The following is a rush transcript of the May 23, 2010, edition of "Fox News Sunday With Chris Wallace." This copy may not be in its final form and may be updated.
CHRIS WALLACE, ANCHOR: Joining us now to survey the landscape for the midterm elections are the leaders of both political parties, Michael Steele, chairman of the Republican Party, and former governor Tim Kaine, chairman of the Democratic Party.
And, gentlemen, welcome back to "Fox News Sunday."
MICHAEL STEELE, RNC CHAIRMAN: Good to see you, Chris.
TIM KAINE, DNC CHAIRMAN: Great to be with you, Chris.
WALLACE: There are several controversies on the campaign trail, and let's get right to them. First, Richard Blumenthal, the Democratic Senate nominee in Connecticut, repeatedly misrepresented his military record. Let's watch.
(BEGIN VIDEO CLIPS)
RICHARD BLUMENTHAL, SENATE CANDIDATE: We have learned something very important since the days that I served in Vietnam.
BLUMENTHAL: I will not allow anyone to take a few of those misplaced words and impugn my record of service.
(END VIDEO CLIP)
WALLACE: Governor Kaine, what do you think of someone who says he is a Vietnam vet when he isn't?
KAINE: Chris, the statements were wrong. He obviously, on many occasions, fully described what his service was and wasn't. He did serve in the Marine Reserve during the Vietnam War era. But in those couple of instances where he — the statements suggested that he was in Vietnam — they were wrong, and he needed to step out and clarify them.
What the voters of Connecticut will wrestle with as the attorney general, somebody that they've known — he's been in office a long time. I think they have a sense of who he is. And he has members of the press standing up for him now and saying, "Look, we've covered him for 25 years. He's never tried to mislead anybody, in our way of thinking, about his military service."
But it was important that he jump out and acknowledge that those statements were wrong.
WALLACE: Mr. Steele?
STEELE: The statements were knowingly wrong. I mean, you know what you did and when you did it and how you did it. I think it speaks to the concern that voters have all around the country about the kind of leadership that rises up and wants to come to Washington or to a state capitol.
And I think the people of Connecticut are going to look very closely at this, and they're going to weigh it along with a lot of other things. But he knowingly misrepresented what he did. And that's a serious concern for a lot of voters out there.
WALLACE: Mr. Kaine?
KAINE: Again, the interesting thing about Connecticut — as you know, Chris, pretty intimate state. People tend to know their political leaders. And Attorney General Blumenthal has served for a lengthy period of time, got a very strong track record on military and veterans issues, for example. This is not a...
WALLACE: But you would...
KAINE: ...new person...
WALLACE: ... agree that he lied about his...
KAINE: He — because he stated so many times the accurate version, I think in the middle of a speech got carried away or went away from the text and clearly overstated, exaggerated, and it was important that he correct that.
But as people who have covered him for years have pointed out — numerous instances of him completely accurately describing his military service, which was service that he should be proud of. So this is something — I agree with the chairman. The Connecticut voters will wrestle with it, but they just happen to know this guy very, very well.
WALLACE: Let's move on. The Democratic Senate nominee in Pennsylvania, Joe Sestak, who just beat Arlen Specter, continues to say that he was offered a federal job if he would step down and not oppose Specter in the Democratic primary. Let's watch.
(BEGIN VIDEO CLIP)
QUESTION: Did the White House offer you a job to not get in the primary?
REP. JOE SESTAK, D-PA.: And I answered that yes, and I answered it honestly.
(END VIDEO CLIP)
WALLACE: Governor Kaine, was Joe Sestak offered a job?
KAINE: Chris, I have — I have no idea. I have not been privy to those kinds of discussions at all. And certainly, in none of the discussions I've had with the White House about this race did that ever come up.
So I'm not going to contradict what he says, but I have no information about this one way or the other.
WALLACE: Should the White House answer the question openly and honestly instead of stonewalling?
KAINE: Well, I don't know — stonewalling. I'm not sure what obligation they have. But look. If the question gets asked, it is something that they should — that they should deal with.
The issue for us now is, you know, Joe Sestak is a great member of Congress with a great track record. He ran a wonderful campaign. And I had a real good visit with him Thursday morning. We're very excited to work with him so that he'll be the next senator from Pennsylvania.
WALLACE: Mr. Steele?
STEELE: What did the president offer and when did he offer it? It seems like a very straightforward answer to me. And you know, if the — if the guy you offered — made the offer to is out there telling the world, "Yeah, you offered me a deal and I didn't take it because I wanted to run for the Senate," the White House can either corroborate that or call him a liar.
So is Joe Sestak lying right now? Is he — is he saying that the president did something that the president didn't do? That, to me, that is a serious concern and I think — you know, for both Sestak and the White House. And at this point, somebody's got to come through and clarify exactly what happened.
Is it proper, ethical and legal for the White House to try to get a sitting member of Congress out of a race because they have other plans? I don't know. The White House has to answer the question.
WALLACE: All right, Mr. Steele. Now it's your turn. As we discussed with Governor Palin, the new Republican nominee for the Senate in Kentucky, Rand Paul, under fire for criticizing the 1964 Civil Rights Act for the fact that it bans discrimination in private — private — accommodations. Take a look.
(BEGIN VIDEO CLIP)
RAND PAUL, SENATE CANDIDATE: I don't like the idea of telling private business owners — I abhor racism. I think it's a bad business decision to ever exclude anybody from your restaurant. But at the same time I do believe in private ownership.
(END VIDEO CLIP)
WALLACE: Mr. Steele, is that wrong?
STEELE: I believe — I think his philosophy is misplaced in these times. I don't think it's where the country is right now. The country litigated the issue of separate but equal. The country litigated the rights of minority people in this country to access the enterprise — free enterprise system, and accommodation and all of that. And that was crystallized in the Civil Rights Act and the Voting Rights Act of '64.
And I think that the party stands very firmly behind its efforts then, as we do now, to press forward on new civil rights issues — education for one. But I think in this case Rand Paul's philosophy got in the way of reality.
And the reality of it is that was important legislation at the time that put in place important benchmarks for the progress of free people. And I think, as he said, he stands foursquare with the party on this issue, but he had a philosophical difference, as many members who come to Congress have, you know, different philosophies. But when you get here, what you do and how you execute the job is what matters.
WALLACE: Mr. Kaine?
KAINE: Well, Chris, so — against the Civil Rights Act. Rand wrote a letter to the editor of a newspaper in Kentucky a couple years ago about the Fair Housing Act. The paper had run an article about the Fair Housing Act. He wrote and he said this, "A free society will tolerate private discrimination, even if it means that hate-filled groups can exclude people based on the color of their skin." That's the basic quote.
And he advocated for that position. He has said this week that he thinks trying to hold B.P. accountable is un-American. He's questioned the wisdom of mine safety regulations.
WALLACE: In fairness, what he said was the rhetoric about B.P. was un-American, saying put a — put a boot on their neck. He wasn't saying holding them accountable...
KAINE: Well, you know, I look at that and I look at him saying mine safety regulations — questioning the wisdom of mine safety regulations in a state where that's very important — there's going to be a series of things.
But I think these statements were clearly wrong. They reflect lifelong views, and I — and I hope that members of the Republican Party will step up and condemn those statements and say they're wrong.
WALLACE: Let's look ahead to November.
Governor Kaine — and I'm going to ask you each to do this in less than a minute — what's this election about? What's the choice that voters face?
KAINE: Sure. We were in a ditch in January of 2009 when President Obama came into office — economy worse since the 1930s, two wars, blank check, open-ended, no clear end in sight.
In a very tough time the president and members of Congress have done heavy lifting. We've had to build the ladder. We've had to start climbing out. Our economy is growing again. Some time this year we will have created more jobs in 2010 than during the entire eight years of the Bush administration.
So the choice is this. We were in a ditch. We built a ladder. We're climbing. We don't want to put it back in the hands of the folks who put us in the ditch to begin with.
WALLACE: Mr. Steele, just as succinctly, what's the choice?
STEELE: Yes. The choice is very clear. This is not about blaming Bush anymore. This is about holding this administration — Barack Obama, Nancy Pelosi, Harry Reid — accountable.
The voters have already begun to do that in New Jersey, Massachusetts and Virginia, last night in Hawaii with a great win for the party with Charles Djou. We're very excited about the direction we're going because it's fueled by the people. And this party has always been and will remain a grassroots party.
And we're very excited about working with the people to stop the Democrats' encroachment on our free enterprise markets and our — and our liberties.
WALLACE: President Obama campaigned for Democratic candidates for governor in Virginia and in New Jersey — as you can see up there — for the U.S. Senate in Massachusetts, and they all lost. He was nowhere to be found in the final days of Arlen Specter's campaign in Pennsylvania.
Mr. Steele, what does it say about the president's coattails this year and about his political loyalties?
STEELE: It's a very short coat, and the president doesn't have the coattails to drive his policies through his candidates throughout their running as part of his ticket.
And the reality of it is you're going to see, I believe, a lot more candidates going, "No, that's all right, the White House doesn't need to come to my state or my district," because they know the people — the people are the ones who are driving this. The White House cannot change the dynamic on the ground.
WALLACE: Governor Kaine?
KAINE: I think the president is strong. You look at polling in a tough time. He remains strong. We've been winning special elections in Congress very — in a very convincing way over the last year and a half.
As the economy continues to improve, Chris, that choice is going to be very clear. And I was interested when the chairman placed his — you know, his message for the fall, he didn't say anything good about what the Republicans are doing. They're not going to beat Democrats with nothing.
The Democrats are doing the heavy lifting to climb out of the ditch. Republicans saying they're against President Obama isn't going to be enough for them to see any kind of...
(CROSSTALK)
KAINE: ... this November.
WALLACE: Wait a minute, one last issue. Gentlemen, one last issue I want to get in with you.
Mr. Steele, you pointed out the fact that Charles Djou won a special election, a House election, last night in Hawaii. We can see him at his victory celebration there.
But prior to that, your party had lost seven straight special House elections since November of 2008, including the race just this last week on Thursday — Tuesday, rather, in Pennsylvania 12. Is all the talk of a big GOP sweep this year premature?
STEELE: Well, you know, I think that a lot of these races are still getting settled, as you know, and a lot of the races that you refer to are in very strong Democrat areas — Pennsylvania 12, two to one Democrat.
But what people don't understand is that the underlying fundamentals that we're putting in place on the ground matter. Our turnout models are working for us. Our voters are energized. Our base is energized. And we took 14 percent of the Democrat primary vote in that special election, so — in Pennsylvania 12.
So that's a significant shift, if you will, in where the voters' attitudes are and what they believe we will do. We will be the party that's going to be fighting for those grassroots activists to get out there and engage.
WALLACE: And finally, Governor Kaine — we have less than a minute left...
KAINE: Yeah.
WALLACE: ... the fact is your candidate did win in the special election in Pennsylvania 12, in western Pennsylvania, but the fact is he was running against the Obama agenda on health care, against the Obama agenda on cap and trade. It's hardly a vote of confidence in the president and what he's trying to do here in Washington.
KAINE: Chris, here's the difference between the parties. The Democrats are a big tent party. You're right, he had some positions different than the president, although he said he would not repeal health care.
But we have a big tent party. We're not chasing out a Charlie Crist. We're not chasing out a Bob Bennett. We're not chasing out people who don't agree with, you know, one or two issues that have become litmus test issues. Our party is broad and it's getting broader. I think the other party is narrow and getting narrower.
WALLACE: I'll give you the final 15 seconds.
STEELE: He seems to forget the member from Alabama who joined us last fall. So you know, did you chase him out? Did you chase the congressman out or did he voluntarily leave?
WALLACE: All right, gentlemen. On that rhetorical question we're going to leave it there. Chairman Steele, Chairman Kaine, thank you both so much for coming in.
KAINE: Thanks, Chris.
STEELE: Thank you.
KAINE: Good to be here.
WALLACE: We'll check in back with both of you as we get closer to November.
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