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January 18, 2009

Interview with Speaker Nancy Pelosi

Fox News Sunday

WALLACE: I'm Chris Wallace, and this is "Fox News Sunday."

Barack Obama and congressional Democrats work on a plan to save the economy. We'll discuss that and the rest of the agenda for the first 100 days when we sit down for an exclusive interview with Speaker of the House Nancy Pelosi , only on "Fox News Sunday."

Then, the president-elect vows to hit the ground running this week. What's on the Obama to-do list? We'll get answers from one of his closest advisers, incoming White House Press Secretary Robert Gibbs.

And we'll preview the ceremony and substance of Inauguration Day '09 with our Sunday regulars -- Brit Hume, Mara Liasson, Bill Kristol and Juan Williams, all right now on "Fox News Sunday."

And hello again from Fox News in Washington. Well, with the inauguration of Barack Obama now just two days away, this city is buzzing about the kind of change he will bring.

We plan to cover it all today -- the celebration of a new team in the White House and hard questions about how they will tackle the nation's problems.

On Friday we sat down with Speaker Nancy Pelosi . We talked about House Democrats' $825 billion economic stimulus plan, and we got her sense of what Washington will be like under the new president.

(BEGIN VIDEOTAPE)

WALLACE: Speaker Pelosi, welcome back to "Fox News Sunday."

PELOSI: My pleasure to be here.

WALLACE: In the weeks after the election, there was a lot of talk about all sides coming together in the economic crisis to get a stimulus package on the president's desk by Inauguration Day.

Now that has slipped to mid-February. There's more and more talk about an old politics party-line vote. Whatever happened to the new bipartisan spirit under Barack Obama ?

PELOSI: Well, what you say is one interpretation. I see it quite differently.

WALLACE: Well, I mean, we just had this vote on the TARP, the...

PELOSI: Right.

WALLACE: ... and it only got six Republican votes in the Senate. PELOSI: Well, it's amazing, because they had voted for it in much more -- in stronger numbers when President Bush was president.

WALLACE: So what happened to the bipartisan spirit?

PELOSI: To the point of -- I can only speak to what's happening in the House of Representatives. Yes, we are going to work together to have a recovery package for the American people. It's essential that that happen.

To that end, the president-elect came to Capitol Hill on the 5th of January, the day we were sworn in, met in a bipartisan way, Democrats and Republicans, House and Senate, said he was open to ideas that any of us had and that he would be making some suggestion that -- suggestions that talked about what he believed would create three to -- or save 3 to 4 million jobs, to do so in a timely fashion, and that we had to act now.

We were -- we will lose half a million jobs a month the longer we go without a package. So we have taken some of his suggestions, listened to others, put together a package which we announced on Thursday.

The Republican leader, Mr. Boehner, has said to me what I want is a markup. We could go faster without a markup, but he wants a markup, and so we certainly agreed to that, which will happen next week, this coming week, in the Congress following the inauguration.

WALLACE: But if I may -- if I may cut through the process, Speaker, I mean, we're...

PELOSI: Well, that process is the bipartisanship. That's where people...

WALLACE: But the fact is, as I say, in the Senate all but six Republicans voted against it. The Republicans have come out against your new economic stimulus package.

Is the president making -- the new president-elect -- making a mistake chasing Republican votes by putting in, for instance, more business tax cuts...

PELOSI: No.

WALLACE: ... instead of pursuing a Republican agenda?

PELOSI: No, I think that the president-elect is doing what he believes will create jobs for our country.

He knows very much what the urgency is of the matter. And some of the issues, like net operating loss, carry-back, bonus depreciation, are suggestions that have come from the Republicans. And to the extent that they will create jobs, they are in the package that we put forth.

But we're talking about listening to ideas. We also have to listen outside the Congress to -- for example, the economic adviser to John McCain , Mark Zandi, has suggested to us that investments create more jobs than tax cuts.

We are committed to a middle-income tax cut in addition to the business tax cuts, and that is in the proposal. But we also have a strong element of investments.

When our package came out, Mr. Zandi said that this was needed, that it will create jobs, without it we will lose jobs, and it was a good stimulus. And others have said this will create -- this will create over 3 million jobs.

WALLACE: But let's talk about this $825 billion...

PELOSI: Right.

WALLACE: ... economic stimulus package you're talking about. You barely got it out of your mouth before House Republicans, starting with John Boehner, started criticizing it.

They said there's $650 million in there to help people convert to digital television. There's money to re-sod the National Mall.

PELOSI: Right, yeah.

WALLACE: There's money in there for increasing college aid grants.

PELOSI: But that doesn't mean that...

WALLACE: And -- well, let -- if I may just finish. So the point they were saying was this is just more government spending. It's not economic stimulus.

PELOSI: No. No, no, no. Actually, the fact is that, again, the economists have told us you must make these investments which will be job-creating.

Now, we have a strong -- this is not an old-time public works investment package. This is about the future. We have major investments for rebuilding the infrastructure of America in a very forward-looking way that reduces our dependence on foreign oil.

Secondly, it is a commitment to innovation, to science, to keep America number one and competitive and grow our manufacturing base.

Third, it is -- and all of that depends on investment in education. And in addition to that, it's aid to the states so that they do not have to fire people or reduce meeting the needs of their people.

And again, I come back to the science that is in it to reduce our dependence on foreign oil and climate change. It's about science, science, science and science, innovation, as we rebuild America, create jobs, invest in our people and turn this economy around.

WALLACE: And -- and so...

PELOSI: Now, if someone wants to take a little initiative here or there, which are responsibilities of the government, and describe the package that way, I don't think that that is quite fair.

And I don't -- I don't think that -- I think we will get Republican votes on this because it has, again, tax cuts for the middle class. Ninety-five percent of the American people will get a tax cut.

There are business initiatives that are job-creating, and there are investments to address the needs for jobs but also addressing the consequences of a severe downturn in our economy.

WALLACE: Simple question: Do you see any signs that the House Republican leadership is willing to meet you in the middle?

PELOSI: Well, I certainly hope so. We will have a markup, which is what they asked for. You call that process.

WALLACE: Writing the bill.

PELOSI: We call that bipartisanship. But it is -- we are reflecting what the American people want us to do.

Their priorities are children's health, job creation. You know, the American people want results that are relevant to their lives, and that is what this package does, at the same time, as I say, creating three to -- or saving 3 to 4 million jobs. And it's essential that we pass it soon.

Now, you make the point that it was going to be by inauguration. That would have been my hope. But the worse the economy got, and the later we do -- the bigger the package got, the more time we needed to have the markups that the Republicans have suggested.

WALLACE: Let's talk about the agenda for the first 100 days, because there seem to be some differences between the Obama administration that's incoming and congressional Democrats.

PELOSI: Right.

WALLACE: Case in point -- the president-elect says with the economic crisis, he's in no hurry for what's called union card check...

PELOSI: Right.

WALLACE: ... and while he wants to make it easier for workers to unionize, he'd like to see if there's a way to do it without taking away the secret ballot.

PELOSI: Well, you're talking about the first 100 days. The first 100 days we have to turn this economy around. Our commitment is to our economic recovery package, and that is what our focus is. We also have to deal with the housing crisis, which is central to the financial crisis in our country. So that is where our focus is in the first 100 days.

WALLACE: So you agree union card check later rather than sooner, and maybe not taking away the secret ballot?

PELOSI: Well, I believe that -- I know that President-elect Obama is a strong supporter of America's workers. I myself am a strong supporter of that legislation. We passed it with a strong vote in the House in the last Congress, and I continue to be supportive of it.

But in terms of what we have to do in the first 100 days, we must address the needs of this country. Five hundred million people will lose their jobs each month until we have an economic package.

WALLACE: No, 500,000.

PELOSI: What did I say, million?

WALLACE: Yes, 500 million. That would really be a recession.

PELOSI: Oh, no. Excuse me. Thank you for correcting me.

WALLACE: Yes.

PELOSI: It feels like 500 million. Five hundred thousand Americans will lose their jobs each month until we have a recovery package.

That's why I said we will have this package by Presidents' Day recess, and if we don't have it signed into law by then, we will not have a recess.

WALLACE: Mr. Obama has not committed on whether to raise taxes on people making more than $250,000 a year or just to let the Bush tax cuts expire in 2010.

PELOSI: Right.

WALLACE: You say you want to do it now. Is it...

PELOSI: Well, I say now, but I -- what we're saying is that's not part of this discussion for...

WALLACE: I understand that, but...

PELOSI: ... this economic package.

WALLACE: ... my point is this: Isn't it a mistake to raise taxes on anyone during a recession?

PELOSI: Well, first of all, I don't know that a decision has been made by the Obama administration. But I will tell you this, that in '04, '06 and '08, we had campaigned in saying what the Republican Congressional Budget Office told us. Nothing contributed more to the budget deficit than the tax cuts for the wealthiest people in America.

Fiscal discipline is central to what we do, and we can't...

WALLACE: You're about to pass a $1 trillion spending program. That's not -- that's not fiscal discipline.

PELOSI: No, no. It is discipline.

WALLACE: You want to do this in the middle of a recession?

PELOSI: First of all, we are not proposing a $1 trillion...

WALLACE: Stimulus.

PELOSI: It's eight hundred and a quarter...

WALLACE: OK.

PELOSI: ... recovery package that will grow the economy to bring more revenue into the -- into the Treasury so that we can reduce the deficit.

Investments in education, which are strong elements...

WALLACE: But tax increases in the middle of a recession?

PELOSI: Well, the point is it's not tax -- it's a drain on the economy, which has done nothing to grow our economy. Mind you, we're in pretty bad shape. It has contributed enormously to the deficit. But it's not time to be talking about that now.

Now we're talking about how we do an economic package. When we get to the next stage of this -- recovery package. When we get to the next stage, we'll have that debate. We'll listen to experts and the...

WALLACE: But you want to do it now.

PELOSI: No, I didn't say now.

WALLACE: I mean -- I don't mean...

PELOSI: I don't want them to wait two years to expire...

WALLACE: OK.

PELOSI: ... Because they have to prove their worth to me as to how they grow the economy, how they create jobs, how they do not -- justification for being the biggest increase in the budget deficit than any element that you can name.

Don't take that from me. That's a Congressional Budget Office -- under the Republicans.

WALLACE: Mr. Obama says he wants to start tackling entitlement reform of Social Security and Medicaid beginning with a summit next month. Do you think it's a mistake for him to take on that subject so early in his administration?

PELOSI: No, I think it's very important. I think it's very important, and I support what he wants to do, to have a summit of that kind, and we will have our own initiatives in the Congress to work with him on that, because we do -- again, fiscal discipline. Fiscal discipline.

We are committed to pay as you go, not heaping mountains of debt on our children, and the investments that we make have to be job- creating and bring money into the economy. So of course, the entitlements are an important part of how we make...

WALLACE: Speaker, you talk about fiscal discipline. Are you willing to accept in this discussion, at the very beginning, benefit cuts as well as tax increases?

PELOSI: I'd say you put everything on the table.

WALLACE: Everything.

PELOSI: You put everything on the table.

WALLACE: Including benefit cuts.

PELOSI: You put everything on the table. The only thing we didn't want to put on the table is eliminating Social Security, Medicare and Medicaid.

WALLACE: Well, we're not talking about that.

PELOSI: Well, President Bush was talking about...

WALLACE: I understand that.

PELOSI: ... eliminating parts of it. And that was not something we wanted on the table.

But I think on any of these things, they have enormous impact on people's lives. They have enormous costs to our budget and also to our economy, and so this has to be done in a bipartisan way.

Put everything on the table, let it prove its worth, and compare it to other options that we have, similar to what President Reagan did with Speaker Tip O'NEILL over 20 years ago when they were very successful in how they went forward on Social Security.

WALLACE: The president-elect is now talking about it possibly taking as long as the end of his first term to close the prison at Guantanamo Bay. Would you be disappointed if it took that long?

PELOSI: I don't think it will. But he -- you know, if somebody gives an outside date, it doesn't mean you can't do it sooner. But I'm pleased that he has said he will close Guantanamo.

And we have some ideas about how it could be done, and we'll compare notes as to what the timing of that would be. But I think it's very important that the message go out to the world that Guantanamo will be closed.

WALLACE: Mr. Obama says that he's not particularly interested in investigating whatever went on in the past with the Bush anti-terror programs.

You've got John Conyers, head of your Judiciary Committee, who wants to set up a commission to do exactly that.

PELOSI: Right.

WALLACE: Mr. Obama says that at this point we've got to be looking forward, not backward.

PELOSI: I think that we have to learn from the past, and we cannot let the politicizing of the -- for example, the Justice Department, to go unreviewed. Past is prologue. We learn from it.

And my views on the subject -- I don't think that Mr. Obama and Mr. Conyers are that far apart. I think that...

WALLACE: But you want to see investigations.

PELOSI: Well, I want to see -- I want to see the truth come forth. Now, how that is done -- I'm really not completely familiar with what Mr. Conyers is putting forth or the...

WALLACE: But on the Justice Department and the politicization of that, on...

PELOSI: Well, I think that's a matter of -- that's not up to us to say that doesn't matter anymore. I think they're different subjects, and you treat the differently.

We have a contempt of Congress against members of the executive branch who withheld information from us on that subject, and that was reinforced the first day of this new Congress.

So I think you look at each item and see what is a violation of the law, and do we even have a right to ignore it, and other things that are -- maybe time spent better looking to the future rather than to the past.

WALLACE: I get the sense from this conversation -- presidents often have more problems with their own party, especially when they enjoy big majorities, than they do with the opposition.

I get the sense -- you shake your head immediately that he's not going to have problems -- you don't intend to kowtow to this new president.

PELOSI: Well, the point is we're very excited about the election of this new president. Much of his campaign agenda is what we have been working on for a very long time -- the creation of jobs in an innovative way that takes us into the future, reduce our dependence on foreign oil and reverse global warming, to meet the needs of our children by investing in education.

All of these things are part of an agenda. That's why in the first week of Congress, of our legislative work, we passed the children's health insurance program. It's first on the agenda of the American people, the health of our children, and it was early on the agenda for us, probably among the first bills to be signed by the president.

So we have -- again, we are two independent branches of government. Within our own party, we have a range of thinking. We built consensus. We will, by March, come to the middle on it.

We want to have as much bipartisanship, especially on issues that relate to, again, recovery and turning around this economy, how we deal with the housing crisis and the rest.

So we'll take -- you know, we have to respect every voice and every view in the White House, in the Congress, Democrats and Republicans, and it is -- it is -- and this is a president who is committed to that. I wish President Bush had been more bipartisan. We reached out.

This president is reaching out, and we will look forward to working with him. And again, we have a wealth of knowledge and experience here. We all draw upon expertise from outside. We make judgments about it.

But I didn't want to rubber stamp Congress when President Bush was president and the Republicans were here, and I don't want any rubber stamp members of Congress rubber-stamping what I think. We want to hear their views, convey them respectfully to the president, from both sides of the aisle.

WALLACE: Speaker Pelosi, big job, lot of work ahead. Thank you for talking with us.

PELOSI: Thank you. My pleasure. Thank you very much, Chris.

(END VIDEOTAPE)

WALLACE: Speaker of the House Nancy Pelosi .

Up next, we get a preview of the new president's plans when we're joined by one of Mr. Obama's closest advisers, incoming White House Press Secretary Robert Gibbs. Back after the break.

(COMMERCIAL BREAK)

WALLACE: When Barack Obama takes over Tuesday, one of the most influential and visible members of his team will be White House Press Secretary Robert Gibbs.

And, Robert, welcome to "Fox News Sunday."

GIBBS: Thanks, Chris. Thanks for having me.

WALLACE: Let's start with the inauguration. Give us a preview of what Barack Obama 's going to say.

GIBBS: Well, I think the themes that you'll hear on Tuesday around noon will be very familiar to people that have watched the campaign, but they'll be heavily infused with this notion of responsibility and getting our country back on track.

You know, he had us clear his schedule from virtually everything last weekend. I sat down and wrote out the bulk of the speech as it is now. And I think he's relieved to have something on paper and ready to give on Tuesday.

WALLACE: Now, when you say responsibility, are you saying he's going to ask for personal sacrifice or personal responsibility from the American people?

GIBBS: Well, I think there's -- you need -- you know, we need more responsibility and accountability, certainly, in the way our government acts.

We have to have it, certainly, within many of our financial institutions that sort of have gotten us to where we are in this economic crisis today.

Obviously, the American people are all going to have to give some. What's important, though, is ensuring that those that have had the short end of the stick for the last few years -- make sure that they get the help that they need, that this administration begins to create the jobs and give some financial stability to families so that they can feel hopeful about going forward.

You know, the great thing about our democracy and our country is we always find ourselves at crossroads, and we always find ourselves -- at least this country always has -- doing what is necessary to make this country and the lives of the American people better for each and every generation that follows.

WALLACE: Now, you talk about he's going to talk about the responsibility of the financial institutions. I remember in 1933 -- I remember I read about it -- FDR talked about the money changers.

Is he, either in that speech or in subsequent action, going to get tough with financial institutions and say, "Tet lending, get going, let's get this economy going again?"

GIBBS: Chris, there's no doubt that if we don't do that, nothing is going to get this economy moving again. There are no silver bullets.

The president-elect and his team have been working with members of Capitol Hill to get an economic recovery and a reinvestment plan moving as quickly as possible. We have to get a financial stability package that works far differently than what we've seen over the past few months.

When this country lends money to banks and buys a stake in those banks, those banks have to lend that money to small businesses and families that are looking to buy cars or send their kids to school.

We have to do things differently, in a more transparent way. We have to ensure that the American people feel confident that the stakes that they're buying in these banks -- that that money isn't going simply directly into the pockets of executives that got us into this mess.

We have to do things differently. We're going to ask the financial sector reform itself -- not reform itself, but be involved in a reform that asks them to do things far differently than they've done in the past few years.

We have to get ourselves out of this mess, and only by demanding more of the financial institutions will we be able to do that.

WALLACE: On his first full day in office, Mr. Obama will reportedly meet with the Joint Chiefs of Staff. Will he keep his campaign promise and tell them right then that they have a new mission to get us out of Iraq?

GIBBS: He will, Chris. But he's interested -- in his first day, he's going to meet with his economic team to see where we are on an economic recovery and reinvestment plan to save and create millions of jobs, and do so in a transparent and accountable way so that the American people can feel confident that things are moving in the right direction.

And he'll also meet with military advisers to talk about the conflicts in both Iraq and Afghanistan. The goal of the meeting, certainly as it relates to Iraq, is to -- is to keep our commitment to remove responsibly and safely our troops, our combat brigades, over the course of the next 16 months, to give the Iraqis more responsibility...

WALLACE: But the new mission is to get out of Iraq given those provisos.

GIBBS: Absolutely. But we're very interested, and the president-elect and the vice president-elect are very interested, in hearing from military commanders both here and on the ground about what that entails.

And just as I said a minute ago, what's also key is we have to give more responsibilities to the Iraqis as we remove our troops safely and responsibly.

WALLACE: There are also reports that the president-elect, as soon as he becomes president, will issue in the first 24 hours a series of executive orders. On what?

GIBBS: Well, I think it's safe to say that next week we'll address ethics and transparency in government and how it relates to senior White House staff and members of departments and agencies.

We're going to close the revolving door that lets people come into government and then leave quickly to go lobby the government that they were just in. I think you'll see stuff on that.

I think, obviously, you've seen mentioned the closure -- the process for the closure of Guantanamo Bay.

And I think you'll see a series of things where the president will keep his commitments that he made during the campaign.

I would be remiss if I didn't say that we did not get -- we did not get into this situation overnight. The problems and the challenges that our country face didn't happen all last week. They've been building for years.

It's going to take -- it's going to take us some time. Everything's not going to be done in the first month of this administration, but we're going to work hard each and every day to bring change to Washington and to bring hope and confidence to the American people.

WALLACE: Let me ask you about that, because as you just heard me discuss with Speaker Pelosi, House Democrats have come up with an $825 billion economic stimulus plan.

Is that the Obama plan, or is he open to Republican criticism about needing more tax cuts and less spending?

GIBBS: Look, Chris, the president-elect went up to Capitol Hill. That's one of the very first things that he did when he got to Washington earlier in January. He sat with Democrats and Republicans, the leadership on both sides of Congress, and said, "If you've got a good idea, then let's talk about it."

He's willing to listen to any of the ideas that Democrats or Republicans have. He's often been quoted as saying that he doesn't think that good ideas are the province of simply one person or one political party. WALLACE: So the House plan is not the end point. It's the starting point.

GIBBS: Well, we've all watched Capitol Hill, and as you go from a proposal to what the president expects to sign into law by the Presidents' Day recess, we understand there's going to be some give and take in that. We've already seen some give and take.

We think that we're going to have the best plan possible, that we're going to get ideas from across the political spectrum, from Democrats and Republicans, as long as they do a few things -- as long as they get this economy moving again, that we save or create the millions of jobs that we're going to lose if Congress and this president don't act swiftly and surely to get something in front of the American people that improves this economy.

WALLACE: Now, you said a moment ago we didn't get into this mess in a quick period of time, a short period of time, it's -- we're not going to get out of it.

GIBBS: Right.

WALLACE: That's a theme we're beginning to hear, in effect saying to the American people, "You're going to have to be patient."

Are we talking about a recession that goes into next year, into 2010?

GIBBS: Well, I think the American people understand, as the president-elect does, that this economy is likely to get worse before it gets better. And I think the American people and the president- elect understand also that it's certainly going to get far worse unless or until we act immediately.

Chris, if we wait and wait and wait, more and more people are going to lose their jobs. We're going to fall further and further behind. Credit is going to be harder to get. People aren't going to borrow money to go to college. People aren't going to borrow money to buy cars.

Congress and the president I think are both committed to acting quickly to getting an economic recovery and reinvestment plan on his desk and signed into law by mid-February so that we can get this economy turned around quickly.

WALLACE: Treasury secretary nominee Timothy Geithner -- we know now that he did not pay back taxes.

GIBBS: Well he's paid back taxes.

WALLACE: Well, wait. Let me finish. He did -- he paid back taxes after he was audited in 2006, but that he didn't pay some of the back taxes for 2001 and '02 until you guys were about to nominate him in November.

GIBBS: Right. WALLACE: We also know that he claimed a tax deduction for sending his kids to sleep-away camp, which I have to say is the first time I've ever heard of that.

Do you really want someone in charge, as he will be as treasury secretary, of the Internal Revenue Service who has what even the New York Times calls such a cavalier attitude towards paying his taxes?

GIBBS: Well, I don't think Mr. Geithner has a cavalier attitude toward paying his taxes at all.

I think there are two things that are the consensus in this town, that even as Mr. Geithner said, he made a -- he made some embarrassing but honest mistakes as an employee of an international organization, but also...

WALLACE: Can I just pick you up on that? Because I keep hearing...

GIBBS: Well, let me finish...

WALLACE: Well, let me just -- let me just ask you the question.

GIBBS: Let me finish this answer, because...

WALLACE: OK.

GIBBS: ... there's also a consensus among both Democrats and Republicans that Tim Geithner has the intelligence and the experience to do this job, that he's somebody who's dedicated to public service and is the right person to steer this economy and lead the Department of Treasury.

That's not just me saying it. That's Democrats and Republican senators on Capitol Hill that understand it's important to have a treasury secretary in place and that Tim Geithner is the right man for the job.

WALLACE: But I keep hearing from your team and from president- elect Obama, "Innocent mistake, honest mistake."

Here's a fellow who, one, was audited in 2006. He was told pay back taxes because he hadn't paid the self-employment tax for the IMF in 2003 and '04. He had done exactly the same thing in '01 and '02 but didn't pay the taxes.

And we now know that he was getting notices from the IMF, which he signed, which said you've got to pay these self-employment taxes. It sure sounds like he was trying to get away with something.

GIBBS: No. Again, Mr. Geithner has paid all those taxes, paid the interest in any of those back taxes. These are honest mistakes. If you go on the IRS Web site, in '06 and '07, they've got a part of that Web site that allows people that work for organizations like Mr. Geithner do -- it's a -- it's a fairly common mistake that happens. Mr. Geithner said this was embarrassing. His accountant told him he didn't have further tax liabilities. He's made amends for those mistakes.

You know, Chris, I'm reminded that if you or I couldn't make a mistake but still work in this town, it's entirely possible that I wouldn't be able to finish this interview. You might not be able to finish a series of interviews before they shut us down, too.

WALLACE: Well, I certainly wouldn't survive a Senate confirmation.

GIBBS: Well, I think Mr. Geithner has made honest and embarrassing mistakes that even he admits.

But you know, again, the consensus is this is somebody who has the experience and intelligence and the dedication to public service to move this economy forward. He's the right person for the job. And we look forward to him being sworn in very quickly as the...

WALLACE: Finally, I want to do a lightning round, which we do...

GIBBS: All right.

WALLACE: ... around here, of quick questions, quick answers, and I want to talk about Robert Gibbs and your new job as White House press secretary.

GIBBS: Sure.

WALLACE: Who do you work for, the president or the people?

GIBBS: I work for both the president, the people and the working press of the United States of America.

WALLACE: So to what degree do you see yourself as putting the best face, the best spin, on things to help politically your boss, and to what degree is it your job to level with the American people?

GIBBS: Well, I can assure you, Chris, that each and every day that I answer questions, whether it's on your show or whether it's from the podium of the briefing room of the White House of the United States, that I will always tell the truth.

Not only would I not be able to look at myself in the mirror any morning, but I certainly wouldn't be able to do my job every day if I wasn't honest and frank and truthful in every answer that I give.

You know, I understand that...

WALLACE: That raises my -- let me just say that...

GIBBS: Well, hold on. Let me...

WALLACE: Go ahead. GIBBS: I'm told that my office -- it's almost equidistant between the Oval Office and the White House briefing room, between the president and the press.

It's a unique role. I want to make sure that -- I know the president fairly well, and I think the -- I think that what I want to do each and every day is help the press understand a little bit about his decision-making process, what's going through his mind, and endeavor to make sure that they have the information and the access that they need...

GIBBS: You're breaking the rules of the lightning round here, Robert.

Any excuse for ever telling a lie -- operational security, you know, national security? Any excuse for telling a lie?

GIBBS: No. There will be times in which I will tell people that there are things that I'm not going to be comfortable talking about. I think the press understand that.

And I'm certainly -- I would never endeavor to endanger the lives of the men and women that protect me and the rest of this country each and every day.

WALLACE: What's your attitude towards leaks?

GIBBS: They're frustrating at times. There's no question about that. The only thing that -- the thing that concerns me most about leaks is I get concerned that unless or until I hear from the president that a decision has been made, it always makes me nervous when information is out there that might not altogether be accurate.

We're going to -- we will endeavor to make sure that any information that's given to the press is completely accurate and that it reflects the current thinking and the decision-making of the president of the United States.

WALLACE: And finally -- again, lightning round, so I need a...

GIBBS: All right.

WALLACE: ... quick answer from you here -- you were known for going after reporters during the campaign. In fact, you once said, "Sometimes I used a sledge hammer instead of a fly swatter." Will this be a combative press room?

GIBBS: No. I look forward to working with the press in making sure that they have the information and the access that they need from the administration, and making sure that they have an understanding of what the president's thinking each and every day.

I look forward to it. I think it's going to be a lot of hard work, but I think it will be a lot of fun.

WALLACE: Robert, thank you. Thanks for coming on. Please come back. And savor the next couple of days.

GIBBS: We'll try. Thank you, Chris.

WALLACE: Coming up, our Sunday regulars discuss the inauguration and the challenges facing the new president. We'll be right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: There will be false starts and setbacks. There will be frustrations and disappointments. We will be called to show patience even as we act with fierce urgency.

(END VIDEO CLIP)

WALLACE: That was President-elect Obama on Saturday warning of the tough road ahead just before he took that colorful train ride from Philadelphia to Washington.

And it's time now for our Sunday regulars -- Brit Hume, Fox News senior political analyst, and Fox News contributors Mara Liasson of National Public Radio, Bill Kristol of The Weekly Standard, and Juan Williams, also from National Public Radio.

Well, Brit, you've covered a bunch of inaugurations, I think starting -- was it with Teddy Roosevelt or McKinley?

(LAUGHTER)

What stands out for you about this one?

HUME: Well, what stands out -- this one feels a little peculiar, because it feels like an interruption in a process of a presidency already well under way.

Congress has been in town since the 5th of January. Confirmation hearings have been held. Controversies have arisen. There's been this high degree of cooperation between the Bush and Obama administrations, which has made Obama in a very real way a partner in everything that's going on, even as President Bush continues to exercise, obviously, real authority.

But you feel like we're now going to pause in the middle of the early stages of the Obama presidency to have an inauguration, and then we'll get down -- get back to business.

And most of the time, an inauguration feels like a beginning. This one oddly feels like a bit of an interruption.

WALLACE: Do you agree with that, Mara? LIASSON: Yeah. I mean, there's been the pre-presidency, and then there's going to be the presidency, and in the middle will be a humongous celebration which I think every president has -- you know, that's their due.

But except for foreign policy, where president-elect Obama has been very careful to avoid anything -- one president at a time, he keeps on repeating -- till he gets into office, he has been the domestic policy president for the last month or two, crafting the stimulus package, giving all these interviews, especially this week.

We've learned so much more about him. You know, he's been steadfastly pragmatic, almost technocratic, about the way he's going about these problems. He's already signaling which promises people shouldn't expect him to fulfill too fast, which they should.

I think he's been an extremely active president-elect. You know, he's already passing legislation through Congress and he hasn't sworn in -- been sworn in.

WALLACE: Bill, you -- we cannot let this pass -- were one of the favored few who had dinner with Barack Obama . Let's put up the picture. I love this.

This is a picture taken by the New York Times. I don't know if you can see there, but it's like we have our nose pressed up against the glass of George Will's house, and while we're on the outside in the cold, there is Bill Kristol regaling or being regaled by President-elect Obama, about to eat his lamb chops, medium rare I assume.

KRISTOL: Excellent.

WALLACE: I know it was off the record. You and a bunch of other conservative pundits were there. But what sense did you get of where he is personally and politically as he -- as he takes on the presidency?

KRISTOL: You know, well, that photo was of the private conversation that I had with the president-elect where he pulled me aside and said, "Just ignore all that stuff I've been saying publicly. You know, I just got -- I have to keep the liberals happy, but I'm with you on everything down the line."

No, I couldn't resist saying that, partly because the transcripts of these shows -- they don't catch irony or humor, and this won't -- you know, it'll be taken very seriously.

Look, he's a very pleasant and intelligent guy, and he had no problem answering questions and dealing with challenges from nine or 10 conservatives for 2.5 hours. And you know, I think it was an intelligent thing for him to do, and it was nice to be there.

WALLACE: That's it?

KRISTOL: I mean, I don't have any great insights. You know, he is privately -- he seemed to be -- this wasn't really private, but among nine or 10 people, he wasn't that different from the way he is publicly -- cool, calm, confident.

It was like talking to a very -- an intelligent, moderately liberal law professor, you know, debating a bunch of issues -- health care, the economy, the stimulus.

We didn't talk as much as I would have hoped, frankly, about foreign and defense policy. That's my own particular interest.

But I am struck by that -- Mara mentioned, I think, Obama has been -- domestic policy, he's already, to some degree, been in charge or cooperating with President Bush on a bunch of things in the past two, three weeks.

On foreign policy, he has taken, correctly, the position one president at a time. That's a reminder that at the end of the day, you know, there is one commander in chief. And I do think those are going to be his most fundamental challenges.

The economy is a huge challenge, but the degree to which the fundamental challenges he will face, I think, will be abroad is something that I think he understands, and that's something he doesn't take responsibility for until noon on January 20th.

WALLACE: Juan, there were several developments this week that I think give us a better sense of the Obama agenda. First of all, we got the House economic stimulus package, $825 billion, considerably more in spending than in tax cuts.

We also got word in an interview that Mr. Obama did with the Washington Post that he's ready to start at least talking about entitlement reform next month and seems quite confident that he can shake up and settle Social Security. What do you make of both of those?

WILLIAMS: Well, you know, look. Before I address that, let me just say that whereas so many of my colleagues on this panel think it's kind of an interruption, I must say I think -- I sense this town is just so busy with people and excitement and a sense of potential, and I think it has to do with the idea that this is an emotionally powerful moment that goes beyond the ordinary politics that we're all accustomed to discussing on Sunday morning.

It's really going to be an incredible moment with worldwide attention fixed on what Barack Obama has to say in his inaugural speech.

And I think that has to do with the history of it, with the idea that you're going to have not just a black man, but -- it could be black, brown, a woman. You can have now an idea of American leadership that stands beyond white males.

This is an amazing moment. And I think that's -- that is what's the temperature of the town, and I think it's important to say that. Back to normal politics. In answer to your question, I think the entitlement reform thing is something that will get pushed down the way. He's going to have a fiscal summit sometime in February, bring people together to, you know, bring in all the ideas and so forth.

Right now, the biggest thing he's got going for him is public confidence. He's up in the 70s in terms of people saying, "Yes, we believe he can make a difference on the economy."

That was the way that he pushed not just Republicans, Chris, but specifically Democrats on the second half of this TARP money, this troubled assets relief money.

He -- they were worried about -- you know, the first half was not used to their pleasing. It was used on the banks, and there's likely now going to be more money going to Bank of America.

They wanted some assurances about foreclosures and the like, and Obama just steam-rolled and said, "You're not going to stand in the way of us fixing this economy," to Democrats and, of course, Republicans are going to have to come along, too.

WALLACE: Brit, I want to get into one last subject before we take a break, and that -- I was struck with Nancy Pelosi when I raised the question about looking forward or looking backward when it comes to alleged transgressions by the Bush administration.

She made it clear -- I think, in effect, she said, "We don't have the right to ignore this. We've got to look at this." You also had Eric Holder, the attorney general-designate, saying waterboarding is torture.

And current Attorney General Michael Mukasey said the next day, "Wait a minute, torture is a crime. I'm worried that a lot of the government lawyers and interrogators who got involved in this in good faith and with legal approval could now be subject to investigation."

Do you think whether it's criminal investigations or congressional investigations, we're going to just see a raft of this over the next few months or years?

HUME: Well, what we've heard, really, is that John Conyers, one of the most liberal members of the American body politic, wants to hold some investigations. He's held many farcical investigations in the past.

And if these investigations are run by him and out of his committee, the likelihood is they will go nowhere and probably be -- end up being an embarrassment to the Congress and the -- and the Democrats in charge there.

So I think Nancy Pelosi has got restive members who would like to do this. If she -- if it ends up being confined to Conyers and company, probably not much will come out of it.

As for the apparent disagreement in tone between the administration -- the incoming administration and the Congress, we're going to see more of that.

The opposition in Congress is emerging, and it's not really going to be the Republicans, who are essentially really irrelevant at this stage. It's going to be the Democrats who are well to the -- congressional Democrats who are to the left of the nation, to the left, therefore, I think, of where Obama wants to be, and that's going to be the big story, I think, between Congress and the -- and the White House in this -- in these coming weeks.

WALLACE: All right. We have to take a break here, but coming up, we'll take a look at the new team Barack Obama is bringing in with him and a look at the old team that is leaving power. Stay tuned.

(COMMERCIAL BREAK)

WALLACE: On this day in 1957, a trio of B-52s completed the first non-stop flight around the world by jet planes. They landed at March Air Force Base in California after more than 45 hours of flight.

Stay tuned for more from our panel.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

H. CLINTON: I think that the way that this has been hammered out is probably as close as we can get to doing something that is so unprecedented that there is no formula for it.

(END VIDEO CLIP)

WALLACE: That was Hillary Clinton refusing to budge this week after senators from both parties complained about possible conflicts between her husband's fundraising and her new job as secretary of state.

And we're back now with Brit, Mara, Bill and Juan.

Well, if anyone had any doubts about her toughness, and my guess is very few people do anymore, Hillary Clinton gave the back of her hand to complaints from senators of both parties about the fact that her husband is going to continue to raise, apparently, millions of dollars from foreign countries and companies.

Mara, is this going to be a problem down the line?

LIASSON: I think, clearly, she made it clear that she's not going to change anything going in.

Now, are there going to be problems down the line? What I am told by transition people who are also Clinton people -- that he is going to be extremely careful.

There aren't going to be any more of these, you know, Kazakhstan billionaires or whoever it is who goes on the plane with him. That he's going to do some self-policing, because he understands that would be a problem for his wife.

As far as the foreign governments -- I mean, governments like Norway contribute a tremendous amount of money to some of the AIDS work this foundation does, and they feel that that is basically non- controversial.

So this is going to take a lot of self-restraint on the part of Bill Clinton himself and a lot of judgment...

WALLACE: A man who is known for self-restraint.

LIASSON: Yes, that's right -- to avoid problems.

I think that, you know, it would have been a very important symbolic gesture. She might have been well advised to take the suggestions of Richard Lugar and others that she did go a little bit further than the agreement, but she clearly is not going to do that.

And I think that, you know, if Bill Clinton is, you know, well- behaved and exercises good judgment in the matters of his foundation, she'll be OK.

WALLACE: And then, Bill, there is the curious case of Timothy Geithner. As I was discussing with Robert Gibbs, the Obama nominee for treasury secretary didn't pay some back taxes -- I have to say this gives a new definition to chutzpah for me -- claimed a deduction for sending his kids to camp.

And yet the consensus in this town is he's going to skate by. How come?

KRISTOL: Yeah, I don't know. I mean, I myself was dismissing this at first. And everyone does have a sense of, "Oh, let's get over these petty confirmation fights, give him the team he wants, let them govern."

And even I -- but I've been a little bit -- horrified might be too strong, but a little shocked by what's come out. I mean, if you work for the IMF, they're very careful to brief you that you have certain tax obligations, that they're not withholding for you, and he must have known that, and he chose...

WALLACE: And he not only...

KRISTOL: ... and he signed the form, and he...

WALLACE: He signed notices.

KRISTOL: ... chose for whatever reason not to pay it until they forced him to, in effect.

And then he's taking these deductions for -- a child care deduction for sending his kids to summer camp. It's off-putting.

And I actually wonder whether there couldn't be a little more problem. The notion that he's the only person who can run the Treasury Department now is ridiculous.

He's an able guy. Everyone says so. There are plenty of able people who've worked in senior positions at the Fed.

And the truth is, as -- he was head of the New York Fed, supervising Citibank when Citibank was doing all kinds of things it shouldn't have been doing. And I think you can make a case that gee, is he really the guy you want now as treasury secretary?

But I imagine he'll make it through. But I -- this is one that seems to me to resonate a little more than your typical mini-scandal which gets dismissed.

WILLIAMS: Yeah, I wonder, where are the Republicans? Why are the Republicans buying into this guy so heavily?

LIASSON: Because they like him.

WILLIAMS: And I can only assume...

LIASSON: They like him.

WILLIAMS: ... it's because of Wall Street.

HUME: They like him.

LIASSON: Sure, Wall Street wants him.

WILLIAMS: Wall Street -- Wall Street likes Timothy Geithner.

LIASSON: Sure.

WILLIAMS: He has played ball with them on the Citibank deal, and they want to continue -- they want someone they know right there, and they don't want to risk who might come after.

But the most controversial and interesting hearing, I thought, this week was for Eric Holder to be attorney general. And I say interesting because he came out with the business about waterboarding is torture, and that led to the discussion you referenced with Mukasey saying, "Well, are there going to be criminal investigations?"

And when Republicans asked, "Are you going to promise not to go after people," and he said, "Well, no, no one's above the law," he wouldn't offer such reassurances.

And again, if you have the attorney general in that posture, then it sort of opens the doors to what Conyers and Pelosi, to you, were talking about earlier.

I think that and the whole business about Geithner are what strike me, less so than Hillary Clinton.

WALLACE: Brit, let's talk -- with the little time left, as I said -- we've talked about the new sheriff. Let's talk about the old sheriff.

You had a fascinating interview with George W. Bush , the president, last week. And I know he gives this impression he doesn't care about history, he doesn't care about public opinion polls.

He's leaving town, though, according to some of the polls, at an all-time low. Do you think -- I mean, do you get any sense that he's bothered by it?

HUME: Oh, of course he's bothered by it, to some extent. Everybody wants to be loved, and he's -- he has said as much.

I think, though, that somewhere along the line in his presidency, he crossed a divide where he thought he had one principal mission, job one, and that was to keep the country safe.

And I think he thought that was far and away more important than anything else on his plate, and I think he feels he succeeded in that, and that that will stand out in the fullness of time as an enormous achievement, that it was no accident that it turned out this way, that and he leaves office with that intact and accomplished.

And to him, really, that's mission accomplished. And everything else in his view, I think, is secondary. And I think he also feels that he did, on all the main things, however they worked out, the right things for the right reasons.

And I think that's -- that's why his spirits are so high. And of course, you know, this is a man who I think is at peace with himself and with his god, which is terribly important in his case because he is a devout believer.

WALLACE: Mara, you said before the show today, and I was -- I was struck by it, and I want to hear your explanation, that you feel that there's more continuity between Bush and Obama than there is change.

LIASSON: I don't know about more continuity than change, but a lot more continuity than you'd think -- I guess I'd put it that way -- especially in foreign policy.

I mean, the latter -- the end of the Bush administration's foreign policy is not going to be radically changed by President-elect Obama. I mean, he's certainly going to build on what Bush did in Iraq, no doubt about it.

WALLACE: But except we -- I thought we were going to get -- I thought he was going to have a meeting on Wednesday and say get out.

LIASSON: Yes, but we already are on a kind of draw-dawn trajectory there. It's all just a matter of how fast, how many come out.

We have a status of forces agreement with the Iraqis to be out at a certain time. Maybe that's not the exact same date as Obama. But things are going in the same direction, whether it's -- it would be a Bush policy or an Obama policy.

On Afghanistan, there's a consensus now you have to put more troops in there. On Iran, I think if he does have some kind of direct talks, it's only going to be, maybe, to have them fail and then prove to our allies, "Look, you know, we went the extra mile," which is something already that the Bush administration's doing.

WALLACE: Let me just -- Bill, because we're running out of time, do you agree with that? More continuity than change on foreign policy?

KRISTOL: I hope so. Look, and Brit was -- I'm serious, and Brit was right. Job one was keeping this country safe. Job two, the president believed, was winning the war -- the wars to which he had committed us.

Think what the world would look like now if there hadn't been the surge. Think what Obama would be inheriting. I think the president feels that he stood by our fighting men and women and did the right thing.

WALLACE: Thank you, panel. See you all next week. And of course, see you on Tuesday for the inauguration.

And we'll be right back with a final programming note.

(COMMERCIAL BREAK)

WALLACE: This Tuesday, you'll be able to see and hear the inauguration of Barack Obama all across Fox News outlets -- television, radio and the Internet.

On the Fox broadcast network, Shepard Smith will anchor our coverage starting at 9:00 a.m. Eastern.

And on Fox News channel, Bret Baier kicks things off at 8:30 in the morning, and I'll be along for the inaugural ceremony at 10:30. Plus, we'll have the best group of analysts around, led by Brit Hume.

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

END

.ETX

Jan 18, 2009 11:03 ET .EOF

"FOX NEWS SUNDAY"

JANUARY 18, 2009

SPEAKERS: CHRIS WALLACE, HOST

REP. NANCY PELOSI, D-CALIF., SPEAKER OF THE HOUSE

ROBERT GIBBS, INCOMING WHITE HOUSE PRESS SECRETARY

JUAN WILLIAMS, FOX NEWS

MARA LIASSON, FOX NEWS BRIT HUME, FOX NEWS

BILL KRISTOL, FOX NEWS

[*] WALLACE: I'm Chris Wallace, and this is "Fox News Sunday."