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Fox News Sunday

Exclusive: Gingrich, Becerra debate state of 2016 race

This is a rush transcript from "Fox News Sunday," August 7, 2016. This copy may not be in its final form and may be updated.

CHRIS WALLACE, FOX NEWS ANCHOR:  I’m Chris Wallace.  

Hillary Clinton opens a big lead in the polls.  What can Donald Trump do to cut into it?  

(BEGIN VIDEOTAPE)

HILLARY CLINTON, D-PRESIDENTIAL NOMINEE:  Donald Trump is not qualified to be president.  

DONALD TRUMP, R-PRESIDENTIAL NOMINEE:  She's a monster.  She's actually not strong enough to be president.  

WALLACE:  Today, a debate between one of Trump’s most trusted backers, former House Speaker Newt Gingrich, and Clinton supporter, Congressman Xavier Becerra, about the race, the issues, and Trump’s missteps.

And then --

TRUMP:  Four hundred million dollars gets flown into Iran.  Who could approve a thing like that?  

BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  We do not pay ransom.  We didn’t here, and we don’t -- we won't in the future.  

WALLACE:  The uproar over the cash payment to Iran just as American hostages were being freed.  

Senator Tom Cotton, one of President Obama’s sharpest critics on whether it was a ransom payment.

Plus, as Clinton and Trump both face high unfavorable numbers, we'll ask our Sunday panel whether the election will be about who voters dislike more.

All right now on "Fox News Sunday."

(END VIDEOTAPE)

WALLACE:  And hello again from Fox News in Washington.  

It's been a remarkably rough week for Donald Trump, a series of self-inflicted wounds and one poll after another showing him falling behind in key swing states.  But on Friday Hillary Clinton once again stirred up the controversy over her private e-mails, which is way this race between two unpopular and distrusted nominees remains competitive.  

Joining me to discuss the state of the campaign, former Speaker Newt Gingrich, one of Trump’s top advisers, and Clinton advocate, Congressman Xavier Becerra.

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

NEWT GINGRICH, R-FORMER HOUSE SPEAKER:  Good to be with you.  

REP. XAVIER BECERRA, D-CALIFORNIA, HOUSE DEMOCRATIC CAUCUS CHAIR :  Thanks.  

WALLACE:  Let’s start with the two candidates.  As Donald Trump has gone from one misstep to another this week, Speaker Gingrich, you have been as sharp as any critic about your man.  Here are some of things you've been saying about him.  "Very self-destructive, take a deep breath and learn some new skills.  Trump is helping her to win by proving he is more unacceptable than she is."

I know that you think that Clinton would make a lousy president, but is Trump -- how close is Trump to disqualifying himself?  

GINGRICH:  I don't think very close at all.  First, if you look at the last few days, I think he's gotten the messages.  He came out and endorsed Paul Ryan, which he should have done in the first place.  He endorsed John McCain, which he should have done in the first place.  He endorsed Kelly Ayotte.

I mean, these are steps back into being -- you know, it’s very tricky if you've never run for public office, to jump from being a businessman to being one of the two leaders fighting for the presidency, and he’s made some mistakes.  But, frankly, the biggest mistake last week was made on your show.  

And it was -- I mean, it's one thing to lie.  It’s one thing to lie about lying and then Friday, she gave us the perfect explanation.  Her brain apparently had short circuited while she was talking to you.  Well, as George Romney can tell her, using a short circuit as an explanation for why you do something is very dangerous in a presidential campaign.  

So, I’ll take the week.  I think she managed to trump Trump in terms of mistakes.  

WALLACE:  Well, that brings us to Hillary Clinton, Congressman Becerra, who has a different problem than Trump, honesty.  Last week, I asked her about the fact that FBI Director Comey said what she had been telling for -- the American people for a year about her private e-mails was untrue, was false.  Here's how she responded in that interview.  

(BEGIN VIDEO CLIP)

CLINTON:  Director Comey said what my answers were truthful and what I’ve said is consistent with what I have told the American people.  

(END VIDEO CLIP)

WALLACE:  And after independent fact checkers came down on her, here is how Hillary Clinton responded to that question on Friday.  

(BEGIN VIDEO CLIP)

CLINTON:  I may have short-circuited for that, you notice, I will try to clarify, because I think Chris Wallace and I were probably talking past each other.  

(END VIDEO CLIP)

WALLACE:  But, Congressman Becerra, she didn't short-circuit, and we didn't walk past each other.  The problem was that Clinton misrepresented what James Comey told the American people.  

BECERRA:  Chris, what Director Comey told the American people was after a thorough investigation by the FBI, that of the over 30,000 e-mails that Clinton had provided for this investigation, that there was no wrongdoing.  And --

WALLACE:  No, no, he didn't say that, but that's not even what I’m talking about.  

What he said was there was not enough grounds to prosecute her.  He did say she had been extremely careless and negligent, but specifically what he said was what she told the American people over the past year was wrong.  

And this is -- let’s play what he said on July 7th to Congress.

(BEGIN VIDEO CLIP)

SEN. TREY GOWDY, R-S.C., CHAIR, BENGHAZI COMMITTEE:  Secretary Clinton said there was nothing marked classified on her e-mails either sent or received.  Was that true?

JAMES COMEY, FBI DIRECTOR:  That's not true.  

GOWDY:  Secretary Clinton said, "I did not e-mail classified significant to anyone on my e-mail.  There is no classified material."  Was that true?  

COMEY:  There was classified material e-mail.  

(END VIDEO CLIP)

WALLLACE:  Congressman, Comey directly contradicted what Clinton had been telling the American people for a year.  

BECERRA:  But, Chris, what you don’t also show is that Director Comey said that she had no knowledge of some of those so-called classified e-mail because they were not either not marked or they were not classified at the time or incorrectly marked.  So, he did come out and said -- you don't show that, but he did come out and say she did not know.

WALLACE:  They were marked and more importantly, he said that there was classified material that she had e-mailed.

BECERRA:  But she did not know it.  Otherwise, if there had been the intention to send classified e-mails, then FBI would have pursued this much further.  So I think you're trying to make more of this than there is.  

(CROSSTALK)

WALLACE:  She didn't say I didn't intend to send classified material.

BECERRA:  No.

WALLACE:  She said that isn't what she told the American people.  She said there was no classified material.

BECERRA:  Chris, she has made it clear that looking back at this, she would have done it differently, that she did make some mistake, but she never intended to send classified information over e-mails, and the FBI investigation confirms that.  And so, what we may want to make more of it, the fact has said we should move on and get to real important matters of the country.  

GINGRICH:  But I think you're missing the genius of her Friday comment.  Now you can say, did you like to that mother in Benghazi?  She goes, no, it was short-circuit.  And say, did you forget the 76 secret meetings that secretary of state have?  No, it was what short circuit.  

She now has a fundamental way of saying to people, it wasn't that I lied to you, I didn't remember whatever was I was going to say.  

BECERRA:  After 30,000 e-mails have been disclosed, what we don't yet know is one tax return from Donald Trump, we don't yet know how his wife gained her immigration status --

GINGRICH:  That is not true.  That is not true.  

BECERRA:  It's time for Donald Trump to start providing one iota of information on the tax returns, which he's never agreed to do.  

GINGRICH:  OK.  First of all, we know that his wife had a green card before she met him.  She came here --

(CROSSTALK)

BECERRA:  How did she get the green card?  

GINGRICH:  She came here legally.  

BECERRA:  How did she get the green card?  

GINGRICH:  She came here legally.  

BECERRA:  How did she get the green card?  

GINGRICH:  She applied for a green card.  She didn't know Donald Trump.  

(CROSSTALK)

BECERRA:  Because she had been here before she came to work.  

GINGRICH:  And then she came here and decided she want to stay and work.

BECERRA:  Yes.

GINGRICH:  This is the only immigrant in America you're worried about.  I think it's amazing the one person you decide to pick on happens to the wife of Donald Trump.  

BECERRA:  Interesting that the immigrant basher is unwilling how his wife, an immigrant, got gained her status.

GINGRICH:  First of all, he’s not an immigrant basher.  His mother was a legal immigrant.  His wife is a legal immigrant.  He employs legal immigrants.  He just likes his immigrants to be legal.  

BECERRA:  It’s great for Mrs. Trump to have her status and her citizenship.  I have no problems with that.  I’m the son of immigrants, but what does concern me is when some guy goes out and bashes immigrants, not only undocumented, but legal immigrants and won't explain how his wife gained her legal status --

WALLACE:  I think we have made the point.  Let's turn to the economy, kind of a big issue.  Here is what Trump says about his plan.  

(BEGIN VIDEO CLIP)

TRUMP:  We're going to cut our taxes for the middle class.  We're going to cut our taxes for business.  We're going to have massive dollars pouring into this country, and we're going to create jobs like we have never seen before.  

(END VIDEO CLIP)

WALLACE:  But Speaker Gingrich, Trump would cut taxes $9.5 trillion over the next decade, most of it going to top earners, and adds $11.2 trillion to the debt with unspecified spending cuts.  

Mr. Speaker, his numbers don't add up.  

GINGRICH:  Of course not.  I think historically no candidate's numbers add up, particularly in the media.  But --

WALLACE:  You're saying his numbers don’t --

BECERRA:  I’m going to have to quote you on that one, newt.  

GINGRICH:  I said all candidates.  

But let me give you an example.  If you open up America's energy and mining opportunities, there's at least $7 trillion in potential additional revenue just from making it easier to develop our own energy and only mental resources.  There are a number of steps to take to dramatically accelerate the economy.  If you dramatically shrink to 600 new regulations Obama has imposed, you have an explosion of small business getting created.  

In a period of economic growth such as the Reagan era, you in fact do raise a tremendous amount of revenue.  

WALLACE:  Congressman Becerra, you can responsible, but I also --

BECERRA:  Breathtaking.  Breathtaking.  

WALLACE:  Go ahead.  

BECERRA:  The plan you just outlined, which sends money mostly to folks at the top has been scored to probably lose about 3.5 million jobs by Senator McCain's former economist.  It's also very clear that in increasing debt, Donald Trump really meant he was the, quote, "king of debt".  This is a guy who thinks -- and his quote was wages are too high.  

The problem in the economy isn't that wages are too high, because we've seen a lot of jobs created.  Some 15 million jobs created in the last six years or so.  The problem has been that Americans haven't seen their wages go up.  And so, salaries are going to go up.

WALLACE: But President Obama has been the president for the last eight years.  You make it sound like, you know, somebody else has been in charge.

And let me ask --  

BECERRA:  The jobs are good.  What's not good is we have to see Americans' wages go up.  That's what we have to work on.  

(CROSSTALK)

GINGRICH:  The jobs aren't good.  You're not getting manufacturing back.  You're again bartending jobs and service jobs.  

BECERRA:  Donald Trump is one of those who outsource jobs, right?

WALLACE:  Let me ask about Clinton's numbers.  They do add up.  She would raise taxes $1.2 trillion.  Raise a trillion dollars over ten years, most of that on the rich.  And even with big new spending programs, adds only about 250 million to the debt.

But as I discussed with Clinton last week, what it is basically is more of the Obama plan.  Here's that discussion.  

(BEGIN VIDEO CLIP)

WALLACE:  You're offering more government programs --

CLINTON:  Well, but that's --

WALLACE:  -- more spending, more entitlements, more taxes --

CLINTON:  No.  

WALLACE:  -- more tax penalties and credits.  

CLINTON:  Well, let's unpack that.  What I’m offer is the biggest job creation program since World War II, and I hope to be able to --  

WALLACE:  But it's infrastructure.  That's what Obama did.  

CLINTON:  But he didn't get to do enough.  

(END VIDEO CLIP)

WALLACE:  The problem with the weakest recoveries since 1949 is that Obama didn't get to do enough?  

BECERRA:  We didn't invest in our roads and bridges and schools the way we should have.  

(CROSSTALK)

WALLACE:  We had a trillion dollar stimulus plan.  

BECERRA:  And only a small portion went to infrastructure, to investments in our roads, our bridges, our classrooms.  What she’s saying is -- my dad was in construction.  Construction was one of the hardest-hit industries in the 2008 recession.  If you put construction workers to work, you’re putting restaurants to work because somebody has to go to lunch.  And you’re doing a lot more to ripple that --  

(CROSSTALK)

WALLACE:  Just briefly.

GINGRICH:  Notice what he had said thought.  We had the chance, we had $900 billion, we blew it, but now trust Secretary Clinton --

BECERRA:  Fifteen million jobs isn't blowing it.  

GINGRICH:  Well, a lot of them aren't very good jobs and a lot of Americans are working part time.  

BECERRA:  Only in the world of Grinch and Republicans would creating 15 million jobs after George Bush left us with an economy hemorrhaging 800,000 jobs a month.

GINGRICH:  You campaign on things are good enough.  We'll campaign on things can get better.  We'll see who wins the general election.  

WALLACE:  OK.  We have a bit of time left, and I want to get to an important issue and that, of course, is ISIS, the external threat.  Here's what Clinton and Trump are saying about each other.  

(BEGIN VIDEO CLIP)

TRUMP:  It was Hillary Clinton that she should get an award from them as the founder of ISIS.  

CLINTON:  There is no doubt in my mind that Donald Trump is unqualified to be president and unfit to be commander in chief.  

(END VIDEO CLIP)

WALLACE:  Congressman Becerra and we are running out of time.  Briefly, what is Clinton's plan?  Because I have to say, I don't understand either of their plans, what is Clinton's plan to destroy ISIS and why is it better than Donald Trump's?  

BECERRA:  Just as she was there to green light the raid on Osama bin Laden.  Just as she was there to assemble --

WALLACE:  But she didn't green light it, President Obama did.  

BECERRA:  But she was there to give advice to green light.  She was the one that assembled a coalition that helped stop the nuclear buildup in Iran.  

WALLACE:  What's her plan to stop ISIS?  

BECERRA:  She's made it very clear.  You get tough on them at the source.  You make sure we’re doing everything we can to protect the homeland.  What you don’t do --

WALLACE:  How is that different than what we’ve already have?

BECERRA:  What you don't do is you don't call for torture to be used by the U.S. military.  You don't cozy up to people like Putin and Saddam Hussein.  You don't go out there and say, hey, why haven’t we’ve been using nuclear weapons, the way Donald Trump apparently has said.

You do things that show stability and create the partnerships that you need.  You don't go out there and show that you're unfit to be president the way Donald Trump has.  

GINGRICH:  So 15 years after 9/11, we're not winning.  We're not winning in Afghanistan.  We're not winning in Iraq.  We're not winning in Syria.  We're not winning in Libya.  We're not winning in Yemen.  We’re not winning in some areas (ph).  

BECERRA:  That's a knock on our troops who tried really, really hard.  

GINGRICH:  No, it’s knock on two administrations.

BECERRA:  That’s a knock on our troops.

GINGRICH:  No.  Our troops will tell you we're not winning.  

(CROSSTALK)

GINGRICH:  Wait a second.  

BECERRA:  He attacked a gold star family.  What's going on with that?  

GINGRICH:  Look, first of all, he also defends a lot of Gold Star families and the fact is --

BECERRA:  He sure attacked the Khan family pretty tough and he went after the mother.  

(CROSSTALK)

GINGRICH:  And Mr. Khan attacked him pretty tough, too.  Politics is a tough business.  But -- but.  

BECERRA:  Get out kitchen if you can't take the heat.  

GINGRICH:  For both of them.  

But the fact is, Hillary's got a run on the grounds that disrupting Libya, disrupting Syria, failing in Russia, failing in Iraq, failing in Afghanistan as a terrific strategy, and she will do more of the same failure, including, by the way, paying $400 billion in cash, which the president assures us was not in fact --

WALLACE:  Four hundred million, and we're going to be talking about that, which is a good way to get you two off the set.  

(LAUGHTER)

WALLACE:  Speaker Gingrich, Congressman Becerra, thank you both.  I hope when they have the big debate, the nominees do as well as the two of you did.  Thank you.

GINGRICH:  Thank you.  Take care.

WALLACE:  Up next, we’re bringing our Sunday group to discuss both candidates’ troubles.  They’re shaking hands.

And new polls that tracks changing shape of this race.  Back in a moment.  

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA:  If you are repeatedly having to say in very strong terms that what he has said is unacceptable, why are you still endorsing him?  

REP. MIKE COFFMAN, R-COLO., RE-ELECTION CAMPAIGN AD:  People ask me, what do you think about Trump?  Honestly, I don't care for him much, and I certainly don't trust Hillary.  

(END VIDEO CLIP)

WALLACE:  President Obama calling out Republicans for supporting Trump and GOP Congressman Mike Coffman of Colorado coming out against Trump in a commercial as part of his campaign for reelection.  

And it’s time now for our Sunday group.  Syndicated columnist George Will, Gerald Seib of The Wall Street Journal, Lisa Lerer who covers politics for The Associated Press, and Washington Examiner contributor, Lisa Boothe.  

Well, Gerry, how damaging was this week for Donald Trump?  And was it irreparable?  

GERALD F. SEIB, THE WALL STREET JOURNAL:  Very damaging, but not necessarily irreparable, I think I would say.  

You know, we had a poll this week.  I think the numbers that scared Republicans moth wasn't the fact that Hillary Clinton was in our polls up by eight nines, nine points, ten points in other polls.  But we had a number that asked people which kind of Congress you prefer after this election, one controlled by Democrats, one controlled by Republicans?  A month ago, that wasn’t’ even a question, even break, 46-46.  Now, Democrats are up by four points.  

I think what really changed this week was Republicans looked at the Trump campaign and said, it's in trouble, but you know what?  It's the kind of trouble that can drag us down and now you're seeing a separation of the party, a presidential campaign going this way.  Congressional election campaigns going that way.  

WALLACE:  I want to pick up on that with you, Lisa Boothe.  We saw the long and winding route that Trump went to to finally on Friday endorse Paul Ryan, and John McCain and Kelly Ayotte, after first saying he wouldn’t endorse them.  We just saw that ad from a Republican congressman running for reelection, beginning it by saying he doesn't like Donald Trump.  

How much Trump is trouble in with his own party?  

LISA BOOTHE, WASHINGTON EXAMINER CONTRIBUTOR:  Well, that does present challenges for Donald Trump obviously.  I mean, it's not good when your own party is coming out with ads distancing themselves from you.

But I actually think some of the disasters that Donald Trump has faced over the past two weeks could potentially be the best thing that could have happened to him, because sometimes candidates need to get their teeth knocked in to force directional changes that are needed for the campaign that are beneficial for the campaign.

And what we saw is Donald Trump endorsing Paul Ryan, Senator McCain and Ayotte as well, which is a recognition that he needs the Republican Party.  He needs the Republican base to win a general election.

What we’ve also seen is he's hired Cambridge Analytics despite in May saying he doesn’t need data analytics, hiring the firm that was behind Brexit who identified first-time voters and was able to bring them out and get them out to vote.  That's a positive step for his campaign.

We also saw the fact that he actually out-raised Hillary Clinton in direct donations, $64 million to her $63 million, a 69 percent increase in small-dollar donations, which is a positive step for his campaign.  

And also after getting hid with $234 million in radio and TV buys by Clinton and her allies, there's been report that his campaign is finally looking into ad time and ad buys for this election.  So, I think, maybe it was a bad couple weeks.  We’re all going to agree on that.  But perhaps, this is the sort of forced change that his campaign needs.  

WALLACE:  Then we have Hillary Clinton who by all accounts had a very strong week until as we said on Friday, excuse me, on Friday, she once again kicked up the controversy over her private e-mails and what FBI Director Comey said about them, and last night, Donald Trump had some fun with how she explained it.  

Here Trump is.  

(BEGIN VIDEO CLIP)

TRUMP:  Unstable Hillary Clinton, I think that the people of this country don't want somebody that's going to short-circuit up here.  

(END VIDEO CLIP)

WALLACE:  George, how do you explain Hillary Clinton and her continuing troubles with the e-mails?  

GEORGE WILL, SYNDICATED COLUMNIST:  Well, there's no good explanation, which is why they throw a lot of dust in the air.  The old saying, "If you have the facts law on the side, argue the law.  If you have the facts on your side, argue the facts.  If you have neither, pound the table."  She's pounding the table at the moment.  

The question really is, however, does this resonate?  Have people said, well, we’ve already made our mind about this, for her or against her, and I have a doubt as to whether this resonates when people go into the voting booth in November.  

WALLACE:  Why?  

WILL:  Because it's already baked in the numbers in your poll, which is they said not honest and trustworthy, that's largely, not exclusively, but largely related to this, and they have made up their minds.  

WALLACE:  So, in other words, if you're against her, you already -- whatever your feelings are, you have already baked the private e-mails into it.  

WILL:  It's unclear how many undecided voters are in the country, but surely those who were undecided are not undecided about this.  People have probably said we’re for her, we’re for her, in spite of that.  If we're opposed to her, it's because of that, but they have factored it in.  

WALLACE:  Lisa, how much frustration at Clinton headquarters in Brooklyn the fact that she just -- even though politically or rather legally she's in the clear, the FBI Director Comey and Attorney General Lynch say they're not going to prosecute her, politically, she can't seem to get rid of this.  

LISA LERER, THE ASSOCIATED PRESS:  Well, surprising twist, the folks at campaign headquarters agree with George here.  They say that this is issue is a Rorschach test for how voters view Clinton.  If you don’t like here, you see this, you like her less.  If you do like her, you see this and think there's a conspiracy theory against her.  

But, look, I mean, there’s little question that this underscores her weaknesses as a candidate. A campaign is not a court case, public opinion is not a jury.  She's unable to provide anything but these very legalistic answers when this topic comes up, and it continues to be a drag on her campaign.  She can’t put it behind her.

Now, look, none of that may matter.  Donald Trump is having problems that may surpass voters' views of this issue, but it is something that could follow her into the White House should she win.  It's hard to get thing done when voters don't trust you, and that’s exactly what this issue speaks to that weakness of hers.  

WALLACE:  Let's look at not at the national polls, but swing state polls that came out this week, because they were pretty alarming.  Trump is now done 15 points in New Hampshire, down 11 points in Pennsylvania, down nine points in Michigan, and down six points in Florida.  

Gerry, there's even a poll that shows Trump is down four points in reliably red Georgia.  This is trouble.  

SEIB:  And Utah, it's drifting the other way.  The number that ought to bother the Trump campaign is Florida.  It’s only six, the other numbers are bigger.

But for me, it's hard to put together the Electoral College map that wins for Trump without Florida.  The fact he's down there is a bad sign.  If he doesn't win Florida, it doesn't matter if he wins Pennsylvania.  If he doesn't win Florida, he's not going to win Pennsylvania.  

So, anyway, these are all leading indicators.  I think when you step back from those numbers, one of the things you see is that what happened in the last week was that Hillary Clinton and the Democrats consolidated their base in the wake of their convention.  The Republicans went in the opposite direction.  

Donald Trump is bleeding right now among some of his core supporters, white males, non-college educated voters.  These are people who are the Trump voters.  That's where he's eroded in the last week or so since the conventions.  That may be the place where it's easier for him to recover.  

WALLACE:  I want to ask you, Lisa, about -- something -- the thing that surprised me the most in the previous segment debate, if you will, between Gingrich and Becerra, that Becerra representing Clinton went after Donald Trump's wife and her immigration status.  Were you surprised by that?  

BOOTHE:  No, I think this is something that the Clinton campaign is starting in attack.  We've seen articles questioning her immigration status, and if proven -- if their line of attack proves to be true, then that is a very damaging line of attack against Donald Trump who has made immigration sort of the central point of his campaign.  

So, you know, clearly, if there's enough information there that's going to be devastating for his campaign.  So I think it's incumbent upon the Donald Trump campaign to prove them wrong and put that information out there.  

WALLACE:  I mean, we should point out that Melania Knavs, her maiden name, came to this country long before she got involved with Donald Trump.  

Is this something -- is this a new line of attack from the Clinton campaign?  

LERER:  Their goal is to make voters not who he says he is.  So, he plays by different rules in his own life than he would as president and his policies.  You see that also with his attacks in outsourcing.  He wants to bring jobs to the U.S. they say, but she spent -- Hillary Clinton has spent the last week slamming him for making his products overseas and moves jobs to Bangladesh, and China and all these places.

So, they're trying to do what campaigns do in this stage in the presidential race, which is undercut his narrative, undercut his image.  I think these attacks play into that.  

WALLACE:  George, final thoughts on Melania Trump's status?  

WILL:  They may be doing that.  They also may be trying to provoke him.  He is provokable.  When he is provoked, he goes on Twitter and when he goes on Twitter, he says interesting things that take up another two or three days.  

What, we’re 90-some days, less than 90 days away from the election.  We're not talking about 1.2 percent of economic growth.  We're not talking about things that might embarrass Mrs. Clinton.  We’re talking about something that might detonate an easily detonated candidate.  

WALLACE:  We have to take a break.  We'll see you all a little bit later.  

Up next, questions about that $400 million cash payment to Iran.  We'll ask Senator Tom Cotton, a leading critic of the Iran nuclear deal, was it ransom to free four U.S. hostages?  

(COMMERCIAL BREAK)

WALLACE:  Coming up, Trump and Clinton on the Iran payment.  

(BEGIN VIDEO CLIP)

TRUMP:  Who could approve something like that, where they take cash into a country and hand it to them?  

CLINTON:  The White House has addressed this and I think actually this is kind of old moves.

(END VIDEO CLIP)

WALLACE:  We’ll ask our panel if it was ransom and whether it will be a big campaign issue?  Next on "Fox News Sunday."

(COMMERCIAL BREAK)

WALLACE: A look outside the beltway at Martha’s Vineyard, where President Obama is spending his final summer vacation as commander in chief.

Now to the $400 million cash payment to Iran, which the administration maintains was not ransom, even though the exchange coincided with Tehran’s release of those four American hostages.

Let's bring in Arkansas Senator Tom Cotton, a member of the Armed Services Committee, and a fierce critic of President Obama’s nuclear deal.

Senator, we've known since the formal announcement of the Iran deal last January and the release of the four American hostages that the U.S. would pay Iran $1.7 million as part of settlement of an old arms deal. So why are you so upset by the revelation this week about this $400 million cash payment to Iran?

SEN. TOM COTTON, R-ARKANSAS: Chris, it’s good to be on with you this morning.

At the time I said that that $1.7 billion payment was a ransom itself, but the administration has consistently stonewalled Congress and the American people. We don't know the cash payments, for instance. We don't know that it was paid for with bills that can be easily laundered and used for terrorism or support of Iran’s allies throughout the region, and we didn't know that the Department of Justice opposed it. I think it's really shocking to most Americans that the United States government was acting like a drug cartel or a third world gun runner might, stacking cash on a pallets and wrapping it in cellophane and flying it in an unmarked aircraft to give to the world’s worst state’s sponsor of terrorism. There are still a lot of questions left to be answered, and the Obama administration continues to stonewall on this.

WALLACE: Let -- let -- let me quickly point out, if people are wondering, that you're on the Cotton family farm in Arkansas. And I must say, it looks like a very nice place to be on this Sunday.

President Obama didn't keep it a secret. I mean he announced last January that we were giving this money to Iran. Let's look back at what he said.

(BEGIN VIDEO CLIP)

OBAMA: The United States and Iran are now settling a long-standing Iranian government claim against the United States government. Iran will be returned its own funds, including appropriate interest, but much less than the amount Iran sought.

(END VIDEO CLIP)

WALLACE:  Now, I understand the point you made in your first answer. We're talking about $400 million in cash. We’re talking about an unmarked plane. We're talking about the hostages waiting on the tarmac until the plane landed. But you certainly would agree that the administration did not keep this payment, maybe the nature of it, but they didn't keep the payment secret.

COTTON: Well, they didn't keep the nature of it. And when you get $400 million in straight cash in 500 euro notes, a note that is notoriously used for terrorism and drug running around the world, so much so that the European Union is taking it out of circulation, I think that's an important fact for the American people to know.

Again, though, I said at the time, in January, that paying them $1.7 billion, no -- not money that they deserved, not money that they had a right to, on the very weekend that four Americans were released from captivity and the nuclear deal was implemented, was a ransom payment, and that would lead to the detention of more hostages in Iran, which is exactly what has happened in the meantime.

WALLACE:  Now, you -- you’ve talked about it like a drug cartel, money laundering. Former Bush attorney general Michael Mukasey, who was also a former federal judge, had an article this week in "The Wall Street Journal" under the headline, "legal but not right." Do you agree that whether you like it or not the payment was legal? And what do you plan to do about it to try to stop this kind of thing? Obviously you can't undo it, but to try to stop it in the future.

COTTON: Well, Chris, lawyers disagree about the legality of it, but in the end this is not a question of whether it was legal, it was whether it was smart and it’s the right thing to do to keep Americans safe. Again, President Obama said we don't pay ransom this week. He said this payment was not a ransom. It doesn't really matter, though, what President Obama say. It matters what the Iranians think and it matters what dictators and terrorists and gangsters all around the world think. And they clearly think that this was a ransom payment and that if they take an American hostage, then may they too will get a $400 million windfall of 500 euro notes on an unmarked plane. That’s why it’s so dangerous.

WALLACE:  Now --

COTTON: We get -- we have to stand up to -- we have to stand up to Iran, Chris. I've introduced legislation with Bob Corker and Bob Menendez and Joe Manchin called the Countering Iranian Threats Act, that we need to enact almost as soon as we get back into session next month, to stop Iran’s illicit activity and its support for terrorism.

WALLACE:  Well, I want to get into the larger question of Iran because one of the concern is that Iran used this money, and the many more billions that it got as part of the nuclear deal, to support terrorism. But CIA Director John Brennan said that that's not true. Let's listen to Director Brennan.

(BEGIN VIDEO CLIP)

JOHN BRENNAN, CIA DIRECTOR: The money, the revenue that’s flowing into Iran is being used to support its currency, to provide, you know, monies to the departments and agency build up, that’s infrastructure.

(END VIDEO CLIP)

WALLACE: Is Director Brennan misleading the American people, senator?

COTTON: Well, when you give Iran more than $100 billion, there's no doubt that some of that money might go into domestic purposes because a lot of the support for terrorist groups like Hezbollah and Hamas may not require that much money. But there’s also no doubt and even senior White House officials have said that some of this money very likely ended up in the hands of terrorist organizations or the Revolutionary Guard Corps. And as President Obama's own director of national intelligence and commanding general in the Middle East has said, Iran's behavior in the Middle East has gotten worse and more aggressive since the nuclear deal. It hasn’t gotten any better.

WALLACE:  You opposed the Iran nuclear deal, as we’ve said, from the very start. At the time that the deal was announced, the general assessment was that Iran was weeks, at -- at the most, months away from breakout, the point at which it would be able to assemble enough missile (ph) material to make a nuclear bomb. Now most outside experts say they’re at least a year away. So the breakout period has been brought back. Isn't that a good thing?

COTTON: No. Chris, the nuclear deal is still a failure. Remember, the fundamental objection to the deal was not that Iran would break the deal, but Iran would uphold the terms of the deal and they’d still be on the path to a nuclear weapon because we allowed them to keep a vast nuclear infrastructure in just a matter of years. It only took North Korea 12 years from the time that we signed a similar deal with them in 1994 to detonate a nuclear weapon.

But many other outside experts have said that Iran could easily walk away from the deal, then turn the breakout time back to a few months, and that’s because Iran is violating the terms of the deal. German’s intelligent -- Germany's intelligence service said they’ve examined their clandestine procurement network throughout Europe trying to obtain duel use information. They continue to test ballistic missiles in violation of associated U.N. Security Council resolutions. So Iran is not upholding its end of the deal. But even if they were, the deal would still be fundamentally flawed because it allows Iran to keep a vast nuclear infrastructure.

WALLACE:  Now, Donald Trump is trying to link Hillary Clinton to this payment of the $400 million. Given the fact that she stepped down as secretary of state three years before any of this happened, is that fair?

COTTON: Well, Hillary Clinton was the architect of Barack Obama's foreign policy in his first term and much of the groundwork for the negotiations that ultimately culminated in this deal did in fact begin under Hillary Clinton. It was under (INAUDIBLE) within her first term.

WALLACE:  But you’ve got to agree, she had nothing to do with the actual payment.

COTTON: Well, the decision to makes this payment, like all decisions in the end about foreign policy, rests at the feet of Barack Obama. He's the president of the United States. It's his job to keep our country safe. And I think paying a ransom for hostages clearly is not going to keep Americans safe, if you see what’s happened in Iran since we paid that ransom.

WALLACE:  Finally, you've been pretty quiet about Donald Trump beyond the fact of saying that you support him. Given his fight with the Khan family, given his comments about Russia, given the fact that he has at least raised the possibly we wouldn't come to the aid of some of our NATO allies if they were to come under attack, how do you feel about Donald Trump's readiness to be commander in chief?

COTTON: Well, Chris, I've had my disagreements with Donald Trump. I've stated them clearly in the past and I will in the future. And Donald Trump ought not have said some of those things that you just recounted, but Hillary Clinton ought not to have done the things she’s done. She is in no small measure responsible for the death of four Americans in Benghazi and she lied to the faces of their families. She set up an unclassified server in which she used classified information that put Americans at risk and then she lied about it for a year. And then just last week, Chris, on your show, she's lying about lying. All week long, since you interviewed her, she’s been telling lie about her lies. Donald Trump ought not have said some things, but Hillary Clinton ought not have done so many things that she’s done.

WALLACE:  But in 30 seconds, if I may, are you confidence that Donald Trump is ready to be commander in chief?

COTTON: I am confident that if the American people elect Donald Trump as president, and a Republican Congress, that this country will be safer in the world, our streets will be safer, and we will be more prosperous.

WALLACE:  Senator Cotton, thank you. Thanks for joining us. And enjoy the rest of day on the Cotton family farm in Arkansas.

COTTON: Thanks, Chris.

WALLACE:  Up next, we'll bring back our Sunday panel to get their take on the $400 million payment for Iran and how it will play on the campaign trail.

Plus, what would you like to ask the panel about the timing of the payment to Iran? Coincidental or cash for American captives? Just go to Facebook or Twitter @foxnewssunday and we may use your question on the air.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

TRUMP: We’ve just learned about $400 million. Ransom payment. Same day. Just a coincident, right? Cash. Cash.

OBAMA: We do not pay random. We didn't here and we don’t -- we won't in the future. Precisely because if we did, then we would start encouraging Americans to be targeted.

(END VIDEO CLIP)

WALLACE:  Donald Trump and President Obama sharply at odds over this week’s revelation about that $400 million cash payment to Iran last January.

And we're back now with the panel.

Well, George, when is $400 million in cash, flown in on an unmarked cargo plane, with four American hostages sitting and waiting on the tarmac, when is that ransom and when is that a coincidence?

WILL: Well, to use the term du jour, the optics are not good as you describe them.

Senator Cotton said the whole $1.7 billion was ransom. So he thinks there’s no legal claim, I gather -- he’s a lawyer -- deriving from a 1970 Shah era arms deal that never was consummated. There is, however, a difference between what a -- looks scandalous and what is actually a scandal. The cash makes it look terrible because the only reason to want cash is to make it -- make it untraceable. And they could have done all this without the plane, without the pallets full of currency simply by --

WALLACE:  Well, now, wait a minute, I mean because the president says the reason they had to do cash was because of the fact that we have all these banking restrictions and the sanctions and if we had tried to do it through a wire, they couldn't have gotten it.

WILL: It seems to me they could have found a way to digitally bounce it off somewhere. I mean this is a way of evading the letter of the law and they could have evaded it in some other way. What she me as passing strange is the piece we just showed is Mr. Brennan saying, well, they’re using this money for infrastructure, child care for all I know. Money is fungible. You give a nation $400 million, that’s $400 million they --

WALLACE:  They actually get -- I mean they’ve given them over $100 billion.

WILL: Sure.

WALLACE:  Right.

WILL: That's money that they can use for something else.

WALLACE:  We asked you for questions for the panel, and we got a bunch like this one. Don James tweets, "can there be any legal repercussions against POTUS," president of the United States, "for ordering what is obviously ransom?"

Jerry, how do you answer Don?

SEIB: I -- I don’t think so. You know, lawyers were enmeshed in all of this, but I think the -- the -- the nub of the matter and what you discussed with Senator Cotton is, is this Iran's money or is this American money? In the view of the administration and most lawyers, this is Iran -- Iran's money. It was -- it goes back to a 1979 deal in which the Iranians bought, under the Shah, some fighter jets that were never delivered. The rest of it is supposed to be interest on that unpaid amount of money that’s been sitting in escrow ever since. So, you know, if it’s not taxpayer’s money, it's hard to see what the recourse is. If it is taxpayers’ money, then you have a different situation.

But I think that the issue here is not that this -- so much the payment, which, as you noted, the president announced, it's the manner and timing of the payment. And underneath all that is a much bigger issue, which is, is that part of this effort to clear the decks with the Iranians, the nuclear deal, the Americans held hostage and this money, is that going to produce some change in Iranian behavior? Or is this simply a case in which they're going to pocket what they have and then move on to the next attempt to get more out of it? That's the real question that hangs in the air here.

WALLACE:  Lisa Lerer, what makes this even harder for the Obama administration to argue is that one of the hostages, Pastor Saeed Abedini, this week said that they were sitting there on the plane waiting to leave after years of captivity, waiting to leave Tehran, for hours while they were told that they were waiting for another plane to arrive. Here is the pastor.

(BEGIN VIDEO CLIP)

PASTOR SAEED ABEDINI, FORMER IRANIAN HOSTAGE: Everyone was ready that we leave the country. They said we are let -- waiting for another plane. And until that plane doesn’t come, we never let you go.

(END VIDEO CLIP)

WALLACE:  How worried is the Clinton campaign that somehow this washes up on Hillary Clinton and her stewardship of foreign policy with Barack Obama and becomes a campaign issue?

LERER: Well, it’s -- frankly it's not something they’ve talked about much in the past week since it sort of became a national issue. She has dismissed it as old news, saying that this was something that was publicly announced and that she’s very supportive of the nuclear deal and thinks that's the right approach and she’ll be very tough in enforcing that deal.

I think when you talk to Clinton advisers privately, they see that this underscores how Donald Trump is really not fit to be commander in chief and they point out several things that happen, which is that he essentially made up facts about this deal. There was no video, as he later admitted. Hillary Clinton was -- he said that he -- he sort of blamed her for the whole negotiation. That's not quite true. She was out of the State Department for 18 months. And as George points out, this is a case that dates back to the '70s. And, you know, of course he claimed to have seen these payments happening that he just didn’t see, and he claimed it was secret. It wasn't secret. It was announced on January 17th.

So advisers and surrogates are --

WALLACE:  Not the $400 million on the unmarked cargo plane, though?

LERER: Right. Right. But the fact that this agreement had --

WALLACE:  Right.

LERER: The settlement had been reached. So advisers are really focusing on that, that he made up facts, and they had some basis for that. You know, "The Post" did an analysis of his description of the video and they said that he said nine untruthful things in 300 words. So that -- you know, that is a concerning attribute in a commander in chief, and that’s really what they're focusing on when they talk about this.

WALLACE:  The --  he interesting thing about that, Lisa, is that just after Trump seemed, for one of the rare times to walk back and say, well, no, actually I didn't see video of the -- the cash arriving in Tehran, I saw the hostages get off a plane when they were freed from Iran. The -- there was an Iranian documentary which seemed to show cash coming off pallets off a plane. So maybe there really was a video, although Trump apparently didn't see it.

BOOTHE: Right. Well, I don't think he did a good job explaining that clearly. But, look, to Senator Tom Cotton's point, you know, he was pointing out, look, it doesn't matter what the Obama administration is saying, it doesn’t matter what they believe to be the truth. What matters is the perception of the Iranians and other bad actors in the country. And I think that is the big problem here is that Iran has used this in propaganda video. You look at their own military as saying that it was a ransom deal. And they’re pointing at the weakness of the Obama administration as a result. And I think what this does is that, you know, regardless what the details are, the perception of it is a ransom deal. And I think it continues to undermine what has been, you know, an embarrassing sequence of events since implementation of this deal.

You have just two weeks after the deal Iran put ten U.S. sailors on their knees, pointed guns at their head and shot this video and used that as propaganda. We also look that -- in March, after the deal, Iran shot their third ballistic missiles that flies in the face of international law. You look at in April, the U.S. made the unprecedented purchase of heavy water, you know, for nuclear purposes. And -- and you go to June and May, where we had Ben Rhodes admitted to lying about the deal, deceiving the American public. And as in June, the Obama administration doctoring video trying to give the illusion that they didn't lie about the deal in the first place. And then we also have -- go to June, where the State Department once again declared the fact that Iran is the world's largest state-sponsor of terrorism. So we’ve seen, you know, time after time, since the implementation of the deal, one embarrassment after another, which undercuts the deal, undercuts the Obama administration on foreign policy, as well as Hillary Clinton as an extension.

WALLACE:  Yes. I think you bring up a very good point, and then let’s get to that, Jerry, which is, forget the deal, I mean we're going to forget about the $400 million over the course of the next couple of months, but the whole question of engaging Iran and -- and Hillary Clinton was clearly an architect of that under the order of Barack Obama, that is a legitimate issue in this campaign. How do you expect that to play? And, you know, you’ve got Iran continuing to be a bad actor. You’ve also got them further away from a nuclear weapon than they were when the deal started.

SEIB: This is -- this is the -- the question that ought to be debated in the campaign is the 10,000-foot question, or clearly relations with Iran are at some kind of an inflection point and the question is, does engagement produce a -- over time, over the next ten years, a different kind of Iran or does it simply produce the same kind of Iran, just with more money in its pocket?

You know, obviously, Hillary Clinton is going to argue one and Donald Trump is going to argue the other. You know, is what we’re seeing now, and this bad behavior of the Iranians is definitely true in the months since, is that simply a predictable reaction by the hardliners who didn’t want the Iranian nuclear deal from their side at all, is it at the last gasp of the hardline? Or is it a sign that nothing has really changed and nothing will ever change? That’s the real question that ought to be discussed.

WALLACE:  George, your thoughts, who’s got the better side of this argument? And it’s not going to be over the next 10 years. It's going to be over the next 30 months, because that's when people -- voters are going to have to make their judgments.

WILL: The problem is that there’s a -- no overlap between the electoral cycle and the cycle of policy. The cycle of policy is akin to the policy we had in the Cold War. We're going to hold the line, contain the Soviet Union, and wait for internal regime change. Now, it worked. They did have regime change and the regime disappeared. We are wagering now that a very different kind of regime, a theocratic regime, can be as mat -- as pliable and changeable as the Soviet Union was. It’s a big wager, and we won't know the answer in -- in the (INAUDIBLE).

WALLACE:  But your -- your sense, in 15 seconds, are voters going to take the -- the critics' view of this or the Clinton/Obama view of this?

WILL: I don't think it will matter a lot until there's an event. If there's a terrorist event here or a big one abroad that will change the dynamic of the campaign dramatically.

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

Up next, our "Power Player of the Week." Washington's golden girl looking to make history in Rio.

(COMMERCIAL BREAK)

WALLACE:  A look at Rio de Janeiro’s iconic Sugarloaf Mountain, overlooking the 2016 Summer Olympics.

Well, it’s day two of the games and all eyes are on a D.C. swimmer we first introduced you to back in 2014, who has since become American’s sweetheart. Here is our "Power Player of the Week."

(BEGIN VIDEOTAPE)

KATIE LEDECKY, OLYMPIC GOLD MEDAL SWIMMER: Wake up at 4:15, practice from 5 to 6:30, go to school.

WALLACE (voice-over): Katie Ledecky is discussing her daily schedule, a regimen that has made her arguably the best swimmer in the world. She has no thoughts of slowing down.

WALLACE (on camera): Is that ever too much?

LEDECKY: No, I’ve gotten used to it. I think the swimming has helped my schoolwork. The schoolwork and the school day always helps my swimming. So it goes both ways, I guess.

WALLACE (voice-over): It certainly seems to be working.

WALLACE (on camera): What world records do you now hold?

LEDECKY: The 400 free, the 800 free and the 1500 free.

WALLACE:  That’s all?

LEDECKY: Yes. I broke them a few times.

WALLACE (voice-over): When we met up almost two years ago, the then 17-year-old had just started her senior year at a private high school outside Washington.

WALLACE (on camera): How tuff is it to be a normal teenager?

LEDECKY: It's not tough at all. It's been a lot of fun these past couple years, just swimming and going to school.

WALLACE:  Is there any time for boys?

LEDECKY: No, I don't -- I don’t have a boyfriend and I never have.

WALLACE (voice-over): Katie started swinging competitively at six. Her enthusiasm stronger than her form. By the time she was eight, she was starting to win.

LEDECKY: You can improve that time and that's a result of what you do every day in practice. And I think you can really see the correlation.

WALLACE (on camera):  Numbers don't lie.

LEDECKY: Exactly. Numbers don't -- don’t lie, and they don’t -- they show what you do in practice. And I like that aspect of it.

WALLACE (voice-over): In 2012 at age 15, she made the Olympic team, but she was no favorite.

LEDECKY: I would have been happy if I got first or last. I was just really grateful to be at the Olympics. And I didn't have many expectations for myself.

WALLACE (on camera): And what happened?

LEDECKY: I won. It was a thrill night. And this was the 2012 Olympic gold in the 800.

WALLACE:  May I? It is gorgeous, isn't it?

LEDECKY: Thanks. Yes. Yes, it’s --

WALLACE:  I mean that’s --

LEDECKY: It's a nice keepsake.

WALLACE (voice-over): The "keepsake" got some company in 2014, five more gold medals from another competition. Now Katie is back in training, focusing on the Olympics.

LEDECKY: I think it's more of time goals rather than I have to make this meet or I have to get these medals.

WALLACE (on camera): So if you met your time goal and finished third, would you be happy or disappointed?

LEDECKY: I would be happy. You can't control what other people are going to do, but I try to set my time goals so that it will put me up there, put me in contention for a medal.

(END VIDEOTAPE)

WALLACE:  But Ledecky's gold rush will have to wait. She anchored the U.S. team in a relay last night that won silver. She's scheduled to swim in three individual events and one more relay, and she's favored for gold in all of them.

Now this program note, be sure to tune to Fox News Channel tonight at 10:00 p.m. Eastern for Fox News reporting Zika anchored by Trace Gallagher.

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

(COMMERCIAL BREAK)

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