problem for the president in all of this is that he can have a deal anytime he wants. He's driving the bus and he can stop at any moment.

He feels tremendous pressure from markets, tremendous pressure from the largest question that looms over his reelection, which is the condition of the economy. He needs a deal quickly.

Now, he can stop today. They already have a deal in principle for $1.4 trillion, $1.5 trillion in cuts, with the cap extension to match. That takes them maybe not to the 2012 election, but very close. It's a year's worth of borrowing, probably.

And he can stop this buggy any time he wants and they can have a deal. But he's afraid to do that because of two things.

One, he wants to make sure that they get it past the election so that he doesn't have to go through this next summer. And the other problem is, as Nina pointed out, he took a lot of blowback for extending the Bush tax rates. That was a big deal. Supporters did not like it, Democratic members of Congress felt that he sold them out.

So he feels political pressure to push this to the end. But every day longer he goes, the less the markets like it and the more damage to the economy it does. It's a real sweet spot.

BREAM: And Kirsten, in his press conference this week, you know, the question was whether he was going to come out as conciliatory or sounding like somebody who's still ready to fight. A lot of people think he was speaking to his base, being very hard on the Republicans, but maybe that, in some way, bought him some room with them, so if he has to come back at some point and say hey, we didn't get all the tax hikes on the revenue side of this that we wanted, at least I was being tough on them.

What do you make of that?

POWERS: I don't think so. I think that if he caves on this -- it will probably be more like what Bill was saying, where they kick it down the road. But let's just say they don't and they make some sort of substantive deal where he doesn't get the revenue stuff that he wanted. It will be the third time now that he's caved in a very short time with the tax cuts and with the government shutdown.

And I think that I quibble a little bit with the idea that the base cares about this. I think it's more like the latte liberals care about it. The base is actually unions and African-Americans and working class white voters. But that's not a minor thing, because that's who the media talks to, and so could start this sort of drumbeat of Obama's weak, Obama gives in. You know, he gets ruled by people.

And so -- and then the other thing you have to remember is that a lot of the Tea Party members, they don't believe that this August 2nd date is even real. So you're dealing with people who really aren't willing to deal. So, you know, so his best-case scenario is kick the can down the road.

EASTON: And I would say but the only incentive against that is that I think House Republicans don't want to keep voting on this. I think the House Republican leadership, this is a difficult vote for them. And I think if they could solve it now, they'd rather do that than do this exercise all over again.

STIREWALT: And one thing not to forget is that they can extend the debt ceiling by days or by dollars. It doesn't have to be a monetary set amount. They can come up with a deal that said we will honor every obligation of the federal government to X and so date. And that's always on the table.

The Republicans are always waiting there with that, right there, that says let's just kick the can for two months, or let's just roll it into these budget negotiations that are going to take place in September anyway. Let's just advance the ball and move it on. They can always do that.

BREAM: Bill, I want to ask you, who do you think will be ultimately the key players who settle this thing? Because we've had the Gang of Six, we've had the vice president leading bipartisan bicameral talks. We know Democrats are going to meet with the White House this week.

Who actually crunches these numbers and gets it done?

KRISTOL: Well, if you think, as I rather do, that there will only be a mini deal -- I guess we've used the expression "kicking the can down the road" too many times in the last few weeks, but I guess we're using it because it's realistic -- and we get an extension of a few months, I think one issue, it will affect the Republican presidential race in interesting ways. And to come back to our first panel discussion, I mean, there are two members of Congress who are actually running for office, Michele Bachmann and Ron Paul. I think it's a pretty safe bet that Michele Bachmann will want to oppose almost any deal, and oppose a debt limit, debt ceiling hike.

What do Tim Pawlenty, what do Mitt Romney, what do Rick Perry say about that?

But then, what if there's -- if it's six, eight months down the road, there will be a Republican presidential nominee, presumably. And what will he or she have to say about a possible deal? That person will be the leader of the Republican Party.

So, I'm very struck -- we tend to talk about the presidential race and then what's happening here in Washington, but these two come together at some point, and actually pretty soon. And it does become a real question, I think, for Republicans, for the Republican Party as a whole. Are they in the business of cutting deals to help President Obama increase our indebtedness by $2 trillion, or are they in the business of forcing various kinds of showdowns, or at least holding to their principles and not allowing tax increases, and keeping -- limiting the damage done by President Obama so they can then win in November, 2012?

I think there are a lot of interesting tactical and even strategic decisions for the Republicans moving ahead.

EASTON: And I would argue that they have to beyond just not allowing tax increases. They need tax reform.

You need serious tax reform to bring down corporate rates, to close loopholes that will enable you to do that, to level the playing field, and to make this a more investor-friendly country for companies to build in. And if they're going to do that, they need to take that extra time to do something serious like that, like sweeping tax reform.

BREAM: Well, if they have such a hard time doing things like getting the continuing resolution, getting a budget done, getting this debt ceiling done, I mean, who thinks they have the appetite for actually tackling the tax code?

EASTON: Actually, as James Baker said to me not long ago, doing that is actually -- you have gives on both sides, because Democrats get to close loopholes and Republicans get a lowering (ph) of the corporate tax rate. So it actually is -- there is a --


KRISTOL: I'm the only, like, conservative Republican in the country that actually does not think lowering the corporate tax rate is really the key to America's future.


KRISTOL: Corporations have trillions of dollars. If the corporate tax rate is such a burden, how come they have all this money? They're not hiring.

The tax rates on labor are much more onerous, in my view, than the tax rates on corporations. But in any case, this is a heterodox view among conservatives. But nonetheless, this is why this deal can't happen in a year.

I mean, there's a lot of debates that have to happen among Republicans. I think Michele Bachmann probably has a slightly different view of our tax future than Mitt Romney, and this isn't going to happen before November, 2012.

STIREWALT: And I think President Obama had a choice six months ago that he could have done a big deal. And I think cruise to reelection very easily by doing a big bipartisan deal -- taxes, debt. They choose against that, and now nothing will happen substantively until after the election. That's for sure.

BREAM: Kirsten, final word to you.

POWERS: Actually, I wouldn't rule it out. I have heard people talking about possibly let's look at the tax code that is something that could come back on the table. So I think it's a real possibility.

BREAM: But not able to get it done in the next month, say?


STIREWALT: No, no, no.


BREAM: All right, panel. Well, happy Fourth of July to all of you. Hope you have big plans for the weekend. Thanks so much.

Happy Fourth to everybody.


BREAM: Thanks, panel.

All right. We'll see all of you next week.

Don't forget to check out "Panel Plus." Our group continues this discussion on our Web site, And we will post that video before noon Eastern Time.

Up next, actor Gary Sinise and his salute to our troops.


BREAM: And finally, actor Gary Sinise, who was in town this holiday weekend to launch a foundation which will provide support through entertainment and education for veterans, first responders, and those in need.

Mr. Sinise, welcome to "Fox News Sunday."

GARY SINISE, ACTOR: Thanks for having me.

BREAM: Something folks may not know is that you started your involvement in supporting our military decades ago, long before everybody came to know you as "Lieutenant Dan" in the "Forrest Gump" movie.

What motivated you back then to get involved?

SINISE: Oh, various things. Veterans in my family, for one. On my wife's side, her two brothers served in Vietnam. So back in the early '80s, I spent a lot of time with them just talking about their experiences.

I have Vietnam veteran friends in the Chicago area. I got very involved with Vietnam veterans groups through my theater company. I have a theater company there, Steppenwolf.

And we started veterans programs and that kind of thing then. And then I actually played a Vietnam veteran in "Forrest Gump," and I got involved with the disabled American veterans. I played a disabled vet, got contacted by DAV and got actively involved with them. And then along came September 11th, and I just dove into our active-duty folks and trying to help them serve their needs and draw attention to what they were going through.

BREAM: Well, just reading about all of the things that you have done and that you are doing and planning to do, it's exhausting. It's obviously a passion for you, that you care about folks who are serving our country and who how served.

You're launching a foundation that does many different things. What's it all about?

SINISE: Well, like you say, I've been very, very busy over the years. And having participated in programs through other organizations, having gone to help raise money for these organizations that are doing good things for our troops, and military families, and just entertaining them, I just found myself kind of at a certain limit of how much I can actually attend things and do things.

So how do you ramp up from there when you can't be anywhere else throughout the year? So I decided to create this entity, the Gary Sinise Foundation, in order to be able to point people towards programs that are working out there that I've interacted with over the years, that I continue to support. Also to create programs that continue to create programs like Scholarships for Veterans and Wounded Warrior Support and that kind of thing.

And to be able to take in additional funding, because a lot of this stuff I do costs money, and sometimes I'll bring in sponsors, I'll donate myself, I'll fund things myself. I put a lot of my own financial -- luckily, I've got a successful television show, so I've been able to funnel some of that money into these good programs.

But I want people to know that there's a way that they can support what I'm doing. And through that, you support me, I support the other folks that are out there doing good things and helping the troops.

BREAM: And among the things you've done, 40-plus tours with the USO and other groups. You have a band, a Lieutenant Dan Band. You travel around.

There's a new documentary coming out on July 4th that chronicles a lot of what you do, but it highlights the men and women that you go and perform for, and their service. I thought it was really touching. In one of the clips, there's a young soldier who says, "It makes us feel like someone believes in us" when you show up and perform.

SINISE: Well, I get such a great reward out of being able to do it. It's nice to know that there's something you can do to help. And one of the motivators is for remembering what happened to our Vietnam veterans when they came home from war.

I remember when we started deploying to Afghanistan and Iraq, I wanted to make sure that when our troops came home, or when they were in the field, that they knew that they were appreciated, and that people are paying attention to what they're doing. So I started to go out there and perform for them.

I've been doing this over and over for many years. A friend of mine heard about it, Jonathan Flora. He's a filmmaker. He asked me if he could come and document some of it, and now they've put this wonderful documentary together called "Lieutenant Dan Band for the Common Good. "For the common good there means you mean a lot of people that are doing a lot of good things in the movie.

And if you go to, July 4th, for 30 days, you'll be able to put in $4, watch the film. And $1 out ever $4 generously is being donated to the filmmakers to the Gary Sinise Foundation.

BREAM: Well, thank you for all that you're doing to spotlight and serve those who are serving the rest of us.

SINISE: It's my pleasure. Thank you.

BREAM: Thanks so much.

And that's it for today. Enjoy your Fourth of July, but take a minute or two out from the picnics, parades and family activities to think about what a great country we share.

We leave you with some fireworks and the sounds of Lieutenant Dan's Band.

We'll see you next "Fox News Sunday."

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