2012 campaigns talk unemployment numbers, job creation

Senior Romney camp adviser talks unemployment numbers, 2012 race


This is a rush transcript from "Fox News Sunday," June 3, 2012. This copy may not be in its final form and may be updated.


With just five months to Election Day, the campaigns focused on job one-- how to get America back to work.


WALLACE: We'll hear from both sides on the rising unemployment rate and whether the recovery is stalling.

Ed Gillespie, senior advisor to Mitt Romney, and Steven Rattner, President Obama's former car czar.

Then, is Tuesday's Wisconsin recall election a preview of the presidential race?

We'll ask our Sunday panel about the possibility of traditionally blue states may flip to red in November. And our power player of the week, working to attract new generations to the father of our country -- all right now on “Fox News Sunday”.


WALLACE: And hello again from Fox News in Washington.

The economic news Friday was grim. Employers added the fewest jobs in a year. The stock market wiped out all of the gains it had made in 2012. How does this reshape the presidential race?

We'll talk with a former advisor to President Obama in a moment. But, first, we welcome Ed Gillespie, senior advisor to Mitt Romney.

And good to have you back, Ed.

GILLESPIE: Good to be back. Thank you.

WALLACE: Let's start with the jobs picture. For the first two months of 2012, job growth it averaged 267,000 jobs a month. For the last three months, it has averaged 96,000 with just 69,000 jobs created in May.

Question, what does Governor Romney think is the problem?

GILLESPIE: The problem is this administration and this president, policies are hostile to job creators and we see that on any number of fronts, whether it's the excessive regulations and mandates.

The mandate in the president's healthcare bill alone was estimated to cost 850,000 jobs in or economy by the Congressional Budget Office. You look at the Keystone pipeline decision which would have had an immediate impact on job creation. The proposed tax increases on job creators.

This is a hostile environment for job creation in our economy and that's why, frankly, it has a sense of urgency in terms of this year's election to be able to turn things around because the only thing that's going to change it are changing the policies and that means changing the person in the White House.

WALLACE: All right. President Obama says a big part of the problem is that House Republicans are blocking some of his jobs ideas that he's had out there sense last September, ideas like giving small business a tax incentive to hire more people or more targeted spending for infrastructure and to hire more people. Take a look.


PRESIDENT OBAMA: Congress hasn't acted on enough of the other ideas in the bill that would make a difference and help create jobs right now. There's no excuse for that -- not when so many people are still looking for work.


WALLACE: Does Governor Romney think that the House Republicans should pass some of the Obama Jobs Act and what about early action to deal with this big spending or spending cuts rather and tax increases that are automatically going to be triggered at the end of the year?

GILLESPIE: Couple of things. The House has passed job creating legislation that the Democrats in the Senate have not taken up and passed and sent to the president, and the president hasn't worked to get them done.

The problem is not what the Congress hasn't done with Republicans that control the House. The problem is what Congress did do when Democrats controlled the House and Senate and the White House in the first few years of this presidency.


GILLESPIE: The stimulus bill and healthcare bill and Dodd-Frank excessive regulations are part of what's stifling our economy today.

WALLACE: If I may press my question: does Governor Romney, you know -- because forgetting the election -- the fact is the economy is going to be in trouble over the next five months. If he is elected, the next seven or eight months before he steps into office, does he think that the House Republicans should pass some of the Obama Jobs Act and what about early action to take away what is being called taxmageddon?

GILLESPIE: Chris, Governor Romney thinks we need stronger presidential leadership. You don't see President Obama -- all he does seemingly is campaign and go to fundraisers. Where is his leadership on this, on taxmageddon and the sequestration? Has he done anything at all to try to bring members of Congress together to try to avoid this?

WALLACE: Would he support early action?

GILLESPIE: I think he would wait to see what they came up with. But I think what he supports leadership, which is vacant right now, which is absent and that is what is contributing to the stagnant economy.

WALLACE: All right. The president says that the Romney plan to fix the economy is the President Bush 43 plan on steroids. Tell me specifically where does Romney differ from Bush on economic policy?

GILLESPIE: A couple of ways? One, I think there is a clear distinction on Governor Romney's policy toward China for example and currency manipulation. When you look at Governor Romney's support for entitlement reform, it's different in nature from President Bush's entitlement reform proposals.

But the most important thing is not the differences between what Governor Romney would do and how President Bush approached the jobs. There are major differences between what Governor Romney would do and what President Obama is doing and this is really the focus of this election and where it should be.

Those are pretty differences when it comes to entitlement reform and saving Medicare and Social Security for future generations, stopping these tax increases from hitting small business owners who traditionally provide two-thirds of the new jobs in our economy, and are going to get hammered under President Obama's proposed tax increases, and repealing the ObamaCare bill which has, like I say, a job-killing mandate and job-killing taxes in it as well.

WALLACE: But specifically on taxes and spending, does Romney have a different plan than George W. Bush?

GILLESPIE: He does, Chris. Like I say on taxes and spending both, what Governor Romney has called for in terms of bringing down 20 percent across the board tax cut, but offsetting that with specific elimination of tax deductions and see simplifying the tax code is different than what President Bush called for.

WALLACE: The Obama campaign is going after Romney's record as governor in Massachusetts. And let's take a look at that record. Here's their main charge.

During the four years before Romney took office, the state ranked 36th in job creation. During Romney's term it ranked 47th. When Romney took office the state had an unemployment rate lower than the national average. When Romney left office the state had an unemployment rate higher than the national average.

GILLESPIE: Well, a couple of things. One, I don't agree with the data that you just about put up there, Chris. My understanding is when Governor Romney took office as governor of Massachusetts, Massachusetts was ranked 50th, dead last, 51st --


WALLACE: Four years -- over the four years, I think you are wrong.

GILLESPIE: And I think you are wrong. So we'll have to arbitrate this because the BLS data shows that Massachusetts when Governor Romney took office.

WALLACE: Saying for the four years it was 50th.

GILLESPIE: When took office it was number 50 in job creation. Actually 51 if you count the District of Columbia.

WALLACE: We will check out the numbers.

GILLESPIE: We'll check it out, OK? And when ended his term in office, his four years in office, it was number 30. So, he moved it dramatically.

WALLACE: Over the four years, it was 47th. There was no question about that.

GILLESPIE: You take the first year which is a low base year when the governor came in and took office because it was 50th in job creation out of all of the states dead last, and moved it to 30th by the fourth year and a net job creation of 40,000 jobs, and they averaging out over the four years. So, they are bringing down the gains of his fourth year in office which shows the real impact of his policies and diluting it with the first year in office when came into office and it was 50th in job creation.

He inherited a $3 billion projected deficit, turned it around without raising taxes balanced the budget and put $2 billion in the rainy day fund. The unemployment rate when took office was 5.6 about percent. When left office, it was 4.7 percent.

The fact is that the average income for a family in Massachusetts went up by $5,500. We are proud to contrast that with President Obama who came in and for four years in a row passed deficits of more than $1 trillion. We've had more than 500,000 lost jobs in this economy, 23 million Americans either unemployed or under-employed or out of the work force entirely, and average wages down $4,300.

WALLACE: Let's compare Romney and Obama in another area. Romney hit the president this week for engaging in what he said is public equity -- using taxpayer money to invest -- try and pick winners and losers, the most obvious, the poster child if you will is Solyndra.


WALLACE: But as governor, Romney approved millions of dollars in tax money for loans and tax breaks for private companies. What's the difference?

GILLESPIE: Well, the difference is, Chris that in Massachusetts, there is a board that does approve these loans. There is a big story about in, Konarka, for example, that was in the news today. The fact is that was approved before Governor Romney even took office. You don't have control over what the board does.

WALLACE: No, but he signed on to a bunch of the companies --

GILLESPIE: You know, when was there, what I know is, that when was governor of Massachusetts, he said the state should not be investing in private enterprise and he tried to reprogram the money away into other government spending in Massachusetts.

WALLACE: So, how about all these cases where they gave tax breaks to companies, where there was a company in Rhode Island that they had -- that they enticed to come over and then went bankrupt?

GILLESPIE: Chris, the structure in Massachusetts as I understand it that it is a commission of political appointees that the governor does not have direct control over.

WALLACE: And you are saying Romney was opposed to all of this?

GILLESPIE: I'm saying that what Governor Romney said when he was governor of Massachusetts is that we should not have the state investing in private enterprise, the fact is we should be reprogramming this money and tried to reprogram the money away from those kinds of investments.

WALLACE: As you know, we're talking in the next segment to Steven Rattner, who was former car czar.

WALLACE: One of the biggest knocks against Romney is that he opposed the government bailout of G.M. and Chrysler.

The Republican governor of Michigan says if you hadn't had the government bailout there was no money coming from private investors. No money coming from banks -- this is during the financial meltdown during 2008. If you hadn't had the government bailout that these companies, G.M. and Chrysler, would have gone into a long-term liquidation and been in bankruptcy for years. Not the quick managed bankruptcy they had with the government bailout.

GILLESPIE: Well, I remember this debate pretty vividly and the fact is there were conflicting points of view both on Capitol Hill and in the White House at the time and then when President Obama came in and did essentially the managed bankruptcy that Governor Romney had called for.

WALLACE: I know. But he hadn't called for government money.

GILLESPIE: He called for a managed bankruptcy.

WALLACE: Without government money.

GILLESPIE: That's right.

WALLACE: And the point that Rattner will make there was no private money so if you hadn't had the government money, it would have gone into Chapter 7 liquidation.


WALLACE: The company would have been in bankruptcy for years and it would have to lay off all their workers.

GILLESPIE: Chris, I understand that that is an opinion. There are different opinions as to whether or not that could have been done. I know there were different opinions at the time and I know the decision was made this is the way it has to be done.

Governor Romney's belief and the belief of many other people is that we would have been better off if we had gone through a managed private sector bankruptcy. It wouldn't have had, for example, the unions having been given especially control over the auto companies and put in front of the line over bondholders. You would have had, I think, more of a restructuring that may have made the companies even viable over the long-term than today. But this is -- but there are different opinions on this, there's no doubt about it. Governor Romney's view is managed bankruptcy would have been the right way to go. They ended up going a similar route at the end of the day anyway. But there's no doubt, there is difference of opinion.

WALLACE: A couple of questions I was talking with a top member of the Romney campaign, not you, but somebody else, who said the big revelation has been that the Obama campaign is not as good as you thought it was and there have been a series of missteps, whether it's getting into the fight with the Catholic Church over contraception or the president himself going so negative so early.

Do you have a feeling -- is there a feeling in Boston we can beat these guys?

GILLESPIE: Oh, there is clearly a feeling in Boston that Governor Romney is going to beat President Obama. You know, you can go back and forth about tactics and who won the week and that kind of thing. The fact is at end of the day it is the candidates and Governor Romney's experience and his record and his positive agenda for turning this country around I think what's going to prevail at the end of the day.

Look, you know, it's easy for political folks to look smart when things are going their way or look dumb when things aren't. But it's the American people are smart and it is the candidates who matter and they're the ones are going to be -- their names are on the ballot and I think that's why we're going to have a change in November because of Governor Romney, not political tactics.

WALLACE: Last question, finally, there is a recall election as you well know in Wisconsin on Tuesday. If Republican governor walker wins, beats the recall, how much do you think that carries over to November and the possibility that Romney could win a state that hasn't gone Republican since 1984?

GILLESPIE: Well, I think this recall is about Wisconsin and about the reforms that Governor Romney -- sorry, Governor Walker enacted there. And I think it going to be close. I think he is going to win and the voters are going to reject the recall.

I don't know at the end of the day how much that's going to factor to November but it does reflect what has been a trend in Wisconsin, you know, not only was Governor Walker elected as a Republican to the governor's mansion but Republicans won't control the statehouse and Senate for the first time in a long time.

There is something going on in Wisconsin and all across the Great Lakes where it is moving away from liberal Democratic policies and for more reform-oriented Republican policies.

WALLACE: And very briefly, if Walker wins, what's the statement to big labor?

GILLESPIE: I think the statement to big labor and big government employee unions, government worker unions is you can't be too greedy and you need to understand that times are tough and a lot of these legacy costs that you imposed are due for reforms and some restructuring.

WALLACE: Ed, we're going to have to leave there. Thank you so much for coming in today. We'll talk to you down the road, sir.

GILLESPIE: Thank you.

WALLACE: Up next, Steven Rattner, the former Obama car czar, on why the president is still the best choice to fix the economy.


WALLACE: Joining us now with a Democratic perspective on the economy is Steven Rattner, President Obama's lead advisor on the auto bailout, who has also had a long career in investment banking.

And, Steve, welcome to "Fox News Sunday."

RATTNER: Thank you for having me, Chris.

WALLACE: Why shouldn't voters hold President Obama responsible for the weak job growth and the sputtering recovery that we saw this week? Why shouldn't they see him as part of the problem and not the solution?

RATTNER: Because President Obama arrived to find 700,000 jobs a month being lost in this country. We continue to lose jobs for some months as a result of the recession that began before he got here and since early 2010 when the economy job picture began to recover, we've added over 4 million jobs in the country. We've added jobs every single month since then.

Nobody is happy with the rate of job creation today. I believe that without the policies that the president put in place, we would not even have this level of job creation.

WALLACE: All right. Well, let's pick up on that because the president and his team said Friday that it is, quote, "critical" that the country continue the Obama policies for economic recovery.

Let's take a look at those policies. Since the president took office, Congress has passed his $831 billion stimulus. The $193 billion 2010 Tax Act and $123 billion extension of the payroll tax cut and unemployment compensation. The grand total of these and other bills $1.3 trillion in stimulus over a decade.

Steve, the result is 8.2 percent unemployment and 1.9 percent GDP growth in the first quarter and the president says more of the same?

RATTNER: The problem we have with these kinds of discussions is it's all compared to what? What would have happened had the things not been put in place.

The stimulus program that you referred to has been studied by bipartisan economists, like Mark Zandi and Alan Blinder. And they agree that without that, we would have had unemployment substantial higher than we've had over the last years.

The tax cut -- the payroll tax cut that you just discussed were bipartisan. Everybody wanted to extend the Bush tax cuts for another two years. Everybody in the end agreed that a payroll tax cut would be helpful to the economy.

WALLACE: You're saying the president wanted to extend the Bush tax cuts, or was forced to as part of a deal?

RATTNER: I was saying it was a bipartisan agreement that -- as part of the package, this was the right thing to do for two years while the economy was weak.

WALLACE: But how do you explain the fact we were creating a quarter of a million jobs a couple of months ago and now we're creating 69,000?

RATTNER: That's something we're all going to have to see what happens. We had similar slowdowns in the spring the last two years. We had this kind of a dip in the spring.

I don't want to get technical here, but some economists wonder about the seasonal adjustment factors in our economic data, but it may be something more substantial. We have to wait and see. One month's data or even two month's data, particularly when we are still creating jobs even at an unacceptably low rate.

WALLACE: How serious do you think and, as I say, you have a long history in private investment, how serious do you think is the threat that we're going to go into another actual recession?

WALLACE: And does the president need a new economic plan, including some early action on taxmageddon, all of the spending cuts and tax increases that are built in at the end of the year? Does he need to do something between now and November?

RATTNER: So, you asked a few different questions.

First, with respect to whether we will go into another recession now or not, I would say the probability is still quite low we will actually go back into another recession. We are growing slowly but we are still growing.

Remember that we have very -- important sectors of this economy that are not position to contribute to our growth. Government is shrinking. Housing is still at a bottom. Finance is not growing. This is over 40 percent of our economy and these sectors are not growing.

The thing to worry about most in the short-term is probably Europe and what might happen there. That is the thing that could tip us further downward.

With respect to the president's plan, whether he needs a plan, he has a plan. He has a plan in front of Congress. Congress has not acted, and the president has limited powers as you know.

With respect to your third question about taxmageddon or the fiscal cliff, it would be in the interest of everybody in the country if the Congress and administration got together early on a plan. Business cannot operate not knowing what its tax rates are going to be next year. Not knowing how the government is going to function next year. The lack of action with respect to all these matters on Capitol Hill is very disruptive for our economy.

WALLACE: Do you think the president's continued bashing of Wall Street and the wealthy is helpful when the economy is in such trouble.

RATTNER: I think the president has found the right balance in his conversations about Wall Street. I think he has made clear that private equity is a perfectly legitimate respectable business and important part of our financing activities. As he said the same thing about Wall Street.

On the other hand, the president also said that we can't be in a situation where you have a relatively few number of people doing so well and the rest of the country doing so poorly and we need to find not necessarily redistributionist policies but policies that will bring up the 99 percent who are not participating.

WALLACE: Since the president started attacking Romney for his record on Bain Capital, a number of Democratic surrogates, including you, have defended private equity. This week, I will call him the big surrogate weighed in and defended Romney's experience if not his ideas. Take a look.


BILL CLINTON, FORMER U.S. PRESIDENT: There is no question that in terms of getting up and going to the office and, you know, basically performing the essential functions of the office, a man who has been governor and had a sterling business career crosses the qualification threshold.


WALLACE: I know that you think Romney made a mistake of billing himself, bragging about himself as a job creator. But don't decades in the private sector give you a somewhat greater insight into how businesses operate, how business men make decisions to hire and to grow?

RATTNER: Sure. Decades in the private sector give you an insight into all of the things that you speak about. But when Romney turns around and attacks the president's qualifications. I would say three years in the trenches, fighting this economic war every single day, dealing with economic policy matters, auto rescues, bank rescues, every single day for three years actually gives you more qualifications to be president.

WALLACE: What is wrong with the basic Romney idea and we don't have to go into the details but the basic idea, cut taxes but tax reform you lower everybody's tax rate but you also close some of the loopholes so it is at least neutral, cut spending, cut regulation and basically get government out of the way, let business do its job?

RATTNER: So everybody agrees that we need to address our deficit. No thinking person could deny that at some point, not today because of the weak economic conditions we need to address our deficit.

I notice you trying to get Ed Gillespie to differentiate Romney from Bush. Romney is actually quite different from Bush. As you say, Romney would cut taxes 20 percent across the board without specifying a single mechanism for paying for that tax cut, which we can't afford.

WALLACE: Well, he does say that there would be mechanism.

RATTNER: Yes, sure. OK, fine.

But he's been specific about the tax cuts and completely vague about how he would pay for the tax cuts. He has endorsed the Ryan budget which provides for massive reductions in discretionary spending. What Ed Gillespie talks about is fixing Medicare is actually privatizing and voucherizing Medicare, dramatic cuts in Medicaid, dramatic cuts in food stamps. I don't believe myself this is a recipe to fix the economy.

WALLACE: Well, about how specific has President Obama been on reform of entitlements?

RATTNER: He has not yet been specific.

WALLACE: In three and a half years?

RATTNER: No -- well, it has become a ripe issue in the last year or so since the Simpson/Bowles Commission and the super commission.

WALLACE: Steve, please, he came into office and people were talking. We have all known that Social Security and Medicare were ticking time bombs.

RATTNER: We have all known, but the Republicans haven't had a plan until recently neither.

WALLACE: Neither has the president.

RATTNER: OK. But he had other things on his agenda that are more urgent, the stimulus act. We can argue about his healthcare plan. We can argue about his Dodd-Frank bill, I think all those were important agenda items for him to deal with in his first two years in office.

And I think he has acknowledged and recognized that entitlements are something that has to be dealt with.

WALLACE: You would agree that he hasn't come up with a credible plan. I mean, you may not like the Romney plan but at least he's got a plan on entitlements. The president doesn't.

RATTNER: If you want to say that having a plan that would essentially eviscerate Medicare and turn it into a private program, with seniors go from paying 25 percent of their costs today, paying 68 percent of their costs is a better plan, than a commitment to do something --

WALLACE: Than no plan at all.

RATTNER: You can say that.

But I do believe that President Obama recognizes the problems of entitlement.

WALLACE: I mean, I want to get into other things, which is are briefly, you know, the Ryan plan changed and now it is a compromise with the Democratic Senator Ron Wyden, which allows people to stay in Medicare.

RATTNER: Yes. But I don't really understand how that works because if you allow people to stay in Medicare and they say, then what do you actually accomplish? You haven't actually cut your Medicare expenses. So, I think it's a little bit of a Trojan horse that plan.

WALLACE: This week, Romney went after the president's record in so called private equity -- spending taxpayers’ money on companies like Solyndra. Let's take a look.


MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: Free enterprise for the president means taking money from the taxpayers and giving it freely to his friends.


WALLACE: A few days ago you said something similar. Quote, "I don't think the government should be in the business of what some people call industrial policy where picking winners or creating make work jobs or things like that." So, is Romney right?

RATTNER: Well, first of all, as you pointed out in the last segment, Massachusetts engaged in exactly the same practices. Konarka Technologies, a solar energy company in Massachusetts, funded with $1.5 million by President Obama coincidentally went bankrupt on Friday. So, Solyndra is not an isolated example of where the government can actually make mistakes on rating in the private sector.

I think the government has a role to play in encouraging technologies. I personally am reluctant to see the government acting as a venture capitalist. I think it is hard.

Programs like the Solyndra program began in the previous Bush administration. They've existed for a long time in the government. This is not some idea that President Obama came to Washington with and suddenly adopted for the federal government.

WALLACE: But he certainly embraced it, especially in the case of Solyndra where he personally went out there?

RATTNER: He embraced the idea of these kinds of investments. Solyndra was not a political decision. Solyndra was not a political decision. I actually didn't see Solyndra happen. But when I was in the government, I watched a number of other investments made, and they were made by serious people trying to do serious things.

But I think it's very hard for anybody to be a venture capitalist, let alone the government.

WALLACE: All right. I'm being unfair because I didn't realize we only have a minute left. But I do want to ask you. As the former car czar you heard the discussion with Ed Gillespie about the auto bailout. He says -- Romney says that Washington basically followed his advice in a managed bankruptcy, true or false?

RATTNER: Completely false. And what Ed Gillespie said was completely false. The fact is there was no private capital available for these companies. And not only did President Obama recognize that, President Bush recognized that. Remember that the first $17 billion that went in to General Motors and Chrysler was put in by President Bush because he and Hank Paulson, his secretary of the treasury, recognized that there was no private capital. There was no private capital. That's not a hypothetical. That is a fact.

I was there. President Bush was there. It would have been government money or nothing.

And if it would have been nothing, as you said but it worse than what you said, the companies would have run out of money, they would have closed their doors, they would have liquidated, and they would have laid off hundreds of thousands of workers. That is a fact.

WALLACE: We're going to have to leave there. Steve, thank you so much for coming in today. Good to talk to you.

RATTNER: Thanks for having me.

WALLACE: Up next, whatever happened to the vaunted Obama machine from 2008? We'll ask our Sunday group about the president's campaign and its shaky start.



DAVID AXELROD, OBAMA CAMPAIGN CHIEF STRATEGIST: You can't handle the truth, my friend. (Inaudible) problem. (Inaudible).


WALLACE: The Obama campaign's David Axelrod running into some trouble in Boston this week in what was supposed to be the kickoff of a new line of attack on Mitt Romney's record as governor. And it's time now for our Sunday group.

Fox News political analyst, Juan Williams; Republican strategist Chip Saltsman; A.B. Stoddard of The Hill newspaper and David Brody of the Christian Broadcasting Network.

Well, after 2008, the Obama team had a reputation as political masterminds, but so far, this campaign, not so much.

Chip, as someone who has run campaigns, how are they doing at the political fundamentals of blocking and tackling?

CHIP SALTSMAN, REPUBLICAN STRATEGIST: Well, you know, the first week we saw a campaign that was based on hope and change. We got hip and cool and now they seem hapless and confused. The first week they started off by attacking Bain. And that didn't seem to work and they quickly pivoted to attacking his time as governor and that got people confused. And they've not had a good week.

The Axelrod press conference was a disaster of epic proportions. A month ago everybody thought Obama was going to cruise, they were the smartest campaign in history, the smartest guys in the room. Now, we see they have got some real cracks in the armor and I think the Romney campaign is going to try to take advantage of it the next couple of weeks.

WALLACE: Well, here's another blunder that you may not have seen. On the day, Friday, when all of the bad economic news came out, the Obama campaign decided that was the day to release a video of Anna Wintour.

If you don't know her, she is the editor of a fashion magazine, Vogue, saying to people, contribute to the Obama campaign and you can come to a big exclusive dinner in New York that Sarah Jessica Parker and I are hosting. Take a look at this.


ANNA WINTOUR: Sarah Jessica and I both have our own reasons for supporting President Obama and we want to hear yours so please join us but just don't be late.


WALLACE: Yes, don't be late.


WALLACE: And this is on the day when we find out that the economy created only 69,000 jobs. First of all, do you subscribe to Chip's idea that the campaign is off to a shaky start and if so how big a deal?

JUAN WILLIAMS, FOX NEWS POLITICAL ANALYST: By the way, that was hilarious.

That looks like a parody. It looked like the Romney campaign planted Dr. Evil in the House of Obama, and he said you know on the day the grim job numbers come out, let's have someone who reeks of ornamental excess announce that the peasants can have a place at the table. It's just unbelievable. It was just a -- I mean, so, you know, just a mistake.

But look, in response to Chip, this is a new face in the campaign. Governor Romney is now the nominee and what you have is a contest in which there is a lot of mud being thrown by both sides to try to define the opponent very early.

What that means for the Romney campaign is to point to the economy and say we have economic problems and this guy is not a worthy steward of the American economy.

What it means for the Obama campaign is to throw mud and say look at this guy's record and how he has been pushed to the far right and, of course, the primaries on immigration, women's rights, tax cuts, gay rights, immigration, it just goes on. That is the idea.

So what you get now is both sides throwing mud and nobody comes out of this clean, Chris. Everybody gets dirtied up. I think the Obama campaign is investing with the idea that Romney's numbers in the last week, especially in terms of favorability, have improved.

You don't want the fact that Republican women are rallying now to Romney to define Romney as acceptable in the mind of independent voters. I think the Obama campaign is actually doing the right thing in saying you got to know exactly his record as governor of Massachusetts, not a good record.

One other quick note. You notice Romney sneaking out to Fremont, California, to go to Solyndra because he is afraid that the Obama people are going to boo him or stop him. And then Axelrod in Boston, every gofer from the Romney campaign shows up to hoot and holler at Axelrod. It's just dirt being thrown at each other.

WALLACE: Is that it, dirt? And who is throwing better dirt, if that is what it is?

DAVID BRODY, CBN NEWS CHIEF POLITICAL CORRESPONDENT: There is quite a bit of dirt going around. There's no doubt about it.

Look, I think the Romney campaign has a real opportunity here -- I'm sorry; excuse me -- the Obama campaign has a real opportunity here to make sure and look at people and say look, Romney doesn't connect with voters.

And I think that is the -- you know, they have been talking about Bain a lot. They've been talking about Massachusetts' record and the economy and jobs. I think that is a losing proposition for the Obama campaign.

What the Obama campaign really needs to do, if they are listening, is look, is to basically say that Romney doesn't connect with voters. I mean, if you look at favorability rating, you see it right there in the numbers.

And so if you can bring back the "I'm not concerned about poor people, I like to fire people," all of it, you know, all of it taken a little bit out of context, but the point is you can make a narrative, craft it, get away from the economic numbers because that doesn't serve the Obama administration at all and get it more to a connection level.

WALLACE: A.B., for all the talk of the campaign and Axelrod, and, of course, we haven't even mentioned the fact that Romney spent a day with Donald Trump, which didn't cover him in glory, the big news this week -- no question about it, the only thing anybody will remember about this week are the jobs numbers and the very weak job creation.

How big a deal, is it time for the Obama campaign in Chicago to panic?

A.B. STODDARD, THE HILL: Oh, yes, and they are panicked. Though the early winter reports, which were so good, gave everyone a sense of momentum and hope, the Obama administration knew that the growth estimates for later in the year were not going to support 200,000-plus jobs a month and wouldn't be continuing, 69,000 is obviously worse than expected.

More, there is a higher labor participation rates and more people are coming back into the system. That could continue that makes unemployment numbers go up.

That is such a symbolic metric that the public uses to measure, like the state of the economy, the wrong track, right track. And so if you look at what we have been saying, oh, this will go up and down, bumps and scrapes, but the summer of 2012 that is when it is going to solidify the opinions of voters.

We are in the summer of 2012. The hour is late; there is not a lot the president can do to actually -- barring some maneuvers by the Fed to really change the unemployment picture and the economic outlook of the voters before November 6th. Congress is not going to work with him on that stuff. And he is looking at a very narrowing window.

WALLACE: Let me pick up on that with you, Chip. What can the president do about it? If the numbers stay roughly this bad -- and people do agree.

Political scientists say people's ideas about the economy kind of lock in, certainly by Labor Day or the end of September; can he win by attacking Romney? Can he win by going after Congress? Or does he -- or summer's adjusting; now he needs to come up with a new economic plan?

SALTSMAN: Well, all the above. The challenge is going to be for President Obama in a short amount of time -- and we learned in the '92 campaign with the first President Bush, the economy actually was doing much better by the time the election was, but people had already made up their mind in the summer.

And the economy is not going to get better tomorrow. And even though the economists all said it would be much, much better by now, it is not. And so I think the Obama campaign and what you saw this week, they're trying to find a message that sticks. So they attacked him on Bain; it didn't quite work. Then attacked him on being governor of Massachusetts; it didn't quite work.

And I think what you're going to see over the next couple of weeks is they are going to try to find what attack will stick on Mitt Romney, and I think there's going to have lots of opportunities to pick. But I think it's going to be a big challenge because no matter what happens, it is the economy that is going to drive the message for the next five months. There is nothing else.

WALLACE: But, briefly, Juan, I mean, at this point what we heard from the president; what we heard from his people on Friday is we -- it didn't happen quickly and it's not going to be solved, they said, overnight. I mean, it's been three and a half years. Continue the policies.

Does he -- can he just say stay the course or does he have to come up with some late correction?

WILLIAMS: No, I don't think a late correction is believable. I think it would reek of desperation at this point and people wouldn't trust it.

It's got to be a message that says -- and I think this picks up on what you heard earlier here -- it's got to be a message that says we are in the middle of stormy waters; don't change captains at this moment; and remember exactly where we departed from.

You know, we were in a bad situation. And if you look at the economy, in fact there has been an increase in job creation, particularly in the job sector. So stay with us. Don't worry about Europe. Close your eyes to what's happening with Spain. Don't worry about the Middle East.


WALLACE: That's a very convincing message. All right.


We're going to have to leave it there. Thank you, panel.

But when we come back, all eyes turn to Wisconsin, where a bitter recall election has some Republicans believing the state could be in play for Romney in November.


WALLACE: Still to come, our power player of the week.


SUSAN MAGILL, VICE PRESIDENT OF ADVANCEMENT AT MOUNT VERNON: The most difficult audience is a 13-year-old boy.


WALLACE: She's working to attract new generations to the father of our country.


MAGILL: The patriotism, the courage, the complete commitment to his country -- those are things that don't go out of style.


WALLACE: Stay tuned. Our panel will be right back.



GOV. SCOTT WALKER, R-WIS.: Before our reforms, a handful of special interests dictated, at both the state and the local level, what was going to happen. Instead we drew a line in the sand and said we're going to put the power back in the hands of the taxpayer.

MAYOR TOM BARRETT, D-MILWAUKEE, WIS., GUBERNATORIAL CANDIDATE: You did intend to divide and conquer, Scott. You did. You wanted to pit people against each other because that's the way you operate.

WALLACE: Wisconsin's Republican Governor Scott Walker and his Democratic opponent Tom Barrett scaring off over the controversial Walker law that cut back on collective bargaining rights for most public workers. And we're back now with the panel.

Well, the big Wisconsin recall is on Tuesday. When the whole recall process started, Juan, it was widely thought that this was going to be a referendum on the Walker plan to cut back on collective bargaining rights for public workers' unions, but there has been relatively little talk about that in these closing days, much more talk, in fact -- that was one of the few clips in the debate -- much more talk, Barrett charging that there has been corruption by some former Walker associates when he was Milwaukee county executive.

What happened to the referendum on collective bargaining?

WILLIAMS: Well, I think Governor Walker is exactly right that the topic has shifted here and the argument about collective bargaining just wasn't proving to be effective. In fact, the polls right now show...

WALLACE: Wasn't proving to be effective for whom?

WILLIAMS: For Barrett and for the unions.

WALLACE: For the Democrats?

WILLIAMS: Right. And so right now, the polls show Walker with a substantial lead, about seven points, although there are some other polls that show that it might be closing. And former President Clinton was in Wisconsin this weekend campaigning for Barrett.

Now, Barrett, I should tell you, is not the choice of the unions. And the unions are the ones who have been driving this. Barrett is seen as someone who is not particularly strong about those very collective bargaining rights that you ask about, Chris.

But this is going to have major impact going forward because it's about the power of unions and about the power of the Republican agenda in several states. You look at Florida, Indiana, Michigan, as well as Wisconsin, with regard to unions, with regard to voter ID. These are what Republican governors are doing, and if they win here, I think it opens the door to further funding and more, sort of, an energized electorate for them in the fall.

WALLACE: Well, if those are the stakes, why is it that most of the top Republicans in the country -- you've seen Christie and Jindal and a bunch of top Republican governors coming in and backing Walker, but with the exception of Bill Clinton this weekend, almost all the top Democrats have stayed away. How come?

SALTSMAN: I think it's a big problem for the Democrats to do that. There's no question I think the unions overplayed their hands with this when it first got started five or six months ago. They put a lot of money into it and now they're losing, and the national Democrats are now playing hands off.

And I think that's a big problem for them in November. Because, if the president is staying out of it and it's noticeable that the president is staying out of it, are these volunteers and activists going to stay home in November? And I think that's a real possibility. I think -- I think Wisconsin can be a real bellwether for November.

WALLACE: Well, before we get to November, let's talk about the stakes for unions, A.B.

For those who may not remember, the Walker plan sharply limited the ability of public employee unions to bargain for public workers on a variety of issues. And it also removed the automatic dues membership. So as a result, you have to voluntarily say I'm going to pay money. It isn't taken out of our paycheck, and the result, not surprisingly, is that the membership in the unions has dropped substantially.

So if they lose, whether this is the focus now, it certainly is the main backdrop to this election, what is the message and how bad a message would it be for unions?

STODDARD: Oh, it's very tough. They have been working very hard on this now for over a year. They collected more than the amount of -- twice as many signatures as required to recall the governor. They were fired up. And what they have found is that the Obama administration is not there to help them. They...

WALLACE: Why not?

STODDARD: Well, what the Obama administration calculated was that this is -- if he ties himself to this recall and Barrett goes down, that's bad for him in the state at this point. He might not have made up enough of the difference.

Democrats and the unions are actually looking for 100,000-plus votes that weren't around in the 2010 election. They're trying to find people who didn't even vote for Barrett or Walker in 2010. So they know they're going to come up short and it's not -- even Bill Clinton is not going to help get Barrett over -- over the top.

And the administration has decided that they can't be connected to this. But they will pay a price for that because labor will be very dispirited by losing this battle, and it's hard to imagine them being able at that point to put a lot of resources into getting people up and out and on the ground trying to elect Barack Obama just months from now.

WALLACE: Now, we should point out that, while the latest poll showed Walker leading by seven points, there have been some indications that the -- from some other surveys that the lead is narrowing.

So let me pick up on this, David, though. If Walker wins; if the recall is defeated, how big a defeat for unions -- and to pick up on what Juan said, how much of an incentive to other governors -- we'd already seen it in Indiana; we'd already seen it in Ohio -- how much of an incentive to other governors to go after particularly the public workers unions?

BRODY: Well, it's a huge defeat for unions, clearly. I think what you are seeing here is, with Scott Walker, Paul Ryan and others, I mean, you're seeing this word "courage" come up a lot, you know, that they had the courage to take on the tough problems.

And I think you'll see a lot more governors, at this point, take on some of the more tough budget gimmicks in that -- in that budget.

I've got to tell you, I think the underreported story here is what's going on, on the ground in Wisconsin, as it relates to the Tea Party. I mean, you have a conglomerate of Tea Party groups there, Tea Party Express, Tea Party Patriots, Americans for Prosperity, FreedomWorks. You can go on and on. You put all of those folks together; this is going to be the number one crowning jewel of the Tea Party movement in -- between 2010 and 2012. Mourdock beating Lugar, yes, huge and there has been others.

WALLACE: That was Indiana.

BRODY: I'm sorry, Indiana. Huge. But this -- what's been going on there. They have been on the ground there for a year there, Chris, all of these groups. It shows you the real power of the Tea Party, what they can do in terms of taking on unions.

WALLACE: Now let's talk about November.

Wisconsin is a very blue state. It has not voted for a Republican for president since Ronald Reagan won 49 states in 1984. If Walker wins, how translatable do you think this is to Romney having a chance in a state as I say that has not gone Republican for a quarter century?

WILLIAMS: Well, as I say I think it will energize the base, the Republican base in the state. I think people will feel as if there is an opportunity there not to be missed. The fact is that President Obama didn't win by a lot last time in Wisconsin and that narrow margin is what has made people think it is possible here for the Republicans to see a resurgence.

So I think it's -- it definitely helps anybody. It doesn't guarantee anything because the state is terribly divided, polarized over this Walker thing. A lot of money has come in from people like the Koch Brothers and others, you know. I'm not sure that is going to be present in the fall. But the base, and this picks up on David's point about the Tea Party and the energy -- the Republican base in Wisconsin is going to feel like, wow, we are Superman. We saved the day.

WALLACE: Let's put up a poll that shows the Republican -- or rather presidential horse race because as we said Walker is leading by 7 points, but we got a poll at the same time that shows Obama still leading by 8 points over Romney in Wisconsin.

So assuming a Walker win, and we got to say assuming -- and this is not a done deal yet, Chip, how translatable does it really put Wisconsin, in play?

SALTSMAN: It gives us a snap shot that says it is not 2008 where Obama won in double digits. And it's maybe not 2010 where every Republican won statewide, but it puts Wisconsin in play, especially if you have a Congressman Ryan on the ticket which is possible. And Wisconsin really becomes in play in November.

I think Obama's people are putting more states on the board for Mitt Romney right now and that is good thing for him.

WALLACE: Explain.

SALTSMAN: Well, in the Electoral College you have to get to 270. And the race is always about trying to get about 14 or 15 states that are on the tossup column. The race is always about getting those states in your column as quickly as possible. Well, right now, Obama is putting states that should be Democrat into the tossup column or the Romney column.

WALLACE: All right. We're going to leave it there. Thank you, panel. See you next week.

Don't forget to check out panel plus where our group picks up with the discussion on our website And we will post the video before noon eastern time. And make sure to follow us on Twitter @foxnewssunday."

Up next, our power player of the week.


WALLACE: The start of summer means the beginning of tourist season here in Washington as millions of visitors come to the nation's capital, that got us thinking about one of the biggest attractions here which is reinventing itself. Here is our power player of the week.


MAGILL: It is not just that there is an unattractive looking person on the dollar bill.

WALLACE: Susan Magill is talking about George Washington. As head of fund raising for Washington's home Mount Vernon she is working to attract new generations to the father of our country.

Do you worry at all that Washington has been displaced by some of the other founding fathers in recent years?

MAGILL: Yes, I do. And it is not to take anything away from the other founding fathers, but when they got their backs up against the wall they always turned to Washington.

WALLACE: One big addition is the museum and education center.

MAGILL: The most difficult audience is a 13-year-old boy. For this education center was really built to get him excited.

WALLACE: There are interactive displays on Washington's life and what is called an immersion theater.

MAGILL: In the theater that the cannons roar, your chair is shaking, you can feel that you are right there in the midst of the battle.

WALLACE: Mount Vernon is the most popular historic home in the U.S. with more than one million visitors a year. And now there is a new project, to build a presidential library that will recreate the 1200 volume collection Washington had here.

MAGILL: Washington wrote over 22,000 letters. It really is very meaningful to read some of those and try and understand what was on his mind at that point.

WALLACE: One thing I learned is Mount Vernon was falling in disrepair in the 1850s when 27 women, the Mount Vernon Ladies Association, bought it for $200,000. The association still owns and runs the estate with no government assistance.

Since 1860, no federal money, no state money, no public money.



MAGILL: They think this is their responsibility and the responsibility of other generous Americans. I don't think they want -- you know, the federal government; the federal money usually comes with some strings. And we don't want to do that.

WALLACE: Magill has more ideas. She would like to see Washington's actual birthday recognized again.

MAGILL: Instead of having a three day mattress sale extravaganza, what if we really tried to return to our roots in a patriot patriotic celebration of George Washington, and the founding principles of this nation.

WALLACE: I'm old enough to remember, February 22.

MAGILL: Exactly, good for you.

WALLACE: She is also trying to get schools to put his portrait back in the classroom.

MAGILL: We will send a free portrait of George Washington, along with a lesson plan, a celebration kit and a flag that's been flown over Mount Vernon.

WALLACE: Does it always thrill you when you come out here?

Susan Magill is passionate about Washington and Mount Vernon and a legacy she says must never be lost.

MAGILL: I think the patriotism, the courage, the complete commitment to his country, those are things that don't no out of style.


WALLACE: One other thing about Mount Vernon it is open every day of the year. So if you are in the D.C. area over Thanksgiving or Christmas or any holiday you can always go see Washington's home or send your family there.

And a quick reminder, please check out my wife Lorraine's new cookbook Mr. Sunday's Saturday Night Chicken. And you can go to our website for this week's recipe not fried chicken, which I must tell is my favorite of all of Lorraine's chicken dishes.

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

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