The following is a rush transcript of the January 8, 2012 edition of "Fox News Sunday With Chris Wallace." This copy may not be in its final form and may be updated.
CHRIS WALLACE, HOST: I am Chris Wallace reporting from New Hampshire, where act two of the GOP presidential race plays out in the first of the nation primary.
While Republicans are battling over who will be the nominee, Democrats are itching for a fight. We'll get a preview of the general election campaign from the two national party chairs, Republican Reince Priebus and Democrat Debbie Wasserman Schultz.
Then, he has the money and energetic supporters. But can Ron Paul knock off front runner Mitt Romney?
We'll ask the congressman about his strategy for winning the nomination.
Plus, Santorum's near win in Iowa puts the spotlight on his surging campaign. We'll ask our Sunday panel if the new "not Mitt Romney" can withstand the oncoming onslaught.
And after a all-nighter in Iowa, a mad dash to New Hampshire. We'll get the sights and sounds when we go on the campaign trail.
All right now on "Fox News Sunday."
And hello again from Fox News, today in New Hampshire. We are just outside downtown Manchester on the campus of the St. Anselm College. In just two days, voters head to the polls for the first in the nation's primary and even though former Senator Rick Santorum got a boost from his strong finish in Iowa, his support here has cooled, while Mitt Romney still looks like the overwhelming favorite.
Here's where the race stands in the latest Suffolk University tracking poll. Romney leads with 39 percent, but is down slightly since Iowa. Ron Paul is second with 17 percent. Newt Gingrich is third in 10 percent. While Santorum and Jon Huntsman are tied at nine, and Rick Perry is last.
For more on the state of the race and a big debate Saturday night, let's bring in Fox News chief political correspondent Carl Cameron -- Carl.
CARL CAMERON, FOX NEWS: Hi, Chris.
It was the 15th debate and it was a brawl. Everybody threw punches, but few of them at Mitt Romney.
MITT ROMNEY, PRESIDENTIAL CANDIDATE: I'm not surprised to have the New York Times try and put free enterprise on trial. I'm not surprised to have the Obama administration do that either. It's a little surprising from my colleagues on this stage.
CAMERON (voice-over): Battling for second on the polls, Ron Paul and Rick Santorum savage each other.
REP. RON PAUL, PRESIDENTIAL CANDIDATE: You're a big spender. That's all there is to it.
RICK SANTORUM, PRESIDENTIAL CANDIDATE: It's a ridiculous charge. And you should know better.
PAUL: Really what the whole -- there it goes again.
SANTORUM: They caught you not telling the truth.
PAUL: But really --
CAMERON: Paul accused Newt Gingrich of avoiding the draft and promoting war.
NEWT GINGRICH, PRESIDENTIAL CANDIDATE: I personally resent the comments and aspersions you routinely make without accurate information and then just slurs people.
PAUL: I'm trying to stop the wars but at least, you know, I went when they called me up.
CAMERON: Jobs and the economy were overshadowed by social issues.
GINGRICH: The sacrament of marriage is based on a man and woman.
SANTORUM: I'm for overturning Roe versus Wade.
ROMNEY: I would totally and completely oppose any effort to ban contraception.
GOV. RICK PERRY, PRESIDENTIAL CANDIDATE: This administration's war on religion is what bothers me greatly.
CAMERON: Romney pounced when Jon Huntsman, the former Obama administration ambassador to China, accused him of trying to pick a trade war with China.
ROMNEY: I'm sorry. Governor, you were in the last two years implementing the policies of this administration in China. The rest of us on the stage were doing our best to get Republicans elected across the country and stop the policies of this president.
JON HUNTSMAN, PRESIDENTIAL CANDIDATE: I think it's important to note, as they would say in China, Mitt, (SPEAKING CHINESE). He doesn't quite understand the situation.
CAMERON: First time Mandarin has probably been spoken on a New Hampshire primary debate stage. Romney won in Iowa. He leads the polls in New Hampshire, as well as the next two states, South Carolina and Florida. It now looks like the debate and race is about who will rise up and be his closest rival -- Chris.
WALLACE: Carl, thanks for that.
With the battle for the Republican nomination starting to take shape, we want to take a look at what lies ahead in the general election.
Joining us to preview that race are the heads of the two parties. From Racine, Wisconsin, Republican National Party Chair Reince Priebus. And here in New Hampshire, Democratic Party chair and Congresswoman Debbie Wasserman Schultz.
And welcome to both of you.
REP. DEBBIE WASSERMAN-SCHULTZ, DNC CHAIR: Thank you.
WALLACE: Chairman Priebus --
REINCE PRIEBUS, RNC CHAIR: Good morning.
WALLACE: -- we've got some good news for the nation on Friday -- 200,000 jobs created in the last month, the unemployment rate down to 8.5 percent, the lowest in almost three years. But while it's good news for the country, isn't it taking away your strongest argument to replace Barack Obama.
PRIEBUS: Well, not at all, Chris. I mean, obviously, 8 1/2 percent is unacceptable. Now, clearly going -- taking down 1/10 of 1 percent is better than at 8.6 percent.
But, look, I'm talking to your from Racine, Wisconsin. And what people feel out here in Racine and Kenosha is that we're losing manufacturing jobs and people don't feel better off today than they were two or three years ago. So, I'm not sure if an F-minus to an F is good news.
Now, certainly, it's better, but this president has failed in his major promises when it comes to jobs, the economy, the debt, the deficit. And look, Nancy Pelosi and Debbie Wasserman Schultz herself in 2006, they were bashing George Bush over 4.6 percent unemployment.
So, look, this is a great country. We can do better than this. And our candidate is going to make the case for the American people that 8.5 percent, 8.6 percent isn't good enough for the --
WALLACE: All right. Let me bring in Congresswoman Wasserman Schultz.
Yes, the numbers are better -- 200,000 jobs created, 8.5 percent. But 13 million Americans are out of work and the fact is that no president has been reelected with unemployment over 7.2 percent since FDR back in the 1930s. So, better yes, not good.
WASSERMAN SCHULTZ: Well, certainly not where we want to be. And it's important to look at where we were when President Obama took office. I mean, he did inherit an economy and largest set of problems of any presidents since FDR and was in the situation where we were bleeding 750,000 jobs a month when he took office.
Now, three years later, we've had 22 straight months of job growth in the private sector. You know, Reince, it's amusing -- disappointing actually that he seems disappointed in the progress that we've been able to make. But we've had 22 straight months of job growth. We've had as you said almost 3 million jobs created in the private sector, 200,000 alone in just the last month.
And now, in manufacturing, let me just correct what Reince just said, we've actually had the largest growth in the manufacturing sector that we've had since 1997.
WALLACE: All right.
WALLACE: Wait, wait, wait. Guys, I said I was going to play traffic cop, I'm going to do that.
Congresswoman, President Obama was interviewed in early 2009, about a month after he took office and when he was pushing his $800 billion stimulus, here's what he said about fixing the economy. Take a look.
(BEGIN VIDEO CLIP)
PRESIDENT BARACK OBAMA: If I don't have it done in three years, then there's going to be a one-term proposition.
(END VIDEO CLIP)
WALLACE: Congresswoman, the president has clearly failed to meet that test.
WASSERMAN SCHULTZ: Well, I think the president certainly has been -- should be credited for pushing hard, fighting to get the economy turned around, fighting to create jobs without any help from the Republicans at all. I mean, the Republican Congress --
WALLACE: But you would agree -- he hasn't gotten it done in three years.
WASSERMAN SCHULTZ: Well, he inherited a huge set of problems at once and it's very clear that --
WALLACE: But that's what he said, get it done in three years.
WASSERMAN SCHULTZ: Well, I understand. But I certainly think he deserves credit, he should give himself some credit and does for beginning to get the economy turned around, for bringing us as far as he has. We have gone from an unemployment rate that was over 11 percent at one point. Now, it's below nine and we are beginning to move in the right direction.
WALLACE: But, and let me just quickly say, it was 7.8 percent when he took office.
WASSERMAN SCHULTZ: Well, but he had inherited a huge set of problems with the economy that was on the precipice of disaster. Thanks to Republican policies.
Remember, George W. Bush presided over the turning of a record surplus into a record deficit -- a financial disaster because no one was minding the store. Almost no regulation that was appropriate over the financial services industry. Now, we have Wall Street reform that makes sure that consumers had protection, makes sure that banks can't be too big to fail. We begun to get things --
WALLACE: All right. I am going to get --
WASSERMAN SCHULTZ: President Obama deserves some credit.
PRIEBUS: Can I respond?
WALLACE: Chairman Priebus, go ahead.
PRIEBUS: Yes. Let me respond.
First of all, the president is going to be held accountable to the standards and the promises that the president made himself. This is not Reince Priebus' standard or the RNC standard. He promised 8 percent unemployment. In fact, it's even worse. His transition team promised at this point, we'd be at 6 percent unemployment.
WASSERMAN SCHULTZ: Oh, that's just simply not true.
PRIEBUS: Now, the other piece of all this is that Debbie Wasserman Schultz likes to add up all of the people who are hired, but she doesn't subtract all of the people who have been laid off number one, all of the people in every other month, hundreds of thousands of people, that aren't added into the 8.5 percent number who have that said, look, the economy is so bad, I'm not going to be looking for a job across this country.
The president will be held to the standards that he set himself. And right now, he's failing to meet those standards. And, in fact, Debbie Wasserman Schultz and Pelosi were out there pounding the pavement for Hillary Clinton, warning us this was going to happen. They called him a hypocrite from the very beginning.
WALLACE: OK. All right. Let's Chairman Priebus -- Chairman Priebus, let's move on. We don't need to go back to the 2008 election. The president says and, you know, this is one of the lines that he's going to use in the general election -- that he is looking out for the middle class while Republicans are protecting the wealthy.
WALLACE: This week, Mr. Obama made a recess appointment of Richard Cordray to head the Consumer Financial Protection Bureau.
Now, Chairman, I understand that the GOP has problems with this, but doesn't your party run the risk of looking like you are more concerned about protecting predatory lenders and debt collectors than you do protecting consumers?
PRIEBUS: Well, there's two different issues here, Chris. I mean, there's one issue which is the agency itself, and Dodd-Frank and that debate. But I think what --
WALLACE: But if I may. But if I may, and I -- if I may, sir -- and I also interrupted Congresswoman Wasserman Schultz -- the fact is, the Republicans have been blocking appointing somebody to head the Consumer Financial Protection Bureau for months.
PRIEBUS: Well, here's the deal, there are rules and there is a Constitution. You know, if you want --
WALLACE: No, no. But the party blocked Elizabeth Warren first and Richard Cordray second. Long before the recess appointment was made.
PRIEBUS: But, look, the president -- but, Chris, the president has to live within the rules and within the confines of something called the United States Constitution. Now, he may not like it, but the reality is, is that this president is making -- they are not even recess appointments, but he's making appointments when the Senate is not in recess.
This is all about -- this is another chapter. I'm not saying that we're going to win an election on this issue. But when it comes to power, when it comes to the growth of government, this president takes the cake. He gets the blue ribbon.
And this is just one more chapter in Barack Obama's book of trampling on the Constitution, on growing a government that we already can't afford, and he doesn't seem to want to stop. That's what --
WALLACE: OK. Let me -- Chairman, let me give Congresswoman Wasserman Schultz a chance.
The fact is, the Democrats, who came up with this idea of these pro forma sessions to block George W. Bush for making recess appointments. Wouldn't you be howling if Bush made this kind of appointment, during a recess appointment and was ignoring Congress the way Barack Obama is now?
WASSERMAN SCHULTZ: What we are howling about on behalf of the American people is what -- is the basic premise of your -- exactly what your question was, is that the Republicans didn't question Richard Cordray's credentials, didn't question that he was qualified. They simply don't like the Consumer Financial Protection Bureau. So, as a result -- because they have no interest in protecting consumers, they refused to bring his -- to allow his nomination to come up for a vote.
President Obama has allowed that process to go on for long enough and he went to bat for consumers, used his authority to recess-appoint Richard Cordray so that the Financial Consumer Protection Bureau can get up and running. And, quite frankly, what the Republicans are trying to do is used a pro forma process to try to block his nomination and his appointment. That's unfair and it's anti --
WALLACE: I want to move on to something else.
PRIEBUS: You know what?
WALLACE: Wait, wait. Let me -- Chairman, let me move on.
Congresswoman, Republicans are just beginning to pick your nominee -- their nominee, rather, your party is putting out ad after ad targeting Mitt Romney. And, in fact, during the debate last night, the DNC sent out several e-mails going after Romney but no one else.
Why all of the focus by your party on Mitt Romney?
WASSERMAN SCHULTZ: Mitt Romney has earned that scrutiny. He had spent his entire campaign relentless attacking President Obama, distorting his record, decategorizing his record.
WALLACE: Forget about distorting. That fact is all of the Republicans are going after Obama. But you guys are going after Mitt Romney.
WASSERMAN SCHULTZ: Well, Mitt Romney is one of the candidates who was near the top, or at the top of their field. And so, he invites and deserves that scrutiny because he has been distorting and mischaracterizing the president's record.
And you know what? Other presidential candidate has taken that lying down and we're not going to. The fact is that this president has a remarkable record of beginning to getting the economy turned around, of fighting for the middle class and working families. Hold on one second.
WALLACE: No, no, I am trying to be fair.
WASSERMAN SCHULTZ: OK. Well --
WALLACE: No, I am trying to be fair. I understand --
WASSERMAN SCHULTZ: Why the scrutiny, because Mitt Romney has no convictions. He's someone who has flip flopped on every major issue and voters need to know.
WALLACE: Let me ask you a question. You go after -- let me ask you -- you go after Romney for laying off people at Bain Capital, correct?
WASSERMAN SCHULTZ: Well, for a lot of things, related to his role at Bain Capital.
WALLACE: But that's one of them.
WASSERMAN SCHULTZ: For that. For outsourcing jobs --
WALLACE: Let me ask you about that. Is the president responsible for laying off the people at Solyndra?
WASSERMAN SCHULTZ: No, because the president wasn't the CEO of Solyndra.
WALLACE: Well, Romney wasn't the CEO of these companies, either. The president was --
WASSERMAN SCHULTZ: No, Romney --
WALLACE: Excuse me. The president was a venture capitalist. He put taxpayer money into Solyndra and a thousand people lost their jobs.
WASSERMAN SCHULTZ: OK.
WALLACE: So is the president responsible for the thousand people who lost their jobs at Solyndra?
WASSERMAN SCHULTZ: Not even close. But Mitt Romney is responsible for being CEO of companies that he took over. That --
WALLACE: No, he wasn't the CEO.
WASSERMAN SCHULTZ: He was the CEO of Bain. Bain bought these companies, took them over --
WALLACE: Well, the president is the CEO of the country.
WASSERMAN SCHULTZ: But he's not the CEO of Solyndra.
WALLACE: And Mitt Romney wasn't the CEO of AMPAD or these other companies.
WASSERMAN SCHULTZ: But Bain Capital owned those companies. He made the decision --
WALLACE: So, you are saying the president had no responsible for what happened in Solyndra? WASSERMAN SCHULTZ: What I'm saying is that Mitt Romney, as the CEO --
WALLACE: I'm asking you about the president.
WASSERMAN SCHULTZ: No. Mitt -- no, the president --
WALLACE: Has no responsibility for Solyndra?
WASSERMAN SCHULTZ: The president has responsibility for the green jobs programs where he made investments.
WALLACE: And how about the company Solyndra that went bankrupt?
WASSERMAN SCHULTZ: But the decisions that were made at Solyndra that ultimately led to their bankruptcy were those of the people who worked at Solyndra. Mitt Romney -- Chris, let me answer you a question, please.
WALLACE: Well, I think you did answer the question.
WASSERMAN SCHULTZ: Mitt Romney, it's total apples and oranges comparison.
WALLACE: But you made the point. You think that one is he is the CEO of Bain and the other one you say yes. And I just would like to give -- we got a minute left.
Chairman Priebus, your response for that, sir.
PRIEBUS: Well, you know, I learned in law when the other side is losing the argument, sometimes you quit talking and you let them continue.
But I mean, the reality is the president is the CEO, the first rots that they had, millions of Americans don't feel better off today than they were three or four years ago.
Look, you know, if the Democrats think that Mitt Romney is so weak, it's curious as to why they keep attacking them. I'll leave that up to the candidates.
But the fact of the matter is, this isn't about Republicans and Democrats. I think we should kind of put that on hold and start talking about America. And our country is on the brink of an economic disaster that is very predictable and we have a president --
WALLACE: Sir, you got 10 seconds.
PRIEBUS: And we are going to hold his presidency accountable to the words and promises that he made himself and he has failed this country.
WALLACE: We're going to have to leave it there. Chairman Priebus, Congresswoman Wasserman Schultz, I know you both would like to talk more about this. And you know what? We're going to have them 10 or 11 months to do so. So, we welcome you both back then and we'll see how the battle lines lay out as we head to the general election this fall. Thank you both.
WASSERMAN SCHULTZ: Thank you.
WALLACE: Up next, the Republican candidate with the money and the prevent supporters to go deep into the primary race this spring, Congressman Ron Paul. We'll continue from St. Anselm College here in Manchester, New Hampshire, after this break.
WALLACE: We are back at St. Anselm College in Manchester, New Hampshire.
Joining us now is the candidate who finished in the top tier in Iowa and is a strong second now in most polls heading into Tuesday's primary here in New Hampshire.
Congressman Ron Paul, welcome to "Fox News Sunday."
PAUL: Thank you very much. Nice to be with you.
WALLACE: Let's start with your third place finish in Iowa this week. According to the entrance polls, you took 40 percent of voters who described themselves as moderate or liberal. But only 14 percent of Republicans.
Question -- how can you win the GOP nomination if Republicans don't vote for you?
PAUL: Well, you know, there was another analysis that -- you know, nearly half of the 48 percent of the independent. And another number was close to 40-some that were conservatives. So maybe they are independents or something like that.
But, no, the message has to be across the board. We have to get Republican votes. But right now, I'm very strong on those individuals who want to come in to the party, you know, the young people, they wanted to come in. I do very, very well there -- and the independents, you know, I think.
But I still have to, you know, attract those voters who consider themselves conventional Republicans. But, you know, I talk about, you know, the wisdom of the Republican Party. They talk about limited government and balanced budgets, and because, you know, I have to stand up against the party, some people don't figure it out. But I really speak the language of the Republicans who think that we should have limited government.
WALLACE: Here in New Hampshire, roughly 40 percent of the primary vote is expected to be so-called undeclared voters, not registered either as Republicans or Democrats. Are you counting on the undeclared voters in New Hampshire?
PAUL: Oh, absolutely. We solicit them and, of course, we go to the Republicans as well. But the whole spirit up here, you know, falls into place what I've been talking about for a long time, you know, very limited government economically and with personal liberties.
And so, we work hard with the independents. But I think we are doing quite well with the Republicans, too.
WALLACE: Your campaign manager says that your focus is to win five caucus states, caucus states like Minnesota, and Maine and Missouri. Because if you take five states, you can then get your name placed in the nomination at the Republican convention in Tampa in August. Question, that sounds more like a strategy to make a prime time speech at the convention to affect the party platform than it does to win the nomination.
PAUL: Of course, that's fall back, you know, if we don't pull it off and we're not in first place, yes, that would be a good goal and people ask me why I run. And, you know, I run to win and I have won a lot, but we also want to help direct the party and country in a certain way. So, that would be a very, very positive strategy to influence the party. So, we certainly would look at that as well.
WALLACE: Well, let me ask you about that, because, you know, there's a big deal made about the platform at the convention and then frankly, I don't have to tell you, people ignore it.
Is it important to you to get your views, anti-war views, anti- government views into the Republican platform?
PAUL: Oh, I think so and you are right. But that's also the reason the American people are so sick and tired of the promises by Republican and Democratic leadership. You know, they make these promises. They have platforms. And they go and they don't do anything about it.
Democrats act like Republicans. Republicans act like Democrats. They keep spending the money. They don't shrink the size of the government. They don't protect our privacy. And they don't --
WALLACE: And why do you care what's in the platform?
PAUL: Well, I guess I'm an optimist, you know, that -- you know, you keep plugging away. I have to be an optimist because I have been plugging away for a long time.
My views, I've expressed since the '70s. But all of a sudden, they're getting a lot of attention, a lot of popularity. The country out of desperation now is looking at a constitutional approach.
You know, in foreign policy, they're tired of the war. Just think how many people now are looking at monetary policy. And that only happens about every hundred years where people get real concerned about monetary policy. And everybody knows we're up against the wall in spending and the debt is a problem, and they know I'm aggressive in dealing with the deficits that we have.
WALLACE: In your speech in Iowa Tuesday night, I think it's fair to say that you made a statement that no candidate running for the president of the United States has ever made before. Let's watch.
(BEGIN VIDEO CLIP)
PAUL: I'm waiting for the day when we can say we're all Austrians now.
(END VIDEO CLIP)
WALLACE: I think you'd agree -- no presidential candidate ever said that.
You were advancing something you believe very deeply, the Austrian School of Economics, which opposes the idea of government intervention in times of downturn, of crisis, and says, basically believes in a value of what's called creative destruction. Is that what President Paul would do? Creative destruction?
PAUL: Well, that -- that is the answer to our problems. I mean, if want economic growth, you have to listen to that. But, you know, obviously that statement comes from the fact that I did have a very good handlers that I did listen because I'm sure my political handler, what are you talking about? Only your supporters know what you are talking about. But a lot more people know about, the young people in campuses.
Now, what you want is corrections. And we are talking about a correction in one year instead of five or 10 or 15 years. For instance, Japan has been correcting for 20 years and they haven't cleansed their system, they haven't gotten rid of the malinvestment and the bad debt. We did it in the 30s. And we're trying real hard.
We predicted these problems and said the malinvestment distortions come from the Federal Reserve having artificially low interest rates.
WALLACE: So, you're saying, don't intervene. If it's going bad, let it go bad.
PAUL: Quickly. In 1921, that's exactly we did. And the GDP went down like 15 percent. And debt was liquidated and nobody even remembers it. So, now, when you prolong and you prop things up -- like in the Depression, we did things like, well, the farmers didn't have enough money. So, we need more money for crops, so we, you know, plowed the crops under when people were starving. That's silliness of government intervention.
So, you need to get rid of the mistake. It's sort of like you need the operation. You need the surgical removal of the tumor. And the tumor is the mistakes and debt.
And this is why I made bold proposals to cut $1 trillion out of the budget.
WALLACE: Last week, you were asked about and defended your criticism of the 1964 Civil Rights Act, which ended discrimination and public accommodation.
Back in 2004, you said this. And we're going to put it up on the screen. "The rights of all private property owners, even those whose actions decent people find abhorrent, must be respected if we are to maintain a free society."
It's -- are you saying that the owner of a restaurant, a private restaurant, should be able to decide whether or not to serve black people?
PAUL: What I'm saying is I'm challenging individuals to say, what is private property? Is private property -- is your house private property but your restaurant is not? How do you separate the two? One is good and, you know, one isn't.
But, yes, we believe that the law, the bad laws, the Jim Crow laws where government forces integration. They are evil and --
WALLACE: Forced desegregation.
PAUL: Yes. So, we have to get rid of those but you don't throw away all kind of property because we are convinced that your civil liberties are protected by property. You have a right of free speech and you have a TV station. But it's this property, nobody can walk into the studio and exert themselves.
WALLACE: But --
PAUL: Let me finish if I could.
The bedroom is private property. So, if you want to protect sexual preferences, you protect the property of the bedrooms. So, we can't separate civil liberties from property.
WALLACE: But specifically, are you saying that if I own a restaurant and I don't want to serve an Africa-American, I should be able --
PAUL: Well, you know what they've done. The whole thing is, is that's ancient history. That's been settled a long time ago and nobody is going to go back to that. It would be the most devastating things, stupid for people to do that, then lose your business. So that --
WALLACE: So, it would have been wrong?
PAUL: It would be wrong. It would be morally wrong. But I'm not going to throw out the -- because I have such high regard for property rights.
What -- the whole thing is, sometimes these things don't work out as well. What do they do? They privatize a lot of things. You know, they had private clubs and things like that.
I think you have to change people's hearts and minds, but you have to understand property. Property protects our religious beliefs, our personal beliefs, our civil liberties. If you throw that all out, just think how often government was culprit, whether it was slavery, the Jim Crow laws, and, you know, segregation in the military. This was all government.
So, we want that out of the way.
WALLACE: But it sounds like ideally -- I'm not saying you would do it because you're also practical. It sounds like ideally, you would like to return back a century to the days when government didn't intervene when there was an economic problem, didn't soften the blow and quite frankly didn't force racial integration.
PAUL: We think of ourselves as advancing the cause of liberty in a modern state because we go back a hundred years ago and go back to Jim Crow laws and slavery. So, no, we don't want to go back. Even the gold standard, I don't want to go back to an imperfect gold standard.
We want to build on the freedoms that our founders gave us and the tremendous success we've had and the prosperity. Now, we are losing this. We're losing our liberties. We have, you know, the National Defense Authorization Act and the rest of the American citizens. I mean, we are going backwards on this, and all civil liberties are going to be, you know, attacked if we don't reverse this.
WALLACE: Finally, you have recently been leaving the door open to again to running as an independent if you don't win the Republican nomination. I want to take you back though to a conversation that you and I had two months ago here on "Fox News Sunday." Let's watch.
(BEGIN VIDEO CLIP)
PAUL: I have no intention of doing that. That doesn't make sense to me, to think about it, let alone plan to do that.
PAUL: Because I don't want to do it.
(END VIDEO CLIP)
PAUL: You like that answer.
WALLACE: Yes, I loved the answer then, I love it now. So my question is, where are you? What you're saying now, which is, I will decide later, or I have no intention to doing it because I don't want to do it.
PAUL: I'll give the same answer. I don't want to do it. I have no plans on doing it. I want to see how well I do. I'm doing pretty darned well.
WALLACE: I know you are. But are you leaving the door open or are you not leaving the door open?
PAUL: I'm not an absolutist. When I left Congress, I had no intention whatsoever to going back. But, 12, 15 years -- if I said, I will never return to Congress, they would have closed the door.
But I have no plans. Everybody knows I have no intention of doing that. It would be a bit of a burden. And besides, I don't want to do it.
WALLACE: Congressman Paul, thank you, as always, for coming in and talking with us. Good luck on Tuesday night, and we'll see you down on the campaign trail.
PAUL: Thank you.
WALLACE: Up next, our special New Hampshire Sunday panel on who's up, who's down. And can anyone knock off Mitt Romney? Back from the campus of St. Anselm College after this quick break.
(BEGIN VIDEO CLIP)
SANTORUM: Being the president is not a CEO. You can't direct members of the Congress and members of the Senate as how to how you do things. You've got to lead and inspire.
ROMNEY: I wish people in Washington had the experience of going down and working in the real economy first before they went there, and they'd understand some of the real lessons of leadership.
(END VIDEO CLIP)
WALLACE: One of the key exchanges during last night's Republican debate.
And it's time now for our special New Hampshire Sunday group -- Bret Baier, anchor of "Special Report"; A.B. Stoddard of The Hill newspaper; Ovide Lamontagne, an influential conservative voice here who is running for governor, and Neil Levesque of the New Hampshire Institute of Politics.
Welcome, all of you.
Mr. Lamontagne, as one of the key political figures who has not endorsed a candidate, let me ask you, who helped themselves last night, who hurt themselves?
OVIDE LAMONTAGNE, NEW HAMPSHIRE GUBERNATORIAL CANDIDATE: Well, first of all, I think Governor Romney helped himself by presenting a good case for himself, but also avoiding being essentially challenged by the other candidates. And then the other -- the second-tier candidates, if you will, the people jockeying for second position, I think, actually, Governor Perry had a very nice presentation, but didn't have a lot of face time. And I think Rick Santorum also did fairly well, but he mixed it up with Ron Paul to a point where I'm not sure how that's going to reflect over the next couple days in this process.
WALLACE: Mr. Levesque, the Institute of Politics helped sponsor the debate. Did you see it altering the race at all here, the dynamics of the race over the next 49 hours?
NEIL LEVESQUE, NEW HAMPSHIRE INST. OF POLITICS: Well, certainly the fact that Romney did very well, and he seems to have gotten through it OK, certainly will get us to Tuesday, where he seems unscathed. The fact that they did not land a punch, essentially, with him seems to make sure that he's got a good commanding lead here in New Hampshire.
WALLACE: And explain that to me, because, I mean, everybody -- coming in, everybody thought Santorum was going to go after him, Gingrich was going to go after him. He does have a lead, depending on the poll you read, of 20 points.
Why didn't they go after him harder?
LEVESQUE: I don't know. It seems like this seems to be a race for second. But the fact is, is that Romney came into that debate, he landed his economic message right through the first 30 minutes, which is he got his message out. And in New Hampshire, he's been campaigning hard, he's almost unscathed with this message going into Tuesday.
WALLACE: Bret, I think it's fair to say the two big takeaways from the polls so far is that Romney is holding on to his commanding lead and that Rick Santorum is not getting as much of a bounce out of his basically dead heat finish in Iowa, as a lot of people expected.
Are you surprised by either of those?
BRET BAIER, ANCHOR, "SPECIAL REPORT": No, not surprised by either of those. I am surprised at the surge of Ron Paul. And we thought that he was going to do well here. He could very well finish second behind Romney. It is, as you know, an open primary, so there's a lot of -- as you talked about in your interview, an effort to go after Independents.
I was struck by one thing about Ron Paul not only in your interview, but in the debate, in that when he answers the question about whether there's a third-party run or not, it has now turned into, I'm going to make an impact on the GOP platform. And however he finishes -- very few people believe he's going to be the nominee, but he is going to have an influential role in Tampa at the convention. And what he does to the GOP platform is -- I've head more and more, not only your interview, but in the debate last night.
WALLACE: Yes. It is interesting in that regard, because his people talk openly about going to the caucus states, which is not where you get the delegates. But if you get a plurality in five states, you can have your name placed in nomination and you have more of a role in the platform. That's more of a strategy, as I've said in my interview with him, to have an influence in Tampa than it is to actually be the nominee.
BAIER: Yes. And I think he is going to have a significant influence. Clearly, he's going to have a big speaking role, and how he affects the GOP platform will be really interesting as you go ahead to the general election.
Now, listen, this is not done. South Carolina is still going to be a real fight, we think. But in New Hampshire, it feels less of a battle than it ever has, I think, in recent memory.
WALLACE: A.B., why do you think it is that Santorum has not had the bounce that a lot of candidates get when they do surprisingly well in Iowa? And a second question, Huckabee did well in Iowa, and came here, and afterwards, he and his campaign aides say it was a huge mistake, he never had a chance here, he should have skipped New Hampshire, gone straight to South Carolina, spent his money and his time and his energy there.
So what about Santorum, his apparent failure here? And should he have just skipped New Hampshire and gone straight to South Carolina?
A.B. STODDARD, THE HILL: Well, he really wanted to take the fight here. He's made many, many visits to South Carolina. People didn't know that until this week. He's also made many visits here, and he wants to win in the Northeast.
He wants to paint himself as a general election candidate who can win, take the fight to Obama in -- not just in the South among Evangelical core, Christian conservative voters. So he wanted to do that.
It might, in hindsight, be a mistake. But he still has time to win South Carolina. The problem is, he's running out of time. It's more important than money.
What we've seen since Iowa is these conservatives talking about how they're going to get together and they're going to try to coalesce behind Santorum, possibly as an anti-Romney choice. Gingrich is still in the race. Perry is still in the race. Santorum has to get rid of them.
He's going to need the help of big, big endorsements where heavies in the conservative movement are urging their supporters to rally behind Santorum and urge Gingrich and Perry to quit. And he's going to need some super PAC money behind him to really make the next 11 days count for him so that he can win South Carolina and say to the voters, you know, Mitt Romney might have really won well in New Hampshire, but he and I shared Iowa, we're on to a nomination battle, it's a two-man race now.
WALLACE: Mr. Lamontagne, I want to pick up something that Bret said. We've had some pretty dramatic New Hampshire primaries over the years. I can think of 1980, when Bush -- George H. W. Bush -- won Iowa, and then Reagan came back and -- well, I'm looking at another one here that they've put up instead, which is -- that was another scramble. Obama won Iowa, and then Hillary Clinton, of course, staged her big comeback here. And the other one was Bush and -- we don't seem to have film. We've just got still pictures.
Guys, there were movies in those days.
Bush won Iowa and then Reagan saved his candidacy and went on to become president with his victory here.
So far, at least, New Hampshire seems a little boring.
LAMONTAGNE: It's been a very different primary cycle, there's no question about it. It's been late-breaking, and also, the focus on the debates and sort of the national attention has taken some of the attention away from the early states. But I would say here in New Hampshire, there is no real Iowa bounce, and you've just used a couple of examples where New Hampshire voters are fiercely independent, they're going to vote for the person who brings the best message and who, in the end, can win the nomination.
We're usually behind the candidate who actually carries the nomination. And I think that will probably again here in New Hampshire if that person can sustain their campaign past New Hampshire.
But this has been a different primary cycle. There's no question about it.
Neil, pick up on that. I mean, I think the big surprise is that there have been so few surprises.
Romney came in with a 20-point lead. He still has a 20-point lead. Santorum hasn't gotten much of a bounce. It really hasn't moved at all so far.
LEVESQUE: Well, the other history lesson here is that most Republican voters seem to pick people who have been on the ballot before. We look back to Nixon, Reagan, Bush, as you mentioned, even McCain.
The fact is, is that Romney has been on the ballot before. So has Dr. Paul. So we've got the first and second place people who have already been on the Republican ballot, they're known commodities, and they seem to be going into this election doing pretty well.
Mentioning Ron Paul, the fact is, is that he is being people into the party that are first-time Republicans, essentially. So he will have an influence going down the line.
WALLACE: All right.
We have to take a break here, but when we come back, the economy is a campaign issue. With jobless numbers improving, how will Republicans push back against the president, who now says his policies are working?
(BEGIN VIDEO CLIP)
OBAMA: We're starting to rebound, we're moving in the right direction. We have made real progress. Now is not the time to stop.
(END VIDEO CLIP)
(BEGIN VIDEO CLIP)
ROMNEY: This president doesn't understand how this economy works. It's time to get a president who does.
(END VIDEO CLIP)
WALLACE: President Obama on Friday touting the improved unemployment numbers, but GOP front-runner Mitt Romney still not impressed.
And we're back now with the panel.
Bret, let's pick up with my discussion with the two national party chairs. Unemployment, there was 200,000 jobs created. Unemployment numbers, down. Good news for the country.
How much does it hurt the Republicans though in making their main argument, which is that this president has mismanaged the economy?
BAIER: And that was a fiery discussion, by the way.
It does hurt the argument. However, they are saying the recovery would have been better had President Obama not been in office. In other words, he made the recovery worse even if it's happening as the White House believes it truly is. And the numbers show it is.
The Republicans are going to argue that regulations, the environment, setting the table for businesses, still is an issue that they can run on and really affect a lot of voters on that issue. However, the Democrats are going to have, if things are trending in the right way, a powerful field to things are on the right track. And that's a challenge for somebody like Governor Romney.
And in his -- one of the questions of the ABC debate, you saw him not answer the specifics about his economic plan, but turn it to American exceptionalism and this broad general election argument. And that's really what he's going to try to pitch.
A.B., I want to pick up on that. It's clear that by historical standards, unemployment is still going to be very high by November of 2012. As I mentioned with Congresswoman Wasserman Schultz, the highest unemployment rate any president has had to get reelected since FDR was Ronald Reagan, was 7.2 percent in 1984. We're not going to be anywhere near that by November.
On the other hand, President Obama is going to be able to argue, as Bret said, we're making progress, things are headed in the right direction.
So, which do you think is the stronger side of the argument, the absolute numbers or the question of direction, momentum?
STODDARD: If the numbers continue to show progress and not deterioration, I think it will be, you know, we're in a new normal and we're making progress and we have the right policies to pull ourselves away from the cliff.
We can talk about the fragile eurozone, the weak housing market. There's so many fundamental problems underlying the economy still that don't bode well. Economists predict a slowdown in growth in 2012 that wasn't as good as we had in the last quarter. There's a lot of problems remaining.
But if they can show -- the public's measure is often the unemployment number. So, if they can show that there's been sustained job growth throughout 2011, if it continues into 2012, that's good for President Obama.
You will hear, as Mitt Romney did last night, a Republican nominee say that -- he called it -- he said the president made the recession deeper and the recovery more tepid. But President Obama is going to position himself as a champion of the middle class. He's going to make the argument about sunsetting the Bush tax cuts for the highest earners.
Republicans need -- the nominee needs to make the argument more clearly and more forcefully that sunsetting those tax cuts for the wealthiest earners is a threat to the recovery, and they need to make that case forcefully because he's going to be telling the middle class, you're the only ones that need a tax cut.
WALLACE: Mr. Lamontagne, as a conservative Republican, how do you weigh in on this argument? And unemployment here in New Hampshire, 5.2 percent. Is the economy still a big issue here?
LAMONTAGNE: The economy is the issue here, and job creation is the issue here in New Hampshire, as it is across the country. There's a lot of anxiety that those numbers are masking a lot of underemployed people, people who are at risk of losing jobs, or at least they fear that. And this is a very anemic recovery, if that's what's happening, the 200,000.
After spending almost $1 trillion in stimulus, Chris, economy is not moving forward in the way it should be, and government was the problem that brought us to the Great Recession in the first place. That's the fundamental difference between the Democrat approach, which is to say, the government is the solution. We recognized that government was the problem, and then government's got to get out of the way of the private sector so that jobs can be created here in New Hampshire and across the country.
WALLACE: Mr. Levesque, New Hampshire, which was a traditionally Republican state, has in recent cycles become something of a swing state. Obama won here last time with 54 percent of the vote over John McCain.
How would he do if the election were held today, let's say, against Mitt Romney?
LEVESQUE: Well, it's generally a tossup. The fact is, is that we are a purple state now. But going back to that unemployment number, I think 5.2 percent here in New Hampshire, and the fact that we are still talking about the economy -- foreclosures are still high in New Hampshire, and that is the number one issue going into this primary.
Whether or not the president -- they're going to put a lot of effort here in New Hampshire. We are a swing. We have four electoral votes. Not a lot, but certainly we're looking forward to -- yes, we could make the difference.
WALLACE: So what do you think today if it were Romney/Obama? Is it a dead heat? I mean, is it --
LEVESQUE: I think it is a dead heat, and it will depend on who's on the ballot in state elections and things like that.
WALLACE: Mr. Lamontagne, do you agree with that?
LAMONTAGNE: I do agree with that. It's going to be a swing state again, which is why New Hampshire is such an important state after our primary is over.
Whoever is going to prevail in the presidency has to carry New Hampshire. In 2000, New Hampshire went for George Bush by 10,000 votes. If we had not gone for George Bush, there would have been no Florida, and President Gore would have been the president, we'd see, for eight years, potentially.
WALLACE: Let me simply say the New Hampshire Chamber of Commerce Approves that message.
WALLACE: Let me go back to something that A.B. said, Bret, and that is the president's new push to be the champion of the middle class. And we saw this fight this week with -- about Richard Cordray as head of the Consumer Financial Protection Bureau. There are certainly arguments on both sides, but the president is able to say, I want to put a watchdog out there to protect you against predatory lenders and debt collectors. And Republicans, for whatever their reason, are saying no. Who's got the better side of that argument politically?
BAIER: Well, politically, the White House believes they're on the right track here and the president is going to run against Congress, a do-nothing Congress, and he's done so effectively. It's affected his approval rating so far in this battle back and forth as we continue to live on the precipice every few months in Washington, the next crisis.
However, back to the campaign, I think Republicans come back to, what is the starkest difference between President Obama and the nominee? And that's where the argument is for the Newt Gingriches and the Rick Perrys, and they say that they are more of a stark change, a difference change, than Mitt Romney. And they're hoping to getting seen that way, and so far it hasn't taken off, especially here in New Hampshire.
WALLACE: A.B., do you think that the White House is playing between the payroll tax last month and now this fight over the Consumer Financial Protection Bureau? Do you think that they're winning on that?
STODDARD: I think that we will see in the months to come whether or not the legal challenges to -- and investigations into Richard Cordray's recess appointment is going to make headlines and have political reverberations for him. My argument is, it moves partisans, it makes Democrats pleased, it infuriates Republicans.
I think persuadable Independent voters aren't paying attention to that. And if they are sold on the argument that we need a Consumer Protection Bureau, and we need a director to run it, it might be advantageous to the president.
The payroll tax cut fight certainly benefited the president. And the Republicans are preparing right now, Chris, to fold on that again so it doesn't become a second fight.
WALLACE: All right.
Thank you, panel. We'll see some of you next week.
And don't forget to check out "Panel Plus," where our groups picks right up with the discussion on our Web site, FoxNewsSunday.com. We'll post the video before noon Eastern Time.
Up next our Granite State edition of "On the Trail."
WALLACE: It was a week that started with victory and defeat in Iowa, but there was no time to rest as the race hurdled on here to New Hampshire. And we followed it all "On the Trail."
SANTORUM: Game on.
ROMNEY: It's been a great victory for us here.
REP. MICHELE BACHMANN, PRESIDENTIAL CANDIDATE: Last night, the people of Iowa spoke with a very clear voice. And so I have decided to stand aside.
Thank you, everyone. Thank you. It's been a wonderful ride.
GINGRICH: Governor Romney ran a relentlessly negative campaign of falsehoods which earned one of his ads four Pinocchios in The Washington Post.
HUNTSMAN: The establishment is teeing up Mr. Romney as the choice for the Republican Party, and I say the people of New Hampshire will not be told for whom to vote.
SANTORUM: All right. See you guys. Bye-bye.
ROMNEY: This president has engaged and is engaging in crony capitalism.
SANTORUM: Someone needs to stand up and say, "Enough, Mr. President. You are not the emperor."
GINGRICH: I think Rick's a fine person, and we've worked together for many years. If you think of us as partners, he would clearly, in historical experience, have been the junior partner.
ROMNEY: We have some people who want to make themselves heard.
SANTORUM: Everyone has a right to live their life. That doesn't mean that they're entitled to certain privileges that society gives, for certain benefits that society obtains from those relationships.
ROMNEY: Fresh from that landslide in Iowa, maybe -- can we double that number? You know, instead of an eight-vote margin, maybe 16? I sure hope. I want to win.
SANTORUM: I am confident that a candidate that America needs will come out of New Hampshire.
GINGRICH: I would love to have your help on Tuesday. This election is wide open, as you know.
PAUL: We're predicting we're going to do very well on Tuesday.
WALLACE: And the pace will stay just as hectic until the polls open at midnight Tuesday morning in the tiny town of Dixville Notch.
Now this program note. Please tune into Fox News Channel Tuesday at 8 p.m., when Bret Baier and Megyn Kelly will anchor our coverage of the New Hampshire primary. But that's it for today. Have a great week, and we'll see you back in Washington next "Fox News Sunday."
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