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Sen. Bill Frist, Sen. Dick Durbin, Roundtable

Fox News Sunday

CHRIS WALLACE, HOST: I'm Chris Wallace. A reduced role for U.S. troops in Iraq, next on "Fox News Sunday".

The Senate takes a major step toward immigration reform. But will it become law? We'll cover the legislative landscape with the Senate majority leader, Bill Frist, and the Democrats' assistant leader Dick Durbin.

Also, the FBI raid of a congressional office touches off a constitutional conflict and pits Republicans versus Republicans. What does it mean? We'll ask our panel, Brit Hume, Nina Easton, Bill Kristol and Juan Williams.

And on this Memorial Day weekend, our Power Player of the Week honors his fallen comrades, all right now on "Fox News Sunday".

And good morning again from Fox News in Washington. Let's get a quick check of the latest headlines. A senior U.S. military official says security in Baghdad could be turned over to Iraqi forces by year's end.

More peaceful parts of the country will be controlled by Iraqis this summer. The scaled-back role could allow U.S. troop levels to be reduced, but the official says there's still no timetable.

The Justice Department has asked two federal judges to dismiss legal challenges to the NSA warrantless wiretap program. The government says court action could cause grave damage to national security.

And officials in Indonesia say Saturday's earthquake killed more than 4,200 people and injured thousands more. The U.S. and other nations have pledged millions of dollars in aid.

And on this busy and controversial week in Congress, we're joined now by the Senate majority leader, Bill Frist.

Senator, welcome back to "Fox News Sunday".

SEN. BILL FRIST (R-TN), MAJORITY LEADER): Chris, good to be with you.

WALLACE: Let's start with immigration. Here's what you said after the Senate passed a comprehensive package this week. Let's take a look.

(BEGIN VIDEO CLIP)

FRIST: This is a success for the American people. It is a success for the people who hope to participate some day in that American dream.

(END VIDEO CLIP)

WALLACE: Senator, is it a success for the American people that illegal immigrants are going to be able to collect Social Security benefits and even tax credits on past illegal work?

Is it a success for America that American officials must confer with Mexican authorities before they start building a fence on the border?

FRIST: Chris, the success for the American people is that we've got about two million people coming across our borders every year illegally. We don't know who they are. We don't know really what their intentions are. We've got hemorrhaging coming across our border.

So the success for the American people is that our government, the United States Senate, as a first step, have in a comprehensive way addressed a problem that is economic, that is humanitarian, and that has to do with our national security.

It has to be comprehensive, because that's the only way we can stop this hemorrhaging coming across our borders.

WALLACE: But how do you respond -- and I don't want you to go into each individual thing, but there are a lot of measures there which I mentioned. I'm getting a lot of e-mail about them -- I'm sure you are as well -- where people are saying this is a giveaway, we're a sovereign nation.

FRIST: Well, you know, I don't agree with everything in the bill. What I do agree with is that the Senate approach is saying that we've got to be tough on our borders, stop hemorrhaging across our border. Yet we've got to address the fact that we're a magnet to pulling people across the border by not enforcing the laws at our workplace.

The reality that you can't just take 12 million people here, millions of whom are fully assimilated into our society, and send them back, and the fact that we in this country do need a strong temporary worker program with people coming to this country on our farms, in our entertainment industry, in our hospitality industry, in our construction industry.

Those are the realities today. It's not necessarily politically popular. It's certainly not easy, as we've seen on the floor. But I can tell you the bill that came off the Senate floor -- not perfect; I don't agree with everything in that bill -- does reflect the overall will of the Senate.

It's a first step. We're going to go to conference. The president obviously is going to get very involved. And with that, we'll be able to address what is a national security, economic and humanitarian issue.

WALLACE: All right. As you point out, now the real hard work starts. You've got to work out a compromise with the House. On Friday, the lead House negotiator, Congressman Sensenbrenner, rejected the path to citizenship as a non-starter. Here he is.

(BEGIN VIDEO CLIP)

SENSENBRENNER: Well, I reject the spin that the senators have been putting on their proposal. It is amnesty.

(END VIDEO CLIP)

WALLACE: Would you, would the Senate, accept as a compromise a bill that takes out the path to earned legalization?

FRIST: Chris, I think we need to -- if the goal is national security, for example, it is mighty hard to say that we've got 12 million people living out around this country, out in the communities of our viewers today, and say you stay in the shadows, everything will be okay.

I think, you know, politically it is tough, and thus when we say comprehensive, temporary worker program, employer workplace, strong at the border, we do, I feel, have to address the 12 million people to bring them out of the shadows. So we'll see what happens.

The Senate has taken a position which is the position that I just outlined -- not perfect. There are things in there I don't agree with. The House has taken a position that does not look at the temporary worker program.

WALLACE: But I'm going to try and press this. Are you ruling out any bill that would strip out the earned legalization?

FRIST: No, I'm not going to -- I'm going to basically say we've seen the will of the Senate reflected. We've seen the House will. Although the majority leader in the House side, Majority Leader Boehner, said let's get together, let's look for common ground and let's move ahead -- again, it may not be politically popular in every single case, but let's do what's right for the American people.

WALLACE: Your conservative critics say that you have flip- flopped on precisely this issue, and they point out what you said last October when you were asked what should happen to the millions of illegals who are here in the country right now. Take a look.

(BEGIN VIDEO CLIP)

FRIST: They should be sent back. And, again, I will say, in principle, I oppose amnesty.

(END VIDEO CLIP)

WALLACE: Now, you were still saying that same thing as recently as this March, two months ago, and yet you voted precisely for what you were then calling amnesty this week.

FRIST: You know, what we have done and what I did vote for is basically say if you've been here less than two years, you do get sent back. If you came across this border in the last two years -- from two to five years, you go into a temporary worker program.

If you're here greater than five years and you are willing to put another six years and then another five years up for a probationary period, and willing to pay a $3,000 fine, willing to learn English, willing to pay back taxes, willing to have a job, have to have a job, then you can be eligible for citizenship.

So let me go back just real quickly. In October of last year, the same time that clip was, I said we were going to take a border security, strong border security, to the floor. I did exactly that four weeks ago.

I said at that time that we were going to build it out with a strong temporary worker program. We did exactly that -- with strong employer workplace program. We did exactly that.

One last thing real quick is I think the debate has matured a lot. The American people are paying attention and I expect that to continue as we go to conference.

WALLACE: But, Senator, why was it amnesty to provide for these millions -- and the vast majority of them are the ones that have been here more than five years, so it's precisely that group. Why was it amnesty in October? Why was it amnesty in march? And yet you voted for it in May?

FRIST: No, but we did change it. And again, I hope that you and your viewers pay attention to what we actually did in the conference.

The bill that we put on the floor was to get 12 million people here, just leave them out, really no essential barriers there, and what we did is took that bill with compromise and made it into the zero to two years, you are deported, you go back home -- three to five years -- all that's new. That was amendments in the bill.

So the bill was radically changed -- again, not perfect. I call amnesty giving somebody who broke the law a leg up on citizenship. And that's not -- this bill does not do that.

It does give them a 16-year period in which they have to go through certain hoops before they're eligible for citizenship -- five years in the country, six years' probationary period, five years with a green card before they get to citizenship.

WALLACE: I want to ask you, because -- I want to move on to other subjects, but I want to ask you two more immigration questions, so let's try and go through these quickly.

One compromise that some House members are now suggesting is a phase program: Start the border enforcement now, delay the guest worker program until you've certified the borders are acceptable. You are secure. You voted for that...

FRIST: I did.

WALLACE: ... in the Senate and you lost.

FRIST: Yes, I lost.

WALLACE: Would you accept that as part of a Senate-House compromise?

FRIST: Well, no, I personally would, because I think, first and foremost, you've got to lock down the borders. You can't allow this hemorrhaging of millions of people. We caught 1.2 million people last year.

For every one coming across, at least two snuck across. We've got to lock down the borders. I do think we need a strong temporary worker program right now, and I think if we want to keep food on the table right now, that people can come here -- temporary, where people come for a period of time and go back home.

And I do lastly think the employer workplace -- we have to enforce the law of the land. We're not enforcing the law of the land today.

WALLACE: One more housekeeping question. Some Republicans have suggested put this whole conference off until after the November election.

FRIST: No, no. You can't do that. I know, first of all, politically -- I know the politics are out there. And I know people ultimately have to do what's in their best interest for their district or for their state.

But we've got a national security problem. It's an economic problem. It's a humanitarian problem. People are dying coming across these borders.

And if we as a governing party or as the United States Congress can't address these tough issues head on like we did in the United States Senate for four weeks, with good debate, open debate and amendment, improving the bill -- still not yet a perfect bill -- then we really shouldn't be here. It's not politically popular all the time, but we've got to do what's right for the American people.

WALLACE: You met with Attorney General Gonzales on Friday to discuss the FBI raid exactly a week ago of Congressman Jefferson's office.

Do you believe that a raid by the executive branch with a court order violates the separation of powers? And what did you discuss with Attorney General Gonzales?

FRIST: No, no, no. I don't. Was this a raid? I'm not sure if it was a raid or not. I mean...

WALLACE: They went into his office and...

FRIST: If somebody has a search warrant...

(CROSSTALK)

WALLACE: ... files.

FRIST: ... if there are accusations of bribery, of having lost the trust, abused the trust of the American people, criminal activity, no House member, no senator, nobody in government should be above the law of the land, period.

And a search warrant was obtained to go in. So to answer your question, no, I don't think it abused separation of powers. I think there's allegations of criminal activity, and the American people need to have the law enforced.

I don't think it was a separation of powers question. I've looked at it very carefully. There is in the Constitution, in Article I, this whole speech and debate wording. Since this type of event has never occurred in Washington, in the United States Congress, I think we all need to look and see what the clause -- what the case history on that clause means, and that's where the debate is today.

I think we've seen it pretty much put to bed now, I hope. I trust our Department of Justice in looking over and talking to the attorney general. I think they acted appropriately. I do think that we in Congress need to make sure whatever precedent this does set is one that shows that no congressperson is above the rule of law.

WALLACE: So specifically, you're OK, then, with this?

FRIST: I'm OK and I think the president handled it well, because we had tempers flying, and, I guess, people saying that he might retire, resign, and back and forth.

We don't need to be doing that. And so the president came in and put a pause, 45 days, to let things settle down. And I think over the last 24 hours things have really settled down. And I think the lawyers will decide.

I don't think it's an issue of the separation of powers or balance of powers, and so I'm comfortable where we stand today.

WALLACE: Finally, let's talk some politics. How much danger are Republicans in of losing control of the Senate this November?

FRIST: Well, I think right now, when you've got energy prices high, when you've got people, millions of people, coming across our borders today, when you've got the war in Iraq that people are uncomfortable in the sense of seeing people dying every day, not fully realizing the great progress that has been made in the last few weeks in standing up their government, that the environment is very, very tough.

I think our responsibility is to govern with meaningful solutions, taking the tough problems like immigration head on, dealing with them in a way that is civil, that is respectful, will earn and help re-earn the trust of the American people. Our agenda will be to support our troops overseas, secure peace and safety at home, securing prosperity. The economy itself is booming -- 5.3 million jobs in the last three years, 4.7 percent unemployment, lower than average of the '60s, '70s and '80s. That's the good news that's out there to counterbalance the other.

We need to demonstrate to the American people that we can govern with meaningful solutions on the tough problems that are out there.

WALLACE: All right. You talk about a lot of issues that affect people's lives, and yet you're going to bring two constitutional amendments to the Senate floor in the next few weeks, one to ban same- sex marriage, another to ban flag burning, both reportedly in the papers to mobilize your conservative base.

I have to tell you I talked to a Republican senator this week who said he may vote for both of them but said they're both pandering. Are gay marriage and flag burning the most important issues the Senate can be addressing in June of 2006?

FRIST: Let me tell you what the agenda is real quick. Secure America's safety here at home. I mentioned supporting our troops overseas, making sure we pass that supplemental bill, making sure we tighten down our borders, securing America, a healthier America, so we'll continue...

WALLACE: All right, but let's get to these two amendments.

FRIST: No, but let me tell you, because right now there's no prioritization there. Securing America's values -- and I hope tomorrow and today, as people see that American flag -- and I'm going to Arlington Cemetery tomorrow, and I'm going to see that American flag waving on every single grave over there.

And when you look at that flag and then you tell me that right now people in this country are saying it's OK to desecrate that flag and to burn it and to not pay respect to it -- is that important to our values as a people when we've got 130,000 people fighting for our freedom and liberty today? That is important.

It may not be important here in Washington where people say well, it's political posturing and all, but it's important to the heart and soul of the American people.

WALLACE: Sir, sir...

FRIST: Marriage, let me just -- marriage you asked about.

WALLACE: OK.

FRIST: Right now, why marriage today? Marriage is for our society -- that union between a man and a woman is the cornerstone of our society. It is under attack today.

Right now there are 13 states who passed constitutional amendments in the 1.5 years to protect marriage. Why? Because in nine states today, activist judges, unelected activist judges, are tearing down state laws in nine states today.

That's why I will take it to the floor of the Senate -- simply define marriage as the union between a man and a woman.

WALLACE: All right. We have less than a minute left. It's no secret that you're considering a run for president in 2008. You were asked recently about how difficult it is to be the Senate majority leader and considering a presidential run, and you responded with not one but four terribles.

You're going to be out of the Senate next year. You've decided not to run again. Will we see Bill Frist unplugged?

FRIST: You know, we'll see. As you know, I'm a physician. I spent 20 years in medicine. And that is my life. It's healing one on one. And I spent 12 years in the United States Senate, hopefully, being able to participate to a healing process, a better quality of life, of looking at things like immigration and health care and education.

And so I'll make a decision when I leave. I'm pretty comfortable who I am.

I am committed to healing, whether it's doing my best in politics, in policy, or the 20 years I spent in medicine. Then I'll make a decision after we leave.

WALLACE: Senator Frist, we're going to have to leave it there. We want to thank you so much for coming in, especially on this holiday weekend. It looks like you're going to have a busy summer, sir.

FRIST: Yes, indeed. Good to be with you.

WALLACE: Thank you.

FRIST: Thank you.

WALLACE: Coming up, what are Democrats offering the American people? We'll talk with their number two man in the Senate, Dick Durbin, after this break.

(COMMERCIAL BREAK)

WALLACE: Joining us now from his home state of Illinois, the Democrats' assistant leader in the Senate, Dick Durbin.

Senator, welcome back to "Fox News Sunday".

SEN. RICHARD DURBIN (D), ILLINOIS: Thanks, Chris.

WALLACE: One of the features of the Senate immigration bill that has drawn the most fire, as we just discussed with Senator Frist, is this measure that requires that before any building of fences goes on along the U.S. border that the U.S. officials must consult with Mexican authorities.

You, in fact, voted for that, Senator. Is it the view of the Democratic Party that the United States does not have the sovereign right to enforce its own borders?

DURBIN: Well, of course we do. There's no question about it. And we have to start with good border enforcement. The Dodd amendment that you're referring to was part of a manager's package, but I supported it.

I mean, to think that we would build a fence without any conversation or consultation with Mexico -- that doesn't makes sense.

WALLACE: Why do we need a consultation? It's our border. Why do we need to confer or consult at all?

DURBIN: Good fences make good neighbors, too. And remember that when it's all over, there'll be cities across the border from one another in the United States and Mexico, and you'll find in most instances they try to find a level of cooperation.

We ultimately want to have the cooperation of the Mexican government. That's going to make this a lot easier, to stop the corruption on either side of the border, to stop these coyotes that are taking thousands of dollars to push people across that border at the risk of losing their lives.

We should have consultation. There's nothing wrong with that.

WALLACE: Let's discuss, as I did with Senator Frist, the basis for a compromise. Will Senate Democrats accept any bill, as Congressman Sensenbrenner has suggested, that strips out the path to earned legalization?

DURBIN: Well, I'm troubled by that. I don't want to prejudge the conference, because I will be a conferree. There are parts of this bill that I don't like. I voted for Byron Dorgan's amendment which eliminated this guest worker provision.

You know, originally, it was 400,000 a year, and it was going to go up just with no end in sight. And because of amendment by Byron Dorgan and by Jeff Bingaman, we brought it down to 200,000 capped.

You know, I'm worried about the impact on American workers. We tried to put a sunset on it so that in five years we take a look. I don't want to lose American jobs as a result of this. But unfortunately, we didn't prevail.

So there are provisions in this that I'm concerned about. I want to make sure we treat people fairly, we have good border enforcement, but we also have to keep an eye on the American workers, is the bottom line.

WALLACE: Will Senate Democrats accept a bill -- and this is something that apparently is gaining some traction in the House -- that would have a phase program where you have to certify that you have secured the borders first and then a guest worker program kicks in?

DURBIN: Well, enforcement is critical. I agree completely with Senator Frist that the borders are out of control.

Over the last five years we've dramatically increased the personnel at the border and during the same period of time there's been a dramatic increase in illegal immigration. So enforcement by itself is not enough.

You need to do three things. Put that border enforcement as the first priority, and then workplace enforcement. Let employers across America know they can no longer be magnets for illegals coming into this country, that people are going to have to present tamper-proof I.D.s and that employers will be held accountable if they hire illegal people.

And then, finally, we have to deal with the people who are here living in the shadows. It's not amnesty. It's not automatic. As Senator Frist explained, it's a long, tough process that many of them will not complete successfully, but at least gives them a chance.

WALLACE: Senator, what about Speaker Hastert's insistence that he'll only bring up a bill -- if there's a conference agreement, he'll only bring up any bill to the House floor if it's supported by a majority of a majority, which means that most House Republicans will support it? Do you have any problems with that?

DURBIN: Well, Denny Hastert is my friend, and I've heard him say that in the past, and I think it's a good statement for a person who wants to remain as the leader of his own caucus. But I hope that he'll take a look at his national responsibility here.

This is an issue where bipartisanship is essential, and the vote in the United States Senate reflected it, both in the Judiciary Committee and on the floor. And if they can put together a strong bipartisan coalition in the House of Representatives for an answer to a complicated problem, we should do it.

We've waited 20 years to address this. The immigration system is in shambles. We can't walk away at the end of this year claiming political victories. We ought to do something constructive.

WALLACE: Let's talk about the raid on Congressman Jefferson's office last week. At a time when Democrats are trying to make a campaign issue out of an alleged culture of corruption in Congress, is there anything wrong with the FBI, with a court order, going into the office of a congressman where those FBI officials found $90,000 in cash stuffed into his home freezer?

DURBIN: Well, let me say two things. First, no one is above the law -- that's been said over and over again -- including members of Congress.

And second, call me old-fashioned, but I believe in the presumption of innocence. I will tell you, though, in this situation, what we know is overwhelmingly negative against Congressman Jefferson.

Getting down to the point in question here, this is rare. I don't think it's happened in history that the FBI has raided a congressional office. So that's why people in both parties have raised questions.

I asked my staff. I said has the FBI ever raided the chambers of a judge, another branch of government. The answer is yes. So at least there is precedent for going into those who are part of another branch of government.

The only other provision's a speech and debate clause in the Constitution. I'm not sure that you can stretch it to apply to this situation. In the next several weeks, we ought to take a hard look at it. I'm not going to rule it in or out at this moment. WALLACE: But you sound like you're, at this point, having researched it, somewhat favorably disposed toward the idea that the FBI did nothing wrong.

DURBIN: Well, I went to the first question of separation of powers. Can the executive branch, the FBI, raid another branch of government's official offices? And I find yes, they've done that when it comes to judges. So it appears that there's been some precedent for this.

Now, as I said, there are other provisions in the Constitution to look at, but that was the first question I asked.

WALLACE: Do you think, particularly with culture of corruption being such a big issue, that the House Democratic leader, Nancy Pelosi, is making a mistake making such a big issue of this?

DURBIN: No, I think she's trying to be assertive when it comes to any allegations of corruption and they're only allegations at this point. But I think that she has shown that she will be more forceful and show leadership if these allegations come forward. On the other side, on the Republican side, look how long some of these cases have dragged on involving Congressman DeLay and others. I think she is trying to say that given a chance in leadership, she'll be much more forceful in ending this culture of corruption.

WALLACE: All right. Finally, let's talk some politics. I want to ask you the flip side of the question that I asked Senator Frist. What do you think are your -- are the Democratic chances of taking over the Senate in November?

DURBIN: I think we have a chance. I think we have many good candidates across the United States, and I believe that the tide of public opinion is flowing in our direction. People believe that it's time for significant change in direction in this country.

The Bush-Cheney policies are being rejected overwhelmingly. I think the people understand that they have failed. We now have an endless war in Iraq and, sadly, we've lost over 2,460 of our best and bravest young men and women. No end in sight.

We know that the deficit situation is totally out of control. This president is the first president in the history of the United States to initiate a tax cut in the middle of a war.

We have no energy policy. We have no plan to bring health insurance to every single American. There's no vision or leadership in this administration. So yes, the stage is set for the Democrats to step forward in each of those areas and say give us a chance, let us try to take this one-party rule in Washington and bring some balance to government.

WALLACE: Finally, there's a story in today's Chicago Tribune talking about the possibility of Senator Barack Obama running for president in 2008, and you're quoted in that story, Senator, as saying I hope he will seriously consider it. Would you like to see Senator Obama run?

DURBIN: I will tell you this. You have to witness Senator Barack Obama in my state of Illinois, from southern Illinois through the Chicago suburbs, into the city, and across the United States to understand that this man brings something special to American politics.

He connects with people better than anyone I've ever seen. He is the number-one person sought after to speak at Democratic events across the United States of America. I think he has dramatic potential to unite this country, both red and blue. And yes, I'm encouraging him. But ultimately, it's his personal decision with his wife and...

WALLACE: You're encouraging him. As the number-two Democrat in the Senate, you're saying you would like to see him run for president.

DURBIN: I can tell you that I've sat down with him and said you ought to look at this long and hard. I know many people are saying wait, and he may decide to wait. But he ought to take a hard look at it.

WALLACE: Would you endorse him if he did run?

DURBIN: Well, let me tell you, Barack Obama is my closest colleague in the United States Senate. We've worked together on everything for the state of Illinois. And if he makes a plan to move forward, I'm going to be at his side.

WALLACE: Senator Durbin, we want to thank you for talking 2006, 2008. Thanks for coming in. Please come back.

DURBIN: Thanks, Chris. Thank you.

WALLACE: Coming up, our Sunday panel on the political showdown between the White House, the Justice Department and Capitol Hill over the search of a congressman's office. You won't want to miss it.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

REP. DENNIS HASTERT (R-IL), SPEAKER: We're going to protect the prerogatives of the House as far as the Constitution, and we think those materials ought to be returned.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

U.S. SEN. JEFF SESSIONS (R-AL): No one is above the law in this country. This should not be characterized as a raid.

(END VIDEO CLIP)

WALLACE: That was Speaker of the House Hastert and Senator Sessions, two Republicans disagreeing about the controversial seizing of documents from a congressional office.

And it's panel time now for Brit Hume, Washington managing editor of Fox News, and Fox News contributors Nina Easton of Fortune Magazine, Bill Kristol of The Weekly Standard, and Juan Williams from National Public Radio.

Well, the controversy over the raid of Congressman William Jefferson's office last weekend just kept getting richer and richer this week with, as we heard, congressional leaders demanding that all of the records that were seized be returned.

We had two top Justice Department officials -- you can see them right there, the attorney general and the FBI director -- reportedly saying that they would resign if those records were returned to Congressman Jefferson, and the president stepping in to impose a 45- day cooling off period. The records are now being sealed in a Funk & Wagnall jar on -- whatever. I don't know -- what Johnny Carson used to say.

In any case, Brit, what do you make of it all?

BRIT HUME, FOX NEWS WASHINGTON MANAGING EDITOR: Well, it's glorious fun to watch. This is the stuff we live for around Washington. Here you've got this congressman who brought new meaning or real meaning to the term cold cash with 90 grand tucked away in tinfoil and food boxes in his freezer. The FBI thought hmm, maybe something's wrong here, maybe we ought to look in his office. The judge said OK. Dennis Hastert loses his temper about it, in effect, and starts talking through his hat about what the law provides and separation of powers. There isn't a legal authority anywhere who says this was on infirm constitutional ground.

But politically, it's another matter. The administration might have been able to notify leaders on the Hill that this was coming. They might have been able to bring the sergeant at arms or the other officials of the House of Representatives into it and thereby have avoided the ruffled feathers, but that's about all we're dealing with here, is ruffled feathers.

And the demand that the documents be returned strikes me as truly absurd. If this is evidence in a criminal investigation, you don't go give it back. So I think that those people in the Justice Department, the attorney general and the director of the FBI and others, perhaps, who threatened to quit were on solid ground.

The president, I think, may get some credit here for a rather deft defusing of the issue with the Taft-Hartley injunction on the whole cooling off period on the whole thing.

WALLACE: Nina?

NINA EASTON, BOSTON GLOBE: Well, the letter that went out to House Republicans from the leadership probably said it best. The opening line of that was is this a smart battle to fight. Perhaps not. And I think it's probably a battle that even Dick Durbin suggests they're going to lose constitutionally.

Secondly, Democrats handed -- as Brit suggested, they handed -- on a silver platter this case was handed to Republicans, this guy who was videotaped taking a bribe.

WALLACE: We should say allegedly.

EASTON: Allegedly -- yes, these are all allegations. Innocent until proven guilty. However, the alleged crimes are so egregious that Democrats are distancing themselves big time. But this was handed to the republicans.

This was a chance to turn around that party of corruption moniker that the Democrats are trying to stick on them this election year, and Denny Hastert, perhaps with the aid of overzealous FBI agents, managed to turn this into a split between House Republicans and the White House.

WALLACE: Bill, we usually refer to you as General Kristol. I'm now going to refer to you as Mr. Justice Kristol.

BILL KRISTOL, WEEKLY STANDARD: There you go.

WALLACE: Is there no legal basis for concern by congressional leaders? And let me flip it around. What if Congress were investigating a president and they got a court order? Could Capitol Hill police march down to the White House and go in and search the president's files?

KRISTOL: Well, actually, the president can't defy court orders. I think that was the Nixon precedent. Look, there's some separation of powers.

WALLACE: But I mean, it went to the Supreme Court.

KRISTOL: Right.

WALLACE: They didn't just sit there, the Capitol Hill police, with a court order and go into the White House.

KRISTOL: Right. There's no, as I understand it, sort of legal doctrine that lawmakers' offices are somehow sacrosanct. They do have the ability to say what they want on the floor of the House or the Senate. That's a different matter. This seems to have been executed carefully in terms of the FBI search.

So I think on legal grounds, the FBI and the Justice Department seem to be in pretty good shape. Hastert seems to have overreacted.

Maybe it was all a brilliant plot by Karl Rove. I was thinking about this. You know, we now have had four days of news about a Democratic congressman having $90,000 in his freezer and being under investigation for corruption, and it's a phony battle.

I think Hastert and Gonzales and Rove worked this all out in private last week. No, really, why not? I mean, Nina says well, this looks bad for Hastert. No, but look. What are we talking about here? We're talking about a Democratic congressman's corruption, not Abramoff's. So I think it was a very smart move by the Republicans. * JUAN WILLIAMS, NPR: Are you serious?

KRISTOL: No.

WILLIAMS: I just wanted to check.

WALLACE: As a politician once said to me, we're not that smart.

WILLIAMS: Exactly. Right. I mean, the one part of this story that I think we haven't picked up on is that I think that in a sense what we're watching is a proxy fight where you have Republicans on the face of it seeming to defend this congressman who's had two people already plead guilty to bribing him, and now the investigation goes forward.

But what you have is I think Denny Hastert and other Republicans worry that the FBI, that Justice, are going to next go after them in much the same way, and it may be their offices next.

HUME: You mean because of the Abramoff investigation.

WILLIAMS: Because of the Abramoff investigation and the sense that Justice and the FBI regard, you know, political contributions as bribes. And if that's the case, then a lot of what we've seen in the Jack Abramoff case may have tremendous resonance going forward. It may create additional problems. So they don't want the FBI just tracking around doing whatever they want.

And the second thing to say is, you know, there is something to be said as a matter of constitutional principle for keeping the executive branch away from the congressional branch -- I mean, the legislative branch. They shouldn't have a right to spend -- those guys went in there around 7 o'clock.

WALLACE: Eighteen hours.

WILLIAMS: And they were there until Sunday afternoon, from Saturday night to Sunday afternoon. And said they had a filter, but they didn't invite any officials of the House to participate. They didn't inform them.

I just think, you know, they stepped across a line, and it invites people then to say oh, the House of Representatives will let them tap your phones and have secret prisons, but once they start looking at the Congress, oh, then all of a sudden they're in a big dither. I mean, it looks like hypocrisy.

WALLACE: Brit, as I said, the story kept getting richer, because as the week went on, ABC News reported that Speaker Hastert, who was raising such a fuss about this FBI raid, was, in fact, the subject of a criminal -- or involved in a criminal investigation.

HUME: Included in.

WALLACE: Included. Well, we'll get to that in a second. And Hastert then fired back and suggested that this was a purposeful leak to try to intimidate him from his fight with the Justice Department. Let's listen to this exchange.

(BEGIN VIDEO CLIP)

ROSS: Federal officials tell us the congressional bribery investigation now includes the speaker of the house, Dennis Hastert.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

HASTERT: This is one of the leaks that come out to try to, you know, intimidate people and we're just not going to be intimidated.

(END VIDEO CLIP)

WALLACE: What do you think of the ABC story? What do you think of Hastert's charge that there was some connection between that story and the fact that he was upset about the FBI raid?

HUME: Well, there's no way to speak for Hastert's allegation, because we don't know who the official was, the unidentified official in the Justice Department, which could include the FBI, that gave this information to ABC News. ABC News has now fallen back on the idea that well, we really didn't quite say he was the target of an investigation, we just said he was in the mix, that he was included, and they quoted their source in a subsequent story as saying you worded it very carefully, but people aren't reading it very carefully.

Look, ABC News came out with this story, worded the way it was. Included in the investigation, in the mix of the investigation, has an unmistakable implication, and that is the guy's under investigation.

We have now had an absolutely equivocal denial of that, not only from the Justice Department at one level, but when this Business about what well, what about being in the mix came along, Paul McNulty, the U.S. attorney, came out and denied that as well.

This looks like a bad story. They led their newscast with it. The implication was unmistakable. They ought to back off this story, and the sooner the better.

WALLACE: Memo to ABC News.

Nina, let me ask you, though, about the political fallout side of this. I mean, the fact is the president has got a lot of business he wants to do with Congress. Do you see a fallout? Is this going to make it harder for him to do business with the House and with Speaker Hastert?

EASTON: Absolutely. I mean, this continues -- it's going to make it harder to do business on the immigration bill. James Sensenbrenner, the head of the House Judiciary Committee, who opposes the immigration bill, by the way, next week is doing a hearing on this FBI raid matter.

WALLACE: I think he's given it the title reckless justice.

EASTON: Reckless justice. I mean, I think that says it all.

KRISTOL: I disagree. The president has had a pretty good few weeks here. He got house cuts through both houses of Congress and signed that bill.

He's got an immigration bill through the Senate that a month ago everyone said oh, it's going to blow up, they can never have a bipartisan coalition.

And now all you can read in the -- he gets a huge legislative victory and all you can read is the president's problems with the House. There are some problems with the House. But the fact is he has made more progress than anyone expected on key legislative issues in the last month.

He got a judge confirmed Friday, Brett Kavanaugh of the D.C. circuit. General Hayden -- there was supposed to be a great uproar over that. You know, the NSA program was going to make it impossible for him to be confirmed. He's confirmed overwhelmingly. I think the president's doing pretty well.

WALLACE: All right. We need to take a break here. But coming up, the Senate OKs its version of immigration reform. What are the chances a deal can be made with the House? Some answers when we return.

(COMMERCIAL BREAK)

WALLACE: On this day in 2003, President Bush signed a $350 billion tax cut to increase the pace of economic recovery and job creation. It is the third largest tax cut in U.S. history. Stay tuned for more from our panel and our Power Player of the Week.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

KENNEDY: America will be a stronger, fairer, more just place.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

SANTORUM: This legislation, I think, is well outside of what I would consider responsible reform. It's misfocused.

(END VIDEO CLIP)

WALLACE: That's a small slice of the political divide that exists on Capitol Hill over immigration reform.

And we're back now with Brit, Nina, Bill and Juan. It's been suggested that what we're seeing here now in immigration and particularly with the compromise -- or the conference, rather, coming between the House and the Senate is a battle for the future of the Republican Party between the George W. Bush brand of compassionate conservatives and the more traditional law and order, enforcement-only side that we're seeing in the House.

WALLACE: Juan, what do you think is at stake for the Republican Party in what's going to happen now in the conference?

WILLIAMS: As I said last week, I think the president had been building a relationship with the Hispanic community that was going to pay off politically. But in terms of the conference, what he's got to hope is that somehow that the people in the House who have been the hard-liners, the ones who want to build walls, the ones who are, I think, on the wrong side of history here, will realize that it's in the party's best interest to have something of a compromise.

For instance, in the bill that the Senate approved this week you have a situation where they're going to provide for guest workers. But you can do that if you've been here five years or longer.

If you've been here two to five years, you still have to leave the country and go apply for a green card. And if you've been here less than two years, you just have to leave. You just can't do anything.

Imagine trying to get these two to three -- it might be four million people who have been here two years or less out of the country, much less in the House version getting 11 million or 12 million people out of the country. It's not practical, not workable, and it's going to hurt the Republican Party.

So that's the argument that they've got to make in the conference.

WALLACE: Brit, I want to -- before we get into specifics, I want to go back to sort of the bigger, overarching issue. Do you see a kind of divide here on where the Republican Party is going? I mean, is that the overarching issue?

HUME: Yes, I do, and I think that it comes down to really the short- term politics and long-term politics. The short-term politics are all running against the idea of a path to citizenship in particular.

The guest worker program isn't wildly popular either, but it's much more popular. The path to citizenship is what gives rise to the epithet that it's amnesty, and that is what the public is so outraged by.

And I think the -- also, the sense of laxness on the border which, you know, people overwhelmingly sense, feel, is a powerful force here, too. So the momentum politically is in favor of much tougher enforcement, and a lot of people would say that's all that needs to be done now.

I think in the long-term, however, if the Republican Party ends up being seen as the party that wouldn't support this vast and growing segment of our population -- namely, the Hispanics -- then I think that's long-term big trouble for the Republican Party.

The Democrats are in a situation where they can kind of, you know, lie down in the tall grass and wait and see what happens here.

WALLACE: Nina, I mean, let's talk about -- because we are going to get this fascinating thing, and according to Frist, we're going to see it pretty soon, this House-Senate conference.

You've got Sensenbrenner, the chairman of the House Judiciary Committee, the lead negotiator, saying no earned legalization at all, non- starter, forget it. Obviously, there are an awful lot of people, I think the majority in the Senate, who are going to demand that. Is there a basis for a compromise there?

EASTON: Well, I think what -- let's step back and look at what's happening in the House first. The House Republicans, vulnerable House Republicans, are hearing a very vocal segment of their constituents adamantly opposed to any kind of path to citizenship.

They want border security. Even a Chris Shays, a centrist...

WALLACE: Now, tell where he's from.

EASTON: ... from Connecticut, sort of centrist, northeastern Republican -- even he is saying he's hearing from constituents we don't want a path to citizenship, we want border security.

You have nervous Republicans. You have that combined with House Speaker Hastert saying I'm not going to bring a bill forward unless a majority of Republicans are behind it.

So I think even coming out of the House, what you're probably going to have is a bill that addresses border security but does not address this question of what to do with the 12 million immigrants here, illegal immigrants here.

WALLACE: You think that's the result of the conference.

EASTON: And I do think that that will -- that could be the result of the conference, that they kick the longer-term issue to a non-election year and they do just focus on border security.

WALLACE: And do you think the Senate would pass that?

EASTON: If you took out things like making it a felony to be here, the making it a crime to help immigrants here -- if you take out some of those pieces of the House, you know, what else -- I don't see the House compromising. WALLACE: Bill, let me ask you to role-play again. You're not general. You're not justice. You're a Republican congressman running for re-election in a district, and which is better for you, to have a comprehensive package that has tough border enforcement, but has some of these other things that aren't so palatable, or just have no bill at all?

KRISTOL: Unequivocally, to have legislation, I believe. It would be crazy to go home without a bill, I think. I think Chris Shays' -- you know, if Chris Shays' wealthy Connecticut constituents prefer having illegal immigrants working for them as gardeners so they can pay them less than letting these people have a path to citizenship, let them defend that principle.

What is the principle in which you say we have 11 million people here, and we employ them, and we pay FICA taxes for them, and they pay their taxes, and then, what, they don't have any chance to apply for citizenship? I think it's crazy. I think...

HUME: The question is...

KRISTOL: ... they need to stand up to their base.

I disagree that the politics of this -- if House Republicans want to listen to the 5 percent or 10 percent or 15 percent of the people who stand up at town meetings and yell and scream about the national anthem is being sung in Spanish, oh, my God -- that was a big controversy, wasn't that, two or three weeks ago?

Fox News alert, someone is singing the national anthem in Spanish...

WALLACE: Let's not make fun of Fox News alerts, now.

KRISTOL: Someone is singing the national anthem in Spanish, oh, my God. I think they need to stand up on this one and pass sensible, comprehensive legislation.

HUME: The thing I think you need to watch going forward here is how they can craft a compromise on the path to citizenship that might fly. I think the House would accept a guest worker program as long as the border enforcement provisions were tough enough.

The path to citizenship is the sticking point. If it could be redrawn so that an alien would have to go home first, that might be good enough. But if they can't fix that, it won't be -- I don't think it can be in any final bill that could pass the...

WALLACE: Thirty seconds left. Better to have comprehensive if you're a Republican congressman or no bill at all?

WILLIAMS: Oh, better to have comprehensive, especially looking down the path. But I mean, you know, we had American Idol and the big vote this week. Republicans will stay home if you don't say that this Congress can do something, even if it's a flawed bill, but get something done. And that's why the president's going to intervene. You watch. The president's going to play a bigger role.

WALLACE: Thank you, panel. That's it for today. See you all next week.

For more visit the FOX News Sunday web page.

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