This is a rush transcript from "On the Record," July 21, 2011. This copy may not be in its final form and may be updated.
GRETA VAN SUSTEREN, FOX NEWS HOST: Our next guest is pointing the finger right at President Obama, calling the president "clever" and "slick." What does he mean by that? We asked former senior adviser to President George W. Bush and author of the book "Courage and Consequence" Karl Rove.
VAN SUSTEREN: Karl, nice to see you.
KARL ROVE, FOX NEWS CONTRIBUTOR/FORMER BUSH SENIOR ADVISER: Great to see you, Greta.
VAN SUSTEREN: All right, Karl, in today's Wall Street Journal, you described the president's press conference of about a week ago in which you said that it was a, quote, "boffo performance" at the press conference. I detect a touch of sarcasm when I read a little bit further into the op-ed. But tell me what you mean.
ROVE: Well, I mean ironic. It's not ... it's not sarcastic, I'm being ironic because the president gave us once again an outstanding theatrical performance. But I mean, he started off by blaming others. Of course, we expected him to blame Bush for the current crisis of the country, but he also blamed the Democratic Congress, saying that they had run away with the credit card. Well, they were just doing over the last couple of years what he was telling them to do.
He -- he -- you know, he insisted that others solve the problem. He said, Within 24 to 36 hours I demand that Congress give me a plan for real deficit reduction. He said the worst alternative to come out of all of this would be if we raised the debt ceiling without taking any steps to rein in spending or to reduce the deficit. But you know, the so-called debt ceiling -- clean debt ceiling vote was what he advocated since last January. For months and months and months, he said we ought to raise the debt ceiling without addressing any of these spending or deficit -- debt questions.
So I mean, it was a boffo performance because the president came out of there, you know, basically saying things that he had not previously, you know, flip-flopping from where he'd previously been.
And you know, he hasn't had a plan, no plan even today. If you ask anybody to produce a piece of paper with a plan written down there, nobody could do it. And he insisted that the Congress solve the problem. Well, you know, that's not leadership.
VAN SUSTEREN: Are you saying -- and I don't mean to put words in your mouth, but I'm trying to understand from what you just said in your op-ed - - are you saying that he's sort of clever and slick?
ROVE: Sure. And look...
VAN SUSTEREN: Or are you saying...
VAN SUSTEREN: ... different position?
ROVE: No, no. It's clever and slick, and he has -- he's undermined confidence in the whole process. How can people trust him, how can actors in this process, members of Congress who have to arrive at some solution to this, trust him when he is out there looking out after himself, not trying to get the problem solved?
I do not think it helped the process for the president to go out and have three news conferences in essentially eight days, all of which designed to say, as we say in Texas, Me no Alamo -- you know, I wasn't at the Alamo. I'm not responsible for it. This is somebody else's problem. I mean, having him sit there and lecture and hector people doesn't help.
One of the most revealing moments was when Jake Tapper of ABC News asked him the first question, says, Mr. President, can you think of one structural change that you would be in favor of? And the president hemmed and hawed and refused to give anything and finally sort of semi-said that he might be in favor of means testing.
But this was not a helpful step in moving this towards conclusion. And as I said in the rest of my column today, I think the Republicans in the House run the risk of being jammed by Senator Reid and by President Obama unless they build on Tuesday's success by continuing to take steps to resolve this process in a way that is in conformity with their object, which is no increase in the debt ceiling unless it is offset by larger real spending cuts.
VAN SUSTEREN: Is your difference with the president simply ideology, or do you think he's not performing his job even in support of his Democratic principles?
ROVE: Yes. I don't think he's doing the job that we expect him to do as Americans. Now, granted, he began this whole debt ceiling with a problem, and that is that in 2006, as a member of the United States Senate, he treated a request by his predecessor to raise the debt ceiling as purity politics and got up and gave a speech and said any president requesting an increase in the debt ceiling is demonstrating a failure of leadership.
Now, we were fighting a war, a war that he didn't like. And he didn't have the votes to cut off funding for the war and didn't have votes to cut off the war itself. So he voted against the debt ceiling and then painted this picture of, he was actually being concerned about deficits and debt and we shouldn't increase the debt ceiling and the president is a failure of leadership.
And that was a relatively modest increase in the debt ceiling. What he's asking for is the largest increase in the debt ceiling as both a gross number and as a percentage of the debt in the history of the country!
VAN SUSTEREN: Is (INAUDIBLE) though his position, though, at that time, was that sort of naivete because he was a brand-new United States senator, he'd never been a U.S. senator before? And today, has he has sort of grown up a little bit and seen, you know, the economic situation -- he's getting information from advisers that we're going to get our credit -- national credit downgraded. We've got to meet -- we've got to meet some of our bills. So has he just grown up in those years, or is this all, in your mind, just his political maneuvering?
ROVE: It is political maneuvering because, look, there were a bunch of other Democrats like Harry Reid who had the same position and voted against raising the debt ceiling. Everybody knew what it was about. It was pure D politics. And that's what (INAUDIBLE) there. And now he's President of the United States and realizes -- you know, he has said it was a mistake for him to do that. Yes, it was a mistake for him to do that, and it's coming home to roost because he has gone out there and treated this process as almost as politically as he treated it in 2006.
I mean, it was irresponsible to begin this process to say for five or six months we have got to raise the debt ceiling with no effort to rein in spending. By doing that and then flipping and finally saying, as he did Friday, We better rein in spending and get real deficit reduction and the worst alternative would be just to raise the debt ceiling -- it undermines his credibility.
It's not like the members of Congress weren't paying attention to him six months ago when he was threatening them that if they tried to do anything to rein in spending that there was going to be a price to be paid. They saw what he said on Friday and they're trying to reconcile the two. And what it fundamentally does is undermine people's confidence in the president.
He's got to have the ability to cut a deal. And whether you agree with him or not, at the end of the day, you have to have confidence that he's got -- he's got integrity that you can count on. And by doing these weird things, and they are weird, he just simply undermines his credibility.
VAN SUSTEREN: All right, let me switch gears to 2012. Texas -- there's a lot of sort of noise that Governor Perry is going to jump into the race. Is he well-liked among Texas voters? Let me start with Republicans. I guess the Democrats, you know, aren't going to be fond of him.
ROVE: Yes. No, he's very popular among Republicans. And he's the longest-serving Texas governor. Now, he -- you know, look, he got reelected in 2006 with 39 percent of the vote in a four-person race. And he trailed the rest of the Republican ticket last year. I think that's just the accumulated weight of having been in office for 10 years.
But he will come out of Texas. I think a big part of the reason that he's looking so strong nationally, running third in the latest poll that came out Tuesday, is because, look, Texas is a big state, 24 million people here, one out of every -- better than one out of 20 Americans lives in Texas. And we're a pretty Republican state, and that gives him a big base to jump into a national contest.
And look, let's not kid ourselves. He's running. I mean, he's -- he's had -- he had a meeting earlier this week in Austin of fund-raising types. He's got two such meetings next week. There are policy experts that are flowing in and out of the city. And you know, he's getting ready to run. And I suspect we'll see him step onto the stage in early August in Houston when he's got this big event with the American Family Association and he'll be in the race.
VAN SUSTEREN: So what's his -- what are his bragging rights, besides the fact that he's got a big state? I know that the governor in Texas is a little bit different than the governorships that we're accustomed to around the country. I mean, what's his bragging rights that he's done that's changed the direction of Texas?
ROVE: Well, he's kept -- he's kept spending in check and presided over a conservative budget. And as a result, Texas has been growing jobs. When the rest of the country was hurting bad, Texas was doing all right. And we've created more jobs in Texas in the last several years than the rest of the country combined.
He's also got some -- he helped Bush -- Governor Bush, before he became president, had passed a medical liability reform, and Governor Perry built on that with an even tougher measure. He's also got "loser pays." In certain kinds of civil cases, if you file a frivolous lawsuit and it gets tossed out, you have to pay both your attorney's fees and the defendant's attorney fees.
VAN SUSTEREN: That's also, though -- that also, though -- and I'm a lawyer. But doesn't that also sort of scares people off who have legitimate beefs (INAUDIBLE) worried to go up against a big corporate because they think they're going to be put out of their house and home with a legitimate beef. So there is a downside to that.
ROVE: Well, they -- they do -- I grant you that. But the bill in Texas is more narrowly drawn and basically is focused on keeping a lot of nuisance ones, if it's a big company with a -- you're filing against a big company that's got a lot of assets and a lot of resources, "loser pays" doesn't apply. But in some of these cases where, you know, you have mom and pop operations that basically get bankrupted by having, you know, a frivolous lawsuit filed against them, this discourages those kind of cases.
VAN SUSTEREN: And straight ahead, more of our interview with Karl Rove. Why he says the Republicans are having a primary before the primary. Now, what does that mean? And should current front-runner Governor Romney be worried tonight? We ask Karl Rove. That's next.
VAN SUSTEREN: Here's Karl Rove.
VAN SUSTEREN: What do you make of the so-called "Bachmann surge"? At least that's what people are calling it. She's moving up in the polls.
ROVE: Yes, look, there are three things to say about this. First of all, she is in second place and it's a pretty dramatic move over the last month. Second of all, the story we don't pay attention to is, is that Mitt Romney continues to A, remain in the lead, and B, continues to widen his lead.
There's a primary going on before the primary. The primary is who's going to be the not Mitt Romney candidate? You have Mitt Romney as the front-runner, though, not out in front by the margin that historically we've seen in this process. And we have several other candidates -- Michele Bachmann, Rick Santorum, Rick Perry, Tim Pawlenty, Herman Cain, Newt Gingrich -- all of whom are vying to be the not Romney candidate.
So that when we get down to Iowa, New Hampshire and South Carolina, you'll have Mitt in front and a principal challenger. And she right now is running -- is in front on that. And as a result, she's going to get more attention, more scrutiny. And when Perry gets in, she's going to have a competitor who might jump ahead of her in the polls because these -- look, these numbers are loosey-goosey and they don't mean a lot.
I would remind you, at this point in 1999, George W. Bush was way ahead. But behind him were Elizabeth Dole, Lamar Alexander and Dan Quayle. And guess what? John McCain was, like, 3 percentage points at this time in the summer of 1999. And yet because of this patient groundwork that he laid during the fall -- summer and fall of 1999, he became Bush's principal competitor in early 2000.
So the same thing could happen this time around and is likely to happen. Somebody who's doing their homework and building the organization necessary to compete in these early primaries, developing a message that allows them to flower in the late part of year or early next is going to be the person who ends up being the not Romney candidate.
VAN SUSTEREN: Can you give me an estimate of when the door closes, when it becomes too late to get into the race because there are some sort of hovering around, at least, we suspect are hovering around, trying to make that decision.
ROVE: Yes. You know, look, unless you have been a -- you know, unless you're the governor of a big state like Texas or you've been the vice presidential running mate four years ago, I think the door is already closed. And it's closing fast for people like Governor Palin and Governor Perry. That's why, you know, Perry's doing this stuff underneath the radar scope, but getting himself ready. And it's because he understands he's got to get in this thing, if he's going to get into it, soon. And he's doing the things necessary to allow himself to get into this thing in two or three or four weeks.
VAN SUSTEREN: You know, there seems to be sort of a set pattern of how you run for president. But everyone -- you hear people say that the rules are different with Governor Palin. Is that true? I mean, can she operate a campaign different from the conventional one?
ROVE: Well, that's going to be the big test. I mean, clearly, she thinks so and her people think so. They've talked with people about it whom I've talked to, and they've been very explicit it, that she doesn't need to go to Iowa, New Hampshire and South Carolina and press the flesh and go to all these local events in order to cultivate the local leadership, she can talk to people over that.
She doesn't need to cultivate the fund-raisers and the bundlers because her mere presence in the race will generate the cash needed for a campaign. She doesn't need to do the things in a normal way to lay out a message. She can do it on FaceBook. She can do it by having a friendly producer release a movie that's seen in theaters.
So that's going to be the interesting thing. I frankly think that, particularly in Iowa, New Hampshire and South Carolina, there are some of the niceties which you ignore at your own peril. There is a reason why -- these people take it these early states very seriously, and they expect to see you, to be able to hear you up close, to be able to ask you questions, to be able to see you multiple times before they make a commitment.
And you know, we'll see if that old rule remains the same. But she's clearly -- if she gets into this race, she will get into having said, I can write my own set of rules. And it'll be interesting to see if she can.
VAN SUSTEREN: Karl, thank you. Always nice to see you.
ROVE: Thanks, Greta. Thanks for having me.