Sens. Graham, Lee talk Edward Snowden, GOP immigration split; Gabriel Gomez's race for US Senate seat

The following is a rush transcript of the June 23, 2013, edition of "Fox News Sunday With Chris Wallace." This copy may not be in its final form and may be updated.

CHRIS WALLACE, HOST: I’m Chris Wallace.

Breaking news: NSA leaker Edward Snowden leaves Hong Kong and avoids extradition.

Plus, immigration picks up steam in the U.S. Senate.


WALLACE: And a deal would mean more patrols, more fences and more money along our southern border.

SEN. BOB CORKER, R-TENN.: We are investing resources in securing our border that have never been invested before.

WALLACE: But opponents are unmoved.

SEN. TED CRUZ, R-TEXAS: As long as they insisted upon legalization first before border security, the bill is not going to pass the House of Representatives.

WALLACE: We'll discuss immigration reform and the split inside the GOP with a member of the "gang of eight", Senator Lindsey Graham and Senator Mike Lee.

Then, the special election for the U.S. Senate in Massachusetts. Just two days until the vote to fill Secretary of State John Kerry's old seat, and political heavy weights on both sides come out in force. We'll talk with Republican candidate, former Navy seal and businessman, Gabriel Gomez. It's a "Fox News Sunday" exclusive.

Plus, a wild week on Wall Street after the Fed announces plans to wind down the economic stimulus. We'll ask our Sundaypanel about fear in the financial markets.

And our Power Player of the Week -- overseeing the only national park for the performing arts.

All, right now, on "Fox News Sunday."


WALLACE: And hello again from Fox News in Washington.

NSA leaker Edward Snowden is on the move today. With the U.S. seeking Snowden’s extradition, Hong Kong authorities allowed him to leave the country, reportedly on a flight to Moscow. And Russian news agencies say he's booked on a flight from Moscow to Cuba on Monday.

Joining us now to discuss the Snowden case and the split inside the GOP over immigration reform are two leading Republicans. Senator Lindsey Graham is a member of the "gang of eight" that is leading the push for reform. Senator Mike Lee opposes the legislation and he is the author of a new e-book, "Why John Roberts Was Wrong about Healthcare."

We should, both are members of the Senate Armed Services Committee.

Gentlemen, let's start with Snowden.

Senator Graham, what do you make of Hong Kong -- excuse me, Hong Kong authorities allowing Snowden to go? They say our extradition papers were not in full compliance with their law and what leverage do we have over Moscow if they decide to let him go to another country?

SEN. LINDSEY GRAHAM, R-S.C., ARMED SERVICES COMMITTEE: Well, I'd like to find out why our papers were not in compliance. That would be a big mistake by the Department of Justice.

I don't think he's a hero. I believe he hurt or nation. He compromised our national security program designed to find out what terrorists were up to. So, the freedom trail is not exactly China, Russia, Cuba, Venezuela.

So, I hope we'll chase him to the ends of the earth, bring him to justice and let the Russians know there will be consequences if they harbor this guy.

WALLACE: Well, I was going to ask you about that because the key decision over the next 24 hours has to be made by Moscow, Senator Graham. Should we put pressure on them now right now, hold him there?

GRAHAM: Absolutely. They want to be part of the world community, the WTO. They want a good relationship with the United States. They should hold this felon and send him back home for justice.

WALLACE: Senator Lee, are we basically helpless here as Ed Snowden thumbs his nose at the United States with the help of the Chinese and now apparently with the help of the Russians. And what if he goes to another country, whether it's Cuba, or Iceland or someplace in South America?

SEN. MIKE LEE, R-UTAH: Yes, I don't know if I would use the word "helpless," but we are in a precarious position here.

But I think Mr. Snowden is also -- look, I made no secret about the fact that I’ve got some concerns about much of what the NSA has been doing, but I think Mr. Snowden is delusional if he thinks that he's going to find a country with a better human rights record in Moscow or in Havana or Caracas. I think he's in for a rude awakening if that’s what he has in mind.

WALLACE: So, what does it tell you if Ed Snowden is headed to one of those countries rather than the U.S.?

LEE: It tells me that if he's looking for a place with a better human rights record than the United States, he’s certainly not going to find it in any of those countries.

WALLACE: All right, gentlemen, let's go to immigration reform, which is the reason we invited you here, in the first place. With the addition of more than $40 billion in new border enforcement, will the Senate this week pass comprehensive immigration reform? If so, how many votes?

Senator Graham, let's start with you.

GRAHAM: The bill will pass. I think we are on the verge of getting 70 votes. That is my goal. It's always been my goal. We are very, very close to 70 votes.

The Hoeven-Corker Amendment I think gets us over the top.

WALLACE: We're going to talk in detail about that in just a moment.

But let me ask you for a general prediction also, Senator Lee. I know you are opposed to this legislation. But do you agree that it’s going to pass with a very wide majority, something like 70 votes?

LEE: I think it is like to pass and I think it may well be along the margin Senator Graham suggested.

And, you know, the sponsors of this bill had the best of intentions. In my opinion, the best intentions aren't enough when you’re dealing with a 1,200-page bill.

They promised us that under this bill, illegal immigration would be a thing of the past. It won't. CBO told us this week that 10 years from now, we'll still have 6 million to 8 million illegal immigrants in this country.

They told us it would be tough but fair. It's neither beneath. It's not tough on those who broke the law and it’s not fair to those patiently who’ve been patiently waiting in line to come to this country legally.

And perhaps, worst of all, Chris, we learned late Friday -- just late Friday, that they are going to replace the "gang of eight’s" bill, about a thousand pages, with a 1,200-page Corker-Hoeven Amendment.

This is a provision few people have read and ever fewer understand.

So, look, we all want immigration reform. But this bill is not the right vehicle for getting there.

WALLACE: All right. Let's talk about this amendment which has apparently changed the calculus and added 10 to 15 more Republican votes. It's being called the Border Surge Amendment.

Let's look specifically at what it would do: double the number of border agents to 40,000. Complete 700 miles of new fencing. Deploy drones, radar and ground sensors. Full implementation of E-Verify for employers and beef up entry-exit tracking for people on visas.

Senator Lee, is your problem that you don't think even with this $40 billion in extra border enforcement, you still don't think it's going to work? Or is your problem the sequencing, the idea that it's going to allow a provisional legal status for the 11 million people, immigrants who are already here before you get all of this border enforcement in place?

LEE: As a proponent of immigration reform, my problem has been sequencing and the fact that it's not a good idea to try to attack the entire problem at once. That's how you end up with a 1,200-page bill.

And with the sequence of this bill in particular, we have to look to the fact that the pathway to citizenship begins basically on day one. But it will take many, many years, if not decades to fully implement all these border security measures.

WALLACE: Senator Graham, you say many Republicans who were opposed to talk about border security -- they really just don't favor a path to citizenship. But the Congressional Budget Office -- and this is something Senator Lee just pointed out -- the Congressional Budget Office said that your "gang of eight" bill would only reduce illegal immigration by 25 percent.

GRAHAM: They are talking about the entry-exit problem, 48 percent of the people here illegally overstayed their visas. There will be improvements in that area.

As to the border, we practically militarized the border. I have been hearing for year, let's secure our border, let’s regain our sovereignty. We have secured our border in a way I could not have imagined four, five years ago.

This whole border security amendment, I think, is the most aggressive attempt to control the southern border and regain our sovereignty. This bill reduces our deficit by $890 billion. It is good for our economy. This bill is good for our national security.

No one can get a green card until border security measures are up and running, until E-Verify is up and running controlling a job in America.

As to the 11 million, they will have an earned, hard pathway to citizenship. They have to get in the back of the line before they can become citizens. They can't cut in line. They have to pass two English proficiency exams.

I reject the idea of becoming the Mideast or Europe where you have 11 million people with a legal status who can't be part of America. America is different than the Mideast and Europe. E pluribus unum, out of many, one.

This is tough practical solution for our national security, for our economy and tough, practical solution to 11 million. And most importantly, if we do the bill, amnesty is the status quo. If we do this bill, there will be no third wave of illegal immigration.

WALLACE: Let me ask you about another objection that Senator Lee just mentioned -- the idea that this is going to be a huge 1,200-page bill. I heard you complain about that during Obamacare, the idea that you have a huge bill nobody read and why not take it in more incremental, bite-sized pieces. Why not in this case?

GRAHAM: Well, let's look at it this way. Give the Republicans all the border security you want and all the legal immigration you want and trust the Republicans to deal fairly with 11 million, that's not going to sell to a Democrat and I’m sure as hell not going to accept an agreement where they get legalization on a pathway to citizenship. Then they give me border security. Then they give me legal immigration reform.

You have to do it together. We have tied border security and legal immigration reform to green card status. Until we secure our border, until we get legal immigration reform in place, you can't get a green card which would put you on citizenship status. We tied the two together.

That's the only way to do this. I’ve been dealing with it since 2005 and 2006, and this is a great solution for our economy and our national security. And I’m very proud of this bill.

WALLACE: Even if the Senate passes immigration reform this week, it still has to go to the House.

And, Senator Lee, you have said it will be dead on arrival in the House. House Republicans are talking about the kind of incremental approach I know you favor. Let's deal with enforcement first. After that we can deal with the 11 million illegals who are in this country.

Let's look at something John Boehner said.


SPEAKER JOHN BOEHNER, R-OHIO: It's border security and confidence that we have the border secured before we begin to go down this path of addressing both illegal immigration issues and the illegal immigration issues.


WALLACE: But, Senator Lee, Lindsey Graham says -- and I must say, a lot of Democrats say -- that will kill the legislation. They’re not going to accept border enforcement first and then a promise of dealing with legalization of the 11 million people who were already here afterwards.

LEE: Well, that's what they have said. It's what they want to be the case.

The fact is, I think the House of Representatives has it right. In any event, the House of Representatives has said border security first. They are doing exactly the right thing. They are dealing with it in the right sequence.

The House Judiciary Committee passed out of committee this week, two security measures -- two things to bring about robust immigration reform and a step by step process. I think that's the approach we ought to be taking.

What's making this contentious, what's making it politically divisive is that the Senate "gang of eight" insisted on wrapping the issues up into one 1,200-page bill. That’s what’s making it divisive because they are putting the single most controversial, confrontational issue -- that of amnesty and ultimate citizenship -- into a 1,200-page bill.

WALLACE: All right. Gentlemen, we’ve got about two minutes left. And I want you to split it evenly, if you will.

There’s a lot of -- needless to say -- a lot of politics in this. President Obama pushed for passage of the Senate bill this week at his weekend media address. Take a look.


PRESIDENT BARACK OBAMA: That's what comprehensive immigration reform looks like -- stronger enforcement, a smarter legal system, a pathway to earned citizenship, a more, vibrant growing economy that's fairer on the middle class.


WALLACE: Senator Graham, is President Obama doing enough to push this, and if Republicans are seen -- whether in the Senate, unlikely, or in the House, much more likely, as stopping the comprehensive immigration reform, what will be the political fallout as the GOP tries to reach out to Hispanic voters?

GRAHAM: Well, President Obama has been better on immigration than Senator Obama. Senator Obama started doing the union's bidding and helped take the bill down in 2006 and 2007. Every time we've asked him to do something he's come through. But when he does things on his own, even this time around, it's been pretty much a disaster coming out of the White House.

As to the Republican Party, here is my firm belief. America is not divided on this, Mike. Seventy percent of Americans, including Republicans who support an earned pathway to citizenship over a 13-year period where you get in the back of the line, learn the language and pay a fine. So, to the Republican Party, this is a chance to improve our economy, reduce the deficit by $890 billion to get border security you will never see in your lifetime, to regain our sovereignty.

If it fails and we are blamed for its failure, our party is in trouble with Hispanics, not because we are conservative but because of the rhetoric and the way we handled this issue. I want to get reattached to the Hispanic community, to sell conservativism, pass comprehensive immigration reform and grow this party. The party has got to be bigger than Utah and South Carolina. The Hispanic community is close to our values but we have driven them away over this issue.

Let's fix this problem for the good of the country and for the good of the party. And this bill does that, my friend.

WALLACE: Senator Lee, let me pick up on what Senator Graham said to you. Mitt Romney got only 27 percent of the Hispanic vote back in November, 50,000 new Hispanic citizens become -- reach voting age every month in this country.

If your party is seen as killing immigration reform, are you going to you see that at the polls for decades to come?

LEE: Well, look, if we turn immigration reform into a political football, everyone loses. We all know that. We’ve learned that from the past. We don’t want to have to learn that in a hard way in the future.

What the American people want is to make sure our border is secure and they want to make sure that we fixed our legal immigration process, especially before we legalize, much less granting citizenship to 11 million people, treating them all the same regardless of whether they overstayed visas or crossed in illegally in the first place.

We have to remember at the end of the day, that CBO told us early this week that this will be bad for wages. It will be bad for unemployment. This is not the right solution.

WALLACE: Senator Lee, Senator Graham, thank you both. Thanks for joining us today to talk about this. We'll watch what the Senate does this week. Thank you, gentlemen.

GRAHAM: Thank you.

WALLACE: Up next, a big election Tuesday in Massachusetts. In the deep blue state of Massachusetts, can Gabriel Gomez pull off another GOP op upset? We'll ask the Republican candidate for John Kerry’s Senate seat next.


WALLACE: Massachusetts voters decide in a special election Tuesday who will fill John Kerry's Senate seat. They're getting a lot of advice from national figures.

Democratic Congressman Ed Markey, with 37 years in the House, is running against Gabriel Gomez, a Republican businessman and former Navy SEAL and a political newcomer. Can Gomez pull off the same kind of upset in the heavily Democratic state that Scott Brown did in a special election in 2010?

And Gabriel Gomez joins us now from Boston. Congressman Markey declined our invitation.

Mr. Gomez, according to the latest Real Clear Politics average of recent polls in Massachusetts, you're running well behind Congressman Markey. He's at almost 52 percent, you're at 39 percent, a margin of 12.5 points. There is a new poll out today that shows you trailing by eight points.

But whatever the margin, it is a big deficit. How do you turn it around in 48 hours?

GABRIEL GOMEZ (R), MASSACHUSETTS SENATE CANDIDATE: We can definitely win, Chris. And I’m confident.

See, our message is resonating among independents, Democrats, Republicans. His message is very narrow. It’s is a narrow sliver of the Democratic Party.

We're giving people to have a reason to vote for me, and Congressman Markey has probably done the most misleading, egregious campaign and trying to paint somebody that I’m not and he’s trying to scare people. I think he’s scared and he doesn't want to talk about his record. And in the end, people are going to come to the polls, because they’re more enthusiastic voting for me as opposed to voting against somebody else.

WALLACE: Why, at this point in the polls, is he leading between somewhere eight and twelve points?

GOMEZ: You know, these polls move up and down, and all over the place, Chris. Bottom line is, this part -- this election is about putting people before politics. And Congressman Markey has got 37 years down there to get things done in terms of immigration reform, comprehensive tax reform, entitlement reform.

And I was asking in this special election, give me 17 months and I will keep my word and I don't need 37 years like Congressman Markey has got (ph). And that's the message that’s resonating over the last week here and that’s why I’m confident on June 25th, in two days, that I’m asking the people to vote for me, that we’re going to be -- we'll be successful on Tuesday.

WALLACE: Well, you have crystallized your main argument. I want to ask you about it.

That’s what you say that Markey has been in Congress for 37 years. You say he's been ineffective. He obviously debates that. You say, give you 17 months -- which is the time left in John Kerry's term, and you’ll get big things done.

But you would be, if you’re elected, just one of 100 members of the U.S. Senate. How are you going to break the gridlock in Washington singlehandedly?

GOMEZ: Chris, if a Navy SEAL can talk a Peace Corps volunteer into marrying him, I think I can work with anybody. I look forward to working with President Obama, I love forward to working with Senator Warren, I look forward to working with all the senators and congressmen down in D.C.

I have been bipartisan my whole life. That's the problem we have in D.C. right now. We have such a high level of cynicism, fiscal mismanagement and hyper partisanship. And the issues are so big that we need to go down, reach across the aisle, respect the other side and get things done.

And that’s why our message is resonating among not just Republicans but independents and Democrats. And it’s a clear choice between me and Congressman Markey. He’s had 37 years to prove that he can do this, and he’s not succeeded in that mission.

I’m mission-focused. I’ll succeed in this mission.

WALLACE: You talk about hyper partisanship. Markey’s main argument against you is that if you win, you’re just going to be another vote for the Republicans in the Senate. Take a look.


REP. ED MARKEY, D-MASS.: They want and need him in Washington in order to advance a radical Republican agenda.


WALLACE: In a liberal state where the GOP agenda is not all that popular, where do you differ from most Senate Republicans?

GOMEZ: See, Congressman Markey wishes he was running against somebody else. But the reality is she’s running against me. I disagree with the Republican Party in the number of issues. I believe in gay marriage. I’m for immigration reform bill.

I also think that we need to have more -- you know, I’m a green Republican. I believe that there is global warming and that the (INAUDIBLE) has something to do with that. I also firmly believed that we need to have an expanded background check, the Toomey-Manchin bill. I’m ashamed that only four Republicans voted for this bill. And I think the NRA is completely wrong on this bill.

There are a lot of areas I don't agree with, with Republican Party on. And, again, Congressman Markey wishes he was running against somebody else other than me.

WALLACE: Well, you say you are for expanded background check, but in fact, one of the issues -- perhaps the issue that Markey has hit you hardest on is gun control. Take a look.


MARKEY: My opponent opposes an assault weapon ban. My opponent opposes a ban on high capacity magazines that attach to those assault weapons that turn them into weapons of war.


WALLACE: So that's his point. Yes, you may be for the expanded background check, but you are against the assault weapons ban, the magazine, high capacity magazine ban and according to the polls, most Massachusetts voters disagree with you on those.

GOMEZ: Right. But this is an example of Congressman Markey not knowing how to solve the problem. In order to need to solve the problem, we need to ban all weapons from the wrong people. That's what's going to make our communities, our schools and our kids safer.

In order to do that, we have to pass the expanded background check and ties to mental health. Only one of us can get more Republicans and conservative Democrats to vote for this bill, so we go from 54 to at least 60 is me.

He’s never had a history of reaching across the aisle. I can go down there with the experience as a Navy SEAL, the credibility to go down there and get more Republicans and conservative Democrats to pass this bill, if that’s how we’re going to get our communities, our schools and our kids safer. That's the problem we need to solve.

WALLACE: Back when John Kerry left the Senate in January. you wrote a letter to the Democratic governor of Massachusetts, Deval Patrick, in which you asked him to appoint you to the Senate on an interim business. And on gun control and immigration reform, you wrote this, "I support the positions that President Obama has taken on these issues and you can be assured I will keep my word and work on these issues as I have promised."

The question, Mr. Gomez, is how could you promise that when you opposed the ban on assault weapons and high capacity magazines that President Obama was very much pushing at that time?

GOMEZ: Sure. When I wrote that letter, I was raising my hand like a Navy guy I have been my whole career. I want to volunteer and serve the people of Massachusetts. I am for the immigration reform bill. That's a group of eight. I want to make it a gang of nine. I hope Senator Warren joins me and makes it a gang of ten.

And on gun control, I know the problem we need to solve is making sure we ban all weapons from the wrong people. That's what the Toomey-Manchin bill does. I want to go down there and make sure we pass that when it comes back up for a vote, hopefully later this year.

WALLACE: But I do have to ask you. At the time that you wrote the letter President Obama was -- this was long before Toomey-Manchin, was very much supporting the idea of a ban on assault weapons and high capacity magazines, you wrote, you promised, you assured Governor Patrick that you supported President Obama's positions on those issues.

Was that true then and you’ve changed your mind? Or wasn't that true?

GOMEZ: No (ph). What I meant in the letter was I support his overall position on getting comprehensive immigration reform done and gun control. And in gun control, solving the problem is making sure we ban all weapons from the wrong people. That's what the Toomey-Manchin bill does. Like I said, I’m ashamed that only four Republicans voted for that bill. I want to go down there and make sure that we get more Republicans and more conservative Democrats.

That’s what I mean. I want to make sure we solve these problems and get the right solution down there, as opposed to not solving the problem.

WALLACE: According to one recent poll, your unfavorable rating in the state of Massachusetts is 33 percent, which isn't bad. But only 34 percent have a favorable opinion of you.

And I guess my question is, as a successful businessman, as a former Navy SEAL, as a Hispanic, why have you had such a tough time making the affirmative case for Gabriel Gomez?

GOMEZ: I think these polls move up and down, Chris. And I know that when we go out and meet the people and get our message out there, people are very enthusiastic. They are not just Republicans, they’re independents, they’re Democrats.

And that's why on Tuesday, June 25th, I humbly ask people to vote for me. They’re going to come out there and they’re going to show that they think there is a reason to vote for someone as opposed to against somebody. I’m confident our message is getting out there.

Like I said these polls move up and down. But I know we're going to win on June 25th because we are putting the people before party and politics. I need 17 months to go down there and do the job for the people that they want us to get done.

WALLACE: It's been suggested that if you lose on Tuesday, that it might not be all bad for you. That you would have gained tremendous name recognition. This is your first race. You will have gained experience in campaigning, debating and all of that and you would be well placed to run again.

Question, win or lose will you be running again for office in Massachusetts?

GOMEZ: I’m confident I’m going to win, Chris. But as a famous general once said in World War II, I shall return. And I know that a lot of people are very excited about our candidacy, and more and more people can continue coming our candidacy and helping out. They want to go to

I’m confident between now and Tuesday, we're going to close the gap and we’re going to be successful on the 25th.

WALLACE: Well, as you say, I shall return. Assuming that’s for the shake of argument, that you were to lose, some people are saying you would run again in the full election, not the special election, in 2014, against Ed Markey who would then have a record in the Senate over the next 17 months. Does that make sense to you?

GOMEZ: Well, if somehow Congressman Markey does win, nothing is going to change. It’s going to be the exactly status.

The only thing that’s going to change, he's to go from one building across the street to the next building. We're still going to have the cynicism, the fiscal mismanagement and the hyper partisanship. I can't imagine what Congressman Markey will do in 17 months that he hasn't done in 37 years.

So, nothing is going to change. So, I’m confident that because of that and I need only 17 months to prove myself, that people are going to come to our side on Tuesday, in two days.

WALLACE: Mr. Gomez, you have learned a lot in months as a campaigner. Thank you. I mean, even getting a Web site. Well done, sir. Thank you. Thanks for joining us. And we'll be watching the results Tuesday night.

GOMEZ: Thank you, sir. I appreciate it.

WALLACE: Coming up, Edward Snowden leaves Hong Kong to avoid extradition to the U.S. We'll bring in our Sunday panel to discuss what the Obama administration can do about it.


WALLACE: You are looking live at the arrival area in Moscow International Airport. And if you’re wondering why there is such a crowd of people there, it is believed that the plane carrying Edward Snowden, the NSA leaker, has just landed, that he's on the plane, and authorities are waiting for him, and the media are waiting for him to clear customs and arrive in Moscow. With the U.S. seeking Snowden's extradition, Hong Kong authorities allowed him to leave the country earlier today, reportedly on the flight to Moscow, and then supposedly on to one of several other countries.

And it's time now for our Sunday group. We'll return to that picture if and when Ed Snowden ever goes through that door. Meanwhile, there are a lot of it looks like Chinese visitors to Moscow, who are getting a very warm reception. Here is ourSunday group. Brit Hume, Fox News senior political analyst. Julie Pace, who covers the White House for the Associated Press. Bill Kristol of the Weekly Standard and Bob Woodward from the Washington Post.

Julie, as the White House correspondent for A.P., what are they saying this morning about these extraordinary developments? They had sought the extradition of Ed Snowden from Hong Kong authorities. They said the papers weren't in order, and they let him go this morning, reportedly on this flight to Moscow.

JULIE PACE, ASSOCIATED PRESS: Right. So officials are obviously in close contact with officials in Hong Kong. One thing I would point out is yesterday we had this pretty stern warning from a senior administration official, saying that if Hong Kong didn't quickly extradite Ed Snowden to the U.S., it would complicate the bilateral relationship, it would raise questions about Hong Kong's commitment to the rule of law. I just talked to a senior administration official who says it does raise concerns in the U.S. about Hong Kong and their involvement in this situation. I also just talked to the lawyer for Wikileaks in the U.S., who says that that organization is working with Ed Snowden. He didn't have any firm details about where Snowden is going, but he did say that we shouldn't necessarily focus on extradition treaties, because a country can have an extradition treaty with the United States, and claim a political exception for Snowden. So all this talk about extradition treaties, it’s actually a little more complicated than that.

WALLACE: Bill, your thoughts?

BILL KRISTOL, WEEKLY STANDARD: I spoke with one former intelligence official this morning, and I said, what's up with this, do you think? He said, look, there are a million flights from Hong Kong to Ecuador or Venezuela or Iceland or the other places if he wants to go. Why Moscow? And the guy said, look, think about it for a minute. Interpol may well have a warrant out for this guy. Presumably, we have asked Interpol to keep an eye out for him traveling. That's what you normally do when you are pursuing a fugitive abroad. But -- so it's the airline as much as the place. It’s Aeroflot, which is a Russian government-controlled airline, which would not, when it lands in the Moscow airport, presumably serve some kind of an arrest warrant. Whereas if he had taken British Airways or something, they might do that. So it is interesting that the Russian government is basically colluding, it seems, with the Chinese government, and with whatever place he's going to end up, to avoid us being able to bring this guy to justice.

WALLACE: We should point out, Wikileaks is very much involved in this. They say that they have lawyers on the plane with Snowden. Wikileaks of course the organization run by Julian Assange, that leaked thousands and thousands of documents that they got from Bradley Manning. And supposedly also that there are diplomats, according to Wikileaks, to the degree you believe them, diplomats from another unnamed country. One doesn't know if it's Russia or perhaps the country where he hopes to seek asylum also on the plane with Snowden. So this is quite a tour (ph). Bob Woodward, you’ve seen a lot of things. This is pretty special.

BOB WOODWARD, WASHINGTON POST: Well, but it shouldn't be turned into a circus where we are chasing O.J. Simpson in his white Bronco. The real question here is whose interests are being served by these leaks? And we don’t know, frankly.

It's clearly a serious matter. But there's been no demonstrated abuse, that somehow this information that the NSA had was used in a way that's illegal or inappropriate. So there is a lot we should focus on here.

Over 40 years, I have had six cases of people coming in like Snowden. Sometimes they had stories that were important to print. A number of times they had stories that should not be printed, and Ben Bradlee, the editor, decided not.

And I have not heard a good answer. We will, I think, in time, whether we really needed to know all of this. I know with the Washington Post, they are very careful about all of it. There are elements of it that are not out, that the public does not know. There are elements of it that Snowden may not know. He may not understand what he has unleashed here. And so we ought to focus on those things rather than what airplane he’s getting on--

WALLACE: Well, let me just ask you, because the Washington Post, along with the Guardian, was one of the papers that broke the original story. They broke the PRISM story about the Internet surveillance. Are you suggesting perhaps your paper should not have done that?

WOODWARD: No. I think they did it very carefully. And there are all kinds, there is information they didn't use.

This should be debated. I think it surprised lots of people. We're going to have that debate. Even President Obama said he welcomes this debate. I'm sure that was an afterthought.

WALLACE: I was going to say, having said that, he hasn’t done anything about it and hasn't talked about it since. Brit, your thoughts?

BRIT HUME, FOX NEWS: Well, my first thought is that we need to think about how much damage, if any, the leak of the existence of this program has done. As we’ve talked about here a week ago, this isn't the first time it’s been reported that this program exists. It sort of went unnoticed somehow when it was broken by USA Today and perhaps others back, what, seven years ago. So how much damage has it done that the people were trying to defend ourselves against know that there’s this vast database of phone numbers which can be searched in case they reach out to somebody in the United States by telephone. It would be better they didn't know that. How much better is imponderable at this point. To me, that’s the key question. How much harm has it done? And does whatever information this character has that hasn't come out yet pose a threat of further damage? What came out this week, I think, didn't do that.


HUME: I just would say that I think that, you know, so far this hasn't been so damaging. Nor has it been all that revelatory, in my opinion.

WALLACE: Julie, I want to go back to this question, because we know that the Chinese, we know that they had received the extradition request. They had some comment about, well, it didn't comply with all of our laws, which seems to be a fairly legalistic dodge on their part. The feeling in the – and also the fact that he’s allegedly in Moscow would indicate that he knew he was going to be safe in Moscow, and that Putin and the Russians weren't going to turn him right over to the U.S. embassy. What do they make of that, and what does it say about their (inaudible) administration, about relations with these two countries with which we have always had a somewhat uneasy relationship.

PACE: Right. And the relationship between China and the U.S. and the relationship between Russia and the U.S. has been right at the forefront of administration foreign policy discussions right now, given the president's meeting last week with Vladimir Putin, his meeting with Xi Jinping at Sunnylands a few weeks ago. These are really complicated relationships. These are not countries where we can just, you know, call and have an expectation that they are going to instinctively agree with us and agree with our position on this. And they obviously have their own interests in this. With China, there are a lot of questions about whether the things that we accuse China of doing to us through cyber hacking are actually being done by the U.S. And Edward Snowden has said that he has some information about that as well. So I think that it’s pretty clear in the choices that he made that he either had some guidance about how he was going to be treated in these countries, or had an expectation about how he may be treated based on the foreign policy relationships that we have.

KRISTOL: And this is a key point. He, Snowden, wanted to get those documents out the week he got them out – remember, he was going to go to the Guardian if the Post didn’t print them. Why? He said at the end of that week, President Obama was meeting with the Chinese premier, and he wanted to prevent – I think there was -- Bob asked whose interests has this served. It served China’s interests to put a focus on U.S. spying, rather than Chinese cyber-attacks on the U.S. And then the next revelations were right before the G-8 summit in London, which helped Putin. I do think -- the notion that Snowden is just this flaky guy who’s randomly putting out stuff, it seems to coincide pretty clearly with the foreign policy interests of our enemies.

WOODWARD: Well, but there is hardly evidence of a conspiracy. Having seen too many of these things, there is a randomness to it, and you really can't control their timing.


WALLACE: He does seem to have leaked things at a particularly opportune time in terms of the schedule. That does not seem so random.

WOODWARD: We’ll see. I mean, I don't think it really impacts the relationship. Unless the Chinese kind of sit around and say, hey, we are going to get some really good stuff from this guy and we'll take care of him and help him.

WALLACE: All right. We have to take a break here. We'll continue to watch to see if Ed Snowden comes out that door. We don't know even if he has landed in Moscow, whether or not he’s going to come out with all of the other tourists and visitors or not, or whether the Russians will take him out another door, which is certainly possible.

Coming up, is it time to end the stimulus? The Fed says the economy is recovering, but the financial markets aren't so confident.



UNIDENTIFIED MALE: Moment of the night that’s the best is when it goes from daylight to evening.

WALLACE: Venocchi (ph) says there's just something different about a concert outdoors.

UNIDENTIFIED MALE: And it becomes maroon and magenta, and finally it’s dark, and then the concert starts. That’s something that only Mother Nature can provide.


WALLACE: Stay tuned. We'll be right back.



BEN BERNANKE, FED CHAIRMAN: If the incoming data supports the view that the economy is able to sustain a reasonable cruising speed, we will ease the pressure on the accelerator by gradually reducing the pace of purchases. However, any need to consider applying the brakes by raising short-term rates is still far in the future.


WALLACE: That doesn't sound so frightening, but those remarks by Fed Chairman Ben Bernanke this week spurred a global sell-off in the markets, which fear interest rates will rise and economic growth will slow. And we are back now with the panel. Brit, the Dow dropped 560 points on Wednesday andThursday after Ben Bernanke made those – I think to most people – unintelligible remarks before the market stabilized at the end of the week. What does that tell you about confidence in this economy without the huge injection of money from the Fed?

HUME: It tells me that there is a large subset of investors who are in the stock market now principally because they don't want to fight the Fed, and who believe that the economy isn't strong enough to stand up on its own hind legs, and who believe – who are in the stock market because you can't get a return from owning bonds. Interest rates are simply too low. So you go to the stock market, you go to equities. These are probably people who don't generally prefer equities under normal circumstances. And they have been terrified that the day will come when the Fed will pull the plug on all this stimulus, and they don't want to be in the market when that happens.

So we get a signal from Bernanke that someday off in the perhaps not too distant future, he may begin to raise – begin to raise the rates, and these people all bailed at once.

I would be surprised if the market doesn't begin to creep back up. I suspect it will. Because in the end, what drives the stock market is corporate profits. And if the corporate profits are strong enough to create the scenario that Bernanke described, which is an economy at cruising speed, there will be plenty of good reasons to be in the stock market.

WALLACE: Julie, White House spokesman Jay Carney was asked about all this, and just refused to say anything about Bernanke's comments. But behind the scenes, as a good reporter, do they think it was too soon for Bernanke to even raise the possibility that the Fed at some point in the not so distant future, will stop buying $85 billion every month in bonds?

PACE: Well, I am going to disappoint you here, because even behind the scenes, the Fed is one thing that the White House is very careful about talking about, absolutely, because of what you saw, where any comment from the Fed has a significant impact on the markets. And any comment from the White House about Fed action can have a significant impact on the markets. The one thing that the White House would point you to, though, is something that got a little overshadowed in Bernanke’s comments, which is that the whole reason he brought up this idea of ending the bond buying program is because he sees the economy strengthening. And that's certainly good news for the White House. The one thing that they would also point to, though, and I think a lot of the American people would say is that, you know, the economy for most Americans is not Wall Street. And the economy for most Americans is not improving significantly. So just because you have some conversations happening in the Fed and on Wall Street, it is still a bit of a disconnect between what a lot of Americans are actually feeling.

WALLACE: If the Fed raises interest rates, that has a real effect on mortgage rates and all kinds of things. Bill, it raises the question whether or not it was a mistake for the Fed to become so attached to easy money and low interest rates in the first place. Did the economy and all of us inside the economy, did we become addicted to this easy money?

KRISTOL: I think so. But you know, I e-mailed four different economists and financial big-shot types.

WALLACE: Got five different answers.

KRISTOL: Exactly. (inaudible) mostly took the words right out of my mouth yesterday, five or six different answers about what should I think about this. So I think, yes, there was a reasonable reason for an emergency intervention in ‘08. Keeping a zero interest rate going for five years is just asking for trouble down the road. It’s kind of a Faustian bargain, and I'm afraid we will at some point pay the price for it.

The other thing I will say is I do think the zero interest rate regime has been good for Wall Street, good for big banks, good for big government, which can borrow incredibly cheap. If the interest rates were higher, we would see much more of an impact on the deficit. It's been bad for small savers who can’t make any return on safe investments. It's been bad for small business, actually, because community banks are hurting, they don't benefit from this regime. So I do think the Bernanke policies are part of an overall set of policies which I think characterized the Obama administration. It’s true of Obamacare, I think, true of Dodd-Frank. It’s basically good for big banks, big business, big government, big Wall Street, and not very good for middle class America, for small savers, for small businesses.

WALLACE: Bob, your thoughts about Bernanke’s comments and what it says about the economy, the reaction from the markets.

WOODWARD: Well, first of all, the strategy is a risky one. Five years, effectively zero interest rates. Let’s face it, it’s an experiment. No one has ever done it. And I think within the Fed, they are kind of saying, gee, let’s see – we’re going to have to get out of it at some point in a kind of tentative – he sounded like Greenspan. On one hand, on the other hand, you didn’t know what he meant. But just the idea that it's not going to last forever sent a real shock to the markets. And the question is, and this is the looming one, what's the real condition of the American economy? Because this is an artificial boost to it. And if you take the artificiality out, where do we go? And no one knows that answer.

And this is the big -- I think this should be Roman numeral one for Obama and the congress. They've got to do something. Their role in the economy. and they have just punted by and large.

WALLACE: Well, I mean, let's pick up on that. Because as Julie said, there is the argument that in its own way, Bernanke's statement is good news. That the inflation is low, that it may be tepid but growth is continuing and that this shows the economy is recovering.

HUME: But worrying, of course, for someone like Bernanke is when you've got interest rates at this level and this much stimulus in the economy from that, and the economy strengthens to the point where we have got some reasonably robust growth, you're right on the danger point for an outbreak of inflation. And that's what a fed chief has to be concerned about.

And the deft thing that fed chiefs often have to do is try to begin to raise rates in such a way that it doesn't blow up the force of whatever recovery is going on, but in time to prevent an outbreak of inflation. And once the inflation genie is out of the bottle, as you've heard many people say, it's very hard to put it back in.

The last big experience we had with that was with the new hyper inflation we had in the late 1970s, and a massive recession was induced when Paul Volker clamped down on that and interest rates to the point where we went through a nasty recession with unemployment much higher than it was in this most recent one. And that, of course, is what Bernanke is trying to head off.

But as Bob suggests, this is a dangerous game he's playing. He's playing with fire. He has been playing with it for years. And whether he can get us out of the building before it burns down is really the question.

WALLACE: Julie, the president made some interesting comments about Bernanke this week. He said the chairman has already stayed at the fed -- I'm going to get the quote here right -- longer than he wanted or was supposed to. Does that mean Bernanke is gone when his term ends in January? And is there an early line on who might replace him?

PACE: Well, it sounded like Bernanke won't be sticking around. He has stayed about the average length of time for a fed chairman. Alan Greenspan obviously stayed for longer than the average. One of the names that is bandied about as a possible replacement is former Treasury secretary Tim Geithner..

A lot of, you know, pros and cons that come with that name being thrown out there.

But, yeah, I mean, Obama did signal that Bernanke would probably leave at the end of his term.

WALLACE: And in 30 seconds has he been a good or bad fed chairman?

WOODWARD: We don't know. It's just like Greenspan. It looked like he did a great job and then there's been lots of criticism. And the impact of what the fed does often comes years later when people look at it and say, oh, they missed this bubble, like the housing bubble.

WALLACE: Thank you, panel. See you next week. And don't forget to check out Panel Plus where the group picks up with a discussion on our website, And make sure to follow us on Twitter, @FoxNewsSunday.

Still no word on Ed Snowden in Moscow.

Up next, our Power Player of the Week holding a music festival in a national park.


WALLACE: Summer means vacations, barbecues and fun in the sun. It also means outdoor music festivals, including at one national park. Here is our Power Player of the Week.


ARVIND MANOCHA, CEO, Wolf Trap: When you are outdoors in the summer time with open air, there's something -- it's a very different atmosphere.

WALLACE: Arvind Manocha is talking about the magic of summer music festivals. He's just taken over as head of Wolf Trap, America's national park for the performing arts outside Washington.

MANOCHA: Whether it be contemporary, whether it be a more classic act, whether it be rock or pop or bluegrass or opera, all of it is represented here at Wolf Trap this summer.

WALLACE: We saw the range ourselves this week. Walking into an opera rehearsal. And then the Indigo Girls at their sound check.

MANOCHA: You can listen indoors, you might as well be listening to your CD or sitting in front of a stereo speaker.

WALLACE: Manocha says there is just something different about a concert outdoors.

MANOCHA: And the moment of the night that's the best is when it goes from daylight to evening. And it's like the house lights coming down in a theater. And it becomes maroon and magenta and finally it is dark and then the concert starts. That's something that only mother nature can provide, you can't do that at home.

WALLACE: As many as 7,000 people come to concerts.

MANOCHA: Our cheapest ticket starts at $4 on the lawn.

WALLACE: And what do you get for that?

MANOCHA: You're sitting on the lawn. We also let you bring in your own food, your own wine, your own picnic.

WALLACE: But Wolf Trap is more than the summer festival. It also has preschool programs in 17 cities, using the arts to teach kids about reading and math.

UNIDENTIFIED FEMALE: About half the class chose shapes up high.

MANOCHA: It's pattern, it's spatial relations, there's geometry, concepts related to the foundations of math.

UNIDENTIFIED FEMALE: How do you know they have less?

GIRL: I counted!


MANOCHA: I grew up in love with music.

WALLACE: Raised in Ohio, Manocha joined his high school marching band.

MANOCHA: It's hard to march with a baritone saxophone when it's snowing on you, but I did it and enjoyed I it.

WALLACE: He has big plans for Wolf Trap, including bringing in new acts he's not yet ready to announce.

MANOCHA: We are very much in the kitchen cooking phase. and until the dishes are ready, we just leave them in the kitchen.

WALLACE: But he has no problem talking about the satisfaction of his work.

MANOCHA: What we are doing ultimately only benefits people. That's really all of the goal is to make people's lives brighter maybe going to a great concert after a busy work week, or it's seeing your kids prosper and develop in ways that you might not have expected, that's a very gratifying feeling at the end of the day.


WALLACE: While many local school systems have cut their music programs, Wolf Trap with a mix of private and public money has not. And it hopes to expand to even more cities.

Still no Ed Snowden. Maybe they lost his bag in Moscow.

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

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