Can Rubio make GOP presidential fight a three-way race?

This is a rush transcript from "Fox News Sunday," January 24, 2016. This copy may not be in its final form and may be updated.


The blizzard of 2016 shuts down much of the country.  


WALLACE:  The storm dumps feet of snow on the East Coast, hitting millions in its path.  We'll have the latest.  

Then, countdown to the last GOP debate before voting starts in Iowa.  We have new battleground polls, and Senator Marco Rubio is looking to take on the front-runners.  

SEN. MARCO RUBIO, R-FLA., PRESIDENTIAL CANDIDATE:  I will beat Hillary Clinton.  She does not want to run against my.  

WALLACE:  Marco Rubio, it’s a "Fox News Sunday" exclusive.  

Then, a new report reveals that some of Hillary Clinton's e-mails were beyond top secret.

We'll ask two top leaders of congressional intelligence committees how serious is the security breach.  

And our panel handicaps the escalating battle between Donald Trump and Ted Cruz.  

Plus, our power player of the week, and Cruz's hardball campaign manager.  

How confident are you?  


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


WALLACE:  And hello again from Fox News in Washington.  

We begin with that historic snowstorm that buried much of the eastern U.S.  The record-breaking blizzard dropped two feet of snow here in the nation's capital.  Baltimore saw the most snow ever.  New York City and Philadelphia also under feet of snow.  Thousands of flights have been cancelled and hundreds of thousands of homes are without power.

As this part of the country begins to dig out, let's bring in Fox News correspondent Elizabeth Prann, who's on the snowy streets of D.C.

Elizabeth, what’s the latest?  


Well, forecasters were right with their predictions.  We got snow and more.  What we do know is the Northeast is waking up to clearer conditions, but those in the mid-Atlantic can attest it's a long road to cleaning up.  


PRANN:  Tens of millions can say they experienced the blizzard of 2016.  Many folks were caught off-guard while tens of thousands were without power for an extended period of time.  

GOV. PAT MCCRORY, R-NORTH CAROLINA:  The storm did not underwhelm us as we wanted.  

PRANN:  As it in step (ph) the eastern corridor, officials began bracing people for harsher conditions.  There was no public transportation in the district.  In Pennsylvania, the National Guard responded to stranded motorists on the Pennsylvania turnpike, some for as long as 16 hours.  

In New York, a travel ban began at 2:30 Eastern, essentially shut down.  

And in New Jersey, Governor Chris Christie jumping off the campaign trails just days before Iowa.  

GOV. CHRIS CHRISTIE, R-N.J., PRESIDENTIAL CANDIDATE:  This is my 17th snow emergency in six years.  So, we know how to do this.  

PRANN:  The ice and snow canceled more than 11,000 flights since Thursday.  Airlines hope to be back in business this afternoon.  


PRANN:  But it's not all bad.  In the district, we saw flooding, biking, even snowboard, and check out this video of the giant male panda at the national zoo.  He didn't hesitate to pounce, play and throw the white fluffy stuff.  

Chris, back to you.  

WALLACE:  Thank you, Elizabeth.  I love that video.  

I also want to thank our friends at Colonial Parking for getting me here today.  Dashim and Abdul Hakim (ph) drove me across town in the snowplow at 5:00 this morning.  Gentlemen, I could not have made it without you.  

Now, from the winter cold to the heat of the presidential campaign.  We have the latest Fox News battleground polls, and with eight days until the Iowa caucuses, Donald Trump has an 11-point lead over arrival Ted Cruz.  Marco Rubio is the only other candidate in double digits.  Just two weeks ago, Trump trailed Cruz by four points.

But take a look at this.  Among the Republicans saying they'd attend a caucus, more than a third say they have never gone before.  Donald Trump has a big lead among those first-timers, but only a three-point advantage among prior caucus goers.  

And in New Hampshire, Donald Trump maintains his lead at 31 percent, that’s more than double either Ted Cruz or Marco Rubio, who are in a battle for second place.  

Joining me now from Iowa is presidential candidate, Senator Marco Rubio.  

Senator, welcome back to "Fox News Sunday."  

RUBIO:  Thank you.  Thanks for having me back.  

WALLACE:  Let's start with breaking news, some good news, that is Iowa's biggest newspaper, The Des Moines Register, endorsed you over the weekend saying this, "Senator Marco Rubio has the potential to chart a new direction for the party and perhaps the nation with his message of restoring the American Dream."

Senator, how big of a deal is that for you in Iowa?  

RUBIO:  Well, what I feel is it's affirmation that our campaign is a serious campaign about solving the problems for this country.  Look, Barack Obama has done incredible damage to the United States over the last seven years.  So, our next president does need to be someone who is frustrated about that, but it also has to be someone who knows exactly what to do to undo this damage.  

And my whole campaign has been build built on that, on a fundamental promise.  And that is if we do what needs to be done, I believe this country can be greater than it's ever been and I believe our children can be the freest and most prosperous Americans that have ever lived.  

So, that's what our campaign is built on.  That’s why we're happy to have that endorsement.  We had a second one yesterday as well from another newspaper, "The Sioux City Journal".  So, we feel positive about the momentum that's gaining as we get closer to the caucuses, as you know, caucus-goers make up their mind on the day of the caucus or the days leading up to it.  So, we feel like we’re gaining at just the right time.  

WALLACE:  On the other hand, Senator, one of my rules is campaigns is: don't pay attention to what politician say, pay attention to what politicians do.  

There are reports this week that your campaign has pulled almost $1 million in ads in New Hampshire and Iowa, switching them from 60-second ads to 30-second ads.  And there's a story in the paper today that says your campaign manager told some top supporters to expect a long slog well into April.  

That sure doesn't sound like somebody who thinks he's going to win the early states.  

RUBIO:  Well, first of all, this is a long slog because of the number of people running.  And it's a very unusual primary and a very unusual nomination cycle.  

And, by the way, we did not cut any ads.  We have more ads on television than any candidate in Iowa and New Hampshire and South Carolina.  We made some strategic shortening of adding, because we got better slots for him and at a better price.  We're always looking to save money so we can redeploy it to things that reach voters.  

And that’s what this campaign has to be about in the end.  It has to be about convincing the largest number of voters possible that we are the right choice for the Republican Party.  

I know this, if I’m our nominee, not only will Republicans be getting a solid conservative who will turn this country.  I will beat Hillary Clinton or Bernie Sanders.  And in the end, that this is what this is about for Republicans -- we cannot allow Hillary Clinton to win.  This country cannot afford four more years like the last seven.  

WALLACE:  Meanwhile, Senator, I was shocked to learn this week that you have been the tart of more negative ads, more attack ads by your rivals, $20 million in attack ads, than any other candidate out there, especially from the so-called "establishment candidates", your rivals.  And your friend and mentor Jeb Bush, both his super PAC and his campaign have really gone after you.

Take a look.  


AD NARRATOR:  He ran for Senate saying he opposed amnesty, then he flipped and worked with liberal Chuck Schumer to co-author the path to citizenship.  

RUBIO:  Anti-American dictators like Assad, if they go, I will not shed a tear.  

SUBTITLE: But when they had a chance to vote for airstrikes in --  

RUBIO:  I remain unconvinced that the use of force proposed here will work.  


WALLACE:  Senator, why is it that the other so-called "establishment candidates", especially Christie and Bush, are ganging up on you?  And because I know it's personal, are you disappointed in the way your friend and mentor Jeb Bush is going after you?  

RUBIO:  No.  First, two things, number one -- in many ways, it's an affirmation of what I’ve been saying, and that is you don't attack a candidate who is not just credible but doesn’t have momentum.  That’s a lot of money.

You only spend it if you feel someone is a threat.  So, I think obviously, that affirms what we've been saying, and that is we have a path here not just to the nomination, but to defeating Hillary Clinton.  

And the second point I would make about all this is, in the end, I mean, voters are going to vote on someone that they know is going to help turn this country around.  

You say establishment candidate.  Chris, every time I’ve ever run for anything at this level, I’ve taken on the establishment.  I had to do it when I ran for the Senate, and even now, when I decided to run for president.  

Most of the establishment said to me, you can't run, it's not your turn.  You need to wait.  I mean, $20 million did not come in $50 increment.  This is not grassroots money.  This is money from big donors and the establishment who believe that we need to nominate the next person in line and I need to wait my turn.  

It's part of the process.  We knew that going in.  I just think that amount of money being spent against us confirms what I’ve been saying all along, and that is we are a campaign that is gaining momentum and support, and obviously other candidates view that as a threat, so they're responding.  But we'll be fine in the end.  

WALLACE:  One of the knocks against you, Senator, is that you're the Republican Barack Obama, that you lack the experience to be president.  You've been in the Senate for five-plus years.

So, let me ask you, what do you consider your biggest legislative accomplishment?  

RUBIO:  Well, first let me say the most important job of president is commander in chief.  Being president is not like being a senator, but it's not like being a governor either.  It's a unique office unlike any other in the world.  

And if all -- if you look at the entire Republican field, no one running for president has more experience or shown better judgment over the last five years on the issues of national security than I have.  

I’m proud of the things we have achieved in my time there.  We brought accountable to the V.A.  I helped lead an effort that got rid of the Obamacare bailout fund.  Just a month ago, in a bipartisan way, I helped impose additional sanctions on Hezbollah.  And I also have if experience of accomplishments as speaker of the House.  

But this election is about the future, about what kind of country we are going to leave for our children in 21st century, the number one role of the federal government and the president is to be commander in chief, and keep us safe.  I will do that.  And I’ve got more experience and have shown better judgment on those issues than any of the other candidates in this field.  

WALLACE:  I want to pick up on one of the accomplishments you have mentioned.  And you have said often that you led the effort to end the bailouts, the so-called "risk corridors" for Obamacare which could have protected insurance companies who lost money on premiums.  

Here you are talking about.


RUBIO:  I’m always the only one running president that’s ever done anything against Obamacare.  Not a speech, but I actually achieved something.  I led the effort and we got rid of the bailout fund, which may very well lead to the collapse of Obamacare.  


WALLACE:  But, Senator, while you certainly did speak out on the issue, it was other Republicans who actually put that provision in a spending bill that Obama was forced to signings which put it into effect.  In fact, you voted against that spending bill.  And the fact checkers at "The Washington Post" gave you, as we put it up on the screen, four Pinocchios for your claim in this regard.  

How do you respond, sir?  

RUBIO:  Well, they’re wrong.  First of all, the reason why it was inserted into that budget to begin with is because I was the first one to raise and I spent a year and a half pushing this issue, communicating with the speaker’s office, communicating with the majority leader’s office, communicating with my colleagues.  For a year and a half, I was the only one even talking about the risk corridor, the Obamacare bailout.  It happened because we led the effort on it.  

Did someone else physically type it up and insert it in the bill?  That's absurd.  Maybe, but that's not the issue here.  The issue is, who led the effort in achieving that?  

And from everyone that was watching this from the very beginning, to the editorials around this country -- I believe "The New York Times" wrote one saying how Marco Rubio has done something that’s going to lead to the collapse of Obamacare.  No one can dispute that we led the effort.  We raised this issue.  We pushed this the entire time.  And had it not been for our efforts, the Obamacare bailout may very well still be there in law.  

WALLACE:  All right.  Let's talk about another controversy involving your record, and that is your tax plan.  Let's lay it out.  

You would establish three income tax brackets topping out at a 35 percent rate for the highest earners, but some still argue that's still too high.  Cruz wants a flat tax rate of 10 percent.  Carson and Paul propose a flat tax rate of just under 15 percent.  

And, Senator, the argument is that their plans would do more to promote economic growth than your plan.  

RUBIO:  They would not, because two of those plans you have just mentioned, especially Ted Cruz’s, contain something called a VAT, a value-added tax, which is a European-style tax.  You find it in Canada as well.  It’s a tax on business --

WALLACE:  Let me just in interrupt to say -- let me just interrupt to say you know that he flatly denies that.  

RUBIO:  Well, he can deny it.  He may not want to call it that, but it works exactly like a value-added tax works, and everybody who’s looked at that, who knows about tax policy agrees with what I’m saying.  It is a value-added tax.  It is a tax on businesses.  Businesses will have to pay a tax on both the money they make and there will also have to pay a tax on the money they are paying their employees.  

And this is why Ronald Reagan hated the VAT tax.  He said it was a way for government to blindfold the people and grow government, because the worker no longer is getting the month or every two weeks a statement with their check showing how much they paid in taxes.  Their business is now paying -- the employer is now paying the tax.  And they're going to get the money to pay that tax by paying their workers less and by charging high prices.  

So, it's a way to disguise the burden of taxation.  You’ve created a new tax, and a future liberal president and liberal Congress now has multiple taxes they can raise.  They can still raise the income tax but they can now also raise the VAT tax.  It's a dangerous scheme.  

And we’re not going to have a VAT tax when I’m president.  And on my plan, you talk about the high rate -- what people leave out is we increased per child tax credit for working families and we allow all businesses, especially S-corporations, a large number of Americans are paying top rate, are paying their taxes as a business, through their business, as high as 39.5 percent.  Under my plan, those small businesses, those S-corporations and partnerships would only be paying 25 percent flat.  

So, my plan actually represents a substantial growth in the economy, but also a substantial savings for the vast and overwhelming majority of Americans.  

WALLACE:  Senator, we're running out of the time, so I’m going to ask you for a quick reaction.  As I’m sure you have seen there's news stories today, The New York Times reporting that billionaire and former New York City Mayor Michael Bloomberg is considering a third-party run for president.  

How would he shake up the race?  

RUBIO:  Well, I don't -- I haven't spent time thinking about Mayor Bloomberg or what he might or might not do.  I’ve met him a couple times, don't know him well, don’t agree with his stance on the Second Amendment and some other issues.

I'll wait until he becomes a candidate.  If he becomes a candidate, then we'll have a conversation about our differences.  If he as just out there talking about running for president, well, there's a lots of people that have done that.  

So, as of now, he's just a private citizen who owns a big company.  If he decides to become a candidate, we’ll engage in a debate at that time.  

WALLACE:  Do you feel at a disadvantage when you've got Bloomberg and Trump who are both billionaires?  

RUBIO:  I think this is a great country where the son of a bartender and maid can be running for the same office and have the same opportunity as the son of a millionaire or for that matter the son of a president.  It's extraordinary.  No other country in the world would that be possible.  

That’s why I’m running.  I want America to remain that kind of country.  

WALLACE:  Senator Rubio, thank you.  Thanks for your time.  We'll see you at the Republican debate this Thursday in Iowa.  

RUBIO:  Absolutely.  Thank you.  

WALLACE:  Up next, frontrunners Donald Trump and Ted Cruz battle it out as we get closer to the first vote.  Our Sunday group will review their step up attacks.

Plus, what would you like to ask the panel about the escalating war between Trump and Cruz?  Just go Facebook or Twitter @FoxNewsSunday, and we may use your question on the air.



DONALD TRUMP, R-PRESIDENTIAL CANDIDATE:  Ronald Reagan would get along with Tip O'Neil and they would sit down and they would make great deals for everybody.  That's what the country is about really.  

SEN. TED CRUZ, R-TEXAS, PRESIDENTIAL CANDIDATE:  If as a voter if you think we need more Republicans in Washington to cut a deal with Harry Reid, and Nancy Pelosi and Chuck Schumer, then I guess Donald Trump is your guy.  


WALLACE:  Trump priding himself as a deal maker, while Ted Cruz worries he’d do -- Trump would do just that with the Washington establishment.  

And it’s time now for our Sunday group: syndicated columnist George Will, Lisa Lerer, who covers national politics for The Associated Press, head for Heritage Action for America, Michael Needham, and Fox News political analyst, Juan Williams.  

Let's look at the latest Fox News poll in Iowa that we presented today for the first time.  Trump is now up 11 points in the last two weeks.  Cruz is down four points.  

George, now that their truce has officially ended, how’s Trump gotten the better of Cruz?

GEORGE WILL, SYNDICATED COLUMNIST:  It's too soon to say, and it’s too soon whether to say whether Trump has done this.  Remember, this is the week that Governor Branstad, six-term governor of Iowa and longest serving governor in American history, came out against Ted Cruz, broke the tradition of governors remaining neutral in Iowa, on the issue of ethanol, of all things, which is an important boondoggle to the economy of Iowa.  

WALLACE: Or a worthwhile program if you’re an Iowan, isn’t it?


WALLACE:  Plus, I’ll be heading out to Des Moines on Tuesday.


WILL:  General Douglas McArthur said that in war, every disaster can be explained by two words: too late.  

And the question is whether the conservative wing of the Republican Party, aka, the Republican wing of the Republican Party, is beginning too late to rally against Mr. Trump.  It's also unclear yet whether the fire between Trump and Cruz is going to have the effect that the war between Dick Gephardt and Howard Dean had in 2004.  They trained their fire on each other, and John Kerry snuck through, won Iowa and won the nomination.  

It’s also -- the polls show that Donald Trump's supporters are disproportionately first time caucus-goers.

WALLACE:  All right.  I’m going to interrupt you there, because I’m going to get to that and I’m going to bring in Lisa to discuss exactly that subject, because there are some interesting numbers in the poll, and the let’s put this up.

Among -- most of Trump's lead is among the 38 percent of those polled who say this will be the first time they go to the caucus.  As you can see, 43-19 among first-timers, but only a three-point lead among traditional caucus-goers -- which, Lisa, raises the question will those Trump supporters show up?  

LISA LERER, THE ASSOCIATED PRESS:  And the truth is we just don't know.  In some ways, this Iowa contest is the first big test of Trump’s organization.  This is a highly untraditional campaign and a highly untraditional organization.  He's not doing any of the things really that you traditionally do in Iowa.  So, it’s just not clear.

Cruz is doing all those things.  He set up Camp Cruz, which is sort of a sleep-away camp for all these volunteers who came in to help him.  He's doing exactly what we're supposed to do if the traditional rules apply in Iowa.  But it's not clear the traditional rules apply at all, and that's what we're going to find out when all these folks go to caucus.  

WALLACE:  Now, George mentioned the fact, they’re being too late, the question as to whether or not the Republican wing of the Republican Party has delayed too long in firing back against Donald Trump.  

Well, that ended this week The National Review published a special edition called, and here you can see it, not very subtle, "Against Trump", in which morn than 20 conservatives intellectuals railed against the frontrunner.  

But this week, Trump also got a big personal endorsement.  Check this out.


SARAH PALIN, R-FORMER VICE PRESIDENTIAL CANDIDATE:  Are you ready for a commander in chief who will let our warriors do their job and go kick ISIS' ass?  


WALLACE:  So, Michael, who moves more votes. the thinkers at The National Review or Sarah Palin?  

MICHAEL NEEDHAM, CEO, HERITAGE ACTION FOR AMERICA:  I don't know, we'll find out once voters go to the polls.  Look, good conservatives are split among all sorts of different candidates.  What we had seen in the last week is that the establishment has become completely unified and they’re unified in trying to kill Ted Cruz.  

Trent Lott, the Senate majority leader during all the wasteful spending of the Bush years, who helped shepherd No Child Left Behind, through the Congress, now become lobbyist, he lobbies for Russian corporations, he came out and said he's going to do what he can to stop Ted Cruz.  

After the 2010 election, with so many people are frustrated with Washington, D.C., in the kind of failed promises of the 2010 and 2014, Trent Lott said, well, we’re going to have a whole bunch of Jim DeMints coming to town, and we need to co-opt them.  The Republican establishment --

WALLACE:  It’s not just Trent Lott.  You’ve also had Bob Dole who did an interview with "The New York Times," which took off after Cruz.  

NEEDHAM:  Absolutely.  He did and got into the 1980 election stop Ronald Reagan back then.  So you see the Republican establishment absolutely hates the fact that Ted Cruz has come to Washington --

WALLACE:  I love the fact that you're leaving out Donald Trump.  They don't like him, either.  

NEEDHAM:  Sure, and I think a lot of Donald Trump’s appeal has been that he's an antiestablishment candidate.  


WALLACE:  So, for the average voters, particularly for the grassroots Tea Party voter, who you represent, is being antiestablishment a plus or minus?  

NEEDHAM:  Well, I think it's clear the two candidates who are duking it out are the most antiestablishment candidates.  Donald Trump because of his personality, Donald Trump because of the things he's said, and Ted Cruz because of his conservative ideas, because he hasn't been co-opted, he’s fought them, they hate that, and most importantly, they fear that Ted Cruz hasn't been able to be co-opted.  

WALLACE:  Before I bring, Juan, I want to ask you one other question.  I want you to look at a comment -- an odd comment that Donald Trump made on the stump yesterday.  Here it is.


TRUMP:  The polls, they say I have the most loyal people, did you ever see that?  Where I could stand in the middle of Fifth Avenue, I could shoot somebody and I wouldn't lose any supporters, OK?  It’s like incredible.  


WALLACE:  So, Michael, there's times in this campaign you just shake your head.  Is that funny or alarming?  

NEEDHAM:  Well, I mean, I think he meant it funny, it probably is funny.  There's certainly no evidence it's not true at this point.  I think that Donald Trump has run a campaign breaking every single rule of politics.  That's what people want, because every single rule of politics has gotten this country $19 trillion in debt.  You don't do that without a lot of bipartisanship.  

You don’t do that with a lot of --- that's why Ted Cruz is so hated by the establishment.  That’s why Donald Trump has taken off.  This is an antiestablishment year and it's a good thing that it is.  

JUAN WILLIAMS, FOX NEWS POLITICAL ANALYST:  You're endorsing Cruz this morning it sounds like?  

NEEDHAM:  I’m endorsing an antiestablishment candidate.  

WILLIAMS:  I understand.

WALLACE:  I want to ask you a question.


WILLIAMS:  I understand Trump.  Even Chris said, you don't mention Trump.  

NEEDHAM:  Those are the people who have gotten us in trouble.  


WALLACE:  All right.  We asked you this question for the panel, and we got this tweeted out to us by a fellow, or a woman, I suppose, by the name Steelers Slob, who tweets this, "Are Donald Trump and Ted Cruz going to feel silly after they're doing tearing each other apart and Rubio eats their lunch?"

Juan, what do you say to Steelers Slob?  And what do you make of this trial balloon we see in The New York Times today that Michael Bloomberg might run as a third-party independent candidate?

WILLIAMS:  Well, on the first score, let’s just say --  

WALLACE:  To Steelers Slob.

WILLIAMS:  Yes, George and I exchanged a look about that.  That was very interesting.  

But anyway, on the politics of this, earlier, you heard George mention what happened to the Democratic race some time ago when you had, you know, Kerry sneak through that lane, and you have here Rubio as the leader of the establishment group that Christie, the Kasich, the Bush group.

The problem here, Chris, is it feels like it's too little too late.  He had a very good debate -- I think some might argue he's been the best on the stage when it comes to the Republican debate, and yet it's had almost no effect in terms of pushing him into the upper layer.  It's clearly now between Trump and Cruz.  

And the other thing I would say is on the key issues here, he needs Cruz to fall apart, specifically immigration and the like.  Cruz is staying there right now is just eating up the opportunities for Rubio.  

WALLACE:  And in 20 seconds, Michael Bloomberg?  

WILLIAMS:  Well, I think Bloomberg has said, it's all about Hillary Clinton for him.  He thinks that if Hillary Clinton is able to best Bernie Sanders, if it's not a matter of Trump or Cruz --

WALLACE:  Again Sanders?  

WILLIAMS:  Against Sanders, then he's not running.  

WALLACE:  So he just needs that -- he needs a big centrist open avenue before he would consider doing it?  

WILLIAMS:  Yes, sir.  

WALLACE:  All right.  Thank you, panel.  We'll see you all little later.  

Up next, two leaders of the congressional intelligence committees tackle the latest chapter in the Clinton e-mail scandal -- material with a classification level above top secret.  

Plus, what do you think?  Is the scandal real or just politics?  Let me know on Facebook or Twitter @FoxNewsSunday, and use the #fns.  


WALLACE:  The Democratic candidates stopped playing nice.  


HILLARY CLINTON, D-PRESIDENTIAL CANDIDATE:  Senator Sanders cares deeply about covering people, but he wants to start all over again.  

SEN. BERNIE SANDERS, I-VT., DEMOCRATIC PRESIDENTIAL CANDIDATE:  Secretary Clinton has a lot of foreign policy, but experience is not necessarily equated to judgment.


WALLACE:  That and the Clinton email scandal, next.


WALLACE: A look outside the beltway at Charlotte, North Carolina, where they're now shoveling out Bank of America Stadium ahead of today's NFC championship game between the Carolina Panthers and the Arizona Cardinals.

Now, to the latest developments in the Hillary Clinton e-mail scandal. We learned this week some of the e-mails contained information so sensitive most lawmakers can't read them. Joining me now, two top members of the House and Senate Intelligence Committees, here in Washington, Democratic Congressman Adam Schiff, and in Oklahoma, Republican Senator James Lankford.

Senator Lankford, how sensitive was some of the information in Clinton's private e-mails? And does it represent a security threat if a foreign government was able to get ahold of it?

SEN. JAMES LANKFORD, R-OKLA., INTELLIGENCE COMMITTEE: It would absolutely represent a security threat. There are about 1340 e-mails that we know of so far that had classified information, whether it be sensitive classified or top secret. And there's been a lot of conversation about the -- what they call S.A.P., Special Access Program, information that's also included. It’s been referred to as above top secret. It’s not above quote/unquote "top secret." It's a special compartmentalized top secret information where only certain individuals should be able to see this information. So, yes, it is a major risk to have this kind of information outside of a government server.

WALLACE: Congressman Schiff, you've generally, I think it's fair to say, played down this story. What about the fact that some of this information on Clinton’s private server we learned this week what this Special Access Program, a special classification, some say higher, some say just a specific classification inside top secret?

REP. ADAM SCHIFF, D-CALI., RANKING MEMBER, INTELLIGENCE CMTE.: Chris, when you read these e-mails, and I’ve gone through a lot of them, I think what really leaps out at you is you can see why there would be a difference of opinion between the State Department and the intelligence community about whether they should be classified at all, what the classification might be. So I wouldn't rush to judgment based on the attorney -- the inspector general's cover letter. I also think that given that none of these were marked classified at the time, there’s no reason, when you read the contents, I think, for the secretary to leave the conclusion that they should have been marked as classified.

And let me give you an example of why. If I were to send an e-mail to Secretary Kerry, who’s on a trip to visit a foreign leaders, including an article in The New York Times or some other publication about a Snowden leak -- and I'm making this up, but for illustrative purposes -- about a Snowden leak. If that e-mail suggests that the Snowden leak is accurate, it might be classified. If it's just to put the secretary on notice it may come up in the meeting but not suggest it’s accurate, it's unclassified. So you can see why even among compartmented programs there could even be a difference of opinion.

WALLACE:  Senator Lankford, not only Congressman Schiff, but the Clinton and her campaign people are pushing back hard on this. This whole story, her spokesman has accused the inspector general in the letter that he sent, and here it is, to committee chairman in the Senate on this subject, has accused the inspector general of playing politics. Here is that spokesman.


BRIAN FALLON, CLINTON CAMPAIGN SPOKESMAN: I think that he put two Republican senators up to sending him a letter so that he would have an excuse to resurface the same allegations he made back in the summer that have been discredited.


WALLACE:  And Clinton says that this supposedly super-secret information was really a "New York Times" article about a drone program. Here she is.


CLINTON (voice-over): The best we can determine is that it's likely what they are referring to is the forwarding of a New York Times article.


WALLACE:  Senator, let me ask you directly to respond to them and to Congressman Schiff. One, is it just politics? Two, are we just talking about a newspaper article?

LANKFORD: No, we're not just talking about a newspaper article. Again, it's the conversation that -- that interchanges between staff here. This whole Clinton procedure of trying to attack the messenger and to say the messenger must be a member of the right-wing vast conspiracy that’s out there, that must be trying to instigate something, the inspector general is an Obama appointee, is doing his job. He has been asked by a committee to keep the committee up to date. He has continued to be able to keep the committees, both in the House and the Senate, up to date. That is his task.

And the inspector general is not the one that’s designating these as sensitive, classified or top secret. That is within the IC community or that is within State Department. And even State Department has continued to redact these documents over and over again, say this shouldn't go out public. This includes methods, this includes procedures, this includes human intelligence, this includes foreign and government information. Those are on their face classified information.

So if someone is -- if something is sent to the secretary of state saying for your eyes only or this is foreign information, those are on its face classified. They don't have to be marked classified. It's known that they are -- that it’s classified information.

WALLACE:  Let -- let me just follow up quickly on this because our intelligence reporter, Catherine Herridge (ph), has said that some of the information in these e-mails include HSC-0, which is about human intelligence operations. Does some of the information that was either sent to Clinton or that she sent back, does it include sources and methods?

LANKFORD: I'm not going to get into all of that. For national security reasons for all of us, we need to stay away from this. Both Adam and I both stay out of what is in all these e-mails and try to not allude to it. I would just say, that is some of the most sensitive type of information that would be up there because people’s lives are on the line or sources are on the line. Anything -- any -- anything like that is ever covered (ph).

WALLACE:  And do you think that lives were on the line -- again without getting into the classification -- lies were on the line in some of the information in these e-mails?

LANKFORD: I -- I am not going to get into that for national security reasons for all of these conversations, but I would say any time any information that comes out that has any human intelligence connected to it or can confirm something that is out there in the public setting that people may wonder about but they don’t know, but once the conversation starts, it confirms it. It tells our adversaries that can get to a private server stored in New York, outside the government system, once they get that confirmation, it does do serious damage to our sources and methods.

WALLACE:  Congressman Schiff, I want to pick up on one thing that Senator Lankford said, the inspector general, Charles McCullough, who sent this information, and he wasn’t offering it, he was simply reporting what the intelligence community was saying, appointed by Barack Obama, confirmed unanimously by a Democratic-controlled Senate. He hardly seems like the right person for a political hit job.

SCHIFF: Well, I would say this, Chris, you’ve got several Republican chairs who are actively campaigning against Hillary Clinton and doing investigations of her at the same time. One of which went to a --

WALLACE:  Charles McCullough isn't. He was a -- he was an Obama appointee.

SCHIFF: No, no, no. No, let me finish. One of which went to a Trump rally and said his purpose is to defeat Hillary Clinton. These are people who are conducting investigation in Congress of the secretary during the presidential campaign. So I think the inspector general has to be very careful not allow -- not to allow him to be used by one political party against another during the presidential race. And I think the inspector general had to know or should know that when you put an unclassified form letter, you have to reasonably expect it's going to be leaked. And that letter, I have to say, was gratuitous in the information it included. It could have transmitted the information from the intelligence community without commentary in it. But by putting that commentary in it, knowing it’s going to be leaked, I think the inspector general does risk his reputation. And once you lose that as inspector general, you're not much good to anyone. So I think the inspector general has to be very careful here.

WALLACE:  The FBI is now investigating all of this material and former federal judge and Bush Attorney General Michael Mukasey had an article in The Wall Street Journal this week in which he wrote this, "it is nearly impossible to draw any conclusion other than she," Hillary Clinton, "knew enough to support a conviction at the least for mishandling classified information."

Senator Lankford, if David Petraeus, the general who led the surge in Iraq, if he was brought up on charges for roughly similar actions, what about Hillary Clinton?

LANKFORD: Yes, I’ll let the FBI to be able to determine that. Jim Comey’s been a very good leader for FBI. He’s been non-partisan in the process. But the real question becomes, willfully retained. Did the secretary of state willfully retain classified information? It doesn’t have to be marked classified, but it has to be information that was classified, on a non-government entity, on her own computer or, in this case, her own server. This is what Paula Broadwell faced when she had information that she got from Petraeus and kept it on her separate computer, though she had clearance in the past, it was not kept on a government computer. She was forced to resign and lost her security clearance.

No other cabinet officials had a private server and kept information. This would be completely unacceptable for the DOD, for the secretary of defense, to be able to have a private server because you assume conversations that happen with the secretary of defense will be classified. You would assume the same for the secretary of state, that that would be classified. So this issue of willfully retaining becomes the questions that Jim Comey and the FBI will have to -- have to determine.

WALLACE:  Thirty seconds, Congressman Schiff, is there a criminal case here?

SCHIFF: No, there's no evidence that there is. And I think you have to take attorney general -- former Attorney General Mukasey's comments as a Jeb Bush campaign adviser with a certainly grain of salt. When you consider the facts --

WALLACE:  He is a federal judge.

SCHIFF: Well, he's also working on one of Secretary Clinton's opponents' campaigns.

But when you consider the facts of the Petraeus case, where there was a deliberate decision to share classified -- high classified information with a mistress and was less than candid about it with the FBI, that is a very differed fact situation than someone who receives information not marked classified and --

WALLACE:  But what about this willful retention?

SCHIFF: And let me just mention one other thing in response to my -- my colleague’s comments, and that is, so many of these e-mails that are now considered to include classified information by the State Department, the State Department acknowledges were not classified by the time they were received by the secretary, but now are going to be marked classified because they might embarrass a forging government. That is hardly among the most sensitive things, But, nonetheless --

WALLACE:  You -- you -- you understand the fact of whether it’s marked classified or not does not alter the question as to whether or not it was classified information?

SCHIFF: Oh, I understand it. But the fact that something is classified after the fact is also significant because of the time they were received by the secretary they were not classified. Now some of those --

WALLACE: The secretary should know what's classified information and what isn't?

SCHIFF: Well, if you go through these e-mails, as I have, Chris, you will see it is not apparent on its face because it often depends on whether something is derived from a classified sort -- source or from a newspaper article. So it is not as self-evident as you might thing.

WALLACE:  All right. We’re going to have to leave it there. Never expected to settle this today. Congressman Schiff, Senator Lankford, thank you both for joining us today.

LANKFORD: Thanks, Chris.

WALLACE: When we come back, with the race tightening in Iowa, and Hillary Clinton falling behind in New Hampshire, she goes on the attack against Bernie Sanders. We'll bring back the panel to discussion her strategy, next.


WALLACE:  A sharp contrast in campaign ads in the Democratic race as we enter the final stretch before the Iowa caucuses. And we’re back now with the panel.

Well, Lisa, the last time most of us looked at the Democratic race, it seems that Hillary Clinton had a pretty clear path to the Democratic nomination. But now take a look at the latest Real Clear Politics averages. In Iowa, Clinton lead by just over six points. And in New Hampshire, Sanders leads Clinton by almost 11 points. So, what's happened in the last few weeks?

LERER: Well, there’s no question that the path has gotten a whole lot messier and a whole lot less clear. The race, as you point out in Iowa, is very tight. In New Hampshire, Sanders, who’s from, of course, the neighboring state of Vermont, has a -- a slight advantage. You know, once you get past those few -- first two states, it gets a little better for Hillary Clinton. She’s stronger -- remains stronger with minority communities. Sanders has had trouble making inroads there.

But then, once you get past Super Tuesday, where you have a bunch of southern states voting, you have these western caucuses in places like Colorado, where he could do quite well. So I think this could be a drawn-out battle. Clinton advisors and other Democrats have told me it could go until May or June. So this could end up being a slog. And the question is, how much damage this does for her when/if she makes it to the general.

WALLACE:  Well, as -- as I said before, watch what politician do, not what they say. And Clinton and her campaign are really going after Bernie Sanders now in a way that they never have before in this campaign, saying that he's a socialist, saying he’s too farther to the left on foreign policy and the economy and taxes. But at least in these early voting states -- and I know they’re more liberal than most -- of Iowa and New Hampshire, George, it doesn't seem to be sticking.

WILL: Well, think about that. He -- Hillary Clinton is saying to the Democrat nominating electorate, which is well to the left of their party, just as the Republican nominating electorate is to the right of the center of its party, she’s saying, don’t vote for the guy, he’s too left wing. They unleash, they say inadvertently, they unleashed Chelsea Clinton, who says, in effect, he wants to dismantle Obamacare and Medicaid and Sanders says, of course, I've always been for a single-payer system, which is approximately where the Democratic electorate is.

Her problem is, she has to hold together the Obama coalition, the coalition that beat her in 2008, without Obama at the top of the ticket. As you said, this is going to be a long slog. And what we know already is that Hillary Clinton is not a wine that travels well. She does not benefit from lots of exposure. The more people see her, the more they seemed to recoil from this.

I think she's in a worst position in January 2016 than she was in January 2008 and I still think, our previous guest notwithstanding, that her biggest problem may not be a senator named Sanders, but a general named Petraeus because distinguish it how you will, the Petraeus precedent does not look good for someone who has carelessly -- indeed recklessly has --

WALLACE:  The fact that he was prosecuted for mishandling of classified information.

WILL: Correct, and probably much less important classified information.

WILLIAMS: But wait a second, he gave that information to someone else. Hillary Clinton didn’t give any information. It’s never even been asserted that her server, private as it was, was violated.

WILL: Well, it’s -- but it is clear she violated the rules and what is important here is, was it careless and reckless?

WILLIAMS: Well, sure, you could -- you can make a negligence argument, but that would be --

WILL: There you go (ph).

WILLIAMS: But that's not a legal charge, George. And clearly what Petraeus did --

WALLACE:  No, he was citing -- wait a minute, Senator Lankford said willful retention, a willful mishandling. I forget the exact phrase.

WILLIAMS: Yes. Right. Yes.

WALLACE:  Let me -- let me -- let me just quickly --


WALLACE:  And I'm going to tee it up for you --


WALLACE:  Hillary Clinton was asked about it this week, and like her campaign manager, she basically dismissed it as political. Here she is.


CLINTON (voice-over): This seems to me to be, you know, another effort to inject this into the campaign. It's another leak.


WALLACE:  But, one -- I mean there are a couple of points here. First of all, you have the inspector general saying that this was so sensitive. It was this classification is sort of like double secret probation I didn’t even know existed, S.A.P., Special Access Programs.


WALLACE:  And --and despite Adam Schiff's talk about, well, you know, we don't want him discrediting himself, Obama appointee, confirmed unanimously by a Democratic controlled Senate, Charles McCullough.

WILLIAMS: Right. So -- and McCullough, of course, has previously said something was classified, and then you had the director of National Intelligence, James Clapper, come back and say, no, that was a mistake, it should not have been classified. So we have things going back and forth. You have argument between different people as to what’s classified and not classified, as you heard from the congressman in the earlier segment.

The over-arching point to me is, Republicans don't want to run against Hillary Clinton. They think they have an easier shot against Bernie Sanders. That's why you have Karl Rove and his American Crossroads running ads in Iowa against Hillary Clinton. Republicans have a vested interest. So this becomes a highly politicized investigation. And at the moment the question is, yes, Mrs. Clinton is entitled, privileged, you know, secretive, but did she cross the line, Chris? Did she violate the law? That's what I’m arguing with (INAUDIBLE).

NEEDHAM: This is -- this is quite the endorsement coming from Juan Williams.

WILLIAMS: No, I’m not endorsing.

NEEDHAM: (INAUDIBLE) because she’s privileged. By the end of -- by the end of 2008, the last remaining argument Hillary Clinton could make against Barack Obama was that she was competent. That you wanted her picking up the phone call at 3:00 in the morning. When Juan Williams is now even saying, well, this was negligence, this is gross incompetence --

WILLIAM: No, I -- I think she broke the rules.

NEEDHAM: And she -- the difference in 2008 and now is that that last argument that she had, I’m competent, you want me picking up the phone call, even that one doesn't stand any more.

WALLACE:  So, Lisa, you know, it's interesting because the Clinton people are now saying, even if she were to lose Iowa, even if she were to lose New Hampshire, then there's a firewall. You get to South Carolina, you get to a lot of those southern states before you get to your western caucuses and there are a lot of big states, winner take all, and that will be her firewall. That’s where she will save it. Do you buy that or --

LERER: I just think there's no reason for Sanders to drop out of the race. He has the money. He has enthusiasm. Even if that is her firewall, she’s not going to have enough delegates. And why would he quit. And the risk I think is whether his argument -- yes, he's taken e-mails off the table, but he’s talking about her Wall Street ties, and her -- her paid speeches. And do those arguments --

WALLACE:  Paid speaking fees.

LERER: Speaking fees -- get at the fundamental problem that she faces, which is a question of honesty and truthfulness. It's exactly what the e-mails -- you know, the problem with the e-mails for voters is, was she telling the truth? And if his arguments start to dovetail into this theme, she's going to have a problem going to the general election.

WALLACE:  And we have less than 30 seconds left, but you know, George, as well as I do, in campaigns, if a surprise happens, momentum can change on a dime. A campaign -- I mean you think of Gary Hart and Walter Mondale, the supposed invincible frontrunner, lose a couple of races, they look like a bum (ph).

WILL: And particularly if you lose the first two races, and then the other states say, do we want to double down and ratify failure? The idea that the Democratic electorate, which is to the left, is going to abandon Bernie Sanders is fanciful.

WALLACE:  Thank you, panel. See you next Sunday.

Up next, our "Power Player of the Week," the man behind Ted Cruz and the secret to their ground game.


WALLACE:  A look at the snow-covered Marine Corps War Memorial in Arlington, Virginia.

We’ve started introducing you to some of the key figures behind the leading presidential contenders. Well, today, a hard-ball consultant for a hard-ball candidate. Here's our "Power Player of the Week."


ROE: I think the rigors of democracy require us to have a real full-throated conversation about our beliefs, defend our beliefs, and point out the differences in our opponent’s beliefs.

WALLACE: (voice-over): Full-throated is the high-minded way Ted Cruz’s campaign manager Jeff Roe describes his brand of politics, but a video for his company brags --

UNIDENTIFIED MALE, POLITICAL AD: (INAUDIBLE) will help you defeat your opponent.

WALLACE: He's ruthless in backing his candidate.

ROE: Your entire life is going to go under a microscope. And I think people want someone with them that will ruthlessly defend them.

WALLACE (on camera): So you don't shy away from that word?

ROSE: Oh, no. Sure, I -- I -- ruthless. I’m -- the context of it to me is it's just all in.

We had a good few days in Iowa.

WALLACE (voice-over): Roe was all in for Cruz, leading an army of 200,000 volunteers, in a campaign that emphasizes data.

ROE: We now have volunteers in -- in 68 percent of zip codes in this country. We have volunteers in 81 percent of zip (ph) in this country.

WALLACE: Roe uses something called psychographic targeting, relying on publically available information on voters.

ROE: We have 17 different scripts out the door, on the phones and different mail pieces for each voter segment.

WALLACE:  Which means they not only know if you back gun rights, but whether you're more likely to respond to a mailer about the hunting tradition or crime stats in places with less gun control. The bottom line, to brand Cruz for voters.

ROE: Scrape all the social media messages, scrape all the nightly tracking and analytics we do. It is "strong," "Christian," "conservative," "leader" are the big words in the word cloud.

Can you explain to him what we’re doing now (INAUDIBLE) have any idea?

WALLACE:  Jeff Roe built his reputation as the bad boy of Missouri politics. In 2008, he targeted a Democrat who was running for Congress.

UNIDENTIFIED FEMALE, POLITICAL AD: Big city mayor Kay Barnes and Nancy Pelosi celebrating their San Francisco values.

WALLACE (on camera): Is that where attacking Donald Trump's New York values came from?

ROE: I think you’d be hard pressed to find a campaign that didn’t talk about values. So there’s no -- there's no link.

WALLACE (voice-over): Four years ago, Roe worked against Cruz in the Texas senate primary. He put on the mailer charging Cruz betrayed his country by representing a company with ties to China. Now they're on the same side.

SEN. TED CRUZ, R-PRESIDENTIAL CANDIDATE: We are running a deeply data driven analytical campaign and identifying the voters we need and devoting the resources to mobilize them and get them out and win. And Jeff does just a remarkable job.

WALLACE (on camera): How confidence are you that Cruz is going to win this nomination?

ROE: Oh, we’ll win.

WALLACE:  Excuse me?

ROE: We will win. And we’ll win because it’s hard to stop a -- the movement has chosen him to be the leader.

WALLACE (voice-over): And then something surprising happened as the ruthless bad boy described the grassroots support.

ROE: We have millions of people that are donating to the campaign. That's big stuff.

WALLACE (on camera): You're getting emotional.

ROE: Yes.


ROE: It's important who our -- who runs our country is important. And this is an honor to lead it.


WALLACE:  Roe grew up on a hog farm in Missouri. When I asked how that prepared him for a career in politics, he said, hog farms are a lot cleaner.

Now this program note. Be sure to tune in to Fox News Channel Thursday at 9:00 p.m. Eastern for the next GOP debate, just four days before the voting starts in Iowa.

And that's it for today. Have a great week. We'll see you next "Fox News Sunday," live from Des Moines.

And we leave you today with some images of the blizzard 2016.


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