David Plouffe talks energy, elections; Rep. Paul Ryan defends GOP budget plan

The following is a rush transcript of the March 25, 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'm Chris Wallace.

As November draws closer, battle lines are drawn between the two parties -- on high gas prices and how Washington spends our money.

President Obama travels the country pushing his "all of the above" energy policy. We'll discuss that with White House senior adviser David Plouffe.

Then, a different vision for getting America back on track and a new budget from House Republicans. We'll go inside of the numbers on taxes, spending and reforming Medicare when we sit down with House Budget Chairman Paul Ryan.

Plouffe and Ryan on "Fox News Sunday."

Plus, Obamacare gets its day in court. We'll ask our Sunday panel what are the chances that the Supreme Court will strike down some of the landmarks law's controversial provision.

And the frontrunner for GOP nomination gets shaken up on the trail.

All right now on "Fox News Sunday."


WALLACE: And hello, again, from Fox News in Washington.

We'll talk with our guests in a moment. But first, some late news. Former Vice President Cheney is recovering in a Virginia hospital after undergoing a heart transplant Saturday. The 71 year old who suffered five heart attacks was on the transplant list for almost two years.

Now, the results from Saturday's Republican primary in Louisiana. Rick Santorum came on top with 49 percent. Mitt Romney was second with 27 percent. While Newt Gingrich and Ron Paul rounded out the field. A look at the updated delegate count shows Romney with 568 delegates, almost halfway to the 1,144 needed for the nomination.

But now, let's turn to some of the issues that will define the general election, between President Obama and whoever the Republican nominee is.

Joining us here in the studio is President Obama's senior adviser David Plouffe.

And, Mr. Plouffe, welcome back to the "Fox News Sunday."


WALLACE: During the 2008 campaign, President Obama blamed President Bush for the rise of gas prices on his watch. Let's watch.


THEN-PRESIDENTIAL CANDIDATE BARACK OBAMA: Here in Ohio, you are paying $3.70 for gas, and that's because it going down over the last couple weeks, two and half times what it costs when George Bush took office.


WALLACE: Using that same logic, how responsible is President Obama now for the gas prices more than doubling since he took office?

PLOUFFE: Well, the point is, Chris, that you, we have gone through this just about every year now, in some respect, we have been dealing this for decades. It's got more pronounced in the last few years as you see increase from countries like China and India.

So, what the president has been saying and said (INAUDIBLE) saying it now, we have to do everything we can here to produce oil and natural gas here in this country. And we're doing that. Production is at an eight-year high, triple the rigs in the fields as there was when the president came to office.

But that's only part of the answer. We have to then quickly move to wind, and solar and biofuels, and next generation cars. It's why the fuel efficiency standards that the president arranged with the automakers are so important. At this point in the next decade, the average car is going to get 56 miles a gallon.

It means we're going to continue to lead in innovation in the automotive field. It means the average person is going to save $8,000, and we're going to save billions of dollars. So, this is a long-term project. We've got to do everything we can and we're making a lot of progress. But, obviously, we're not going to get the energy future we need until we have that "all of the above" strategy.

WALLACE: Well, I want to pick up on that because as you say, the president likes to say and has said this week on the campaign trail -- yes, the campaign trail, that's what it is -- he supports an "all of the above" strategy. Take a look.


OBAMA: Now, under my administration, America is producing more oil today than any time in the last eight years.


WALLACE: The Congressional Research Service says, about 96 percent of the increase since 2007 took place on nonfederal lands. And the CRS says oil production on federal lands actually fell in 2011.

So, isn't the president taking credit for production he has had almost nothing to do with it?

PLOUFFE: No, we are -- we are aggressively permitting as you know. And, you know --

WALLACE: That increase he talks about was on non-federal. It's not federal land.

PLOUFFE: We have 13 percent increase on federal lands in terms of permitting. We make auctions -- we just had an auction in the Gulf of Mexico. We made I believe 20 million acres available. The private sector only claimed three or four of that.

So, we're making a lot. But it's the private sector decision whether they want to, in an auction, purchase and then begin to explore and drill. So, we are -- if you look at what we are doing on- shore and offshore, natural gas -- we are doing everything we can.

But this isn't just about, you know, a political slogan that said I have a secret plan for $2 gas. We are not going to have the future we need.

And the American people understand this. They are tired of being given a bunch of Washington talking points. They say if only a politician would do one thing differently, we magically have cheaper gas. They know we need to use less, we need to diversify, we need to do everything we can here.

And we are getting more energy independent. We are producing more here. We are on track to double the sources of energy we get from renewable. So, we are making progress.

We just got to make sure that we really double down here to make sure that -- if all we do is drill and say, let's let China command the wind industry, the solar industry, we're going to not going to like (ph) the center very much here economically.

WALLACE: Well, you say you are doing everything you can. I want to talk to you about a specific area where a lot of people say you're not doing everything you can. The president went to Oklahoma to make a big show about the fact that he was calling for faster construction of the southern leg, the southern part, of the Keystone pipeline.

But he's basically, and you can see the map here, the southern leg, which is highlighted, it's basically irrelevant for that part, which is controlled by the states that it crosses, and what people are really concerned about is the northern leg, the part above the highlighted area.

The State Department and the EPA studied that for three years and came to the conclusion -- I want to get the quote right -- no significant impacts for the project from the U.S.-Canadian border past Nebraska down to Oklahoma.

Given that, why did the president delay that project past the November election?

PLOUFFE: Well, first of all, the southern part of this pipeline is pretty important because of the production --

WALLACE: I know. But the president doesn't have that much to do with it?

PLOUFFE: There are some permits that the Corps of Engineers and others will have to be done. Our point is, we're going to expedite this, because production is going so well in this country, there is a glut of oil in that section of the country. So, we need to get that oil to market. So, that pipeline is important.

We have approved a dozen of pipelines in this administration. And let's be clear, the governor of Nebraska, a Republican governor, Republican legislators in Nebraska, people throughout the state, had a problem with the pipeline route going through an aquifer. They raised objections, said the permit shouldn't be approved.

WALLACE: Governor Heineman is on record as saying now, start the pipeline, we will route -- right the pipeline around the sand hills area. Go ahead. We're not holding this up.

President Obama is.

PLOUFFE: There's going to be -- the company itself has said they're going to be submitting a new pipeline route. That ought to be reviewed. It ought to be reviewed expeditiously. The politics at this point --

WALLACE: It was reviewed for three years.

PLOUFFE: Well, and issues were raised with the water source in Nebraska. The people of Nebraska are deeply concerned about that.

WALLACE: But they're fine with it now.

PLOUFFE: Now, they're not fine with it.

WALLACE: They're fine with the idea of going ahead and they say it will be fixed by the time they get to Nebraska.

PLOUFFE: The company that's going to build this project said, wait, we're going to put through an entire route from Canada down to Oklahoma and then that will be reviewed. So, every -- you know, listen, the Republicans play games with this, said, even though there's concerns in Nebraska, let's kind of forget about them, let's just play politics.

And I think that the American people understand, who do you trust more on your energy future? Somebody who believes that we have to do everything we can here in a safe and responsible way on oil and gas, but someone who also believes in diversifying new forms of energy.

And sadly, Chris, this used to be a very bipartisan idea, alternative energy. Sadly, the Republicans running for president, many Republicans here in Washington, kind of vilify this, almost mock it.

And it's only going to determine our future. It's a very dangerous thing.

WALLACE: Will the president release oil from the nation's strategic petroleum reserve?

PLOUFFE: Well, we've obviously -- we've spoken of this before. I'm not going to make news here today. It's obviously an option that's always on the table. It was used last year because of the situation in Libya.

WALLACE: Is it something that the White House actually considering?

PLOUFFE: Well, obviously, we are always mindful of what's going on in terms of the oil market. I don't -- I'm not going to make any news today obviously. But it's something -- we are monitoring everything.

We are monitoring some of the pipeline issues out there. Some of the refinery issues out there, some of the distribution issues. Obviously, we are monitoring the supply issues.

Obviously, the sanctions in Iran are working very, very well. They are crippling sanctions, hurting their oil industry, hurting their central bank, hurting their economy and a lot of pressure on them.

WALLACE: What makes you think if you were to do it -- if you were to release from strategic petroleum reserve, that it would be anymore effective in lowering the price of gas, of oil and gasoline than it was last year during the Libyan operation?

PLOUFFE: Well, again, I'm not going to get any hypotheticals about something we may or we may not do. The question is generally this has been whether it was done in 2005 and it was done last year, when there's a determined supply disruption that needs to be filled by the United States and other countries.

Last year, it was a global response, contribute some oil to relieve that. It's really about the supply. No one should expect there's any magic bullet out there that's going to all of a sudden drop gas prices.

WALLACE: So, you would not do it unless there was an interruption in supply. You wouldn't do it just because prices are high?

PLOUFFE: No, but there is right now. That's right. There are some supply issues right that are contributing. You've got some issues in Sudan. You've got -- obviously, Libya is not up to where it was, pre-crisis.

So, so there is some supply disruption right now. But, no, this is about supply.

WALLACE: All right. Let's turn. The Supreme Court holds three days of hearings on Obamacare starting tomorrow. According to a recent poll, 67 percent of Americans think that the court should strike down the entire law, or at least the individual mandate.

WALLACE: Question, two years after it was passed, why is Obamacare still so unpopular?

PLOUFFE: Well, listen, you see a lot of polls on this, as do I. Polls also say that people don't want to start over. They want to refight this political battle. What they want us to do is implement this law smartly, make changes as we should, give states more flexibility.

But listen, I'm convinced at the end of the decade, the Republicans are going to regret turning Obamacare because when the reality of health care is in place. Most of the law doesn't take effect until 2014.

But important parts are getting implemented right now. Two and half million people between the ages of 21 and 26 have health care only because of the health care law. Over 5 million seniors are getting over $600 in prescriptions drug relief.

You've got women now treated equally, not being billed more. Preventive care like mammography in place.

So, for people who are experiencing it and it's a small portion of the population right now, I think they are seeing it quite differently than was advertised.

WALLACE: How confident are you that the Supreme Court is going to uphold the individual mandate.

PLOUFFE: Well, you've seen jurists appointed by both Democrats and Republicans in lower courts that uphold this law. Two very important conservative jurist offering very strong opinions. We're confident it will be constitutional.

And our focus right now, obviously, there's going to be a process play out this week, and the Supreme Court will deliberate. We're going to continue to make sure we implement this law smartly and that we inform people of the benefits that are available to them.

WALLACE: Congressman Paul Ryan, who will be here in the next segment, came out with new budget this week and the White House, including you, immediately started hammering him.

I want to show you a graph that was put up in the New York Times. Let's take a look at it. Under the Ryan budget, the deficit -- the Ryan budget, the deficit in 2016 is $241 billion. Under the Obama plan, it's $529 billion. Under Ryan, added debt over the next 10 years is $3.1 trillion. Under Obama, it's $6.4 trillion.

And the Ryan plan balances the budget by 2040. The Obama plan balances the budget never.

Say what you will, but at least the Ryan budget does addresses our national debt.

PLOUFFE: Well, first of all, we haven't seen all the details. There's a lot of I think that's been described as a lot of candy, not a lot of vegetables. So, we'll see in reality.

But, listen, the Ryan plan, which, by the way, supported by the presidential candidates. Mitt Romney, who's the front runner --


PLOUFFE: -- this is really the Romney-Ryan plan. It will be rubber stamped if Mitt Romney is elected president. It failed the test with balance of fairness and shared responsibility. And it showers huge tax cuts on millionaires and billionaires paid for by seniors and veterans.

WALLACE: Well, you don't know that.

PLOUFFE: Yes, we --

WALLACE: You don't know what they're going to take away in tax deduction.

PLOUFFE: Well, independent analysts who looked at this say there's going to be tax cuts for the wealthy.

WALLACE: No one knows that, David, because they don't know the tax deductions are going to be taken away.

PLOUFFE: I think most people believe that's a conservative estimate, that the average millionaire will get at least $150,000 tax cut. So, the right approach is the president's approach, which is whether it's Bowles-Simpson --

WALLACE: Even though it does nothing to address the national debt?

PLOUFFE: Well, it gets the deficit on a very sustainable path. It cuts -- listen, this president already signed a law --

WALLACE: It never balances the budget according to the CBO.

PLOUFFE: In the next 20 years, it gets us on what most experts, most fiscal experts, consider the right fiscal path. It also allows our economy to grow. It doesn't strangle education. It doesn't gut investments in clean energy. So, it's the right path to grow the economy and reduce the deficit. This president also signed into law almost $2 trillion of spending cuts. We have to make sure we get -- how do we do the rest of the job? Well, we are going to have reform entitlements. But do it in the right way, not by voucherizing Medicare, but actually saving money in the system. And obviously, and responsibly get some Medicaid savings. Now, we also have to get some revenue primarily from the wealthy through tax reform.

WALLACE: OK. I want to switch subjects with you. We could go -- we'll have an opportunity to go on at great length on that throughout the campaign.

The president spoke out on Trayvon Martin this week. The unarmed black teenager who was gunned down by a neighborhood watch volunteer in Florida this week. Does the president consider this a race issue?

PLOUFFE: No, obviously, he spoke I think very powerfully about this as a parent. But any time a young person, any person but a young person, it's a tragedy, obviously. And I think you've seen people in both parties, and I'm sure independents across the country say roughly the same thing.

This is a tragedy. There ought to be investigations. There's investigations happening locally and in the federal level. And that's where I think where the focus needs to be on, sympathy for the family and make sure of thorough investigations.

WALLACE: But does he think race had anything to do with Trayvon Martin being killed?

PLOUFFE: I think he's -- I think he was speaking very emotionally and powerfully as a father. I think that's where the focus ought to be, which is no matter the gender or race, this is a tragedy anytime when a young promising person was taken from us. And we ought to make sure there's a thorough investigation.

WALLACE: Finally, I want to talk a little politics with you. Some would say we already have. The economy is growing and unemployment rate is fairly going down.

But I want to show you this chart. In the last 36 years, only three presidents seeking another term have been defeated. Unemployment under Gerry Ford was 7.8 percent. Under Carter, 7.5 percent. Under Bush 41, it was 7.4 percent.

Unemployment is now 8.3 percent. Why won't that almost necessarily beat Barack Obama?

PLOUFFE: Well, Chris, I've said since the day we are elected, we are going to have a tough election. It's gong to be close. We're clearly going to be governing a tough economy. Only the Great Depression rivals it.

So, I think it's been coming down what people sense of where we have been, and where are we going. And let's --

WALLACE: How about where we are?

PLOUFFE: Well, we've had in the last 24 months, just shy of 4 million jobs created, manufacturing at the strongest peaks of 1990s. We begin to see clean energy sector emerge that's going to make a big difference in terms of energy costs but also economy.

This president has us moving in the right direction. Unemployment is still too high. The middle class is still not --

WALLACE: You'd agree that no president since FDR has been reelected with unemployment as high as it will be under Barack Obama.

PLOUFFE: Yes, but I think you have to look at the context, which is we were almost in a Great Depression. And we're going to make history again, because what our opponents is going to offer is the same exact policies that led to the great recession -- let Wall Street write its own rules, shower the wealth with tax cuts and somehow hope that trickles down, not invest in things like education and clean energy. That is the recipe for what led to the great recession, people don't want to go back there.

They understand this president inherited a very tough decision, he made tough decisions, stabilized the economy, has use moving in the right direction, almost 4 million jobs in the last two years, and he's got the right vision for how to grow an economy that's built to last.

WALLACE: All right. We're going to have to leave it there. Mr. Plouffe, thank you. Thanks for coming in. Please come back. Lots more to discuss. Always a pleasure to talk with you, sir.

PLOUFFE: I'll be happy to, Chris.

WALLACE: Up next, we'll get a Republican view on a number of these issues from the House Budget Chairman Paul Ryan.


WALLACE: This week, the House is expected to debate and pass the budget committee's new fiscal blueprint for the nation. And while Democrats are sure to block it, the GOP frontrunner Mitt Romney has endorsed it, insuring the House budget will be a central issue in the fall campaign.

The author of the plan, Paul Ryan, joins us.

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

REP. PAUL RYAN, HOUSE BUDGET CHAIRMAN: Thanks for having me back.

WALLACE: We want to drill down into the numbers with you and let's start with taxes. You would create just two tax rates -- 10 percent and 25 percent. And you've just heard David Plouffe say that would give the richest Americans a tax break of $150,000 a year or more. Your response, sir.

RYAN: We are taking away the shelters that people in the top brackets use. So, what we're saying is, clean up the past (INAUDIBLE), flatter, simpler, more competitive tax system.

And you have to remember, Chris, that eight out of 10 businesses in America, they file their taxes as individuals. The president saying the wants their top rate to go to high as 44.8 percent in January. You can't compete like that. Canada just lowered their business tax to 15 percent.

So, we're saying get rid of all the special interest, loopholes and tax shelters that are disproportionately used by those higher income earners, get rid of those tax shelters, so you can lower tax rates for everybody, and make us better wired for economic growth and job creation.

WALLACE: OK. I just want to make sure that we are clear on this. But what you're saying is lower the tax rates --

RYAN: And broaden the base.

WALLACE: -- and broaden the base by eliminating a lot the tax --

RYAN: Loopholes and deductions, which are disproportionately used by those taxpayers.


WALLACE: Because you don't say in the budget, which ones?

RYAN: That's right. So, that's what the Ways and Means Committee is supposed to do. That's not the job of the Budget Committee. What we're saying is we want to do this in the light of day. Not in some backroom deal. We want to have hearings in the Ways and Means Committee that Chairman Dave Camp has already started this work, to say what tax benefits should go, which ones are the ones where Washington is picking winners and losers, so we get to a cleaner flatter tax code.

The point I would make, Chris, the president is proposing higher tax rates and more loopholes, more complexities of the tax code, which is contrary to this bipartisan consensus that we are seeing evolve in this country. There are Democrats who agree with us. Lower the tax rates. Broaden the base for economic growth and that's what we're proposing.

WALLACE: But if you can't tell me and I'm going to get in to these specific tax breaks in a moment, how much -- and you would know this, I would think, as the budget, because according to the CBO estimate -- lowering the rates --

RYAN: Right.

WALLACE: -- is going to -- from current policy, would cost $10 trillion.

RYAN: So --

WALLACE: Let me just finish, over the next 10 years. So, the question is -- how much are you going to need to bring in in closing tax loopholes, tax expenditures per year?

RYAN: So, we can bring in the same amount of revenue the government raises today with this kind of a tax system. There's $1 trillion of these kind of loopholes that are built in the tax system.


RYAN: You don't have to get rid of all of them for this kind of tax structure, you don't have to get rid of all them. You do have to get rid of a lot of them in order to get this kind of tax structure.

WALLACE: Can you give me a number?

RYAN: I can't because we -- those decisions haven't been made because you have to decide where those tax rates apply. The point I'm trying to make is, Bowles-Simpson commission proposed a top rate of 23 percent. We are saying 25 percent.

And we're saying you can still keep some of those middle income tax write-offs for people in this kind of a tax structure. And what we want to do is have a dialogue with the country, with the American people through hearings and an open process to find out what kind of a tax system we want to have while we simplify the code and get better us prepared for growth.

WALLACE: OK. I just want to get on this one more time because the Congressional Research Service looked into what are the major tax breaks and how much they are currently costing the Treasury. And let's put them up on the screen, exclusion of employer provided health insurance from taxable income, $164 billion. Exclusion of employer provided pension from taxable income, $163 billion. Home mortgage deduction, $100 billion. Lower tax rate on capital gains, $71 billion.

All right. I understand, this is not your committee, it's the Ways and Means Committee, can you tell me any one of those four that you're willing to say, do away with it?

RYAN: What I would say is doing away, who we do it for. And what we're saying is the people who disproportionately use those, it's the top two tax rate payers use almost of those tax expenditures.

We would limit these things to those higher income earners.

WALLACE: Even things like the deduction for health insurance and pensions and home mortgage?

RYAN: Yes, right. Instead of giving these write-offs, the people in the top tax bracket, take those tax shelters away. For every dollar that's parked in the tax shelter is taxed at zero. Take away the tax shelter, subject all of their income to taxation, you get more revenue and we can lower everybody's tax rate in return. So, we're saying let's limit these kinds of deductions to the higher income earners so that everybody can enjoy lower, flatter tax rate.

WALLACE: Are you willing to say that it would not only be revenue neutral, but also distributionally neutral, which means that the wealthy aren't going to benefit and the middle class isn't going to suffer.

RYAN: I don't know. There is no way to know the answer to that question. But we do believe in a progressive taxes and that's why we have two rates: 10 percent tax rate for low and middle income earners, 25 percent tax rate for higher earners, whether it's distributionally the same as the current code, it's impossible to answer that question.

WALLACE: OK. Let's turn to spending. You would cut Medicaid and other health programs by $770 billion more than the president's budget over 10 years. You would cult entitlements like welfare, food stamps and agriculture subsidies by $2 trillion over the next 10 years.

The White House says you look at that, and you are putting the burden for balancing the budget on the backs of the poor.

RYAN: Couple of things. Number one, these programs still grow. Number two, right now, they are growing at an unsustainable rate. So, we've seen a 400 percent increase in food stamp program, and that doesn't even account for the recession.

The other point I would make is this: is your job or goal to treat the symptoms of poverty, to make it easier to live with, or is the goal to eradicate poverty by treating the root causes?

What we want to do is have welfare reform that gets people off of lives of deficiency and onto to lives of self sufficiency. That's why we couple this with job training programs and work requirements. We think we ought to make sure that we get people out of the cycle of poverty and, unfortunately, I think the plan that we have in place, the president's agenda creates more of a dependent culture, creates people that are stuck in poverty because it denies the idea of upward mobility.

So, to me, this is a critical difference about repairing the safety net and making it a system that gets people back on their feet. And that's why --

WALLACE: I can understand that when it comes to welfare and food stamps, that you are saying you don't want to continue the cycle of poverty. What about something like Medicaid? People get sick.

RYAN: People get sick, but Medicaid is already going bankrupt. Medicaid is already a program that so many doctors won't even take anymore because of its federal rules and regulations and mandates. So, we're saying let's block grant Medicaid back to the states, allow the states to customize this benefit, to meet the particular needs of their populations. And yes, it will still grow under the program that we are talking about. But we will free the states to experiment and make sure that they can customize this benefit to the needs of their population.

WALLACE: I want to pick up on that because you and all of the presidential candidates are saying, let's take Medicaid. And a lot of these programs, and turn them into block grants and give them to a state.

But there was a new study that just came out and I want to put it up on the screen. This was a study of the way that state governments do business. Nineteen of the states got a C; 18 got a D; eight got a F. And there was not a single A.

And, look -- I mean, I've have been around. I've covered state politics. What do makes you think that states are going to be any better, anymore efficient, any less corrupt in doing this than the federal government?

RYAN: All the answers don't lie in Washington. The genius of America does not lie in our bureaucracy in Washington.

WALLACE: They don't lie in the state's capital either.

RYAN: The government closer to you is government more responsive to you. We believe in the principle of government by consent of the governed. And we believe that innovative reforms, like welfare reform in the '90s. Tommy Thompson was trailer blazer of this in Wisconsin and we made it very successful.

So, we think we should return with the 10th Amendment, responsibility to the states with these issues so that state government which is closer to the people who are involved in these programs can be held accountable and can cause solutions.

It's a diverse country. You know, the problems they have in New York state aren't exactly the problems we have in Wisconsin. So, we shouldn't have all these federal rules and regulations that treat us the same with cookie cutter mandates.

WALLACE: Then there's Medicare. And as you predicted when you announced your budget, Democrats, and you heard it again today from David Plouffe, are hammering you, saying you're going to destroy Medicare?


VICE PRESIDENT JOE BIDEN: We'd be so much better off as a country if we spend a lot less time and energy fighting off these efforts to dismantle Medicare. And I mean dismantle it.


WALLACE: The Congressional Budget Office says under your plan, by 2030, average government spending on each new Medicare enrollee would be $2,000 less than status quo. Wouldn't you just -- factually, wouldn't you make seniors pay more for Medicare and their health care than they do now?

RYAN: Those same numbers apply to President Obama's healthcare law. Medicare grows at the same -- under our budget as it does under Obamacare. Here is the key critical difference: the president's health care puts 15 bureaucrats in charge of Medicare. We put 50 million seniors in charge of their Medicare. He is putting these bureaucrats, unelected, unaccountable, in charge of price controlling, which leads to denied care for seniors. We are saying get rid of the health care law, stop putting this rationing board in charge of current seniors health care, give them the guaranteed benefits that they organize their lives around. Don't change their benefits for anyone in and near retirement.

But in order to make good on that promise, which is becoming a broken promise on the status quo, you have to reform for the next generation. And there's a bipartisan consensus on how best to reform it. And that's what we include in our bill. We save and strengthen the program.

The current law makes it go bankrupt and puts this board of 15 bureaucrats in charge of price controlling which will lead to denied care for current seniors.

WALLACE: Mitt Romney was on Capitol Hill this week, and you and other Republican leaders met with him. First of all, does he have the nomination wrapped up? And is it time for the party to unite around Romney, stop fighting amongst themselves and take the fight to Barack Obama?

RYAN: I don't know if he has it wrapped up now. I don't -- we're pretty relevant in Wisconsin. Now, we haven't had a relevance in Republican primary since I think Bush and Reagan.

WALLACE: Yes. Of course, you're not going to say that before April 3rd.

RYAN: Yes. Right. I don't know if I'd say he has it wrapped up. He's clearly on his way. I this he is becoming the prohibitive front runner.

And I think the sooner we coalesce around the nominee, the better off we're going to be, because, you know, the prize is November, not this summer. And I think that it's coming together. But, you know, I'll let the people of this country decide and these primaries --

WALLACE: Do you think some of these candidates, Santorum, Gingrich should consider --

RYAN: I'm not going to get into telling these guys what to do.

WALLACE: All right. One last question, one last try, you made it clear early on, you were very straight, you not running for president. I never hear you saying on this show. I want you to be just as straight now. If the nominee of the party, whoever it turns out to be, comes to you next August and says, "Paul, your budget is the budget; I want you to be the point man for getting this through; will you be my running mate?"

RYAN: Well, I'm already the point guy for doing this in the House.


WALLACE: Well, you'd be more powerful as the vice president.

RYAN: Well, who knows about that? I just don't know the answer to your question, Chris. It's not a bridge that I've even come close to crossing. It's a decision that somebody else makes and a long time from now.

And quite honestly, I'm focused on doing my job in Congress, which I think is important, which is to give the country an alternative choice of two futures on how we save and strengthen America, how we save the American dream from what I think is this path that the president's put us on to debt and decline.

So I don't -- I can't answer that question because I haven't given enough thought to that. I don't know if I'll even have the opportunity.

WALLACE: You're leaving the door open? You're saying, if I were asked, I would have to consider it?

RYAN: I would have to consider it, but it's not something I'm even thinking about right now because right -- I think our job in Congress is pretty important. And what we believe we owe the country is, if we don't like the direction the president is taking us, which we don't, we owe them a specific sharp contrast and a different path that they can select in November. And doing this in Congress is really important.


RYAN: And that's why I think I have a good job right now that helps contribute to this effort.

WALLACE: Real quickly, the White House sounds like they've already made the ticket. You heard David Plouffe talking about the Romney-Ryan budget.

RYAN: We're going to give the country a choice. Now, we're going to show the country, here's how you balance the budget, pay off the debt, grow the economy and stop all the cronyism in Washington, picking winners and losers. Here's how you get an upward-mobile society; here's how you get people back to work instead of being on government dependency.

These are the decisions we're going to have to make this fall, and that's why I think this job in Congress that I have right now is pretty important in doing that.

WALLACE: Congressman Ryan, we want to thank you so much for making time for us. Please come back, sir.

RYAN: Thanks, Chris.

WALLACE: Up next, our Sunday group on the extraordinary hearing starting Monday in the Supreme Court on whether Obamacare is constitutional.



REP. NANCY PELOSI, D-CALIF., HOUSE MINORITY LEADER: We believe in what we did; we did it carefully so that it would honor our Constitution.

SEN. MITCH MCCONNELL, R-KY., SENATE MINORITY LEADER: Two years after its passage, Americans have now come to their own conclusion. They don't like it; they think it's unconstitutional, and they want it repealed.


WALLACE: Democratic House Leader Nancy Pelosi and Republican Senate Leader Mitch McConnell drawing the political battle lines ahead of this week's historic Supreme Court hearings on Obamacare.

And it's time now for our Sunday group, Fox News senior political analyst Brit Hume; Kirsten Powers of The Daily Beast website; Paul Gigot of The Wall Street Journal and also the host of The Journal Editorial Report here on Fox News Channel; and Fox News political analyst Juan Williams.

Well, the big issue the court will have to consider this week is whether the individual mandate and individual, the idea that every American must get health insurance is constitutional. And it may well come down to the commerce clause, which you see up on the screen, Article One, Section 8, Clause 1 of the Constitution, which states, "The federal government shall have the power to regulate commerce with foreign nations and among several states and with the Indian tribes." Brit, what are your thoughts? Does it fall within or outside the commerce clause?

BRIT HUME, FOX NEWS: Well, it's certainly true that the Supreme Court has granted Congress very wide latitude under the commerce clause to regulate things not only are in interstate commerce but may affect interstate commerce.

Famously, the court has ruled that it was constitutional to prevent someone from growing -- or penalize someone from growing a certain amount of wheat on his land.

The question here, though, it seems to me, is whether there are limits. And the court has certainly said there limits to Congress's power to legislate and regulate under the commerce clause.

And never before, to my knowledge, has Congress ever basically commanded that people enter into a contractual regulation of some kind. There's one argument that says to do that makes it a mandatory contract which dissolves any contract. It has to be voluntarily.

So I don't know what the court's going to do. I don't think anybody does. I'm astonished to read these commentators saying, oh, it's a slam dunk one way or the other. I don't think it is. I don't think they would set aside days of argument on this if it were.

But I think it is -- it will be approached as a novel question. This goes very far. And whether the court will permit it, I don't know.

WALLACE: You know, I want to pick up, Kirsten, on that, because to give a sense of how broadly the Constitution -- or, rather, the court has interpreted the commerce clause of the Constitution, let's look at the precedent that Brit just mentioned.

And this was, in 1942, a case called Wickard v. Filburn -- the court ruled unanimously that, under its quota for wheat at the time, the government could order a wheat farmer to destroy excess crops he was growing on his own farm and pay a penalty even though he said he was growing it for private use.

So that is a pretty broad interpretation of the commerce clause. He was growing it on his farm for his use.

KIRSTEN POWERS, THE DAILY BEAST: I think it's very broad, and I think people would be surprised by the case law actually of how often -- how broadly federal power has been extended.

And in terms of how it's going to turn out, I'd say the administration obviously thinks they have a strong case or they would not have gone ahead with it in an election year.

And their argument is that, because this affects such a large part of the economy, that it affects -- it affects the commerce clause -- affects commerce.

So the other case that they're -- that will come into play is Gonzales v. Raich.

WALLACE: Let me just -- now that you mentioned it, this is how prepared we are.


We didn't even know you were going to bring it up. Here's the Raich case. This is 2005. The federal government, the court said they ruled 6-3 that the federal government could destroy home-grown marijuana in California, which allowed medicinal marijuana, because it affected the interstate market.

POWERS: Right. So with home-grown marijuana is going -- we don't even know this person is going to sell -- they're just probably using it themselves -- is going to affect...

WALLACE: Well, it was. There was a woman who was sick and she said she was using it.

POWERS: Right, but it's going to affect interstate commerce. You can see how broadly this goes.

And what's important about that case is that both Scalia and Kennedy concurred with that opinion. And so people are looking at that and saying -- and this was brought up, I think, 10 times in the government's brief because they're really trying to move Scalia on this and they're really hoping for Kennedy to be their number five.

WALLACE: On the other hand, I see you wriggling in your chair -- squirming in your chair, Paul.


Make the other side of the case.

PAUL GIGOT, WALL STREET JOURNAL: Well, you don't have to overturn these cases to hold for the plaintiffs because these cases are different. The difference in this case, as Brit suggested, is that the government is saying we're going to compel you to participate in commerce in order to regulate you. It is not a case of growing wheat. It is a case you must buy this certain product, and if you must buy a certain product, then we can regulate you.

But that is a very different case. And that's an extension of the plaintiff's argument and I think right of the federal power, and extension beyond which the Commerce Clause never been justified by the Supreme Court.

And so I think it is it a novel issue, it's a very grave issue, because if you can compel -- if the federal government can compel individuals to participate in commerce, where do you stop? You can't stop at health care.

What about a car? What about Juan's books, as good as they are? Can you compel somebody to...

WALLACE: Let me just make the counter argument for the sake of argument, which is, with all due respect, you can live without reading Juan's books or, as some people talked about, broccoli. You don't have to eat broccoli. Sooner or later, everybody is going to use health care.

GIGOT: Well, how different is that than housing? How is that different from transportation? Most people in America need a car. All right? But you know what, I think I want you to buy a certain car because I like the Chevy Volt, the government likes the Chevy Volt, just like I think you need to buy a certain health care product.

We're going to mandate this product for you and you must buy that. Yes, just because somebody ultimately partakes of health care, just like the housing and other markets, we can't compel you to buy that product.

WALLACE: Mr. Justice Williams, would you like to respond to your colleague here on the bench?

JUAN WILLIAMS, FOX NEWS CONTRIBUTOR: Certainly. I think that, you know, Justice Gigot needs to understand here that the uninsured aren't making an affirmative step, because their failure to buy insurance affects insurance markets in the country.

It drives up the cost of insurance for you, for me, for emergency rooms that have to treat people after they get smushed. And therefore has a tremendous effect on all of the (INAUDIBLE). This is a classic example that fits under the Commerce Clause.

And in fact, if you look at the record, I think four courts have looked at this, four of the appeals courts, three have said that is exactly right. It fits under the Commerce Clause. One has said it was premature. I guess that's a possibility (INAUDIBLE). They say, you know, the law is not fully in effect so we won't rule . But two of the courts have said, yes, this exactly fits, only one has said there is a problem.

WALLACE: All right. We have less than a minute left and I just want to turn to one last issue, and I want to hear what you have to say about this, Brit. And that is, what about the argument that the president and Congress debated this for a year and it certainly got a full hearing, that this would be judicial activism for the court to rule, and if the political side wants it (INAUDIBLE) there's going to be an election, all of the Republicans have made it clear they will repeal it, leave it to the political system, the court shouldn't step in?

HUME: Judicial activism is in the eye of the beholder and always has been, and it is not in the opinion of conservatives who have been the ones most concerned about judicial activism (INAUDIBLE) inappropriate or improper for the court to strike down a law that it believes is clearly unconstitutional. So I think the judicial activism argument is really kind of pointless.

WALLACE: OK, we're going to have to leave it there. And I -- did you use the word "smush"?


WALLACE: Is that a legal term of art?


GIGOT: Yes, you will see it in Justice Kennedy's opinion.


WALLACE: All right. Thank you. And we have to take a break here. But when we come back, Rick Santorum gets a big primary win, but is it too little, too late?



RICK SANTORUM, PRESIDENTIAL CANDIDATE: The people of Louisiana sent a loud and clear message. This race is long and far from over . And the people of Wisconsin, I would just say to you, "on, Wisconsin," let's get it done.



WALLACE: Republican presidential candidate Rick Santorum celebrating his big win last night in the Louisiana Primary, and we are back down with the panel.

So how much should we make of Santorum's victory and of Romney's continued difficulty, Paul, in reaching out to voters in the South and to some of the conservative base of the party all across the country?

GIGOT: We should make something of it. It was a big win for Santorum. He needed that win badly. And he won in thoroughgoing fashion, I mean, 49 percent of the vote. I think he won in just about every demographic except for people who make more than a couple hundred thousand dollars a year.

So it was a repudiation, I think, of Romney, for his support in the South. Probably a little blowback too for the comment by his staffer, Eric Fehrnstrom, about Etch a Sketch, and now we'll just erase everything and start all over. It reinforced a lot of the doubts that conservatives have about Romney's real core.

But the problem for Santorum is he has got to win outside the South. And he is trying to make this into a replay of conservative 1976 Reagan challenge against the moderate. And to do that he has got to win in places other than Louisiana. He has got to win in Wisconsin. He has got to win in other states.

WALLACE: Which is a week from Tuesday.

GIGOT: And he hasn't shown that he has been able to do that so far. So he has got to deny Romney delegates, because Romney is just piling up those delegates.


WILLIAMS: That is exactly right. I mean, if you look at the delegate count, he has more than twice the number -- that Romney has more than twice the number than Santorum does. April is not going to be a kind month to Rick Santorum. You go into...

WALLACE: Explain why.

WILLIAMS: Well, you go into places, especially towards the end of the month like Connecticut, New York, Pennsylvania, you know, I am not even sure if...

WALLACE: D.C., Maryland.

WILLIAMS: Right, Rhode Island. I think these are all more of the kind of traditional Republican liberal states that Romney does well, and upper income, more educated people. So then you have to go towards May, Chris. And then you get into hopefully...

WALLACE: Let me just say at the end of April you also have his home -- Santorum's home state of Pennsylvania.

WILLIAMS: I mentioned Pennsylvania. But I am not even sure how he would do there. You know, he is the hometown kid, but let's see, I am not sure if that state is favorably inclined towards him, especially if you look at the big cities, Philadelphia and Pittsburgh.

But then you get into May, and there you could go back down South to places like North Carolina, you know, West Virginia, Kentucky, Texas is a big enchilada, if you will. That's what Santorum and, for a while, Gingrich had been hoping for.

That's his hope because delegates are what counts. All they're doing at this point is denying Romney the 1,144 he needs for the nomination.

HUME: This is a key point. Santorum continues to say that he could catch Romney. The odds of his doing that is exceedingly long, to say the least. So he's in this -- basically a position where all he can hope to do is to deny Romney the majority and force a contested or brokered convention.

That -- awareness of that will sink in with voters. And it is different matter to go out and vote for somebody you think can win and vote for somebody because you think they can keep the other guy from winning and extend the contest that I think is making Republicans increasingly nervous and anxious as we go forward.

So I think the odds for Santorum are very long indeed and this next month will only reinforce that. And the Romney delegate lead is bound to swell. I mean, this was -- everybody at this table is now saying this was a big win for him in Wisconsin (sic) last night. He gained...

WALLACE: Louisiana.

HUME: I mean, Louisiana, excuse me. He gained only a handful of delegates on Romney. If he was really going to have a chance to overtake him, he needs to get delegates and win them by the bushel while Romney is winning very few. And I just don't see that happening anytime soon.

WALLACE: So where is this race, Kirsten?

POWERS: Well, I think it's where we thought it was in the beginning, which is Romney is still the presumed front runner. He is far ahead in delegates. As Brit said, I mean, last -- in Louisiana, I think Santorum got 10 delegates to Romney's five delegates. And so what happens is in every state, regardless of who wins, even if Romney doesn't win, he picks up delegates. And so always stays ahead in the delegates. And he will win some of states that Juan is talking about.

I mean, look, Santorum is a real candidate. He has won 11 states. It's not a minor thing. You know, you have Newt Gingrich who has won two states telling him that he needs to drop out if he doesn't win Pennsylvania. But that's ridiculous.

In terms of him being sort of the 1976 Reagan conservative candidate, of course Reagan didn't win. So unless he is setting himself up for the future, which he very well could be, I think it is a long shot.

WALLACE: Well, how about the issue that Brit raised and the nervousness of Republican voters as this drags on, do you think Romney is being hurt by this process?

GIGOT: A little bit but not too much. I think in fact he's being helped, because he's being forced to put out a tax proposal that's better than the one he first proposed. His 59 points that no one remembers.

He's been forced to embrace more of the Paul Ryan budget. And the partial Ryan Medicare plan to put more substance on his agenda than just his biography as a business man, which is his instinct to run only on biography as a technocrat, a manager.

He's been forced by the campaign to put more meat on those bones. And I think that that will help him in the general election if he's willing to make the case for those ideas.

WILLIAMS: But I think the Etch-a-Sketch comment this week was just devastating to him, Paul. Because it played directly to this narrative that he is a man who doesn't have a core beliefs.

GIGOT: But it was a staffer and not Romney himself who said that.

WILLIAMS: Right, but I think it applies to Romney in the voter's mind. I suspect that's going to stick around.

WALLACE: I want to -- I want to -- in the time we have left to something else. You were talking about the Ryan budget. It was very interesting to me to hear David Plouffe, the White House adviser, make big deal of the fact that Romney had endorsed it and it was now the Romney-Ryan plan. And what's so interesting is both sides seem to think that the Ryan budget is a weapon on their behalf.

The White House thinks that this is going to show that Republicans stand for helping the rich on the backs of the poor. And Republicans think it's going to show that they are responsible in getting government out of the way.

HUME: Here's how this plays out, Chris. Democrats will argue that Romney has wholly adopted the radical Paul Ryan budget . Conservatives will say I don't. I don't think we can trust this guy. He's converted too late. He's an Etch-a-Sketch. He's -- so in a sense Romney can't win. I don't -- I think this is just talk really. I think the voters are going to have to make a decision at some point about this kind of action on entitlement spend this is what the 2010 election was about as to whether they are ready to support a candidate and a party that is prepared to do something serious about them. And I think that becomes a central issue in this race, good, because it needs to be. It is the central issue in this campaign.

President Obama has punted. No question about that. His budget doesn't do anything about it. So that's how it should be.

WALLACE: And Kirsten -- and we have about 30 seconds left. I mean, the flip side of that. Do you think that this is good grounds for Republicans? I mean, under the -- for Democrats, rather, under the president's budget he never balances the budget.

POWERS: Well, I mean, -- it is dangerous for Republicans because it is extreme in terms of the cuts that would have to happen to make this budget work. And I don't think there's been a lot of talk about that.

WALLACE: All right. We're going to have to leave it there. And maybe we'll talk about it coming up.

Thank you, panel. See you next week.

Don't forget to check out panel plus where we will talk about it when our groups picks right up with the discussion on our website And we'll post the video before noon eastern.

Up next, we do on the Trail.


WALLACE: This week we had two primaries, one big endorsement and a toy from the '60s, all making headlines On the Trail.


ROMNEY: Each day we move closer not just to victory but to a better America.

JEB BUSH, FORMER FLORIDA GOVERNOR: At some point we need to unify behind our candidate, and I believe that the best candidate is Mitt Romney.

ERIC FEHRNSTROM, ROMNEY CAMPAIGN: Well, I think you hit a reset button for the fall campaign. Everything changes. It's almost like an etch-a-sketch, you can kind of shake it up and we start all over again.

SANTORUM: You're not looking for someone who is the etch-a-sketh candidate. You're looking for someone who writes what they believe in in stone and stays true to what they say.

ROMNEY: I'm running as a conservative Republican. I was a conservative governor. I will be running as the conservative Republican nominee, or at that point hopefully, nominee for president.


SANTORUM: We win by giving people the opportunity to see a different vision for our country, not someone who's just going to be a little different than the person (inaudible).

GINGRICH: To suggest that a Romney presidency would not be dramatically better for any conservative than an Obama presidency is just plain wrong.

SANTORUM: Everybody knows full well my passion about defeating Barack Obama. Over my dead body would I vote for Barack Obama.

GINGRICH: This is either going to be Romney or an open convention. I mean, Santorum is not going to get to 1,144 and I'm not going to get to 1,144. Ron Paul is not going to get to 1,144.

ROMNEY: You got a lot of delegates here, all right? I want -- well, I'd like all of them. I'm probably not going to get all of them, but I want to get as many as I can.


WALLACE: But the candidates got a bit of a break. We have to wait until the first Tuesday in April, nine days from now, for the next round of primaries. That's it for today. Have a great week. And we'll see you next "Fox News Sunday."

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