GOP headed for compromise or confrontation with Obama?

Insight from newly elected Republican Senators Shelley Moore Capito and Cory Gardner


This is a rush transcript from "Fox News Sunday," November 9, 2014. This copy may not be in its final form and may be updated.


Breaking today -- two Americans held captive in North Korea returned to the U.S. with this country's top spy.

Plus, with control of both houses of Congress, are Republicans headed for compromise with President Obama or confrontation?


SENATOR-ELECT JONI ERNST, R-IOWA.: We are heading to Washington. And we are going to make them squeal!

SENATOR-ELECT THOM TILLIS, R-N.C.: And we have swept this nation with a compelling Senate majority.

SENATOR-ELECT CORY GARDNER, R-CO.: Tonight, we shook up the Senate. You shook up the Senate.

WALLACE: We'll talk with two members of the wave of new Republican senators. Shelley Moore Capito of West Virginia and Cory Gardner of Colorado.

Then, after that White House lunch, could the power shift end the partisan gridlock?

SENATE MINORITY LEADER MITCH MCCONNELL, R-KY.: We do have an obligation to work on issues where we can agree. I think we have a duty to do that.

PRESIDENT BARACK OBAMA: I would enjoy having some Kentucky bourbon with Mitch McConnell.

WALLACE: We'll discuss the agenda for the lame duck session and next year with two congressional leaders who were at the lunch, Republican Senator John Barrasso, and Democratic Congressman Xavier Becerra.

Plus, the president authorizes sending 1,500 more U.S. troops to Iraq in the fight against ISIS. Our Sunday panel will tackle that.

And our Power Player of the Week, a man who goes undercover to rescue child sex slaves.

TIM BALLARD, OPERATION UNDERGROUND RAILROAD: We kind of broke role and said, guys, this is the sound of liberation. This is the sound of emancipation.

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


WALLACE: And hello again from Fox News in Washington.

We'll get to the new balance of power in Washington in a moment. But, first, some breaking news: two Americans held by North Korea are back home, and U.S. airstrikes in Iraq may have taken out the leader of ISIS.

Fox News chief intelligence correspondent Catherine Herridge has the latest on both stories -- Catherine.

CATHERINE HERRIDGE, FOX NEWS CHIEF INTELLIGENCE CORRESPONDENT: Chris, the senior administration officials insist there was no quid pro quo for the release of the two Americans. But now that they are home on American soil, there are new questions about the timing and the motivation of North Korea's secretive leaders.

Late Saturday, the blue and white government jet touched down in Washington state. The release of Kenneth Bae and Matthew Todd Miller came from a last-minute trip by the nation's most senior intelligence officer tapped by the president to bring the Americans home. Miller was arrested in April, accused of hostile acts and sentenced to six years in prison. Bae was arrested in November 2012 and sentenced to 15 years of hard labor for unspecified crimes.


KENNETH BAE, FREED FROM NORTH KOREA: I just want to thank you all for supporting me, lifting me up, and not forgetting me. At the same time, that I was not forgetting the people of North Korea.


HERRIDGE: The Director of National Intelligence James Clapper did meet with North Korean officials, but significantly not with the North Korean leader Kim Jong-un. Administration officials say it was emphasized to Pyongyang that it must denuclearize as a condition for further talks.

On Iraq, a defense official confirms that a new series of airstrikes near the Iraqi town of Mosul, close to the Syrian border, targeted the leadership of ISIS. With intelligence suggesting a meeting of senior operatives, possibly including the Islamic state leader, Abu Bakr al Baghdadi, a convoy of 10 heavily armed trucks was destroyed. Damage assessments are ongoing and a defense official had no further information on the status of the ISIS leader -- Chris.

WALLACE: Catherine, thanks for that.

A red wave swept the country this week, giving Republicans control of Congress including their first Senate majority since 2006. We want to introduce you to some of the new members of the Senate, as the GOP sets its agenda. We'll talk with Colorado's new senator, Gory Gardner, in a moment.

But first Congresswoman Shelley Moore Capito is West Virginia's first female senator ever, and its first Republican senator in more than half a century.

Senator-elect, congratulations, and welcome to "Fox News Sunday."

SENATOR-ELECT SHELLEY MOORE CAPITO, R-W.VA: Thank you. Wonderful to be on.

WALLACE: President Obama called you on election night, one of the few newly elected Republican senators he reached out to. Did he give you any sense that he's willing to compromise?

MOORE CAPITO: Well, he did say and he congratulated me, which was very welcome. And the call was wonderful, of course. But he did say that I think we can find common ground to help the people of West Virginia. And as you know, in West Virginia, the president is very unpopular. So, I appreciate that sentiment, I want to find that common ground, I look forward to that.

WALLACE: But he didn't put much meat on the bones?

MOORE CAPITO: Well, no, it was late. You know, I'm going to take what I can get at this point.

WALLACE: In his news conference the day after the election, the president was unwilling to say that he's going to change any policies or change the way he does business. And he also seemed to almost dismiss the message from the voters on Tuesday night. Take a look.


OBAMA: To everyone who voted, I want you to know that I hear you. To the two thirds of voters who chose not to participate in the process yesterday, I hear you too.


WALLACE: Do you think the president gets it, gets how unhappy voters are with him and the Democrats?

MOORE CAPITO: You know, not really. With those comments that we saw right after the election, when he says he hears two thirds of the people that are not voting, I don't -- what kind of message could he possibly be getting?

I think the dysfunction, the gridlock, the overreaching -- certainly in my state, the overreaching by certain regulatory bodies is really I think eating away at the confidence in his ability to lead and ability to get things done. I don't believe that -- you know, I want to believe that we can do this. I do believe we can and we must, and I hope the president kind of gets on board a little bit more than he did in that first press conference.

WALLACE: There's also a question for Republicans, and that is whether they compromise with the president or whether they confront him. And there seemed to be a split in the days after the election within the Republican Party, various comments made by the new presumptive Majority Leader Mitch McConnell and Republican Tea Party favorite Ted Cruz.

Let's take a look at what both of them had to say.


MCCONNELL: I want to first look for areas that we can agree on, and there probably are some.

SEN. TED CRUZ, R-TEXAS: The era of Obama lawlessness is over.


WALLACE: So, are you with McConnell, let's look for areas of agreement, or Cruz, who apparently wants to draw bright lines versus this president?

MOORE CAPITO: Well, let's look at one thing the president did do for the Republican Party on election night. He unified us. We have majorities -- a larger majority in the House, we have the majority in the Senate, many states -- my state hasn't elected a Republican senator since 1956. So -- and part of it was the dissatisfaction with the direction the president is going.

I think what we would be smart to do in my opinion, the way I want to move forward is to score some small victories, bipartisan, with the president, showing and demonstrating to that disaffected majority of Americans out there that we can begin to solve the problem.

WALLACE: Such as?

MOORE CAPITO: Such as Keystone pipeline, such as some tax reform, a transportation bill, a six-year transportation bill that --


WALLACE: Do you think the president is going to back down on Keystone pipeline?

MOORE CAPITO: I think he'd be really smart to do it when he sees a margin in the Senate of over probably 65 votes. I would hope so. I mean, if we're looking at jobs, if we're looking at infrastructure, we've got an energy growth in our country that we really need to capitalize on.

WALLACE: Let me talk about one of the big issues in your campaign, which was what you call the "war on coal," which is obviously a billing deal in coal-rich West Virginia. How aggressive are you going to be in the Senate in trying to rollback some of the EPA regulations?

MOORE CAPITO: Extremely aggressive. That is my promise to West Virginia. We have lost over the last two years, 5,000 jobs. Those are just coal jobs. We had several thousand other miners who are what are called a warn notice, meaning they're potentially going to be losing their jobs. That doesn't even count the transportation job, the electricians, the tire distributors, all the other jobs that go with coal mining.

Coal is our base load fuel. The president's policies is disenfranchising part of the country -- my part of the country. We've been picked as a loser. I'm not going to stand for it. Rolling back the EPA regulations is the way to do it.

WALLACE: Finally, how do you feel about the president getting a lot of things done in this lame duck session of Congress? For instance, just yesterday, he nominated Loretta Lynch to be the new attorney general. How do you feel about his effort to try to get that -- her confirmed by the lame duck session as opposed to waiting for the new Senate with members like you getting to vote to it?

MOORE CAPITO: I think what you see -- the rapid change on both houses particularly on the Senate, I think you're going to see a lot of this push the first of the year. I think that will give us the time to have the debate and deliberation that the Senate hasn't had over the last four years, that we need to have, whether it's a nominee for attorney general.

WALLACE: Do you think it would be a mistake to try to push her, jam her through in this session?

MOORE CAPITO: I do, I do. I think that if we're going to have an era of good faith here, we need to begin the confirmation process for one of the most important jobs in the country and that's the attorney general.

WALLACE: Senator-elect Capito, thank you.

MOORE CAPITO: Thank you.

WALLACE: Thank you for coming in, and please come back.

MOORE CAPITO: I would love to. Thank you.


Now, let's meet another of the new GOP senator in the battleground state of Colorado. Cory Gardner ousted Democratic incumbent Mark Udall.

Senator-elect Gardner, congratulations to you, and welcome to "Fox News Sunday."

GARDNER: Thank you and thanks for having me on.

WALLACE: I want to start with the question that I asked Senator-elect Capito. Do you think -- from what you've heard since the election, do you think the president gets what voters were saying on election night?

GARDNER: Time will tell.

Look, what I saw on Colorado election night wasn't so much about Republicans or Democrats, but it was a rejection of the failed ways of Washington. Democrats happened to be in charge of the Senate, and the -- and the president. So, the fact is, if the president doesn't recognize that people are dissatisfied with the direction of Washington, then he's going to have a challenge over the next couple of years.

WALLACE: What message, Senator-elect, do you think voters were sending Republicans? Do you think it was a mandate? Or do you think in a sense, it was kind of hold your nose and they dislike you less than they dislike the president and the Democrats?

GARDNER: Well, the mandate was this -- people don't like dysfunction, they don't like gridlock, they don't like the way that Washington is working. And so, in two years from now, if Republicans don't prove that we can govern with maturity, that we can govern with competence, we'll see the same kind of results two years from now, except it will be a wave going back the different -- a different direction.

WALLACE: In your campaign, you reached out to Hispanics who make up 14 percent of voters in your state of Colorado. And you did very well in a lot of the areas of Colorado where they live. Since the election, perhaps the biggest issue has been the president's statement, his determination that he's going to sign the executive order differing to deportation of millions of people who are in this country illegally now.

Here is some of the debate over that issue.


OBAMA: What I'm not going to do is just wait. I think it's fair to say that I've shown a lot of patience.

SPEAKER OF THE HOUSE JOHN BOEHNER, R-OHIO: I believe that if the president continues to act on his own, he is going to poison the well. When you play with matches, you take the risk of burning yourself.


WALLACE: Senator-elect, do you worry that Republicans are going to once again be seen, when all this is over, once again be seen as anti-Hispanic and anti-immigration?

GARDNER: I think what we have to do is make sure that we work with the president, show a willingness in the House and Senate to work together so that the president can ultimately do the right thing. The right thing for the president to do isn't going around Congress, but it's working with Congress. So, I think that's the challenge this new era of goodwill, so to speak, presents itself for us.

We have to make sure that the president is willing to do the right thing. And that means the Congress, the House and Senate, are willing to show an effort to work together. I think, ultimately, that's how we have immigration reform, and we have to continue our outreach efforts in every community in our country, in every community in states like Colorado, to make sure that they have the confidence that we're going to look out for them and be a strong voice for them, regardless of where they're from.

WALLACE: But what's going to happen when the president -- and he says he's going to do it sometime before the end of the year -- signs this executive order, goes around Congress?

GARDNER: Well, I hope the president, between now and whenever that is -- will change his mind, will decide to do the right thing.

WALLACE: And if he doesn't?

GARDNER: And that means that Mitch McConnell and Leader Boehner -- again, we have to encourage him to do the right thing. I don't want to speculate about an executive order that may or may not exist.

But the bottom line is this: we know we need immigration reform in this country, because the system isn't working in what we have right now.

But the president -- to encourage working together, to encourage a way to go forward, if he does this, then I'm concerned that he won't be doing the right thing, and that would hurt our ability to move forward the next two years. Let's do the right thing, let's work together, let's find solutions.

That's what the people of Colorado are looking for. In large part, that's why we were able to achieve victory, because we present to that positive, optimistic vision for this country. And that's what the president needs to do.

WALLACE: Well, let's talk about doing the right thing on immigration. The Hispanic vote did not play a big role in the midterms, but you know, as well as I do, they're going to play a very big role, because Hispanics tend to vote more in presidential elections, they're going to play a big role in 2016.

How do Republicans get on the right side of the immigration issue for what is the fastest growing voting bloc in the nation?

GARDNER: When you look at the issues that the Hispanic community cares about -- you know, in Pueblo County, Colorado, I essentially tied Senator Udall, that's one of the largest Hispanic populations in the state, and what of the largest counties in the state, and we did it because we talked about issues that mattered to every community, including the Hispanic community, whether it's education, growing jobs and opportunity, making sure that children aren't trapped in a failing school system.

WALLACE: But sir, specifically on immigration --

GARDNER: That's the kind of message that we have around the state.

WALLACE: Specifically on immigration, aren't Republicans going to have to do something when it comes to legalization of the millions who are already here?

GARDNER: Well, I think when it comes to immigration, we've talked about border security. Let's start with border security, as so many people are asking for. But border security in and of itself is not complete unless you have a meaningful guest worker program to go along with it, to create that way for a legal avenue of labor.

We have to make sure we're fixing the exit/entry systems, making sure we're addressing E-verify systems. Those are things that Republicans can and should do right now. That I think is something that the House, the Senate and president can work together.

So, let's do the right thing. Let's take those steps where I think there is a broad agreement that we can get behind and make sure that we are doing the right thing.

WALLACE: Finally, and we have less than a minute left. For all the talk about the Republican Senate, you're going to find out very quickly, I know you already know it, but I suspect you're not up fully up to how frustrating it's going to be. You're going to need a lot of Democratic votes to hit that 60-vote super majority to get anything done.

Any thoughts about how to break the gridlock in the Senate?

GARDNER: I worked closely with Gary Peters, senator-elect from Michigan, done a lot of energy efficiency worked with Ron Wyden from Oregon. It is about relationships. It's about putting those things on the president's desk that have broad bipartisan support.

Let's start first with putting those kinds of solution, like the Keystone pipeline, like repeal of the medical device tax on the president's desk. Let's show that we can do it with Republicans and Democrats and prove to the American people that Washington learned its lesson and that will ultimately help Republicans in 2016 when it comes to our nominee.

WALLACE: Senator-elect Gardner, we want to thank you so much for talking with us. Please come and visit us when you're in Washington.

GARDNER: We'll do it. Thank you.

WALLACE: And next week, we'll introduce you to another new member, Congressman Tom Cotton of Arkansas who unseated Democratic Senator Mark Pryor. Tom Cotton on the next "Fox News Sunday."

Coming up, a show of bipartisanship as president invites congressional leaders for lunch at the White House. But were there any signs of breaking the ice? We'll find out from two members of Congress who are there.

And what do you think? Will the shift in power in Washington end the gridlock or only increase it? Let me know on Facebook or Twitter @FoxNewsSunday, and use the #fns.


WALLACE: President Obama sat down with congressional leaders of both parties for lunch Friday at the White House over sea bass and pumpkin tart, they discussed the way forward with the Republican soon to control Congress. And they disagreed sharply over the president's plan for executive action on immigration.

Joining us now, two of the leaders who are there, Senator John Barrasso is chair of the Senate Republican Policy Committee. And Congressman Xavier Becerra is head of the House Democratic Caucus.

Gentlemen, welcome back to "Fox News Sunday."

Before we get to the White House lunch, I want to ask you about the president's decision on Friday to send 1,500 more U.S. troops to Iraq, almost doubling our deployment there.

Senator Barrasso, you're on the foreign relations committee. Couple of questions: one, are you going to vote for the $5.6 billion in extra money the president wants? And secondly, how do you feel about the slow motion bit-by-bit escalation of our footprint in Iraq?

SEN. JOHN BARRASSO, R-WY.: Yes, we're going to look specifically at how he wants the money spent, but it's right for the president to come to Congress for an authorization to use military force. I support that. I think Congress want to be involved.

You do get concerned about a mission creep. I think they've been doing a good job in in terms of trying to degrade, but they have a long way to go in terms of destroying ISIS and trying to secure Iraq. There are still big problems in Syria, and we discussed all of this with the General Austin on Friday at the White House, as well as the secretary of defense.


WALLACE: Congressman Becerra, any concerns that this escalation has the scent of Vietnam about it? And do you think the president has a strategy, a strategy and plan to beat is?

REP. XAVIER BECERRA, D-CALIF.: The way it was outlined at a lunch on Friday, it seemed like a coherent plan that was directed at the ultimate goal of dismantling ISIL. And my sense is this, after -- as the senator said, we have an opportunity to look at all the details, I think most members will see this is a buildup of the original plan, which is try to help the Iraqis stand up and take care of business --

WALLACE: So, where does it end? We're talking about -- it was in the 200. Now, it's 2,900. How many more U.S. troops?

BECERRA: I think the president has always said the Iraqis have to handle this. We're going to help them. They've asked for help, we're willing to help, but it's their job to take care of their civil war. So, I don't think the president intends to have this anything close to a Vietnam.

WALLACE: OK. Let's talk about the lunch which you both attended on Friday. Senator Barrasso, how heated was the discussion about the president taking executive action to defer deportations of millions of people in this country illegally? Will that really as some Republican leaders are suggesting, hurt cooperation on every issue.

BARRASSO: Well, I believe it would hurt cooperation on every issue, Chris. What the president does over the next two months is really going to set the tone for the next two years in Washington. You know, nobody ran for office and won a Senate race based on the president having executive authority to take executive actions on amnesty or on health care or any of those issues. The American people want us to work together to find solution.

So, I think it would be like the president pulling the pin out of the hand grenade and throwing in as we're trying to actually work together. I'm hoping that cooler heads at the White House can prevail upon the president to say, look, if you want to have a good, constructive final two years of your presidency, don't do this now, wait until the new Congress is sworn in, let them come together and do the sort of things that Senator-elect Gardner was talking about in terms of working together to find some solution on immigration.

WALLACE: Congressman, a couple questions for you. Did the president really cut off Vice President Biden when he started talking about this, the idea of how long would it take for Republicans to come up with their own bill? And do you worry that it will be the grenade scenario and this will poison the well on a bunch of issues, not just immigration?

BECERRA: First, I don't recall anybody being cut off. There was a good conversation back and forth.

And on the issue of immigration, where we'll go, I think the president has been very patient. He made it very clear for quite some time ago that he's been waiting six years to get a bill from Congress. He's been waiting a year and a half for the House Republicans to act on the bill that the Senate passed on a bipartisan basis, and the president for months has been saying he's going to take action where he can to try to make the law work better, smarter than what it is right now.

And so, I don't think there's anything strange going on here, except for the fact that if House Republicans continue to insist that the president must wait to help fix what everyone agrees is a broken immigration system, the only thing that is harmed is our security, our economy, and all those families that are waiting to see some results.

So, I think the president is right to move forward to do what President Reagan, President Bush Sr., President Bush Jr., President Clinton, all the presidents have used executive orders to try to make laws work better. He cannot change the law. He can only try to make it work better and smarter.

WALLACE: Senator Barrasso, you say the president, and this was quote the other day, still hasn't come to grips with this election. Do you think he's in denial?

BARRASSO: I don't know that, but he is sure I think not fully grasping the significant defeat for his party and his policies. As the president said, his policies were on the ballot each and every one of them. We have now elected -- I think we will end up with nine new Republican senators, his policies have been rejected by the voters, and not just because they're unpopular, but because they don't work.

That's why we went to the White House to say, Mr. President, we want to work with you on issues of jobs, the economy, affordable energy, and health care.

I was astonished during that whole lunch, the president didn't ask us anything about that at all. He just was so focused on this executive amnesty issue, that he ignored the idea of having a dialogue on ways we could actually change the direction of the country and move forward with regard to jobs and the economy.

WALLACE: Is that true?

BECERRA: Let me disagree with the senator. The president wasn't so focused on the issue of executive action until Speaker Boehner was the one that raised it, saying, it's going to be tough to do anything together if you do executive action. And that's when the president tried to respond back.

So, to put the blame on the president for responding to the speaker I think is unfair. The president said, we've got a lot to do together. We've got to deal with --

WALLACE: Was there not a discussion back and forth about both parties' ideas about jobs?

BECERRA: That was -- the president posed that as one of the issues we should super conversation about. Remember, we had only so much time to discuss a number of issues. We had a briefing by the military on the situation in Syria and Iraq. And so, as the president said, he went through about four or five different issues, and saying, all these issues, I hope we have an opportunity to work with --


WALLACE: But, Senator Barrasso, you think there wasn't enough talk about the economy and jobs, which is -- according to the voters -- the number one concern?

BECERRA: But whose fault is it that we didn't discuss the economy more? It was John Boehner who said, started off right away -- executive action, it's going to be tough to do anything.

BARRASSO: And the president then spent an inordinate amount of time talking about his goals for executive action and pretty much ignored the next two years. That's why I say what the president decides to do in the next two months sets the tone for the next two years.

There are dozens of bills that have passed the House in a bipartisan way, specifically related to jobs, the economy, trade, health care that we want to put and will start putting on the president's desk in January.

WALLACE: None of that was discussed?

BARRASSO: None of those issues came up. It seems that, in addition to the Ebola and ISIS briefings, that a lot of the focus was the president's goals and desires to take executive actions when the president's policies and party were repudiated in the elections on Tuesday.

WALLACE: Congressman Becerra, the president said the day after the election that one of the big changes is the Republicans will no longer have to kowtow to the Tea Party wing in the House and the Senate, but especially the House. Here's what he said.


OBAMA: It means that negotiations end up perhaps being a little more real, because, you know, they have larger majorities, for example, in the House, and they may be able to get some things through their caucuses that they couldn't before.


WALLACE: Congressman, do Democrats have to do anything differently?

BECERRA: All of us have to do something differently.

WALLACE: I'm asking about Democrats.

BECERRA: Yes, Democrats and Republicans, Chris.

WALLACE: What do Democrats have to do differently?

BECERRA: I think Democrats have to know now that the Senate and House are both in the hands of Republicans, that we're going to have to see how to work with those that drive the agenda in the House and the Senate to see where we can come together and find common ground. It's no longer going to be a Republican House working with a Democratic Senate.

And so, it's going to be one of those areas where we have to see if we can join with Republicans, as they propose legislation to send to the president.

Hopefully, the Republicans in both the House and the Senate propose bills that the president has said he's willing to sign versus just send him legislation that he's said, this is going to be vetoed as soon as it gets to my desk.

WALLACE: Finally, Senator Barrasso -- and I want to ask you a question that I asked Senator-elect Capito -- how do you feel about getting the nomination of Loretta Lynch as the new attorney general, to get confirmed in this lame-duck session as opposed to waiting for a new Senate? And how much will you resist it if he tries to get her confirmed in this session?

BARRASSO: The attorney general of the United States is a very consequential position. We have not done an attorney general confirmation in a lame-duck since 1906. That was in the same party. The last time we done one with a change of party was whether James Buchanan was leaving the White House and Abraham Lincoln was coming in.

So, as I say, what the president does in two months is very consequential for the next two years. She's going to have to specifically come to the Hill, talk about better relations between the departments and the Hill, and specifically answer questions about executive amnesty. Is it legal? Is it constitutional?

WALLACE: Senator Barrasso, Congressman Becerra, thank you both. Thanks for joining us today.

BECERRA: Thank you.

WALLACE: We can solve one of the mysteries about the lunch. Let's show you a picture of the leaders of Congress as they left the lunch. And you can see they were carrying swag bags, White House swag bags from the lunch. We wondered what was in the swag bags.

Well, John Barrasso has given me -- I don't know, think I may drink it in the second half of the show. White House honey ale.

So, what did you getus? Six pack or ...

Six pack of Whitehouse -- honey ale. Have you tried it?


WALLACE: You tried it?

UNIDENTIFIED MALE: Not yet. Will, though.

WALLACE: Well, maybe we'll have a beer summit.



WALLACE: Thank you, gentlemen.


WALLACE: Always a pleasure with me watching what happens on Capitol Hill. Up next, Republicans win a big victory election night. What happens now? Our Sunday group joins the conversation.



OBAMA: As president, I have a unique responsibility to try and make this town work.

MCCONNELL: We'll see whether we can work with the president. I hope so. That's what he says, and we'll find out.


WALLACE: President Obama and presumptive Senate Majority Leader Mitch McConnell talking about cooperation after Tuesday's Republican wave. But will they find a way to do it? It's time now for our Sunday group. Brit Hume, Fox News senior political analyst, Peter Baker, who covers the White House for The New York Times, Republican adviser Carly Fiorina and Charles Lane from The Washington Post. When Democrats lost their last midterm badly, President Obama came out the day afterwards and called it a shellacking. But what struck a lot of people this time is that he seemed unwilling to admit how badly Republicans had lost or to talk about any changes in his policy or his way of doing business. And I guess the question, Peter, is, behind the scenes at the White House, are they any more realistic about what happened on Tuesday night?

PETER BAKER, THE NEW YORK TIMES: Well, they know it was a bad night. They're not fooling themselves about that, but they look for all sorts of reasons why that happened. It was a bad electoral map. You know, obviously, every six year election in a two-year presidency, it tends to go badly and so on. You know, he didn't want to come out and look chastened. So, he didn't. He didn't want to give us a ward like shellacking or something. Like the last two big midterm switches, and he didn't. He wants to come out and be aggressive. What you've heard a lot from the White House today, in the last few days, is he was chomping at the bit to get out there and be more aggressive, but was held back by Senate Democrats. Senate Democrats, of course, have a different version.

WALLACE: To be more aggressive during the campaign.

BAKER: During the campaign and now he's liberated in effect. Because the election is over, and he can -- he could be more assertive, if he wants to be and certainly, he was with the immigration discussion on Tuesday and on Wednesday.

WALLACE: Brit, you and I have been through a bunch of midterms that have gone badly for presidents, and oftentimes the presidents decide to switch course as a result of the election results. Bill Clinton seems like perhaps the best example of that. Do you think this president has it in him to really change course and to work more cooperatively with Republicans?

BRIT HUME, FOX NEWS SENIOR POLITICAL ANALYST: Well, perhaps on a few issues, but I think there's president -- there's a character issue here. He seems to have this pathological inability to accept responsibility. The last midterm -- second term, midterm wipeout we saw was in 2006. And George W. Bush came out after that and said that the results of the election were disappointing, and he called it a thumping. And he said "As head of the party, I share a large part of the responsibility for this. And, of course, it was in the aftermath of that that he adjusted course in Iraq, which was the issue that I think that dragged this party down to such a great extent in that election. So he made a shift. Bill Clinton, as you pointed out, made a shift after he got -- he lost the Congress in 1994, two years into his presidency. I don't sense that this president is prepared to do that. I think it's almost as if he thinks that this election was somehow not legitimate because he wasn't -- there wasn't a presidential race and it wasn't a big turnout.

WALLACE: And two thirds of the people didn't vote.

HUME: And two thirds of the people didn't vote. And he has this, you know, among his many wondrous qualities, he has his (inaudible) ability to hear people who haven't said anything regarding to -- you have to add that -- you know, the wonders of Barack Obama.

WALLACE: Apparently if there is going to be a confrontation, the first confrontation is going to be over immigration, and as we've been discussing today, the president seems determined to enact executive action, take executive action before the end of the year to defer deportations for millions of people who were in this country illegally. Now, Carly, are Republicans making a mistake here with all this talk this week, boy, you do that, it's going to poison the well on every issue. Should they -- should they separate it out? And say, we are very unhappy about this, but we'll continue to do business, or you know, are they right to say this is going to poison the well?

CARLY FIORINA, FORMER CEO, HEWLETT PACKARD: Well, I think first, Republicans should be reminding the American people that when Barack Obama was president when he held both the House and the Senate, after promising in his 2008 election campaign that he would take on immigration, he did nothing. I think Republicans should be reminding the American people that it was Democrats that killed comprehensive immigration reform under President George W. Bush. This president has done nothing. He has not been ...

WALLACE: But wait a minute, wait, wait, wait. I mean there was a bill, a comprehensive bill ...


WALLACE: Passed with Republican support in the Senate.

FIORINA: That' correct.

WALLACE: And it was killed in the Republican House.

FIORINA: That's right, and generally legislation goes the other way, although not always, that is it starts in the House, and moves to the Senate and eventually gets to the president's desk, but my point is, I do not think this president wants comprehensive immigration reform. I think he wants a club to beat Republicans over the head with. And therefore, unfortunately, I think he will take executive action. I think Republicans must be talking tough about the consequence of that Republican action, because clearly, that presidential action, clearly Republicans want the borders secured, but they also know that the current system doesn't work. However, personally I would counsel Republicans against, say, rushing off to impeach the president if he does this, and to continue in a workman- like way to pass bills with bipartisan support and put them on his desk.

WALLACE: Your thoughts about immigration reform, who is responsible, what Republicans should do, you've got a lot to talk about.

CHARLES LANE, THE WASHINGTON POST: Gee, I mean, we can go on forever arguing about who struck down an immigration reform, but I do think to follow up on your question there is a risk if the Republicans sort of overdo it in saying this will kill any hope of bipartisan -- I think probably the safer position would be so say something like, boy, this will really cause problems, but we're going to soldier on and try to pass legislation anyway.

And the truth of the matter is that in the last Congress, in spite of all the gridlock and so forth, a lot of work was done quietly in committees on unsexy issues, things like postal reform, cybersecurity, housing financing, Fannie Mae and Freddie Mac. There were bipartisan projects that's sort of got a little traction under them, and then just sort of died for all the reasons we are familiar with. It is -- and corporate tax reform, of course, being one of the big ones. So, it's not inconceivable even after all this that something could get legislated.

WALLACE: Real quickly, and we only get about 30 seconds left in this segment. Peter, interesting to hear the Republicans talk about Keystone pipeline. Do you think that there's any possibility that president would bend on that?

BAKER: I do. I think there's room for compromise there. I would -- I can imagine a package where he agrees to authorize the pipeline, in exchange for something that we wants on energy or environment that the Republicans might not be so interested in giving him. So the question is, can they come together on it. He would argue, I think that as a trade-off for whatever damage, you can go argue it, might be created by Keystone, we get this benefit, it may be worth it. But we'll see if that's possible.

WALLACE: All right. That was a little hopeful. All right.

We have to take a break here. When we come back President Obama is now almost doubling the number of U.S. troops in Iraq. Does the escalation of forces signal a change in our mission there? Plus, what would you like to ask the panel? Just go to Facebook or Twitter @FoxNewsSunday. We may use your question on the air. It's a fine- looking group of people there.


WALLACE: Now you can connect with "Fox News Sunday" on Facebook and Twitter. Be sure to check out exclusive material online at Facebook, and share it with other Fox fans.

And tweet us @foxnewssunday using #fns. Be part of the discussion and weigh in on the action every "Fox News Sunday."



READ ADMIRAL JOHN KIRBY, PENTAGON PRESS SECRETARY: They have demonstrated the willingness and the skill to go after ISIL. So they have reached a point where they need additional help and guidance.

SEN. LINDSEY GRAHAM, R-S.C.: Why wasn't that done in September when it really could have helped? He -- to him, national security and war is just politics in another form. That's what I hate so much about the Obama administration.


WALLACE: Pentagon Spokesman Rear Admiral John Kirby, and a Republican Senator Lindsey Graham sharply disagreeing over the president's decision to send more troops to help the Iraqi army fight ISIS.

And we are back now with the panel. Before we get to that, Peter, what are your sources telling you about this U.S. airstrike against ISIS leaders in the Mosul area of northern Iraq in the last 24 hours, and what about the possibility that's being mentioned that they actually hit the leader of ISIS? Abu Bakr Al Baghdadi.

BAKER: Yeah, I know it is a very intriguing possibility, of course, they had the intelligence that these leaders were going to be gathering and took advantage of it while they could. I think we ought to be very cautious in suggesting that anybody specific has been knocked off at this point. We've seen again and again in the 13 years since 9/11, the reports of the demise of this or terrorist leader or that militant leader proved to be unfounded. I think -- I remember during the original Iraq war, we killed the guy named chemical Ali who was a cousin of Saddam Hussein at least five or six times during the time I was there, and it was years later we actually did finally ...

WALLACE: But it is kind of encouraging that they had this intelligence about where at least some of the leaders of ISIS were going to be meeting.

BAKER: That's right. And look, you know, it's not just going to be these troops that are being sent, it's obviously going to provide very heavily on people on the ground who can help spotters, you know, to figure out which the targets for these airstrikes to hit. That's the -- what's going to really matter at this point.

WALLACE: We asked you -- excuse me -- for questions for the panel, and we got this on Facebook from Donna Robb. She writes "How is this -- talking about the escalation of troops, how is this different from when we trickled soldiers into Indochina in the early 1960s? We remember well where that got us. Brit, do you see any similarities to Vietnam here?

HUME: Oh, sure, because you have this seemingly gradual escalation and, of course, the early forces that were sent to Vietnam were advisers. What strikes me about this is that the rationale for this seems to be that now the Iraqi forces are doing so well, that we need to send twice as many advisers to help them as they had before. That seems to me not to make any sense. And it suggests to me that the truth is that they're not doing so well and that's why we need to send the forces, the opposite of what they're saying. And I think that was always the case in Vietnam. We didn't -- you know, we kept escalating and we kept not quite winning, and that's what's caused them to keep ramping up the troops. It's a slippery slope.

WALLACE: Well, let's take a look at however long the slope is, let's take a look at the escalation so far in Iraq. Back in June the president sent the first 275 soldiers there to help support Iraqi forces. Now with this new deployment we're going to have 2900 troops to, quote, train and assist the Iraqi army. The question, Charles, is whether that is going to be enough to defeat ISIS, or whether in a few months -- I mean, that's a tenfold increase since June whether in a few months we're going to need even more troops.

LANE: The honest answer, we have no idea. I do want to say that it is a promising sign that there was good enough intelligence, which was always going to be the defect prospectively in this airstrike to hit what seems to have been a target-rich environment this morning, but the Achilles' heel of this whole project, of course, is the Iraqi army. You know, we're talking about training it to effective against ISIS. This is an army that collapsed after $20 billion and years of U.S. training, collapsed the minute ISIS showed up in Mosul a few months ago. So that is at best a dicey proposition that we're actually going to be able to stand somebody up. I mean there's a little bit of a Vietnam analogy, but there's also a World War II analogy, I might say, in all of this. That we're proposing to team up with one evil, namely the Shia-dominated Iraqi militias and the Iranian backers against what we deem to be a worse evil in ISIS. And if you think the practical problems associated with that are tough, wait until we start hearing the moral problems. Wait till our side starts committing massacres, and so forth and so on, which is actually another thing we had in common with -- it has in common with Vietnam, the corruption and the brutality of our allies.

WALLACE: There's also the issue of timing. Some people thought it was more than coincidental that the Pentagon and the White House announced this just three days after the election. Carly, what do you make of that? And also what do you make of the expansion of our deployment of U.S. Forces?

FIORINA: Well, I think, first, let's put this in the context that we still don't have and haven't heard a strategy. A strategy for how to get any of this done. The drone strikes are great. Let's hope we took the leadership out, but the president has never put forward his plan for defeating -- degrading and defeating ISIS. Secondly I actually think this is within the envelope of the total number of troops that he at one point suggested he would send. The issue is timing. It's always with this president too little too late. I think Senator Graham had the right question, which is why now? Why not two months ago? Why not three months ago? Why didn't we arm the Syrian rebels that we thought were moderate two and a half years ago? We know that this president disagrees with the strong and unanimous advice of his staff, including his military staff. We have seen that over and over and over again. And so, I think the election may have had something to do with this timing, but frankly I think what had more to do with this timing is simply the president's reluctance to commit to a strategy that will win. And we know that doing something too late never works as well as doing something on time. And this president is always too late.

WALLACE: Peter, what about this question of the timing and coming just after the election?

BAKER: To answer the question, I remember -- this has happened before, of course, President Clinton, I remember after he's reelected to come to the briefing and announced he is going to keep troops in Bosnia. I remember President Bush, of course, ended up sending more troops after midterm in 2006. His own caucus is mad that he didn't fire Don Rumsfeld before the election instead of waiting till after the election. It will always have this thing -- and election gets in the middle of the decision process, and it will always create suspicion about motivations and timing. I think it's such a small amount of troops here in the end that it's hard to imagine this really would have had an effect on the election one way or the other before last Tuesday, but, you know, it's not surprising that people wonder.

WALLACE: You know, I want to go back to what Carly said, Brit. And that's the big question, which is there is the means and the ends. The president has a big end here, the destruction of ISIS, but has he got the means? Has he got a strategy to accomplish that?

HUME: Remember, the means -- we already need to add to that, the eventual destruction of ISIS. Everything we're seeing so far now is about containing ISIS from further advances in Iraq. The idea of going after the ISIS in a serious way in Syria really is on the back burner. What I think this president tends to do over and over again is to decide what means he will use, and then tailor the mission to the chosen means.

WALLACE: Also decide what means he's not going to use.

HUME: Exactly. So, what you have, is you impose these limitations on yourself as he repeatedly does, and then he conjures a mission that will fit or seemed to. So far in this case, it seems to me the smaller mission of trying to hold the ISIS back in Iraq has not been met by the means he's chosen for that, and that I think is what 1500 more troops going over there to advise means, that this isn't working so far and he needs to do more, or else this piece of it will fail. Let alone the large ...

WALLACE: Chuck, 30 seconds?

LANE: I think one of the things that's happened recently that they are very worried about the huge massacres in Anbar province of the Sunni tribes that were our allies in the first time around when al Qaeda was defeated in Iraq. And I have a feeling that somehow what some of these troops are going to Anbar to try and shore that up. This is a little bit of an effort to address that hemorrhaging that was going on in the short term.

WALLACE: This is not the last conversation about this subject. Thank you, panel. See you next Sunday.

Up next, our Power Player of the Week, a man on the front lines in the battle against child sex slavery.


WALLACE: He spent 12 years as a special agent for the government, but then he decided he could be more effective working on his own. It's dangerous work, conducting undercover stings. Here's our Power Player of the Week.


TIM BALLARD, OPERATION UNDERGROUND RAILROAD: To see the kind of abuse, and the worth kind of abuse, the abuse you don't want to talk about, that's the shocking part.

WALLACE: Tim Ballard is talking about child sex trafficking and his efforts to stop it.

UNIDENTIFIED MALE: This age -- and of this age ...

WALLACE: He's the founder of Operation Underground Railroad. He and his colleagues call themselves abolitionists. And the comparison to the Civil War is intentional.

BALLARD: People are being sold. The human beings are being sold for the benefits of others. And slavery is alive and well.

WALLACE: Ballard and his group focus on the 2 million child sex slaves around the world.



UNIDENTIFIED MALE: You're the man.

WALLACE: Traffickers convince parents in poor countries to turn their kids over, supposedly to become models. Then the traffickers sell the children for the night or permanently.

BALLARD: In Haiti, for example, we had traffickers sell us children for $15,000, they're yours, we walked out with the kids, a 2- year-old and 3-year-old.

WALLACE: Wait, wait. Two-year-old, three-year-old sex slaves?

BALLARD: They didn't care what we did with them.

WALLACE (voice over): Ballard spent 12 years working for the Department of Homeland Security, as a special agent in the child crimes unit. But last December he decided he could do more outside the government. Last month he and a jump team of former Special Forces got a tip from the Colombian government about sex trafficking on an island off Cartagena. They posed as potential customers.

BALLARD: An individual walks up and says we have this, we have drugs, we have girls. And we asked, what kind of girls? As young as ten. Just like that. Not even -- they didn't even skip a beat. It was like he was selling us a car.

WALLACE: They started negotiating for a sex party.

BALLARD: In Colombia, about $ 300 for the day, for a child, they offered five virgins who were as young as 11 for $1000. And they brought those kids.

WALLACE: Ballard's team set up hidden cameras to report the sting. The traffickers brought 55 kids, and Ballard paid more than $26,000.

BALLARD: I look at these kids, as they're crying. It's a punch to the stomach. They think you're the monster.

WALLACE: But once they had the evidence, Ballard called in a Colombian SWAT team that arrested the traffickers. Usually Ballard and his men keep their cover, for the next operation. But this time the children found out they were the good guys.

BALLARD: At one point this little girl went up to the screen of the window where we passed by, put her little hand up, and I was able to reach out and touch her hand. We kind of broke role and said, guys, this is the sound of liberation, this is the sound of emancipation.

WALLACE: Just this year operation Underground Railroad has done a dozen stings, rescued 230 children and put two dozen traffickers in prison. Ballard is now the group's public face, so he won't go under cover again, but he will still be part of every operation.

BALLARD: The satisfaction you are seeing a child being liberated and knowing that I -- we can do it again and again and again. And it's bittersweet how many more we know are still there. And so, the minute you start to celebrate, you stop yourself and you realize you've got to get back to work.


WALLACE: Operation Underground Railroad is a nonprofit totally funded by private donations. If you want to learn more, please go to our Web site And that's it for today. Have a great week, and we'll see you next "Fox News Sunday."

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