Interview with Michael Chertoff

CHRIS WALLACE, HOST: I'm Chris Wallace. Key arrests made in those British terror incidents, next on "Fox News Sunday".

Terror plot in Britain: What's the latest in the plan to blow up car bombs?

And with immigration reform now dead, what can the government do to protect our borders? We'll get answers from Michael Chertoff, the president's top man on homeland security, live, only on "Fox News Sunday".

Then, should Congress legislate fairness in talk radio? We'll hear from both sides, top conservative talk show host Mike Gallagher, and the head of liberal Air America, Mark Green.

Plus, after a year of controversial rulings, what do we know about the direction of the Roberts Supreme Court? We'll ask our Sunday team, Brit Hume, Mara Liasson, Bill Kristol and Juan Williams.

And our Power Player of the Week says death may be certain but taxes don't have to be, all right now on "Fox News Sunday".

And good morning again from Fox News in Washington. Here's what we know at this hour on the terror investigations in England and Scotland.

British authorities have five suspects in custody, including one who's in a hospital, in connection with the Glasgow airport car bomb attack Saturday and the failed car bombs in London.

British police are combing through evidence and surveillance tape for more clues from those explosive-packed cars. And officials in Britain have raised the terror alert to critical. That's the highest level of alert.

For more now, we go live to London and Fox News correspondent Mike Tobin.

Mike?

MIKE TOBIN, FOX NEWS CORRESPONDENT: And, Chris, that latest arrest was effected in Liverpool. The British authorities are rapidly rounding up suspects. The total, as you mentioned, now stands at five.

The first two arrests happened immediately after the attack at the Glasgow airport. The first two suspects were in the SUV when it rammed into the airport terminal. One of them was badly burned. At the moment, he is in critical condition in the Royal Alexander Hospital in Paisley.

The second two arrests happened this morning on the M6, a major traffic thoroughfare here in England. The video is coming from a citizen's cell phone. It was a big coordinated effort involving some 20 vehicles. Armed officers got out in the front, rammed the vehicle and effected the arrest.

Britain's new prime minister, Gordon Brown, urged the public not to bow in the face of what he defined as a long-term threat.

(BEGIN VIDEO CLIP)

GORDON BROWN, BRITAIN'S PRIME MINISTER: ... that's got to come out from Britain and from the British people is that as one we will not yield. We will not be intimidated. And we will not allow anyone to undermine our British way of life.

(END VIDEO CLIP)

TOBIN: Now, while British authorities are saying that the attack in Glasgow and the unsuccessful bombings in London are, indeed linked, Prime Minister Brown is saying that this is the work of Al Qaida borrowing techniques used in Iraq and Indonesia.

Now, a great advantage for the British authorities thus far has been the lack of effectiveness of these terrorists. They have left behind a mountain of evidence right down to cell phone numbers dialed on the phones intended to be used as detonators in the London bombs.

Chris?

WALLACE: Mike Tobin reporting live from London.

Mike, thank you.

Joining us now, live from Milford, Pennsylvania, the secretary of homeland security, Michael Chertoff.

And, Mr. Secretary, welcome back to "Fox News Sunday".

MICHAEL CHERTOFF, HOMELAND SECURITY SECRETARY: Good to be back, Chris.

WALLACE: What's the latest on the investigation into these terror plots across Britain? And what can you tell us about these five men now in custody?

CHERTOFF: Well, as you know, because of your report you just aired a few moments ago, this is rapidly unfolding. There are five arrests.

Obviously, from our standpoint our principal concern is whether there is any link to the homeland. And at this point in time, we do not see any linkage. We don't have any evidence of a linkage.

But that's the issue we're most carefully monitoring, to see whether there is any potential impact here in this country. We have taken some precautions. You'll see some additional security measures at airports and transit points during this holiday week, but that's really a matter of prudence as opposed to a response to a specific piece of intelligence.

WALLACE: Mr. Secretary, any sense where these five men come from, whether they're homegrown Brits or whether they're foreign terrorists, and how big the entire terror operation is over there?

CHERTOFF: I think this is exactly what the British authorities are investigating. And I think it's, frankly, for them to determine when and what to say about the scope of this plot.

It's clearly serious and had the potential to cause a significant loss of life, and it's a reminder once again that we are in a very dangerous time and we are at war with some very dangerous people.

WALLACE: But the British officials are telling the British people that there are links to Al Qaida. What can you tell the American people?

CHERTOFF: Again, I'm not going to go beyond what the British authorities have said. If they are comfortable in confirming that, then that's fine. I have no reason to disagree.

Our focus, of course, is to continue to look to see are there any suggestions that this is part of a specific plot that would be directed at the United States, and we have not at this point seen that.

WALLACE: Fox News has obtained a New York City government threat assessment, and I'd like to put it up on the screen and ask you about it. It says approximately 150 Britons have traveled to fight in Iraq. A number are believed to have returned and formed sleeper cells.

Now, whether that's related to this plot or not, is that true, sir?

CHERTOFF: Well, without confirming specific numbers, I think one of the issues we're increasingly concerned about is the movement of Europeans, including people with European citizenship, into areas of South Asia to get trained and get experience and then the prospect of these people coming back to carry out operations in Europe or in the United States using Europe as a departure point.

And that's one of the reasons I've been very outspoken in the last few months about the need to continue to raise our level of protection and information about who is coming into the United States from the European countries.

WALLACE: But do we have reason to believe that Iraq is becoming something of an incubator, a training ground for, in this case, Brits who then train over there and maybe fight over there against our forces and then go back to their home country?

CHERTOFF: I don't know that I'd go so far as to say that Iraq specifically is an incubator for training. I think there are training activities going on in a number of areas. We saw some people going into Somalia, for example, to support the jihadists there, too.

What I do think we see in Iraq is a laboratory for techniques where people experiment with sophisticated forms of explosive devices, and we do get concerned that that will ultimately lead to importing those kinds of techniques to the West.

WALLACE: Let me ask you a little bit about those techniques. Any idea why the bombs in London didn't go off? What does that tell you about the sophistication of this group?

And what do you make of the fact that the car bombers in London, apparently, clearly, were not suicide bombers?

CHERTOFF: Well, again, I want to be very careful to comment on an ongoing investigation. The British authorities ought to be the ones to give out information.

I would also caution against people who dismiss plots because they say they're unsophisticated.

I dare say, Chris, if on September 10th, 2001 someone had come up and said, you know, there's going to be a plot to hijack airliners with knives and put them into the World Trade Center, that would have been viewed as a very naive and unrealistic plot. And of course, we saw on September 11th that it was quite realistic.

So we take all plots seriously. As you know, we've had a couple of cases in the last month or two in the United States with significant arrests, and we'll continue to treat this matter and these kinds of matters with the utmost gravity.

WALLACE: Now, this New York City threat assessment that I talked to you about earlier also says that an Al Qaida leader in Iraq had called for attacks during the turnover of power in Britain.

Obviously, this past week Tony Blair stepped down. Gordon Brown became the prime minister. Is that true?

CHERTOFF: Well, there have been a number of high profile public statements by Al Qaida leaders in the last several months pointing to all kinds of issues and reasons why there ought to be attacks. So I wouldn't single any particular one out and attribute special significance to it.

But it does tell us as we get into the summer -- and we've traditionally seen attacks carried out in past summers -- that we need to be ever vigilant, that this threat is not going away, and that one of the great measures we can take to defend ourselves is to have regular citizens be alert and call the authorities when they see something that's out of place or suspicious.

WALLACE: I'm going to get to the question of the threat in this country in just a moment, but I want to ask you one last question about the situation in Britain. ABC News is reporting that U.S. law enforcement received intelligence two weeks ago warning of a possible terror attack in Glasgow and that U.S. air marshals were put on flights going into and out of that city. Is that accurate?

CHERTOFF: Well, I don't comment on intelligence matters, but there was a little bit of misinformation in terms of our deployment of air marshals.

We have since last August increased the frequency of our air marshals traveling to Europe, and we've continued to increase that over the last few months.

We haven't singled out Glasgow until a couple of days ago as a particular location for focus, but there has been a strategy of mixing up the deployment of these air marshals, sometimes more in one destination, sometimes more in another destination.

Going forward, we will be doing some enhanced air marshal work and similar types of activities with respect to U.K. travel.

WALLACE: Let's turn to this country. Why aren't you raising the threat level in this country, sir?

CHERTOFF: Well, let me remind you, Chris, that the threat level for aviation is currently at orange and has been since last August when there was the disruption of the U.K. airline plot. So that's already a very high level.

And we're at yellow with respect to the rest of the country. We do not have at this point specific credible intelligence that there is an attack focused -- a particular attack focused in this country.

We do, however, view the summer as a period of special vulnerability, again, based on past experience and what we've seen in terms of public discussion by Al Qaida, and that's why we have taken some plans off the shelf to do some heightened security measures during this coming week at our airports and at our mass transit and train stations.

WALLACE: But again, no specific threats of any attacks, any terror chatter, involving the United States.

CHERTOFF: No specific attack -- no specific intelligence that's credible about a particular attack focused on the U.S. in the near future.

WALLACE: You were talking about the exporting of techniques. Do you have any information or have you heard anything that would indicate that terrorists would like to export the use of car bombs, which have been so deadly in Iraq -- would like to export the use of those weapons to this country?

CHERTOFF: Well, regrettably, Chris, they've already done it. In 1993 we had a car bomb in the World Trade Center which killed a few people. It didn't bring the towers down, but that was a car bomb attack.

And of course, looking beyond Al Qaida, we have the Oklahoma City bombing which was a deadly car bomb.

Unfortunately, the technology for detonating cars has been well known in this country for well over a decade, and that's one of the reasons you see these concrete barriers and other security measures in cities all around the country, because we have learned some very tragic lessons in our own country.

WALLACE: Let's turn, sir, to immigration reform which the Senate killed this week. You had been lobbying for passage of this bill for months, and after it collapsed this week, you expressed your disappointment. Let's watch.

(BEGIN VIDEO CLIP)

CHERTOFF: I'm disappointed about the fact that there were some necessary tools which we needed to be able to do more than we can currently do in enforcing the law that were left on the floor of the Senate today.

(END VIDEO CLIP)

WALLACE: Secretary Chertoff, opponents of the bill say that you already have plenty of tools to enforce the border which you don't use.

CHERTOFF: Well, I just think that's plain wrong. First of all, in the last couple of years we have overhauled border security strategy.

We have had record numbers of removals. We have seen a significant decrease over the past year in the flow of illegals across the border. We've ended catch and release.

We're on our way to doubling the border patrol. We're building hundreds of miles of fencing and vehicle barriers. And for the first time, we're putting integrated high technology at the border.

But there's one thing we haven't been able to do. We haven't been able to require every employer to enter a system in which they check the work status of their employees and determine whether they're legal.

And without that, we don't really have the ability to enforce the law with respect to illegal work in this country in a way that's truly effective. And that would be the single greatest additional weapon we could use if we're serious about tackling this problem.

WALLACE: Mr. Secretary, let me try and clear up some of the contradictions between you and some of the critics of the administration's policy.

Congress passed the Secure Fence Act in October of last year, mandating construction of 700 miles of new fence along the southwest border.

Now, Congressman Duncan Hunter, who comes from that part of the world, comes from San Diego, says that, in fact, in the eight months since then, that the government has built only 13 miles of new fencing. Is that true, sir?

CHERTOFF: Well, what we've done is we are working on and will complete by September -- we'll be up to about 140 miles to 150 miles of fencing.

As anybody who's ever built a fence or a wall knows, Chris, you don't build it one mile at a time. You take a chunk, like, for example, the 35 miles at the Barry Goldwater range in Arizona.

You have to level the ground. You have to put a foundation in. You have to drive in the pillars. And then you put the fencing in. So in that case, for example, we're going to go from a handful of miles to 35 miles within a couple of months.

We're on track to get about 370 miles done by the end of '08. But I do have to say that for people who believe the answer is just fence, yesterday we discovered a tunnel. So fencing is not the cure- all for the problem at the border.

We've got 40 percent of our illegals coming through the ports of entry using legal visas and overstaying. We've got people concealing themselves in vehicles coming through the ports of entry. I've seen this myself.

I think the fence has come to assume a certain kind of symbolic significance which should not obscure the fact that it is a much more complicated problem than putting up a fence which someone can climb over with a ladder or tunnel under with a shovel.

WALLACE: Mr. Secretary, we have about a minute left. Clearly, what came out of this debate and the failure of immigration reform is that a lot of people in this country don't trust you, don't trust the government, to enforce the border.

So why not take the lesson from this failure and go for enforcement first, resubmit the president's agreement to spend $4.4 billion on new enforcement?

You say you don't have some tools when it comes to employer verification. Why not resubmit all of those and challenge the Democrats on enforcement first?

CHERTOFF: Well, Chris, first of all, anybody who says we haven't been enforcing is woefully blind to the facts. We have done more in terms -- and unfortunately, it's been some painful stuff in terms of arrests, 700 criminal cases against employers, raids involving thousands of people, unfortunate pictures of crying children...

WALLACE: But, Mr. Secretary, we're running out of...

CHERTOFF: ... whose mothers are being... WALLACE: I don't mean to interrupt you. I mean, are you going to submit the $4.4 billion? Are you going to resubmit the tamper- proof card? Are you going to resubmit the employer verification or not?

CHERTOFF: I think we're going to say to the members of Congress who think they have a better way that they should produce legislation and pass legislation, which they have not done for the past two years.

They've tried enforcement only. That didn't pass. We've tried comprehensive. That stalled. I think it's now time for Congress, which has the power to legislate, to make a determination about how it wants to help us solve this problem.

WALLACE: But the government, the president, is not going to submit his own plan.

CHERTOFF: Well, we've submitted a budget. We submitted a comprehensive immigration plan. We agreed on $4.4 billion which was going to be secured by the payments made by the illegals so it would not bust the budget.

In the absence of that plan, I think now those who have a better way ought to come forward with that better way. We're still going to work on our part to enforce the border using the tools that we have.

WALLACE: Secretary Chertoff, we're going to have to leave it there. We want to thank you so much for talking with us today and giving us an update on the very latest from Britain.

CHERTOFF: Good to be on, Chris.

WALLACE: Up next, the battle of the airwaves. Should Congress pass a law to put more liberal voices on talk radio? We'll have a fair and balanced debate when we come back.

(COMMERCIAL BREAK)

WALLACE: A political controversy was touched off this week when some congressional Democrats proposed reviving the fairness doctrine which would require broadcasters to present opposing points of view.

Critics say it's a way to use government to get more liberal voices on talk radio.

To sort all this out, we're joined now by conservative talk show host Mike Gallagher, who's in Dallas, and the president of the liberal radio network Air America, Mark Green, who's in New York.

Mike, fairness sounds like a good thing, making sure that all voices, all sides, get heard. Why are you against fairness?

MIKE GALLAGHER, TALK SHOW HOST: Well, right. I mean, who could be against a fairness doctrine? Well, it's one of the most unfair things that this country has ever viewed, Chris.

It's an antiquated 1949 dinosaur that would basically make radio stations try to keep up with conservative views versus liberal views.

And frankly, it's just a transparent effort by sort of whiny liberals to silence the opposition. They don't like the heat that they've gotten from talk radio, particularly over the illegal immigration debate.

Talk radio has widely been credited with sort of galvanizing the American public, and so liberals who don't like what we have accomplished in talk radio want to have the government mandate speech.

It's unconstitutional. It's un-American.

WALLACE: Well, let me bring Mark Green in there.

There are 2,000 talk radio stations around the country. There's cable television. There's satellite radio. There's the Internet.

Don't liberals have plenty of outlets for their views without having the government mandate that they appear on radio?

MARK GREEN, AIR AMERICA: I don't want the government to mandate that. And in fact, the study, Chris, that launched, I think, this segment by the Center for American Progress this week did not conclude that we need the fairness doctrine.

What it did conclude was two things. First, the 1934 Federal Communications Act said that the public airwaves are owned by the public, unlike car companies, unlike newspapers, because it's a scarce spectrum.

And of course, you need government regulation to make sure that 10 companies don't try to share the same frequency. In exchange for that free public license, a broadcaster promises to have diverse views for diverse communities by going through license renewal hearings.

My goal and the goal of that Center for American Progress study is, "Gee, if we're going to give this away for free, at least, broadcasters, fulfill your promise to hear both sides and have local hearings for license renewals."

Right now -- allow me this -- three companies, for example -- Cumulus, Salem and Citadel -- have 1,000 hours of conservative talk and zero of progressive.

Listen, Mike Gallagher may be handsomer and smarter and a better talk show host than I. A thousand to zero is not, Chris, fair and balanced. Its owner is engaging in bias.

GALLAGHER: But, Mark, excuse me.

WALLACE: Let's let Mike in here.

Go ahead, Mike.

GALLAGHER: Yeah, Mark, how many conservative views do you feature on Air America?

I mean, Mr. Green, with all due respect, this sword cuts both ways. And if there as a return of the fairness doctrine, you'd be forced to hire me and people like me for 50 percent of your programming, which would completely alienate your audience.

Mark, you know better. You know that it ruins your business model. This is like having the government mandate what should be said on the pages of the editorial board from the New York Times. It's preposterous to suggest that the government should mandate speech.

Let's face it. You guys just don't like the clout that we've established over the last decade, and you're trying to silence us. That's all the fairness doctrine is.

GREEN: Mike, I don't blame you for pretending that you didn't listen to me. First, I...

GALLAGHER: (inaudible) GREEN: No. No, you didn't. A, I don't want the government to mandate speech. But if the current law says that you give away licenses on the condition that you have license hearings with local communities -- so instead of the government dictating content, which we're both against, you have the audience dictate content.

And how can you defend...

GALLAGHER: But you...

GREEN: One second. And how can you defend three companies that I just named having 1,000 hours of conservative to zero for liberal?

GALLAGHER: Well, I work...

GREEN: Is that fair and balanced?

GALLAGHER: I work for one of those companies. I work for Salem. I'm one of those companies you just derided.

But the reality is the audience does dictate the content. That's why you guys went bankrupt or were headed into bankruptcy court the first time. People don't want to listen to liberals on the radio.

Now you're trying again. And God bless you. I don't want to silence you. But the fairness doctrine would say we've got to have 50 percent views liberal, 50 percent conservative, on a radio station.

That's nonsense, and it shouldn't be regulated by the government in any way, shape or form.

GREEN: This is the third time you said that we want the fairness doctrine. The report doesn't say it, nor do I. In the 1940s and...

WALLACE: Well, I don't understand. Wait a second, Mr. Green. Let me ask you about that, because, first of all, I believe -- and you told our people that you did support the fairness doctrine, but if you weren't going to do the fairness doctrine, what's the point of all this?

GREEN: Here's the point.

WALLACE: Wait. Let me just ask my question. It works better that way. If some station doesn't have -- has completely conservative talk and doesn't want to put on the liberal, then what's going to happen? They're going to lose their license?

GREEN: No. Here's what happens. Under current law, you have to go back to -- we're a network. We don't own a station. But if you're a local station, you have to go to the community for a license renewal proceeding, because the government -- and Mike doesn't disagree with this -- has to hand out licenses.

The audience will say, "Gee, I never hear my point of view. I'm a liberal." "I never hear my point of view. I'm a conservative. How about some more diversity?" The government has to allocate licenses. I don't like...

WALLACE: But basically, my point is, Mark, whether it's the fairness doctrine or government licensing, what you're basically saying is the government would force stations to have opposing points of view.

GALLAGHER: Obviously.

GREEN: Here's the goal. Here's the goal. Stricter media ownership rules so one station can't control half the market. It's called antitrust, Mike, which is a century old, and conservatives and liberals support it.

GALLAGHER: Mark...

GREEN: I am against...

GALLAGHER: Mark...

GREEN: ... public censorship by government. I am against private censorship by companies who...

GALLAGHER: Excuse me.

GREEN: ... like white baseball owners in the 1940s...

GALLAGHER: Pardon me.

GREEN: ... wouldn't hire black players even though it was in their interest.

WALLACE: Wait, wait.

GREEN: The owners of your station...

WALLACE: We're getting a little far away here.

GALLAGHER: Wait a minute.

GREEN: ... won't allow the other side on.

GALLAGHER: Come on.

WALLACE: Go ahead, Mike.

GALLAGHER: Black baseball -- come on. I mean, with all due respect, you're doing what Air America does on a regular basis. You're talking out of both sides of your mouth.

Let me give you a little bit of logic and let me give you a fact for just a moment. You're denying that you want the government to mandate speech on the radio airwaves, and then you turn around and you say you want to have government renewing licenses or not renewing licenses.

The government, because the FCC is a governmental agency -- the FCC regulates the airwaves. You know that. You want the government to step in and not renew a license because you don't have enough liberal views on wildly successful talk radio networks like the Salem radio network, the one I work for.

You can't have it both ways, Mr. Green. You either want the government to step in or you don't.

GREEN: Mike, everybody on this program and listening agrees that the government has to allocate spectrums because it's scarce. Otherwise, you have...

GALLAGHER: Scarce?

GREEN: Yes, it is. And you can set up a...

GALLAGHER: How is it scarce?

GREEN: ... newspaper or an Internet company tomorrow without government approval. But you can't have WNBC in New York have two people trying to control the same spectrum space.

GALLAGHER: Oh, my word.

GREEN: What I want is -- by the way, the law requires -- you don't want to say it -- for 70 years, the law requires license renewal hearings, and we want all sides heard, conservative and liberal.

WALLACE: Guys, let me try to move this conversation, because I think we're sort of repeating ourselves here.

Mark Green, what do you think the effect of the dominance of talk radio -- and it clearly seems to be market-driven. They've just been more successful. What has the effect of conservative talk radio been on our democracy?

GREEN: It's good. More voices is better. But when you say it's market-driven, Chris, you're leaving out two things. When owners like the ones I cited have 1,000 hours to zero, that's not market-based. It's like Sinclair Broadcasting. There are those who...

WALLACE: But wait a minute. Why do you think...

GALLAGHER: Of course it's market-based.

WALLACE: Why do you think you went bankrupt, and meanwhile a lot of the conservative talk show networks and stations are thriving? Is that not the market?

GREEN: Chris, I have good news for you. It took Fox News five years and $500 million of subsidy from Murdoch to be profitable. Air America in its third year is out of bankruptcy, and we are going to be more...

GALLAGHER: Oh, please.

GREEN: Excuse me. I just said a fact, Mike. GALLAGHER: You guys were selling...

GREEN: And we're moving...

GALLAGHER: You guys were selling the furniture to make your payroll.

GREEN: Mike, Mike, I'm sorry to speak...

GALLAGHER: You guys hit a brick wall.

GREEN: I'm sorry to speak while you're interrupting me.

GALLAGHER: That's all right. You go ahead and tell them...

GREEN: We are going to be profitable...

GALLAGHER: ... how successful liberals are.

GREEN: We are going to be profitable -- we are going to be profitable more quickly than Fox.

And so at the moment, we are now turning it around. But the issue is...

GALLAGHER: Hey, Chris...

GREEN: The issue is why some owners are scared of the other point of view like Sinclair Broadcasting, like Cumulus, like Salem.

WALLACE: All right. All right. We're running out of time here.

Mike Gallagher, I'm going to give you a 30-second last word. Go ahead, sir.

GALLAGHER: You got it. With all due respect to Mr. Green's radio acumen, I've been doing this since 1978. Back when he was running for mayor and was a city councilman, I was in the trenches doing talk radio.

GREEN: I was never a city councilman.

GALLAGHER: The fact is liberals -- the fact -- or running for mayor. The fact of the matter is liberals don't succeed in talk radio across the board. I don't know why. It's been debated for years.

The fact is people don't want to hear angry liberals on talk radio. This is our medium. Good luck with your second go-round with Air America. But you're going to go belly up again, and we're still going to be around.

And the government shouldn't step in and tell us what we should say...

WALLACE: All right. Gentlemen, we're going to have to leave it there. GREEN: Randi Rhodes and Thom Hartmann beat you when we're on air. Your owners don't want us to be on air.

WALLACE: OK. Mike Gallagher, Mark Green, I want to thank you both.

(CROSSTALK)

GREEN: ... censorship.

WALLACE: Now I understand. This is talk T.V.

GALLAGHER: Thank you, Chris.

WALLACE: And, Mark, I wish you...

GREEN: Thank you.

WALLACE: ... every success in becoming as successful as Fox News. Thank you both for joining us today.

GALLAGHER: Thank you. Good luck.

WALLACE: Coming up, the Roberts Supreme Court ends its term with a clear move to the right. We'll bring in our Sunday regulars to review what the court did. Stay with us.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. JOSEPH R. BIDEN JR., D-DEL.: Some of the people on this stage and the press criticize me for being awful tough on Justice Roberts and awful tough on Alito.

The problem was the rest of us weren't tough enough on them. They have turned the court upside-down.

(END VIDEO CLIP)

WALLACE: That was senator and Democratic presidential candidate Joe Biden talking about the newest justices and what effect they've had on the Supreme Court.

And it's panel time now for Brit Hume, Washington managing editor of Fox News, 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, in its first full term with both Roberts and Alito on the court, the Supreme Court has clearly moved at least somewhat to the right.

In the 19 5-4 decisions that broke along ideological grounds, the conservatives prevailed in 13 cases.

Brit, how significant a move to the right did you see this year?

BRIT HUME, FOX NEWS WASHINGTON MANAGING EDITOR: Well, it's clear, and I think it is significant. I don't think it's huge, however. What you're having now is 5-4 decisions, and some of them, like this latest schools case, are on relatively narrow grounds.

So the court has moved distinctly to the right but not massively, and it's still a very closely divided court in which, you know, Anthony Kennedy can change the outcome of case after case.

And so that's -- you know, it's tilting right, but it's not -- it's not completely gone right.

WALLACE: Mara, let's look at some of the key rulings from this past term. And let's put them up on the screen. The court upheld a federal ban on partial-birth abortion. It scaled back the McCain-Feingold ban on some issue ads just before elections. It struck down plans using race to achieve school diversity.

On the on the other hand, liberals won a victory in a ruling that the EPA has authority to regulate greenhouse gases.

So, Mara, where do you see the court headed?

MARA LIASSON, NPR: I see the court heading to the right. I mean, I think it was a distinctive move. I think that this really cements President Bush's legacy.

No matter what he fails to accomplish in the domestic arena, now matter how history will judge his intervention in Iraq, I think that he has left an imprint on this country through his appointments to the court for a generation, if not generations, to come. I think we have seen pretty clearly.

And I think that, you know, Chief Justice Roberts said he wanted to respect stare decisis and he wanted the court to be collegial and work through consensus if possible, and those two things have not necessarily been borne out by this term.

BILL KRISTOL, WEEKLY STANDARD: Justice Kennedy was the swing vote in all 24 5-4 decisions.

WALLACE: Amazing.

KRISTOL: It is amazing.

WALLACE: Every single one, including -- there were 19 that broke on ideological grounds. There were four, I think, or five that didn't. They were sort of a mix. Kennedy was in the majority in every one.

KRISTOL: Right. So it's a Kennedy court. I hope it becomes a Roberts-Alito court.

It would be nice if President Bush got another vacancy and could replace a liberal justice with a constitutionalist so we could have even more principled constitutional rulings.

WALLACE: You're a happy man.

KRISTOL: I am a reasonably happy man, but I'd prefer the president to get -- maybe one of these liberal justices could step down next week and enjoy the pleasures of vacations, fly fishing, and all that.

LIASSON: Yes, and the Democratic Senate would comply.

KRISTOL: Well, let them -- I'd like to see the Democratic Senate try to filibuster for a year and a half a well qualified nominee like Alito and Roberts. It would be a good fight for the country, a good debate on constitutional issues. And I think it would be a debate that conservatives would do pretty well in.

WALLACE: Juan, Justice Steven Breyer, one of the liberals on the court, wrote something in his dissent in the school race case that may have summed up his feelings about the whole court, and let's put it up on the screen.

He said, "It's not often in the law that so few have so quickly changed so much." Do you buy that?

JUAN WILLIAMS, NPR: I do buy that. I mean, to me the big difference is Sandra Day O'Connor going away. She was the Kennedy of just the last few years in terms of being the deciding -- the swing vote.

And now you see it -- I think that this is an effort, really -- you know, it's interesting to my mind. Scalia and Thomas actually are not pleased with Roberts. They want him to be more resolute, more conservative.

And to my mind, what you have is the court undoing precedent in such a way as to really shake the foundations. And I think that's not good for the Supreme Court.

Let the legislative branch, let even the executive branch, be the ones who reflect public opinion. But they're making opinion. They're making law rather than holding fast to what we've understood to be laws in these United States.

To me, that's shaking our constitutional government to the ground.

HUME: Juan, look at these particular cases. The school desegregation case -- they threw out a school assignment scheme that had been developed in two communities because they said it was based entirely on race, which they found -- but did they say race could not be a factor?

Did they throw out all consideration of race? They did not. It stopped short of that. And Justice Kennedy was very clear about that.

If the next one comes down, if it's a plan not entirely based on race, it may well be upheld.

Let's look at the partial-birth abortion ban case. Within the text of the decision came a relatively ringing reaffirmation of the basic woman's right to an abortion.

This was a particular practice used in a relatively narrow set of circumstances, which is a pretty abhorrent practice when you think about how it's done.

So I would say yeah, these cases have come down, but they've come down narrowly and they are rather narrowly drawn. I don't think we're seeing foundation shaking here. WILLIAMS: I think you are seeing foundation shaking, Brit. And I think that you're trying to minimize the success that the right wing has had here.

I mean, there's a reason they didn't want Harriet Miers and Alberto Gonzales on this court, as Bill will tell you. They wanted people who were doctrinaire conservatives, and that's what they got in Roberts and Alito.

And for all the talk that Roberts had about trying to work with other people and narrow -- you know what? This is about really changing things.

The school case -- that was about people involved in voluntarily trying to avoid racial isolation, and the court saying, "No, we're not going to allow you even to volunteer on your own basis, no court mandate, do what you want to do."

And in the abortion case, the signal that was sent in this country was that abortion is in danger and that even when it's a doctor saying that a woman's life may be in danger that the law will not allow him to go ahead with a procedure that he may think is in the woman's best interest.

KRISTOL: The abortion case was upholding a congressional law that was passed by overwhelming majority. This was not the Supreme Court imposing its views on the country.

The race cases were truly outrageous race-only assignment, in one case of a kindergarten student to a school 10 miles away from this 5- year-old's home, where the parent preferred a school nearby. It's not voluntary.

And in the high school case...

WILLIAMS: No, no, it was...

KRISTOL: In the high school case...

WILLIAMS: I just want to make this point. It was voluntary on the part of the school district. It wasn't mandated by the court.

KRISTOL: Right. So the school district tried to assign people on the basis of race, which -- in this country, you are not allowed to discriminate or to assign on the basis of race. That's sort of the principles of the Civil Rights Act.

In the Seattle case, incidentally, the schools are totally integrated. The school was 40 percent Asian, 30 percent black, 20 percent white or something.

It didn't quite meet some Seattle bureaucrat's definition of a perfect racial balance, and therefore they had these kids denied the chance -- the parents denied the chance to send their kids to the school they wanted. WALLACE: Mara, let me bring you in on this and ask you about the political aspect of this, because I can remember -- I was at all the debates in 2004, and I remember John Kerry with George W. Bush and saying, "Listen, folks, you've got Sandra Day O'Connor there. A lot of these issues are hanging by one vote. If you want the current standing of the court on these issues to stand, you better vote for me."

It didn't seem to be in all of the exit polls to be a real issue. Now with some of this having been rolled back, do you think -- is the Supreme Court going to really be a voting issue in 2008?

LIASSON: Look. It's always a voting issue for some small number of people on both sides. I think that this has certainly thrown into relief a little more sharply the changes in the court.

I think the Democrats will be able to mount that argument and find more receptive ears for it, to say, "Look what Supreme Court appointments actually do."

The problem is that even if there was a Democratic president, even elected by force of that argument, the people who are more likely to retire -- in other words, the openings that a next Democratic president might have to fill -- are not on the conservative side.

So in other words, even the chance that a Democratic president might have to shift the balance on this court is not going to happen for a very, very long time.

KRISTOL: And it will be a voting issue for conservatives, because the next two resignations, retirements, are likely to be liberal members, presumably Justice Stevens, who's 87; perhaps Justice Ginsberg.

For Republicans, getting a president who will make Roberts- and Alito- type appointments will be extremely important.

Rudy Giuliani, the most socially liberal Republican candidate, was the first person out with a statement Thursday praising the Supreme Court's decisions on race preferences.

It was a very smart move by Giuliani. He's got to reassure social conservatives that while he may not personally agree with them on everything, he will appoint constitutionalist judges, and that's why he made that statement Thursday.

WALLACE: All right.

WILLIAMS: That's not going to help him with women voters, I'll tell you that.

WALLACE: All right. We need to take a quick break here.

But coming up, with -- you do play up the clock, don't you? With immigration reform dead, what do we do now to secure our borders? We'll get some answers from our panel when we come right back.

(COMMERCIAL BREAK)

WALLACE: On this day in 1968, the U.S. and Soviet Union signed the Nuclear Non-Proliferation Treaty to limit the spread of nuclear weapons. One hundred eighty-seven nations have now signed on.

Stay tuned for more from our panel and our Power Player of the Week.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

PRESIDENT GEORGE W. BUSH: I believe we can get it done. I'll see you at the bill signing.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

BUSH: A lot of us worked hard to see if we couldn't find common ground. It didn't work.

(END VIDEO CLIP)

WALLACE: That was President Bush confident three weeks ago about passing immigration reform, but dealing this week with the bill's collapse.

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

So, Brit, what happened?

HUME: What happened is that this bill ran into a wall of opposition that was genuinely grassroots opposition. Yes, it was fanned, to some extent, by talk radio, but they had plenty of facts to work with.

And it was also a compromise reached by a small group of members of the Senate, relatively speaking, that on paper looked like you could hold enough groups together and get it passed, but once this storm erupted over it -- it was undermined in the end, too, by the fact that people simply did not have any confidence.

People who are worried about the enforcement of the borders did not have any confidence that that part of the bill, strong though it may have been, would ever fully be implemented based on the record since 1986. They had a point.

WALLACE: Mara, the bill and this whole plan for comprehensive immigration reform may be dead, but the problems remain.

There are still going to be people flooding over the border. There are millions of people in this sort of shadow status. They're illegal, but they work and pay taxes in this country. Big business is still looking for a cheap labor.

I was fascinated in my interview with Secretary Chertoff, because I asked him repeatedly, "Well, why not go for enforcement first?"

LIASSON: Right.

WALLACE: He didn't want any part of it.

LIASSON: No. I don't think anything is going to happen on this issue until after January of 2009 when we have another president.

And I think for the moment this issue is dead. And of course, the supporters of this bill made the argument, "Well, that's the same thing as silent amnesty, because the 12 million illegal immigrants who are in this country are not going anywhere."

I actually think -- you know, Brit mentioned the fact that people didn't have any confidence in the government, and that certainly is what the opponents kept on saying at the end. They made it -- they were trying to make it into a purely populist issue, this is just a war of the people against the government, it transcends immigration.

I actually think that's not completely true. I think that underlying this was a disagreement with the idea that these people who had come to this country illegally would, even after long waits and penalties, have a path to citizenship.

And I think there also was a kind of overlay of anti-Hispanic rhetoric...

HUME: That's not fair.

LIASSON: ... that occurred amongst a lot of the people who were arguing against this. And I think that that, in the end, is going to hurt the Republican Party over time.

WALLACE: Bill, why would you think that the Republican Party and President Bush wouldn't say, "Look, you guys are asking for enforcement first. Good. We'll do it. We'll put the $4.4 billion back in."

I mean, I'm sort of beating a dead horse here. But why not go for all these measures that were in the enforcement component of the bill?

KRISTOL: You know, I think someone in the Congress will introduce that, and I think it's going to be hard for the president to explain and for Secretary Chertoff to explain why he wouldn't support it.

The secretary said to you that he's very sorry the tools that were useful for homeland security were left on the Senate floor. In particular, what did he mention? Tamper proof I.D. and...

WALLACE: Employer verification.

KRISTOL: ... employer verification, in particular, which would deal not with only people coming across the border, but with people who are already here, getting a handle on who they are.

Why? I mean, if the Senate introduced those proposals, is the president going to oppose them? Incidentally, I think they would pass. I think they would pass.

(CROSSTALK)

KRISTOL: Well, I think they would pass. I think a lot of moderate Democrats are going to have a -- leaving aside your views ultimately on legalization, the proper levels of legal and illegal immigration and the like, if there is a proper level of illegal immigration -- but leaving aside all that, how do you oppose something that the secretary of homeland security says would be useful for the security of the United States?

I'm an employer. I run a magazine. I wouldn't mind. If they tell me it's important to have heightened employer verification...

WALLACE: To ensure that Fred Barnes is legal?

(LAUGHTER)

KRISTOL: Right. Well, that's one -- that would be a price we'd have to pay, you know? For the sake of the country, if Fred has to go, he has to go.

I'm serious. I think someone in the Congress will introduce those enforcement provisions which, again, Mike Chertoff has said are important for national security, and I don't think -- I think it's going to be hard to stop them.

WILLIAMS: I like the way you preach bipartisanship when it comes to something you want done, but when it comes to something that most of America wants done, or as you want -- I'm sure you think in terms of the left or the immigration -- pro-immigration people want done, then it becomes, you know, "Oh, that's too controversial, can't do it, we need to do something else first."

Even President Bush says this can't be done piecemeal, that you have to do it as comprehensive reform.

I'm just troubled now. I think in the aftermath of this you're going to see more state and local governments put in place what I think are sometimes, you know, extreme measures, and they're intended to punish people, and I think they're going to be anti-immigrant. I think Mara is exactly right. Brit said it was unfair to say that this had a smell of bigotry to it. But I think there was a lot of Mexicans go home about this. I think it's a lot of us versus them.

I was talking to someone this week who runs a Head Start program, and they said, you know, they used to get so many people coming in who were Hispanics. No more.

They're afraid to even get involved in any aspect of help because they're afraid the government's going to come get them. There are more raids on local plants.

You know what? These immigrants, Brit -- they are 5 percent or more of our economy. And even people at the White House are saying -- you know how much it's going to cost if you wanted to just house and detain these people? Billions of dollars. It's not rational.

HUME: Juan, I think that everything you're saying is true about the effect of this, and I think it is a very tragic outcome.

But let me make this point. This is the central point that stopped a lot of people from supporting this bill. And that is that people who are here illegally, who didn't wait their turn, who came in and are here, were going to get, before any new piece of enforcement was put in place, a probationary visa which made them, in effect, legal immigrants.

That is what gave rise to the cry of amnesty. And that, I think, was a reasonable argument. That is a kind of amnesty. You weren't legal, and overnight a new law passes and you are legalized. Now, it doesn't mean you're going to be a citizen. It doesn't mean a lot of things. But it means that you're legalized.

WILLIAMS: I thought you said to me a couple of weeks ago, "You know what? It's not amnesty by the dictionary definition, Juan. You know what? When you have to pay a fine, when you have to leave the country, it's not amnesty."

HUME: Well, I agree with that. What I'm saying is, though, you certainly ought to be able to see how that gave rise to the cry of amnesty, because to a lot of people that's what it looked like.

WILLIAMS: I think what gave rise to the cry of amnesty were people who wanted to defeat this at any cost and who, you know, appealed to the talk radio class in saying, "You know, we're going to demagogue this, demagogue this, and echo chamber..."

HUME: Juan, the word I heard applied by the critics of this bill to the immigrants that would benefit from it was not the word Mexican, not the word Hispanic, not the word Latino.

What I heard over and over again was the word illegal. A lot of people simply couldn't get past that. And there's good reason for that.

WILLIAMS: Do you know what most of the polls show on this? The polls show overwhelming -- there's no question, most Americans say we would like these illegal immigrants to become legal because we believe we are a country of laws and we want these people to become part of our legal system.

HUME: The problem with that is -- this is always the problem with certain emotional issues, and that is that whatever the polling may show, the intensity was overwhelmingly with the opponents. And intensity is what moves politics.

KRISTOL: And I think even those general polls are mixed. And I would just make one point. On piecemeal legislation, we've done homeland security in a piecemeal way.

We improve airport security. We don't improve everything all at once. Michael Chertoff said he's building the fence in a piecemeal way. Why no do employer verification and a tamper-proof I.D. card?

WALLACE: Thank you, panel. That's it for today.

Up next, our Power Player of the Week.

(COMMERCIAL BREAK)

WALLACE: Politicians come and go in Washington, but there's another group of powerful operatives who spend decades here trying to move national policy to the right or left.

And there are few better examples than our Power Player of the Week.

(BEGIN VIDEOTAPE)

GROVER NORQUIST: Taxes are the lifeblood of the state, and if we want to limit the government so the people can have more freedom, step one is to limit the amount of taxation that they take from the American people.

WALLACE: Grover Norquist is president of Americans for Tax Reform, a powerful conservative group that for the last 22 years has pushed a simple message: Lower taxes and less government.

But couldn't there be a case either in the federal government or a state government where you actually needed a tax increase?

NORQUIST: No. No. Total government at present, federal, state and local, is 33 percent of the nation's income. There's no need to raise taxes. There is a need to reduce total spending.

WALLACE: The centerpiece of the group's agenda, the Taxpayer Protection Pledge, in which elected officials and candidates promise to vote against or veto any tax increase.

NORQUIST: We have over 190 members of the House who have signed the pledge now, 43 Senators.

WALLACE: Mitt Romney was the first presidential candidate to take the pledge this year. Since then, all the Republicans have signed up except Rudy Giuliani and John McCain, who still promise not to raise taxes.

(BEGIN VIDEO CLIP)

RUDY GIULIANI, PRESIDENTIAL CANDIDATE: We believe in lower taxes, and they believe in higher taxes.

(END VIDEO CLIP)

WALLACE: But Norquist is about more than one issue. Each week he conducts the Wednesday meeting where more than 100 conservative activists discuss how to push their various causes.

NORQUIST: It's the leave us alone coalition. They want to be left alone in the most important zone in their life. For some people that's their business -- don't tax or regulate my business. For some it's their faith.

WALLACE: The meeting started in 1993 to block then-First Lady Hillary Clinton's health care plan.

Now that Senator Clinton is the frontrunner for the Democratic nomination, Norquist says she's even more of a threat.

NORQUIST: She says, "Taxpayers, I'm going to get you. Businessmen, I'm going to get you. Home-schoolers, I'm going to get you."

WALLACE: Norquist was investigated but never charged in the prosecution of lobbyist Jack Abramoff for allegedly agreeing to place news articles and arrange meetings for Abramoff clients. He says he did nothing wrong.

NORQUIST: Where he had a business that hired him that opposed a tax increase, and they contributed to us, we would oppose a tax increase because that's what we do.

WALLACE: Looking ahead to 2008, Norquist is just as adamant there is no Democratic tide sweeping the nation.

NORQUIST: Nobody lost in 2006 because they were too much for taxpayers, or too respectful of people of faith, or too protective of the Second Amendment.

WALLACE: He says the Republicans' big problem is Iraq and that by next year the policy must be the U.S. is in the process of leaving.

NORQUIST: If Iraq is in the windshield in 2008 rather than the rearview mirror, there will be very serious problems for the Republicans. But I don't believe that that will be the case.

(END VIDEOTAPE)

WALLACE: Norquist also tracks what he calls cost of government day, how long we all work to pay for government spending and regulation. And he says it's almost until the 4th of July.

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