Gov. Jim Gilmore on global hot spots, tax plan, state of the race

This is a rush transcript from "Special Report," July 30, 2015. This copy may not be in its final form and may be updated.

BRET BAIER, ANCHOR: Former Virginia governor Jim Gilmore is the newest contender in the Republican presidential sweepstakes. He is in our Center Seat tonight. We welcome him aboard, along with our panel, Judge Andrew Napolitano, Fox News senior judicial analyst, Julie Pace, White House correspondent for the Associated Press, and syndicated columnist Charles Krauthammer.

Governor, thanks for being here.


BAIER: I would not want to sugarcoat it. We asked people for their questions today, and a lot of them were, why? Some of them were, who? A couple of them are not sure why you're getting in this crowded field. Thomas writes "Starting to look like a new reality show, "Who Wants to be President?" Rebecca types in "My head is spinning with all the candidates." Sue on Facebook, "What makes him more qualified than all the others running on the ticket?" So I put that to you, sir.

GILMORE: Great. Well, thank you. Well, look, I've looked at the race. I've looked at the people that are in the race, and I've concluded that I ought to run for the presidency. I think the United States is in decline.
It's in decline on its foreign policy, its national security. We're in decline in our economics. The report today was not good. I don't care what anybody says, we're not doing as well as we're supposed to do in economics.

And I have the credentials to address these issues. I'm a former governor, so I'm in a position to address the domestic issues. We built jobs, we created opportunities in Virginia. But more than that, I have a background in foreign policy that the other governors do not have. I chaired the National Commission on Homeland Security for the United States for five years. My degree is in foreign policy. I'm a United States army intelligence veteran assigned to NATO in Europe. I'm well-traveled across the world. I was the governor of Virginia during the 9/11 attack. I know what needs to be done in order to reverse this decline and get America back on track again. And I believe that that's why I should be the chief executive.

BAIER: Charles?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: Well, what would you do to reverse our decline? Let's talk about abroad. How would you approach Iran, how would you approach ISIS, how do you approach the Russians -- in about 60 seconds?


GILMORE: Well, in about 60 seconds. First of all, I'm very concerned about the Iranian deal. It does not do what needs to be done. I think the president has worked us now into a position where we either negotiate or we go to war. That's not healthy. As president I would try to undo this agreement.

But what it does is it doesn't stop their terrorist activity across the Middle East in Yemen and in Hamas in the Gaza Strip. It doesn't stop the activities with Hezbollah. It does give them modern weapons. It does give them more money. These are fatal deficiencies with this. And furthermore, it only postpones the nuclear deal.

KRAUTHAMMER: Would you withdraw the United States from the deal?

GILMORE: Yes, I would try to with draw the United States from the deal.
By the time we're at '16 we don't know what it's going to look like. But the answer is, yes.

And furthermore, I have been assigned to NATO. I've seen the Russians. I was there working in Europe and I understand the danger of the Russian incursions.

Charles, this is my view. My view is that we're not sending a strong message in America today. President Obama and the Obama-Clinton foreign policy is taking a dangerous world and making it much more dangerous. Not to mention the Chinese. Not to mention the dissolution of the Middle East, the danger of ISIS which must be addressed in the strongest possible terms with collective action and collective security in the Middle East.

BAIER: Julie?

JULIE PACE, ASSOCIATED PRESS: You mentioned serving with NATO in Europe. What would you be doing differently as it relates to the situation in eastern Ukraine? Would you support the U.S.
and NATO either directly getting involved with military action or supplying the Ukrainian military with more weaponry?

GILMORE: Yes, I think that we do have to supply the Ukrainian's with more ability to defend themselves. I do not think that it's necessary to try to suggest that we would put United States soldiers into the Ukraine.

But the fact is that they are under invasion, they're under attack. And the danger is larger than just the Ukraine. If you can take the Ukraine and change it and say that borders no longer count, if you then threaten the Baltics, which are in NATO, you then threaten the eastern European countries, this is a serious roll up of a problem in Europe.

The correct answer to this, though, is a bigger answer. The biggest answer is that we have to take the sequester off the defense budget. We have to build up the United States military. Do you know that the Navy isn't even planning to send a carrier later on this fall into the Persian Gulf because they don't think that they have enough ships and ability? The United States army is reduced by 40,000 troops. The marine corps doesn't have the combat brigades that it needs. And the political message is one of withdrawal, pulling back, decline. And potential adversaries see this and they understand it. We have to begin to reverse that to get America back on track again.

BAIER: Judge?

JUDGE ANDREW NAPOLITANO, FOX NEWS SENIOR JUDICIAL ANALYST: Governor, you mentioned how dangerous the Middle East is and how awful and dangerous ISIS is. Would you introduce troops on the ground to stabilize Libya, to liberate Syria, to resist Iran? Or would you use the sort of drone secret warfare, intelligence, CIA warfare that Barack Obama favors?

GILMORE: Well, I think that the secret warfare is helping but it's not going to solve the problem. I would favor taking specialized United States troops. And by the way, I was one of those when I was in the United States Army with the army intelligence. Intelligence people, trainers, specialized people, some special forces people to lend a sense in the Middle East that the United States is actually there behind them providing stability and backstop so that we can encourage our potential allies in that region to get in and do something about ISIS, which, Judge, is why I've urged that there be a new NATO for the Middle East, a new NATO for the Middle East where you take countries like Egypt, Jordan, Saudi Arabia, the Arab Emirates, and even as a side matter some participation in some form with the Israelis in order to make it clear that an expansion by the Iranians will not be permitted and will not be satisfactory. And perhaps with the United States' leadership in a new NATO in the Middle East we can provide some stability.

I might say one more thing on this before we go.

KRAUTHAMMER: Before I come up with a question.

GILMORE: Well, before. It's terribly important that we build up the United States military not for war. And I think that we've been too quick sometimes for that. I think we need to build up the United States military for peace. It's peace through strength on the Reagan model that we need to be going toward.

KRAUTHAMMER: If you do NATO in the Middle East, that means an attack on one is an attack on all, meaning if there's an attack on the United Arab Emirates it's an attack against the U.S. and we are at war on the ground.
Is that what you want?

GILMORE: As president I think I would have the ability to define this in a way I thought works best and the way that I think the United States interests would be best served. No, I'm not sure that we have to say that an attack on one is an attack on all exactly on the NATO model in that very volatile area. But I believe to say that the United States' strength and leadership will be placed in that area in order to support those people without having to necessarily make that commitment would still be a way of dealing with these issues.

BAIER: More with Governor Gilmore and the panel Center Seat after a quick break.


BAIER: Former Virginia governor Jim Gilmore is in our Center Seat tonight.
Governor, what is the Gilmore tax plan going forward?

GILMORE: It's advised by our economists. We've worked it up over a number of years in the nonprofit I've been running, and it's simply this. We need a three-bracket personal tax code. We need a tax code for everybody in the United States. We need to take all business activity and combine it in one place and charge 15 percent.

And what that will do, Bret, is that will encourage, in fact demand investment and make us competitive with the rest of the world. And then eliminate the debt tax. With a couple of additional tweaks we know what the result would be. And you can growth over four percent. And you really have to. Today's report was 2.3 percent. That is pathetic. If you can't get in the 3.2 range, you're not really making any progress. We need to go upwards and build this so people can get jobs, so that young people can have an opportunity for careers, so that laid off workers have a chance to get another job.

And what that does is increases the availability to get better wages.
That's why it's imperative, imperative that we do something to reverse this decline in the United States economy. It's critical for national security also.

BAIER: Julie?

PACE: On health care, by the time the next president takes office, millions of people will have health care coverage under Obamacare. Is it going to be realistic for the next president to fully repeal that law, and if not, what would you do to tweak it around the edges?

GILMORE: Well, it certainly ought to be revealed, but I don't know whether at that point in time it's going to be politically possible or not. But what you can do I believe with presidential leadership is begin to build in some reforms into Obamacare, to begin to address some things that will work better. Now, everybody agrees the preexisting condition is a good reform.
But, frankly, removing some of the free market abilities to offer the best possible services at the best possible prices has been a real problem.
And, frankly, the ability to withdraw from Obamacare unless you have over
49 employees, that makes sure that that is antigrowth. That way it's a discouragement on people adding more people.

As a matter of fact, the whole policy of the Obama-Clinton policy on economics has been to discourage business, to attack business, to say things that are discouraging businesses from investigating. Investing is what creates productivity. Productivity it what creates more jobs, which creates higher wages, and that's the free market approach that we have to take.

BAIER: So governor, when they say, listen, we saved -- the administration saved the country from going over a cliff, that we were handed this lemon of an economy and we saved it. What do you say to that?

GILMORE: I would say we haven't saved it enough. We have a slow growth economy. . That's why so many people are hurting today. That's why so many people are out of jobs. That's why so many people are working part time that want to work full time. Just because he may have actually gotten at the top of the business cycle and began to pull us out doesn't mean that we have to be satisfied with that. America can do better and we must do better.

BAIER: Judge?

NAPOLITANO: Governor, switching gears a little bit, would you unleash the NSA to spy on everyone all the time as Presidents Bush and Obama have done?
Or would you confine them to going after people they suspect of wrongdoing as the constitution arguably requires.

GILMORE: Well, thanks, judge. That's a good one.

NAPOLITANO: Knew it was coming.

BAIER: It's fairly familiar.

GILMORE: I'm not in favor of people going in and spying on Americans. I'm not in favor of that, so I understand that. But I believe the danger to this country is so severe that we must give the tools to our intelligence people, our law enforcement people to keep America safe because I believe there are still bad times still ahead.

And if ISIS can get in here and an organized way, we're going to have the best defenses panel. So it would seem to me the direct answer to your question is today we do enable people to be able to look at potential suspects who are terrorists, people who have connections to ISIS, people who are revealing themselves as such, and focus on that and those people.

KRAUTHAMMER: To ask that question less contentiously and a little more specifically, do you support the reform in the USA Freedom Act, which takes the collection of metadata out of the hands of the government and puts it with private companies? Are you a supporter of that?

GILMORE: No. I would have preferred to have a much closer entitled regulation and oversight of that as opposed to throwing away the ability to protect Americans.

KRAUTHAMMER: So you would have kept it in the hands of the government with what kind of oversight?

GILMORE: With much more oversight. First of all, Congress needs to do its job to do oversight, which I think it has not been doing. Second of all, we need to have some oversight of the judges if they're not doing their jobs in doing the oversight.

And third of all, Charles, we've created a situation where we don't trust ourselves anymore. We believe that the government is the enemy. I don't like that. I think that we need to be in a position to defend ourselves from the attacks and the challenges ahead while at the same time preserving our liberties.

If you look at when I chaired the national commission, I wrote a letter that strongly said that I was very suspicious that we were going to in fact take away our liberties and that would cause us to lose the game to the terrorists. But at the same time I think lurching the other way the way Rand Paul has is wrong.

NAPOLITANO: Governor, who would trust a government that reads every e-mail and listens to every phone call?

GILMORE: Of course they were not doing that. They were not reading -- listening to phone calls. That was not what was going on. But the point is this, if it does go on, if they're reading our e-mail, frankly, a lot of people read our e-mail, but if they were reading our email, the government was, or listening to our phone calls, then that ought to be a very serious felony. And the Justice Department ought to be pursuing that as opposed to pursuing regular people trying to conduct business.

BAIER: One more segment with Governor Gilmore in our Center Seat after a short time out.


BAIER: And we're back with our panel. Our newest Republican presidential candidate in the field declared, Former Virginia governor Jim Gilmore.
Governor, in the latest Monmouth, New Hampshire, poll, you are at less than one percent. There are some national polls that are not even polling you.
Several are just starting to this week after you have declared.

In Quinnipiac, however, you're favorability in Virginia, 16 percent favorable, 20 percent unfavorable, 62 percent haven't heard enough. And it's been about a decade since you've been in the national spotlight. How are you going to win your party's nomination?

GILMORE: Well, we need to do a couple of things, and that is to focus particularly in New Hampshire on the message. We need to focus for all Americans on the message, which is this absolute necessity of reversing this Obama-Clinton foreign policy which is so dangerous. And frankly, I'm hearing people in New Hampshire telling me they agree with that.

BAIER: And you've been there a bunch? I've been there eight times and I've been to every county in New Hampshire. And I'm going to continue to go.

But your point is a strong one. I'm just getting into this race. And it's true I haven't been the governor of Virginia for over a decade. So I have to win this on the strength of my experience, my credentials, what I've been and where I'm going and what I need to do, what I want to do for the country. Right now it seems to me that the political circus is not about that. And that's all I care about.

BAIER: Charles?

KRAUTHAMMER: New Hampshire is the tent pole in your campaign. You've told the "Richmond Times Dispatch" that you have got people on the ground there.
How well do you have to do in the New Hampshire primary to come out of there alive and viable?

GILMORE: That's a great political question. But the more important answer, I think, is will the ideas I have on the economy and national security grab and will it give me enough attention so that people like FOX News and CNN and others will begin to take seriously the message. And if so then I can begin to gain momentum. If I don't get momentum then --

BAIER: I don't think you're getting a number. Julie?

PACE: If you look at the 17 Republican candidates right now, there's not much diversity in terms of gender and race. What does that say to the American public about diversity in the Republican Party? And should that be a priority for the party to diversify?

GILMORE: When I was the governor, Julie, I worked pretty hard on that. I got 20 percent of the African-American vote in my state as a conservative Republican. And I did that because I care a lot about the church burning issue and stood up as attorney general against people attacking African- American churches. I was very strong where the traditional African- American universities. I made the Martin Luther King holiday its own exclusive holiday.

I dealt with all those issues. And what I was really trying to do was to send a message of inclusiveness and to talk about bringing people together.
The whole theme of my inauguration was a time for all Virginians. So I think we can do that nationally. I think we can reach out and make the Republican Party broader, but not on the basis of race agenda, but on the basis of the ideas I'm putting forward.

BAIER: And I just will point out the Republican Party has the same number of women and one more African-American in the field than the Democratic Party.

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