The following is a partial transcript of the Jan. 6, 2007, edition of "FOX News Sunday With Chris Wallace":
"FOX NEWS SUNDAY" HOST CHRIS WALLACE: And we're back live from the FOX box on the campus of St. Anselm College just outside Manchester, New Hampshire, where in just two days the first-in-the-nation primary will be held.
And joining us now fresh from his victory in Iowa is former Arkansas governor Mike Huckabee.
Governor Huckabee, congratulations and welcome back, sir.
REPUBLICAN PRESIDENTIAL CANDIDATE MIKE HUCKABEE: Thank you, Chris. Pleasure to be back.
WALLACE: You are talking somewhat less about faith here in New Hampshire and more about economic populism, looking out for the little guy. In a sense, are you trying to rebuild the Republican Party?
HUCKABEE: I think the Republican Party needs some repair. The Republican Party needs to remember that its strength was being the champion for small business. Eighty percent of all jobs in this country come from small business.
If we become the party that forgets that, if we become the party that does not empower the individual who wants to struggle from his place at the lower end of the economic spectrum up the ladder, then we're going to lose a lot of the base that gave us great strength, that helped us to become the majority party, that built the Reagan coalition, that also helped elect both George Bush 41 and George Bush 43.
WALLACE: As some of your critics, conservative critics, say, this sounds like Democratic class warfare.
HUCKABEE: Not at all. It is not class warfare. Look, I'm not about wanting to make rich people poor. I just would like to see that poor people have a chance to get rich.
And if we have an economic system that ignores the fact that $3- a-gallon gasoline really does hurt a working class family, health care costs going up double digits, really affects people's lifestyle — and we've got people who, when asked how's the economy doing — they just look around and they say, "It's just doing terrific," okay.
The macro economy is doing great. You can take a look at the stock market, take a look at how certain portfolios are performing and it looks great.
But translate that down to the factory worker who loses his job, take that down to the single parent for whom every day is a struggle to keep food on the table, and our party had better be talking to those people, because there's a whole lot of them.
I put it this way. Abraham Lincoln said it this way. God must love the common man because he made so many of them.
WALLACE: Your big idea in this campaign — and you're one of the few, I've got to say, who has a big new idea — is doing away with the IRS and creating the fair tax, which would be a consumption tax on...
WALLACE: ... all goods and services. Now, you and I have argued this several times so far...
WALLACE: ... this year. I want to go at it one more time. President Bush's tax commission says that a fair tax would reduce taxes for those making less than $30,000 a year and those making more than $200,000 a year, and it would increase taxes for everyone else. That doesn't help the little guy.
HUCKABEE: But his tax commission did not look at the fair tax. They looked at a consumption tax without the prebate provision and the provisions in the actual fair tax.
WALLACE: But that's how it ended up making — reducing taxes for people making less than $30,000. They did look at a prebate.
HUCKABEE: Well, but the actual analysis was not of the fair tax proposal. And the reason I think that's important is because his commission was essentially a group of tax lobbyists.
Of course they don't like the fair tax. These are the guys that are going to go out of business. Thirty-five thousand lobbyists in Washington — do you think they like the idea that a tax would be so simple that they couldn't really go in there and tinker with the congressmen and get them to...
WALLACE: Do you think President Bush was in bed with the tax lobbyists?
HUCKABEE: No. I think that he appointed a group of people that are tax experts, but they're tax experts tilted toward keeping the system the same with a few tweaks.
This is not a system — put it this way. Eighty percent of the American people say, "We need a major overhaul of the tax system, not a tweaking of the tax system." And what the fair tax does — it eliminates all of the current penalties on productivity.
I would suggest this. I would even challenge the other candidates. If you don't like the fair tax, tell me what you would do that would so eliminate capital gains, dividend taxes, income taxes on both corporations and individuals, payroll taxes, and that would be a better system that could empower people to go out and earn and keep what they earn.
WALLACE: Governor, you have also been critical of the president's foreign policy, and you've gotten some attention for this. In Foreign Affairs...
HUCKABEE: Oh, a little bit of attention on that, yeah, Chris.
WALLACE: In Foreign Affairs magazine, you write, and let's put it up, "The Bush administration's arrogant bunker mentality has been counterproductive at home and abroad."
You also want to shut down Guantanamo. You also want to ban waterboarding. Governor Romney says, "This sounds more like Obama and Clinton and Edwards than it does like a Republican."
HUCKABEE: I spent a couple of hours with 12 different general officers from the Navy and the Army and the Marine Corps. It was a very fascinating discussion.
I share the same view that Colin Powell does, that every general officer that I know in the military shares, and that is that when you engage in torture, you do two things.
First, you do not get the information that you really are seeking because it's rarely reliable. And the second thing is that you do something to the people who carry out the torture, and I'm not sure we want to do, and that is that we ask them to violate the very code that we teach them when they're going through the military.
WALLACE: But I want to follow up on this question of the arrogant bunker mentality, because ever since you wrote it, you have been portraying it as, "Well, this is Don Rumsfeld refusing to go in with enough forces."
I read the article. I know yesterday you were challenging Mitt Romney. I read the article. That wasn't your point. Your point was that we need to make our fight against the terrorists, not against the world, that we have been making it against the world.
In what way has President Bush made our fight against terrorism a fight against, in effect, our allies in the rest of the world?
HUCKABEE: Well, I think the general theme is that when we say you're either with us or you're with the terrorists, that sort of, "Here's the line in the sand and it's all or nothing," sort of defies the basic rule of politics in that you want someone to be with you 100 percent, but if they're with you 80 percent, that's better than 0 percent.
Once you define the terms as 100 or zero, you often are going to get zero when you could have had 80. That's my point.
And I do stand by the fact that we did not listen to many of our military leaders when they told us how many troops we needed. That was, I think, a mistake that most people acknowledge.
It was interesting to me that Governor Romney, who you just had on the program, made the comment — I think it was yesterday, in fact. He said that under his foreign policy, if he were president, it wouldn't be a "my way or no way" foreign policy.
That essentially mirrors what I've been saying, and I was glad he agreed with me on that one.
WALLACE: In last night's debate, you said that you supported President Bush's troop surge when he announced it in January of last year. But let's take a look at what you actually did say in January, and this is when Mitt Romney had already said that he approved the surge.
You said, "Well, I'm not sure that I support the troop surge, if that surge has to come from our Guard and Reserve troops, which have already been overly stretched."
Governor, you were not the supporter of the troop surge that you represented yourself as last night.
HUCKABEE: Well, I supported the surge. I questioned the use of our Guard and Reserve in repeated deployments because as a governor, I'd seen what that had done to our own Guard troop.
About 90 percent of our Guard have been deployed now to Iraq, and some repeated deployments, long periods of time, three out of five years. These are citizen soldiers. These are people who certainly are willing to go. I've never heard any of them complain.
But it's a real incredible, I think, challenge for not only the soldier but, more importantly, for their families, their employers and their communities.
And what we've done with Guard and Reserve forces has got to be changed. It's one of the things that I would do as a president.
And my point was and remains that if we're going to have the kind of war we're going to have, we've got to have more troops at the beginning.
WALLACE: Governor, I'm not saying you're right or wrong. I'm simply saying that you misrepresented yourself last night when you said you approved the troop surge. In fact, days later you said you weren't sure you supported the troop surge.
The fact is the Guard and the Reserve have been part of the troop surge.
HUCKABEE: They have been a part of it. And my point was and remains that we need regular Army. We've got to beef it up. The surge is working.
I think one of the things we've seen is it's been a dramatic success, and hats off to General Petraeus, and I'm grateful that he's been in that position.
WALLACE: Let's talk about the comments of your campaign chairman, Ed Rollins, who says you may enter a temporary alliance with McCain to take out Romney. Is that your plan here?
HUCKABEE: No. I love Ed. Every now and then I have to rein him in. He's an old boxer and loves to fight.
And it's not that we're conspiring with John McCain. Look, I've made no secret about it. I have admiration for John McCain. I consider him not only a friend and a colleague — we differ on some issues.
But let me tell you what I respect about him. I think he's maintained the high road in the campaign, the manner in which he's run it. He has staked out his positions.
He has taken positions that sometimes are counter to maybe, say, the conventional Republican position, but he's done it with conviction and with courage, and I can respect that.
And I think he's come to respect me and that's all in the world there is. Both of us — I'll tell you what we have in common.
We have both been brutally assaulted by Governor Romney with amazingly misleading ads that attacked and distorted and misrepresented our records, Romney attacking me in Iowa, attacking him in New Hampshire.
So I do think it's kind of created a brotherhood here. I would not deny that. But it's because we've both been the recipients of millions of dollars' — millions of dollars' — worth of negative ads.
WALLACE: Let's talk about where your campaign stands now. While you won, by all accounts, a remarkable victory in Iowa, the fact was 60 percent of the voters there were evangelicals. Eighty percent of the people who voted for you said they were evangelicals.
Don't you still have to demonstrate that you can reach out to a broad cross-section of voters?
HUCKABEE: Oh, I think not only that I have to, I think I am, Chris. If you look at those numbers carefully, we had a majority of the women. We had a majority of the younger voters in the Republican primary.
We had a majority of those who made less money than the ones who made more, which really kind of affirms my statement that people are looking for a president that reminds them of the guy they work with, not the guy that laid them off.
I think that what you saw in Iowa was that you have a lot of evangelicals. Most of them supported me, but 40 percent didn't. So it's not like they're all marching in lockstep and I say, "Hello, I'm an evangelical," and they all say, "Praise the lord and pass the ballot." I wish it were like that. I'd have won by an even bigger margin.
I won by a really good margin, but here's what people have to remember. We're number one in Delaware. We're leading in South Carolina. We're leading in Florida. We're second in California.
We're leading in places where it's not the evangelical vote. It's about people who really do want a president who's going to bring some significant differences not just to the Republican Party but to this nation and also will focus more on, as I often call it, the vertical politics of up and down, not the horizontal politics of left, right, liberal and conservative.
WALLACE: We've got about a minute left. How well do you have to do here in New Hampshire? And have you seen a boost in your campaign resources — your money, to put it bluntly — since you won in Iowa?
HUCKABEE: Big jump in the resources. Our online contributions at MikeHuckabee.com continue to just set new records each day. Our fundraisers — we used to do $25,000 fundraisers. We now do $250,000 fundraisers when we do them.
People are beginning to realize this guy could win, and that was the only thing before that was happening.
WALLACE: And how do you have to do here in New Hampshire?
HUCKABEE: You know, most people didn't expect me to be in the top four or five. So I think if I beat those expectations, we're going to have a great victory. We'll go on from here.
WALLACE: ... third, right?
HUCKABEE: Third would be fine. I mean, if we do third or even fourth, I think we're going to be sailing on and we're going to win South Carolina.
But let me tell you what's happening in New Hampshire. We are seeing great crowds and they're jazzed. We're pumped.
WALLACE: Well, that's because you're playing rock music.
HUCKABEE: That's what it is.
WALLACE: Thank you for joining us.
HUCKABEE: Thank you, Chris.
WALLACE: We have to leave it there, but we'll see you also tonight at the Fox presidential forum.
HUCKABEE: I look forward to it. Thank you.
WALLACE: Me, too.