Updated

The following is a rush transcript of the January 27, 2013, 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.

The Pentagon lifts the ban on women in combat.

(BEGIN VIDEOTAPE)

WALLACE (voice-over): As the gender barrier falls, there are still questions -- whether women should serve in the infantry and special operations. We'll hear from two retired officers, Air Force Colonel Martha McSally, the first female U.S. combat pilot, and, Army Lieutenant General Jerry Boykin.

(on camera): Then, with the pageantry over, now comes the hard part -- dealing with the nation's big issues.

(voice-over): From our debt to gun violence, to getting America back to work, is Congress ready to act?

We'll get the latest from two top senators -- Democrat Dick Durbin and Republican Bob Corker.

(on camera): Plus, the president uses his inaugural address to push a liberal agenda.

(voice-over): We'll ask our Sunday panel how Mr. Obama is likely to do in his second term.

And, our power player of the week: a student of the ways presidents exercise power.

All, right now, on "Fox News Sunday."

(END VIDEOTAPE)

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

American women in the military have served on the front lines for years. And 152 have been killed in Iraq and Afghanistan. But when Defense Secretary Panetta lifted the ban on women in combat, his decision, this week, drew strong praise and sharp criticism.

We have brought together two distinguished veterans to discuss the issue.

Colonel Martha McSally was our nation's first female combat pilot, logging 325 hours in the skies over Iraq and Afghanistan and she joins us from Tucson.

Lieutenant General Jerry Boykin was one of the original members of the Army's Delta Force and former head of the U.S. Special Forces Command.

Colonel, General, welcome to "Fox News Sunday." I have to say, I have been looking forward to this discussion.

RET. LIEUTENANT GENERAL JERRY BOYKIN: Thank you very much, Chris.

RET. COLONEL MARTHA MCSALLY: So have I. Thanks for having us on.

WALLACE: Right. Here's how Defense Secretary Panetta explained his decision this week. Take a look.

(BEGIN VIDEO CLIP)

LEON PANETTA, DEFENSE SECRETARY: Not everyone is going to be able to be a combat soldier. But, everyone is entitled to a chance.

(END VIDEO CLIP)

WALLACE: General Boykin, you dismissed this as another case of the Pentagon using the military for a social experiment. I'd like you to tell Colonel McSally directly, knowing her background, look into the camera and tell her why she is unfit to serve in combat.

BOYKIN: Well, Chris, you need to frame it correctly. It's not an issue of women in combat. Women are in combat already and have been since 9/11, in fact, prior to that. And Colonel McSally is a great example of how women can be used effectively in combat.

My issue here is, mixing the genders in infantry units, armored units and Special Forces units is not a positive. There are many distracters there which put a burden on small unit combat leaders and actually creates an environment because of their living conditions that is not conducive to readiness.

WALLACE: Colonel McSally, those are the two basic arguments. You are a combat pilot but you are not -- formally, not in combat on the front lines. You are attached to combat units and the two arguments are: one, physical limitations, particularly to serving in the infantry, and also this question of a distraction during operations, when you are in close quarters. There's no privacy and rugged living conditions.

And look in your camera and tell General Boykin why he's wrong.

MCSALLY: Let me just say I realize flying combat aircraft and being on the ground in combat are two very different missions. However, the same flawed arguments were used against allowing women to fly in combat and now allowing them to be on ground combat, like what General Boykin has said.

These are flawed arguments the battle line is we need to treat people like individuals. What are the capabilities they bring to the fight? Which includes physical strength, plus courage, plus aptitude, plus leadership and, all the other things we need to have the most effective fighting force.

So, we are a country that sets standards and then allows people to compete as individuals and if they bring the better soldier to the fight, then women should be able to compete on equal ground. I'm not talking about changing standards; I'm talking about allowing people to be considered for what they bring to the fight.

WALLACE: Well, let me just --

(CROSSTALK)

WALLACE: Colonel, if I can, follow up on that.

MCSALLY: Yes?

WALLACE: Because the Marine Infantry Officer Corps offered last September a course, training and two women took part and both dropped out and they said carrying those 70-pound backpacks in infantry on this ground is too tough for women.

Are you confident that women can meet the same physical standards for ground combat that men do in?

MCSALLY: Look, we know the bell curve of men is stronger than the bell curve of women but they overlap. And so, the current policy, basically says that no women can meet the standard and therefore, all men can. So that's like saying, General Boykin, Pee Wee Herman is OK to be in combat but Serena and Venus Williams are not going to meet the standard.

The bottom line is treat people like individuals. Physical strength is one element of ground combat, but all those other qualities I've mentioned like aptitude and courage, and discipline and leadership are also what women bring to the fight.

The Pentagon estimated a few years ago, that 75 percent of 17 to 24-year-olds are not even qualified to be in the military. So we are recruiting from 25 percent of the population, 15 percent of them go on to college. So we need to recruit from 100 percent of the population in order to make sure we have the most effective fighting force.

WALLACE: Let me bring General Boykin in here. I'm about to say I like the analogy of the Williams sisters versus Pee Wee Herman and I would also point out, Colonel McSally competed in the Ironman triathlon, military division, men and women in Hawaii, she won.

So what does that say? I mean, clearly some women can meet the standard.

BOYKIN: Well, first of all, some women can and there will be few but some can. But that's not the issue I raised initially. What I have raised is the issue of mixing the genders in those combat units where there is no privacy, where they are out on extended operations, and there's no opportunity for people to have any privacy whatsoever.

Now, as a man who has been there, and a man who has some experience in these kinds of units, I certainly don't want to be in that environment with a female because it's degrading and humiliating enough to do your personal hygiene and other normal functions among your teammates.

WALLACE: Let me ask Colonel McSally to respond to that.

MCSALLY: Sure. Again, right now, we're in a 360 battlefield and women and men are serving together out there in combat.

Privacy is a red herring. You can figure out the privacy issues, as long as you have the most capable, qualified force. That should be no reason for exclusionary policies.

Some of our closest allies have figured it out for many years. Canada is the best example. They've had women fully integrated into the combat forces. They have taken serious casualties in Afghanistan and women are out there on the front lines, leading men in combat, and doing a fantastic job of it.

So, this privacy issue, our men and women next to each other, it's the same issue we have seen, which is a myth, really, and it's not a show-stopper to make sure we have the most capable, qualified, fighting force.

WALLACE: Let's -- this sort of edges into the next area I wanted to get into, which is the issue of sexual assault.

The Department of Veterans Affairs did a study and they found that 22.8 percent, almost a quarter of military women deployed to Iraq and Afghanistan reported they were sexually assaulted.

But, General Boykin, the chairman of the Joint Chiefs, General Dempsey, said he thought the ban on women in the military contributed to those assaults. Take a look at what he said.

(BEGIN VIDEO CLIP)

GEN. MARTIN DEMPSEY, CHAIRMAN, JOINT CHIEFS OF STAFF: When you have one part of the population that is designated as warriors and another part designated as something else, I think that disparity begins to establish a psychology that in some cases led to that environment.

(END VIDEO CLIP)

WALLACE: Is General Dempsey wrong?

BOYKIN: Well, I don't -- I don't agree with General Dempsey on this issue. And first of all, we need to recognize, that is bad people doing bad things but it happens all over. I'd also like to go back to Colonel McSally's last comment.

There is a big difference in flying a combat mission and going back to a hangar where there are facilities and being on a 30-day operation where you are in very close quarters with your teammates. And so, this is not a specious argument. And I can tell you, having been there is something that has to be considered.

But also consider, Chris, where does it go? Do we draft women? Do we release them from the service for pregnancy? Where does it go? Where does it ultimately go?   They are in combat and they should be in combat and we should find opportunities, just like with Colonel McSally for them to serve in combat. I'm talking about infantry, armored, Special Forces, those units where I object.

WALLACE: We're going to get to the issue of the draft in a minute, because it's a very legitimate issue a lot of people have raised.

But, Colonel McSally, does this kind of second-class status -- I don't mean to call you second class -- but the idea that women are not allowed into some combat roles, that as General Dempsey said, men are warriors and women are something else -- do you think it has contributed to the environment in which sexual assault happens?

MCSALLY: Absolutely. I mean, when you have an environment where women are treated as sort of second class warriors -- they can, you know, do almost anything but not quite the elite jobs, not out there doing what really brings about promotions and leadership positions and really what matters in the military the most -- you create this subconscious feeling that, you know, women are not quite equal with the men. And, so, that adds to our problem of sexual harassment and sexual assault.

Sexual assault is a very complex issue. But the way to address it obviously is finding those who are the criminals and make sure we rat them out of the military. You don't avoid the issue by keeping women out of those units, because those men are assaulters, they're going to assault civilians and others they come into contact to.

So, this change -- I agree with General Dempsey -- is absolutely necessary and the restrictions in the past have actually added to the problem.

WALLACE: Colonel McSally, General Boykin brought up the idea of the draft. And a lot of people said the -- and in fact the Supreme Court said, the reason women should not be subjected to the draft is because they are not combat-ready.

If you are going to lift the ban -- and it has now been lifted, and, if we should have to go back to the draft in a military emergency -- should women take their place with men in the draft?

MCSALLY: Well, I know really smart people who would argue that maybe we shouldn't be having a selective service system in the first place but given the fact we do and we have tied citizenship with the obligation to be ready to defend the country, in whatever capacity needed in an emergency, equal equals equal. So, I do believe that men and women at age 18 should be registering, because if the country needs you, they will need you for all the capabilities in the military -- combat, noncombat and all the specialties.

And so, I have no problem with, if we are tying citizen obligation to the readiness to defend, that goes across the board.

WALLACE: So, General Boykin, is that OK with you? If we're going to have this -- and now it is a matter of fact, that the ban on women in combat, ground combat has been lifted, women in the draft?

BOYKIN: Well, I think you have no option. I think you'll have to have women register with selective service and, obviously, be eligible for the draft. I don't think you can do it any other way.

WALLACE: And do you have a problem with that?

BOYKIN: Well, I certainly don't want my daughters registering for the draft. And I'd like for them to have more of a choice, than a man would have, in a national crisis.

WALLACE: I just want to end this with one final statistic and, Colonel McSally kind of brought this up, talking about the fact that the women are not in combat roles, has hurt their representation, their ability to rise through the ranks -- 74,000 women in the Army, 19 generals. That is .026 percent.

I mean, doesn't the practical effect of not allowing women to serve on the ground in combat hurt their ability to rise through the ranks, General, to become a general like yourself?

BOYKIN: Well, that's right. But, I think -- I think it does, Chris. I think it clearly does.

But, keep in mind the mission of the military is to fight and win wars. Every decision made today should be made in the interest of military readiness. And, while I, again, I say women are in combat and women need to be given opportunities to serve in other combat roles, I am no longer against that. There was a time when I was.

But, I also think that we have to consider the second and third order effects and look at this holistically.

WALLACE: And, 30 seconds -- Colonel McSally, what do you want to say?

MCSALLY: Sure. This really isn't about rising to leadership. This is about military effectiveness.

The 230,000 positions that were previously closed, only a fraction of them are Special Forces and infantry. And the rest are a whole variety of other jobs that have been closed to women.

If we want the most effective fighting force, we need to pick the most qualified capable man for the job, even if it's a woman. This is about military effectiveness and allowing to us recruit the most capable and qualified force.

WALLACE: Colonel McSally, General Boykin, I want to thank you both -- thank you so much for coming in today and, thank you, both of you, for your service to our nation.

BOYKIN: Thank you.

WALLACE: Up next: two key senators on President Obama's ambitious agenda for a second term. How much of it will Congress pass?

(COMMERCIAL BREAK)

WALLACE: Just four days after President Obama's triumphant second inaugural a federal court handed the White House a major setback.

Here to discuss it all are two congressional leaders; from Illinois, Dick Durbin, the number two Democrat in the Senate; and, Bob Corker, the top Republican on the Senate Foreign Relations Committee.

Senators, welcome back to "Fox News Sunday."

(CROSSTALK)

CORKER: Yes, sir.

WALLACE: Well, a federal appeals court ruled Friday that President Obama violated the Constitution when he made three invalid appointments to the National Labor Relations Board.

Senator Corker, you and 41 of your Senate colleagues joined in support of the lawsuit. What do you think this ruling says about presidential overreach, both in these appointments, and, also, in all of the executive actions he has been taking recently?

SEN. BOB CORKER, R - TN: Well, it was a huge victory for anybody who believes in balance of power and the Constitution. And I could not have been more excited and came up off the floor when I saw that that had happened and hopefully the Supreme Court will uphold it.

But, there is no question that what happened with the NLRB and Richard Cordray, the Consumer Financial Protection head, that was abusive. And, thankfully, the district court here in Washington struck it down and, hopefully, the Supreme Court will uphold it.

WALLACE: Abusive in what way?

CORKER: My gosh, I mean, these people never had a hearing. So -- I mean, they came forth, they never had a hearing and he confirmed them. I mean, it was just -- or he appointed them. So, it was one of the most abusive cases ever.

Obviously, this ruling is very far-reaching and actually knocks down decades of action by presidents, as far as common practice goes. But I'm very thankful that it came forth and, hopefully, we can get back to more of a balance of power.

Through the years, executive branch, obviously, has been gaining tremendous power.

WALLACE: Do you think -- and I'm going to bring in Senator Durbin in a second. Do you think this invalidates the more than 300 rulings made by the NLRB in the last year with the three invalid appointments? And what about the action taken by the Consumer Financial Protection Bureau, is all of that out the window?

CORKER: Could well do it. In each case, someone might have to challenge the rulings to make them invalid. But, certainly that's what we said at the time, Chris -- was these people were going to be working in banks, and the rulings they come forth with will be challenged. That's turned out to be the case.

And, thankfully, for our country, there will be a balance of power here.

WALLACE: Senator Durbin, I don't have to remind you, the Democrats came up with the idea in 2007 of these pro forma sessions, gavel in every three days for 30 seconds so that there wouldn't be a recess and, therefore, you couldn't have recess appointments. President Bush did not challenge that. President Obama did. And that's why the lawsuit was filed.

Was that presidential overreach?

SEN. DICK DURBIN, D - IL: Let's step into this a little more. And ask why did we reach this point? Why did the president believe these recess appointments were so critical?

And I think even Bob would concede, we reached that point because we couldn't go through the orderly process of reviewing nominees, and literally voting them up or down. There was a question about how often they could be brought to the floor, how long they would languish on the calendar. What secret hold would apply? Whether or not there would be a vote.

And in its frustration, this administration said, we were elected to govern and whether it's a National Labor Relations Board or whatever, they wanted to put people in place to govern.

I hope what happened Thursday night, Chris, is going to change this. We had a bipartisan, strong bipartisan vote for some rules changes, and included in those rules changes were changes in the way we treat nominees, not only for the courts but for these agencies.

Let's have a day in court for each one of them, and let's have a hearing and let's have a vote.

WALLACE: But, Senator -- Senator, and I want to move on to another subject but briefly, I understand the president's frustration. That doesn't mean he can just rewrite the Constitution.

DURBIN: Listen, I worked in the congressional branch, the legislative branch of our government, and I certainly didn't hold up our team, model, whatever it happens to be, whoever the president happens to be, but I want to put it into perspective. We have seen this president denied the opportunity to make appointments over and over and over again because one senator happens to hate a particular agency or a particular person.

For goodness sakes, in fairness, give them a hearing, give them the vote, let's get on with it.

WALLACE: Do you want to respond to that?

CORKER: We'll I think we did something very good Thursday night in that we didn't blow the Senate up.

But I would just say, in the case of the NLRB nominees, there was never a hearing. So in that case, it was incredibly abusive. And again, I'm glad the court has struck this down and, hopefully, we'll get back to regular order and doing things the way we should be in the United States Senate.

WALLACE: All right. Let's turn to the president's inaugural, his agenda for a second term. I think it's fair to say that it's a pretty liberal agenda.

Here's what he said during his address.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The commitments we make to each other through Medicare and Medicaid and Social Security, these things do not sap our initiative, they strengthen us.

(APPLAUSE)

They do not make us a nation of takers, they free us to take the risks that make this country great.

(END VIDEO CLIP)

WALLACE: Senator Durbin, the president said that he rejected the -- that Americans must choose between caring for our seniors, and investing in the new generation, but the question I have is, who on Capitol Hill, which Republicans are saying that they don't intend to care for our seniors?

DURBIN: Do you recall the last campaign? When a man named Mitt Romney talked about the 47 percent of people who were takers? Those who were living off of the government? And those are the ones who will support the Democrats?

That approach was soundly rejected, even by many Republicans.

And what I heard the president say was programs like Social Security and Medicare and Medicaid, critically important for our future, and, we need to have a bipartisan commitment to make them work.

Now, Bob and I have been in a lot of meetings talking about deficit reduction. I think we need reform in these programs, and it means they'll live onto serve future generation. That's the message I took from the president.

WALLACE: All right. Senator Corker, I'd like you to respond to that. I also like you to comments that House Speaker Boehner spoke about the president's attitude towards the Republican Party. Let's watch.

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER, R - OH, SPEAKER OF THE HOUSE: We're expecting over the next 22 months to be the focus of this administration as they attempt to annihilate the Republican Party. And, let me just say, I do believe that is their goal, to just shove us into the dustbin of history.

(END VIDEO CLIP)

WALLACE: Senator Corker, do Republicans want to gut Social Security and Medicare? Does President Obama want to destroy the Republican Party?

CORKER: Obviously, Republicans want to make sure these entitlement programs are here for future generations. Right now, for every dollar we spend on the young people, we are spending $4 on seniors. Right now, in Medicare, the average person pays for 1/3 of the cost of the Medicare program.

Now, Dick Durbin, for what it's worth, has been one of those people that is willing to sit down and solve that problem. And I congratulate him on that.

As far as the president's goal of annihilating the Republican Party, I will say that I was glad to see that the House was unified behind something recently as it relates to the fiscal issues, and I think that is a backstop to that.

The fact is that one thing the president didn't mention in his speech was the major fiscal issue that our nation faces. It was everything but that. And, to me, that was disheartening. It is the one issue that, before anything else, we need to put in the rearview mirror to make our country stronger.

WALLACE: Senator Durbin, you are a member of a bipartisan group of senators which plans to release a blueprint this week for immigration reform. A couple of questions: are you talking about a comprehensive package or a piecemeal approach? And will it include a path to citizenship for the 11 million illegals who are already in this country?

DURBIN: Let me tell you, Chris, the answer to both questions is yes. And I can tell you that sitting in these meetings, with three Democrats and three Republicans, working on this immigration issue has been as encouraging as that rules vote on Thursday night. We are trying to work our way through some very difficult issues.

But, we are committed to a comprehensive approach to finally, in this country, have an immigration law we can live with. We have virtually been going maybe 25 years without a clear statement about immigration policy. That's unacceptable in this nation of immigrants.

And we are also saying that we're putting into high priority the unification of families, to make sure that families have a chance to come together. I'm glad the DREAM Act is also an integral part of -- something I've worked on more than 12 years.

WALLACE: Senator Corker, from what you've heard -- and I know you are not a member of this group -- could you accept a plan with a path to citizenship for the 11 million illegals already here, if it's tied to benchmarks on border security and enforcement?

CORKER: Well, I do like the things that Marco Rubio has been laying out. And I did talk to one of the members on the other -- my side of the aisle working with Dick Durbin and he was very optimistic last night at a dinner I attended.

So, again, the details matter. I think right now, they are at the talking point stage and this needs to be reduced to legislation. The last time this blew up was when it was reduced to legislation, so it's my hope we will come up with a bipartisan solution. I do think that enforcement has to be a big part of it.

But, again I like many of the principles that Marco Rubio has been laying out, and I think he's a member of this group and I look forward to seeing what they produce.

WALLACE: Finally, you are both members of the Senate Foreign Relations Committee which heard from Secretary of State Hillary Clinton about the Benghazi terror attack. And here's the moment that got the most attention. Take a look.

(BEGIN VIDEO CLIP)

HILLARY CLINTON, SECRETARY OF STATE: We have four dead Americans.

SEN. RON JOHNSON, R - WI: I understand.

CLINTON: Was it because of a protest or was it because of guys out for a walk one night and decide they go kill some Americans? What difference, at this point, does it make? It is our job to figure out what happened and do everything we can, to prevent it from ever happening again, Senator.

(END VIDEO CLIP)

WALLACE: Senator Durbin, doesn't it make a difference? Isn't it important to find out whether or not the administration was telling the truth in the days after the attack?

DURBIN: Secretary of State Hillary Clinton has done an extraordinary job for this country and it will be recognized by history. And this was one of her finer moments.

Step back, Chris, and take a look. Four brave Americans died. She called for an independent investigation. They called for dramatic changes. She said I accept full responsibility and we're going to move forward to make those changes so that all Americans working around the world to represent us are in a safer place.

You know, we know what happened here. In the six or eight weeks before the election, this became a red flare of an issue. But now, now that that's passed, what we are going to do, through Secretary Clinton's leadership and I hope soon Secretary Kerry's leadership, is to make sure it never happens again. That's the critical mission.

WALLACE: Senator Corker, is it important for folks to know? Does it make a difference, to use the phrase of secretary Clinton, whether the administration was telling the truth to the American people in the days after Benghazi?

CORKER: Well, to her credit, the deception around the Benghazi issue did not come from the state department. And no doubt, emanated from Susan Rice on this program and others that Sunday morning, on the 15th. And continued through this White House --

WALLACE: Well, she didn't do it by herself, if you believe --

CORKER: Well, my point is, is that it was more of a White House political operative deception that was carried out. Not from the State Department.

I do think that Senator Johnson and Secretary Clinton were talking past each other. I understand the point she was making. Certainly, I understand the emotions of the American people who feel like they have been misled. And, in fact, Americans were misled in the beginning about what happened around Benghazi.

WALLACE: Senator Corker, Senator Durbin, we're going to have to leave it there. Thank you both so much for coming in. Always good to talk with both of you.

CORKER: Thank you.

DURBIN: Thanks, Chris.

WALLACE: Up next: the president issues an inaugural call to arms for his liberal agenda and suffers a big defeat in court. Our Sunday group breaks it down when we come right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

PRESIDENT BARACK OBAMA: We cannot mistake absolutism for principle or substitute spectacle for politics or treat name-calling as reasoned debate.

(APPLAUSE)

We must act.

(APPLAUSE)

We must act, knowing that our work will be imperfect.

(END VIDEO CLIP)

WALLACE: President Obama in his inaugural address, dismissing the opposition to him here in Washington.

And it's time now for our Sunday group: Brit Hume, Fox News senior political analyst; Jeff Zeleny of the New York Times; Kimberley Strassel from The Wall Street Journal; and Fox News political analyst Juan Williams.

Well, before we get to the inaugural and the president's agenda for the second term, I want to discuss the very important ruling by the -- the Circuit Court of Appeals here in Washington, D.C. on Friday, that the president violated the Constitution when he made three invalid -- their words -- appointments to the NLRB. Brit, how big a deal?

HUME: I think it's a very big deal and I think that it is going to be a little hard to overcome, if the administration decides to appeal it. And I say that for two reasons. One is the court basically threw out these nominations, these appointments to the NLRB, two grounds, principally. One was that -- and this was a groundbreaking ruling -- that only between sessions of Congress, when Congress isn't in session at all, when one session of Congress has ended and you're awaiting the start of another one, could a recess appointment be made.

Well, that's counter to practice that's been going on for a very long time, and that ground may not be upheld on appeal. But the other ground, which said that the Senate was not actually in recess, is, I think, the one that will be hard to...

WALLACE: Because they were having these pro forma sessions every three days.

HUME: They were every three days. There have been appointments made when the Senate was in recess, not between sessions. And -- but the shortest length of time in which any of those appointments had been made was, like, 13 days. This was in, like, a little two-day or three-day hiatus. And, as far as the Congress was concerned, both houses -- the Senate was not in session. So the question comes, who gets to decide...

WALLACE: No, they were in session.

HUME: I'm sorry. The Senate was in session.

So who gets to decide when -- when one house of the legislature is in session, the president or the legislative body? That's a separation of powers issue and one I think that is likely to be resolved against the president's view here.

WALLACE: Jeff, I think it's fair to say the president has been riding high since his re-election. He had his way with Republicans on the fiscal cliff. He made 23 executive actions when it came to his gun control plan. Now he takes a beating in this court ruling which says that he acted unconstitutionally, invalidates these appointments, could invalidate a year's worth of work by the NLRB and conceivably by the Consumer Financial Protection Bureau, which also -- its head was appointed at the same time.

Does this bring Barack Obama back to earth?

ZELENY: I think it probably does, and I think that was going to happen anyway. I mean, the -- the first term agenda here is packed with a bunch of things and the Constitution says that the president has four years, but he actually has a lot -- a lot less time to get things done.

So I think this, sort of, brings him down to earth a little bit. But what they're trying to talk about right now in the West Wing is how to prioritize things. They have all these issues going on. And this court ruling surprised everyone. And it really throws a wrench in things in terms of what they want to get done. But I think he was going to come down to earth anyway, and this probably hastened it a bit.

WALLACE: Kim, put this court ruling in the context of the president's inaugural address. We just heard a clip of it. And what seems to be a very ambitious agenda, and to the degree that he talked about compromise and has talked about compromise since his re- election, it's basically on his terms?

STRASSEL: Well, I mean, I don't think this brings him back down to earth, because this is the strategy, executive power. And it has been ever since the Republicans took back the House two years ago. If they want to accomplish anything, it has to be done via the auspices of the White House. And he reminded all of us of that in his inaugural by basically saying we've got to get it done and I'll get it done by hook or crook.

And that's what he's done. The NLRB decision...

WALLACE: And you don't think this slows their jets at all?

STRASSEL: No. I mean, think about it, This is how they have operated for two years. You know, the Congress doesn't pass the DREAM Act, so the president issues an executive order, basically putting it into place. They don't -- he doesn't necessarily agree with the marijuana laws, and so -- the federal marijuana drug laws -- and so they just don't prosecute in court. They don't defend the Defense of Marriage Act in court.

They basically just use executive power. They use the NLRB to impose issues that they can't get Congress to pass, versions of card check, for instance. They use the EPA to do a cap-and-trade bill that they can't get through Congress. This is what he is going to do over the next two years, with the further ambition of trying to make sure that the Republicans lose the House, in which case he will have control over Congress again.

WALLACE: Juan?

WILLIAMS: I think that's right. I think that what you are seeing here is a response to political gridlock. What we're talking about in the case that the court ruled on -- I think it was Pepsi-Cola bottlers versus their union -- is that the Republicans really do not like the decisions that would come from Democratic appointees on the National Labor Relations Board, and so they were -- they do not want that board to function.

Now, remember, these agencies have been created by Congress, Chris. They are legitimate agencies. But they are nonfunctional if you don't have people to run them. And so you had a minority in the Senate and in the House basically conspire to stop the functioning of government agencies.

WALLACE: But isn't that -- isn't that the Constitution...

WILLIAMS: No.

WALLACE: ... balances?

WILLIAMS: Yeah, I think this is a powers issue, you know? Because what's going to have to happen is the Supreme Court, I think, is going to have to rule. Is this a legitimate exercise of congressional power?

We have seen, as Brit Hume said a minute ago, that presidents, Republicans and Democrats, have exercised recess appointment powers for years. That's nothing new in this town. The difference here is...

HUME: They've got to be in recess.

WILLIAMS: But the difference here is they intentionally created a sham, a sham in which they say...

WALLACE: You know who created the sham?

WILLIAMS: Tell me.

WALLACE: The Democrats.

WILLIAMS: No, Democrats had...

WALLACE: No, the Democrats started it in 2007 with Harry Reid to block George W. Bush. George W. Bush never challenged this.

WILLIAMS: Correct, and, in fact, George W. Bush's lawyers wrote recently in the newspapers that this is presidential power. The Constitution gives the president the power to make recess appointments.

HUME: Juan, that's really not in dispute.

(CROSSTALK)

HUME: What's in dispute here is whether the Senate was actually in recess. And the question comes, who gets to decide whether the Senate's in recess, the Senate or the president?

STRASSEL: And I think...

WILLIAMS: But it can't be a sham...

STRASSEL: You also have to put this in broader context. One of the things that was...

WALLACE: Actually, things got done during those -- during that -- during...

WILLIAMS: There was no -- they weren't in town. They weren't in town. They -- you could not consider a nomination because they weren't here.

STRASSEL: The thing about this, though -- put it in broader context. The more interesting aspect of this ruling was them dialing this way, way back and saying, in fact, if you look at the Constitution, you can't even, if you're a president, hold out these recess appointments, and, then make them finally put them forward when Senate is in recess. The recess actually has to happen while the senate is in recess.

WALLACE: In the little bit of time we have left, what do you think of the Republican argument, you heard it from the John Boehner clip that we played for the senators, that this president doesn't just want to beat the Republicans and have his way, but in some sense wants to annihilate the Republicans, divide the Republicans, as he said, consign them to the dust bin of history.

Do you see a more aggressive thing here than presidents usually have against the opposition?

ZELENY: I'm not sure it is more aggressive than other presidents have had, but I think it is more than this president has had. There is some truth to the fact he is trying to break the backs of some Republicans. Look at gun control, for example. He's trying to separate this Republican unity that really has pretty been strong during the first term. He is trying to peel some people back, but I'm not sure it is any more powerful or authoritative than other presidents have done with the opposition party.

WALLACE: He certainly did it also with tax rates.

ZELENY: He did. He did.

WALLACE: All right. We have to take a break here, but when we come back, Secretary of State Clinton has a rare joint interview with the president and trades parting shots with congress.

(COMMERCIAL BREAK)

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

UNIDENTIFIED MALE: I don't like him or dislike him.

WALLACE: He says he's not a biographer, he's a student of power -- how you get it, and what you do with it.

UNIDENTIFIED MALE: You are in awe, because you are constantly saying, look what he's doing now.

WALLACE: Stay tuned, we'll be right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: I just wanted to have a chance to publicly say thank you. Because, I think Hillary will go down as one of the finest secretary of states we have had.

HILLARY CLINTON, U.S. SECRETARY OF STATE: President Obama asked me to be secretary of state. And I said yes. And why did he ask me and why did I say yes? Because we both love our country.

(END VIDEO CLIP)

WALLACE: President Obama and Hillary Clinton in an unusual joint interview as she ends four years as secretary of state.

And we're back now with the panel.

So apparently, folks, the president called "60 Minutes" and he says to them I would like to do an interview with Hillary Clinton. Now, what makes this so unusual, is that in his four years as president, the only time he sat down with another person for an interview, Mr. Obama was with Mrs. Obama, not with the vice president, not with any secretary, not with anybody else, but with Mrs. Obama.   So, Jeff, one, what do you make of it?  Will the chattering class here in Washington think this is a kind of mini-endorsement of Hillary for 2016? And how unhappy do you think Joe Biden is going to at 7:00 tonight when "60 Minutes" goes on the air?

ZELENY: Well, he's definitely going to be following this. And he was probably in the wings on Friday when this interview was being done sort of listening in.

But, look, I'm not sure it is any more than just, this is good for the president. Her approval rating is very high among women, among others. So, why not sort of sit down in that forum, the "60 Minutes" forum has been pretty friendly to him in the first term. So I think it is not an endorsement per se but it is certainly sort of looks like that.

We don't know if she's going to run for president in 2016. She's leaving her options open obviously. I think one thing we saw this week on the Hill was that if she does decide to run for president, her approval rating is going to go back to how it was before. I mean, she's going to come down to earth here on things.

But, if she runs for president, I think Vice President Biden will obviously not.  There is a lot of chattering about him. Is he sort of keeping his options open?  He had Iowans and New Hampshire Democrats over to his house, over the, you know, weekend. I think that he is not going to challenge her. If she runs, he will not.

Who knows, both may not run, but it is a bit of intrigue.

WALLACE: Kim, why do you think the president -- and it was his decision -- why do you think he wanted to get engaged in this kind of an event?

STRASSEL: Well, I mean part of this might have also been to build on Hillary Clinton's progress this week on the Hill, on Benghazi, sort of try to put this behind us. She was actually fairly remarkable in it there in that she went in, the Republicans were fairly unprepared to move her off of her talking points. They had built this up for months. They were finally going to get the answers on Benghazi, nothing really came out of that.

They also didn't manage to put Benghazi into this broader context of the president's meek foreign policy, which I think is going to be important to them when they deal, for instance with the Hagel nomination.

So it was score one for Hillary. And I think this was an attempt to kind of build on that, move beyond it, talk about Hillary Clinton's legacy as a whole rather than that event.

WALLACE: Yeah, I want to pick up on that, Brit, because during the hearing, what struck me was the Republicans were tough on Hillary, on Benghazi and the Democrats weren't. But, both sides kept on saying what a great secretary of state she had been and to praise her service.   And here's some of the points that have been brought up, some of her accomplishments. She helped assemble the bombing campaign in Libya to topple Muammar Qaddafi. She helped assembly the coalition that imposed the toughest sanctions ever on Iran. And, she established diplomatic ties with Burma.

Question, Brit, how do you rate Hillary Clinton's performance, record as our top diplomat?

HUME: I think those examples you cited would add up to a case for her competence. They do not add up to a case for greatness, after all, the groundwork on Burma had been done by the previous administration. And the administration properly followed through on it. You look across the world, now at the major issues. Are Arabs and Israelis closer to peace? How about Iran and North Korea and their nuclear programs? Have they been halted or seriously set back? Has the reset with Russia, which she so famously introduced with the photo-op in Moscow with the reset button, has they lead to a new and more cooperative relationship? Is there a Clinton doctrine that we can identify that she has articulated and formed as secretary of state? Are there major treaties that she has undertaken and negotiated through to a successful conclusion? I think the answer to all those questions is that she has not. And those are the kinds of things that might mark her as a great secretary of state.

She has certainly been industrious. She has visited 112 countries. Her conduct as secretary of state has been highly dignified. She does her homework. There have been no gaffes or blunders. So I think she has been a capable and hard working secretary of state, but I think the case for her being a great secretary of state is exceedingly weak.

WALLACE: Juan, was Hillary Clinton a successful secretary of state? And how much does Benghazi, writ large, how much does that tarnish her record?

WILLIAMS: I think she has been a very successful secretary of state. I think that the industry that Brit touched on at the end has been impressive to people far and wide, that she has traveled, she has made the effort big time.

I would say contrary to what Brit said, when you look back at this era in American history you would have to say that our efforts, started by the Bush administration to promote Democracy agenda, the freedom agenda in the Middle East, has been carried through. So Arab Spring took place under Hillary Clinton's watch. And, you can say negatives in terms of the impact democracy has had. This weekend we've seen some of the flare up in Egypt. But you have to say that in terms of promoting American ideals of democracy she has been effective.

When you talk about China and the reset button with Russia, I think she's managed those relationships. She certainly managed, as Chris Wallace pointed out, what happened in Libya. She certainly managed to build the alliances that President Obama wanted.   She has not undermined this president. She has been an effective tool for this White House. He put together a team of rivals. And, to pick up on Jeff's point, it has played to Democratic base in terms of women and in terms of Bill Clinton, who became Mr. Obama's chief surrogate during the last campaign.

HUME: I would simply say those are examples of competent conduct in office. But you look at those other -- I mean, you mentioned Libya. How is that working out for us?  How about all those weapons that came from Libya that are now in Mali? How is that working for us -- excuse me -- and what about Syria? How is our policy there succeeding in furthering the cause of democracy?

WILLIAMS: We have ended two wars under her watch, Brit, Iraq and Afghanistan. And she has been critical in managing both of those situations, and...

HUME: Actually if you think about it. Look at the relationship that was required with -- in Afghanistan with Hamid Karzai. Who was the key figure, if there was one, in managing that relationship? John Kerry.

WILLIAMS: I think that you are under estimating Hillary Clinton and President Obama. Karzai was here just recently.

HUME: I get that.

STRASSEL: The most interesting aspect of that hearing actually was barely reported was the fact Hillary Clinton, how aggressive she was in outlining this hawkish foreign policy. She kept saying America has to get its act together. America has to lead. We have to confront the growing jihadists threat North Africa. Fine, exempt for that it is utterly opposite to this president's policy and foreign agenda.

So either she doesn't really believe that, and she was saying it for her further political prospects or she has been an utterly rolled by this president and actually does not have a lot of influence with this administration.

WALLACE: In less than a minute that we have left, Jeff, Benghazi, does that stay as a tarnish?  What difference does it make, which was the big line that came out? Does that stay with her if she decides to run four years from now or will that be forgotten?

ZELENY: I think it certainly stays with her, but four years from now it will be placed in a broader context I think. So I think that sound bite is always going to be with her. I'm not so sure that was a mistake, though. I mean, she wanted to be emotional. And I think she was very effective in those hearings. But think of all the sound bites that are out there from Hillary Clinton. I think that is one of many. And, four years from now, you know, who knows?

WALLACE: What is wrong with us that we're already talking about 2016?    Thank you, panel. See you next week. Don't forget to check out panel plus where our group picks right up with the discussion on our web site, foxnewssunday.com. We'll post a video before noon eastern time.

And make sure to follow us on twitter @foxnewssunday.

Up next our power player of the week.

(COMMERCIAL BREAK)

WALLACE: Watching President Obama lay out his ambitious agenda in the week's inaugural got us thinking about another president who did much the same thing a half century ago. Fortunately as we told you last September, one of America's most celebrated historians has been explaining to us for decades how that president turned his plans into law.

Here's our power player of the week.

(BEGIN VIDEOTAPE)

ROBERT CARO, AUTHOR: You want to know how political power works in America in the last half of the 20th Century studying Lyndon Johnson's life, watching him exercise power is a way to see what a president can really do.

WALLACE: Robert Caro has spent almost half his life telling the story of LBJ. But he says he's not a biographer, he's a student of power, how you get it and what you do with it. And Johnson, he says, was a genius at both.

How long did you think it was going to take?

CARO: I, thought about ten years.

WALLACE: And now we are, what, 36 years into this?

CARO: Something like that.

WALLACE: The breadth and depth of the work is stunning. Since 1976, Caro has written four books, 3400 pages, winning almost every award there is starting with the Pulitzer. And he's not yet to Johnson in Vietnam.

Why has it taken so long? When Caro looked at how Johnson was first elected to the senate, in 1948, by 87 votes, he ended up writing a book about him.

CARO: Nobody ever looked at a stolen election from beginning to end, and said, this is what a stolen election is.

WALLACE: And his latest, "Passage of Power" tells how Johnson succeeded John Kennedy, and saved his agenda.

CARO: He takes legislation that Kennedy had introduced that was stalled, that really was not going to pass: civil rights, the tax cut bill, and, in an instant, Johnson gets it moving towards passage.

UNIDENTIFIED FEMALE: Thank you very, very, very much.

WALLACE: Last fall, Caro took part in the Library of Congress book festival, on the National Mall. And it was clear he has made Johnson come alive for many readers.

Do you like him?

CARO: I don't like him or dislike him, you are in awe of him because you are constantly saying, look what he's doing now.

WALLACE: He got excited talking about Johnson's rise to power.

But, as we turn to the final book he's writing now, about Johnson's presidency and Vietnam, his demeanor suddenly changed.

CARO: The story is going to turn very dark as soon as Vietnam enters the picture. It is sort of a tragic story, a story of his great dreams that are destroyed by a war.

WALLACE: You are 76 now. Do you ever worry that you are not going to have time to finish the last book?

CARO: Well, sure. But, you know, it is not productive to think like that.

WALLACE: How long do you think it is going to take you to finish?

CARO: Well, I could say three or four years, but why would you believe me?

WALLACE: After all, Caro's latest book took nine years.

But there is at least one part of the final chapter of the Johnson story that is already written.

Is it true that you already know the last sentence of the book?

CARO: I always have to have a last sentence to write towards. I have to know what the conclusion is...

WALLACE: Can you tell us?

CARO: No.

WALLACE: Is it a doozy of a last sentence?

CARO: Well, I hope so.

(END VIDEOTAPE)

WALLACE: While Carroll feels the time pressure to finish up the Johnson story, he also has plans to write another book, on a different subject, after that. As a big fan of his work I can't wait to read it.

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

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