Lt. Gov. Parnell, Leaders Hoyer and Boehner on "Fox News Sunday"

Lt. Gov. Parnell, Leaders Hoyer and Boehner on "Fox News Sunday"

By Fox News Sunday - July 5, 2009

WALLACE: Hello again and happy 4th of July weekend from Fox News in Washington. And what a weekend it's been, with Sarah Palin 's stunner of an announcement that she's leaving office later this month.

Saturday Palin posted a statement on Facebook that cited a higher calling to advance the country along conservative principles.

To help sort out why Palin is stepping down and what she does now, we welcome from Anchorage Alaska's lieutenant governor, Sean Parnell, who takes over from Palin in just three weeks; from Austin, Texas, the architect of two presidential victories, Karl Rove; and from Little Rock, Arkansas, former governor Mike Huckabee, who ran for president last year.

Lieutenant Governor Parnell, Sarah Palin called you into her office on Wednesday night to drop the bombshell. In a couple of sentences, because I'm sure a lot of people are still a little bit confused, why did she say that she is dropping out?

PARNELL: Well, good morning. You know, I think what I heard from the governor really had to do with the weight on her, the concern she had for the cost of all the ethics investigations and the like, the way that that weighed on her with respect to her inability to just move forward Alaska's agenda on behalf of Alaskans in the current context of the environment. So that's what I saw.

WALLACE: So basically, she was saying that all of the personal attacks, all of the ethics attacks -- that that was preventing her from doing her job. That's why she decided to quit.

PARNELL: Well, and the fact that it cost -- it was costing just about $2 million of state taxpayers' dollars just to fund the staff to deal with the records requests and the like, and that -- that was just over the top, and I think she used the word insane in her -- in her remarks.

WALLACE: Lieutenant Governor, I know there's bad blood between Palin and Alaska's Republican senator Lisa Murkowski , because Palin beat her dad when she ran for governor.

But I want to put up Murkowski's full statement about all of this. "I am deeply disappointed that the governor has decided to abandon the state and her constituents before her term is concluded." Does Senator Murkowski have a point?

PARNELL: You know, I was actually disappointed when I saw the senator's release. And does she have a point? I don't think so. I think what the governor did was actually look out for Alaskans in this.

She made the comment, "I need to pass the ball when I've got the four court press on me so we can move Alaska forward." Governor Palin accomplished more in 2.5 years in office than most governors accomplish in one or even two terms here. So in that context, I don't think so.

WALLACE: Karl Rove, let me bring you in. You're as plugged in to Republican politics as anyone in this country. What are you hearing from insiders that you're talking to about why Sarah Palin decided to step down?

ROVE: Well, they're a little perplexed because she -- if she wanted to escape the ethics investigations and save the taxpayers money, she's now done that, but it is -- it sort of sent a -- sent a signal that if you do this kind of thing to a sitting governor like her, you can drive her out of office.

Also, she's not going to be able to escape media attention. If she thinks somehow that she's going to be able to protect her family against the kind of things that she's suffered over the last couple of months from David Letterman and others, and seek a role of leadership for effective change for our country, as she said in her speech, she's not going to be able to do it.

The media, if she wants to run for president, is going to be following her intensely for the next three years.

WALLACE: Governor Huckabee, are these the actions of somebody who wants a career in national politics or somebody who wants to get out?

HUCKABEE: Well, it's a risky strategy, and nobody knows whether it's going to pay off or not. And even if she did get out, primarily because of the -- a feeling of being chased, that's not going to stop if she continues in politics.

The only way that stops is for her to completely exit the stage and the spotlight. And on that point, I totally agree with Karl.

I think the one thing that I wondered about tactically was hastily calling a news conference that ended up raising more questions than it did answer them.

And my political mentor, Ed Rollins, the other day on his radio show brought that up, that you don't call a press conference that creates questions. You call one to resolve them.

WALLACE: Governor Huckabee, almost every politician is on the firing line. You may not have been to the degree as governor of Arkansas that Sarah Palin was once she achieved national prominence. But what about this argument, "I'm doing this for my state because the attacks against me are getting in the way?"

HUCKABEE: Well, if that had been the case for me, I'd have quit about my first month, because I was a Republican governor in a state where 89 percent of my legislature were Democrats.

I had constant ethics complaints filed against me, even by newspaper editors, and a lot of it was because if they can't attack you on policy, what they do -- they just absolutely bombard you with personal attacks and keep you tied up in court, make you hire lawyers. Been there, done that.

Arkansas was a tough political environment, period, even tougher for a Republican, and one of the things you have to do is just decide, "Look, they're not going to, you know, chase me out."

Now, what they do -- they throw all this stuff at you, and then they say, "Oh, there's a pattern of ethical issues." Actually, what the pattern is is a pattern of phony charges being filed by the opposition party.

The danger that Sarah Palin faces -- and let me be very quick to tell you, in the way of full disclosure, I'm a Sarah Palin fan. I like her personally. I like her points of view. I think she's right on the issues. The challenge that she's going to have is that there will be people who say, "Well, look, you know, if they chase you out of this, it won't get any easier for you at other levels of the stage."

WALLACE: All right. Let's talk about those other levels.

Karl, let's talk about Sarah Palin 's future. Does her decision to step down in the middle of her term, not serve out her full four years -- does that help her or hurt her if she has any hopes of becoming president?

ROVE: I think it hurts. When you're a sitting governor, you have the tactical advantage if you're thinking about running for president of turning down a lot of things with an excuse that people will accept -- "I've got a job to do as governor." She's now removed that.

So now the expectations are going to be she's going to be fully available, she's going to be able to come to the lower 48, and she's going to be able to do whatever people ask her to do, and that's going to be a problem. It raises the expectations.

It's also unclear what her strategy is. Again, she said she wanted to lead effective change outside of government. Well, now we're -- now people are going to be saying, "What is it that you mean by that? And how are you -- demonstrated effective leadership for change around America?"

I'm like Governor Huckabee. I'm a fan of Sarah Palin 's. But the effective strategies in politics are ones that are so clear and obvious that people can grasp it.

It is not clear what her strategy here is by exiting the governorship 2.5 years through the term and putting herself on the national stage that she may not yet be prepared to operate in.

She did a great job during 63 days during the fall campaign of 2008, with 63 days from her emergence in Ohio to the election date. But now she's going to have hundreds and hundreds and hundreds of days between now and the 2012 election, and she's going to raise expectations about how well and how visible she's going to be early on in those -- in that struggle.

WALLACE: Governor Huckabee...

PARNELL: Hey, Chris, can I jump in?

WALLACE: Yeah, sure, go ahead.

PARNELL: Well, I appreciate being able to jump in here, finally.

You know, Governor Huckabee made a point. He was comparing his experience as governor of Arkansas with Governor Palin's of Alaska. And I have to tell you that I think they're -- they're miles apart in terms of what he faced versus what she faced. She became a national figure -- an international figure during the last presidential race. That's a clear distinction. What that means is that she not only had the local press after her, the local party after her, she had the national -- national candidates, national party, after her -- international, perhaps, even.

Beyond that, she has plenty of time now within which to define how she will further her core values. But I have to tell you, when she went to Kosovo and visited our Guard members and the wounded soldiers there and in Germany, she saw that she doesn't need a title to effect change and bring some hope to people who need it.

WALLACE: Well, I'd like both Karl and Governor Huckabee to respond to that.

And let me throw one other point into the mix in support of Governor -- Lieutenant Governor Parnell's comments, and that is our very own Bill Kristol, who was pushing Palin as McCain's running mate before McCain had seriously considered it, said that, you know, this is a risky strategy, but it's crazy like a fox.

She doesn't -- she's not going to convince the skeptics with another 18 months as governor. This gives her an opportunity to write a book, make speeches and travel around the country.

Governor Huckabee?

HUCKABEE: I think there's -- there's some wisdom to that. It could be a brilliant strategy. The point is we don't know. It's risky in that there's no forgone conclusion as to whether it will play out as to give her some sort of reprieve from the national stage or simply to give her opponents -- and let me be very clear.

In a primary, this is going to be an issue she'll have to face. Will she be able to withstand the pressure?

And I think that Governor Parnell's comments regarding the Arkansas stage -- I'll be honest with you. The experience that I had in Arkansas politics was far more brutal than running for president. And in a primary, it may not be quite the same.

But I'm telling you, when your opponents within your own team spend millions of dollars to redefine you, it's very, very difficult. And she'll have to face that if she runs in 2012.


ROVE: Well, she can't be a conventional candidate. She's never been one. She's putting herself in a place where, unless she comes up with something new and novel that demonstrates leadership for effective change outside of government, as she said in her speech, then she's going to be conventional.

She cannot simply count on going around and collecting chits by campaigning for Republican candidates in 2010. She's got to demonstrate leadership. She also, I repeat, has lost control of her time. She had the excuse of being able to say, "I'm the governor. I've got things that I've got to do." Now people are going to be clamoring for her, and the expectations are going to be out of sight.

She went to Kosovo as governor. She had a platform there as governor. The question now is what kind of idea does she have about the platform she will have during the next three years. This is a personal decision. It's a risky strategy. She marches to the beat of her own drum, and it's going to be very interesting to see how she pulls this off.

WALLACE: Finally, Governor Huckabee -- and we've got less than a minute left -- when you take a look at Governor Sanford confessing his personal affairs, John Ensign confessing his personal affairs, Sarah Palin dropping out as governor, as a possible candidate in 2012 do you feel like you're gaining by just staying on your feet?

HUCKABEE: Oh, I thought you were going to ask me if I had something to confess here today, Chris, and I was going to tell you...

WALLACE: Well, we all do.

HUCKABEE: ... (inaudible) no.

You know, I just re-signed my deal with Fox for the next three years, so right now I'm very comfortable doing what I'm doing. And I know everybody assumes that I'm, you know, going to make another shot at it. But honestly, it's a brutal experience. I'm not sure that that's in my future. I just don't know at this point.

But right now I know that, you know, it's going to be a wide open field, and it may be a lot more narrow in the sense of the number of candidates, but the field itself is wide open. And I think we'll see other people emerge that we haven't heard from yet.

WALLACE: Lieutenant Governor Parnell, Karl Rove, Governor Huckabee, we want to thank you all so much for joining us this holiday weekend. And I bet we'll be talking about Sarah Palin some more.

HUCKABEE: Thanks, Chris.

PARNELL: Thank you.

ROVE: You bet. Thank you.

WALLACE: Up next, news out of Afghanistan, Russia and North Korea has the U.S. military on watch. We'll get the latest from the nation's highest ranking officer right after the break.


WALLACE: Joining us now, the chairman of the Joint Chiefs of Staff, Admiral Mike Mullen .

Admiral, welcome back to "FOX News Sunday" and happy 4th of July weekend, sir.

MULLEN: Good morning, Chris. Happy 4th to you.

WALLACE: You join the president in Moscow tomorrow for a summit with Russian leaders. They have now agreed to open their airspace to flights of U.S. troops and weapons over Russia into Afghanistan. How much will that help with the war effort?

MULLEN: Well, any effort in terms of being able to support the kind of logistics effort that is significant is very helpful.

And as we were talking just before we -- I came on, I was just in Russia last week, met with my counterpart -- the first time that I'd been there to meet with him -- to discuss -- to renew -- move towards renewal of military relationship with the Russians.

And that will be an important part of this summit as well.

WALLACE: Well, I want to pick up on the state of U.S.-Russian relations. Here's what President Obama said this week about the message that he intends to bring to Moscow. Here it is.


OBAMA: The old Cold War approaches to U.S.-Russian relations is outdated -- that it's time to move forward in a different direction.


WALLACE: From your meetings, do the Russians agree that the Cold War is over or, as Mr. Obama said about Prime Minister Putin, that they have one foot in the old way of doing business and one foot in the new way?

MULLEN: Well, I've met with my counterpart twice, once in Helsinki several months ago and then again last week. And the indications I get from him are he's anxious to move forward.

We have things in common that we need to work on. Afghanistan -- neither country wants to see the Taliban return to Afghanistan. The kind of efforts we share in counterpiracy, counterterrorism, a focus on Iran -- and we obviously have areas of difference. I would cite missile defense as certainly a big one.

WALLACE: But do you have a sense that the Cold War is over in their minds or not?

MULLEN: Well, I think -- I think they want to move forward. I mean, that's -- from my counterpart, certainly, the indication is they do want to move forward, and they want to do it in a way where we look -- basically deal with each other from positions of respect. And certainly, that's how I've approached my interaction with him.

WALLACE: You pointed out one of the areas where you're disagreeing, and that's missile defense, and particularly the Russian objection to the setting up of a missile defense system in Eastern Europe.

There's nothing in the Obama budget for that system. Is the president committed to installing it in Eastern Europe, or could he conceivably make a deal with the Russians?

MULLEN: Well, he's directed us to undertake a very extensive review, and that is ongoing and won't be done until this year.

The whole issue of missile defense from my perspective is focused on defense of Europe. Obviously, the Russians see it differently. So I think we've -- we're going to have to work our way through that.

I visited Poland as I left Moscow the other day, and certainly they're anxious to see us move forward. And clearly, we've had engagements with Czechoslovakia as well. I think all of that is certainly a part of what will be determined later this year.

WALLACE: But I'm just trying to get a sense -- as the president sits down with the Russian president and prime minister, is missile defense in Eastern Europe negotiable?

MULLEN: From my perspective, that's something that President Medvedev and President Obama are going to have to work their way through, and the details of that will be -- will obviously be part of the discussions that they undertake later this week.

WALLACE: Speaking of missile defense, the North Koreans fired seven -- seven -- missiles...

MULLEN: Right.

WALLACE: ... on Saturday and four missiles on Thursday. What are they up to, Admiral? And do we think that they're still going to launch a long-range missile towards Hawaii?

MULLEN: Well, they certainly still have that potential. These seven missiles that were fired yesterday were relatively short-range. It's similar to what they did in 2006. He's clearly trying to send a message. That said, I think -- and it's a clear violation of the United Nations Security Council resolution.

WALLACE: What do you think's the message they're trying to send?

MULLEN: Well, I think that -- I mean, the -- I believe that the international community has to continue to come together. I think the international community has stayed strong with respect to this Security Council resolution.

WALLACE: But what do you think is the message that the North Koreans...

MULLEN: Well, it's very difficult to figure out exactly what the North Korean leadership is up to. It's not predictable historically. He clearly wants to continue to be belligerent and thumb his nose at the international community.

And beyond that, it's difficult to tell. But it's very destabilizing, potentially.

WALLACE: Admiral, as I just said, 11 missiles fired in three days -- is this any time for the president to be cutting missile defense as he does in his new budget?

MULLEN: I'm comfortable. We've worked our way through the missile defense readiness that we need right now, and I'm comfortable with the preparations that we've taken that we can defend our interests very specifically.

Again, I think the long-term future with respect to missile defense will be determined in how we move forward with this review and the various pieces -- the Navy piece, the land-based piece, the air side of this -- that we put together in the long run.

WALLACE: In Afghanistan, the U.S. has launched a new offensive with 4,000 Marines in Helmand province. How certain are you that this new strategy, which is certainly based on the troop surge in Iraq -- that it's one that will work and that they will be able to hold presidential elections in Afghanistan next month?

MULLEN: Well, I'm very comfortable that we have the troop -- the troop numbers about right in the south. That offensive just started.

The whole goal of this is to provide security for the people of Afghanistan. They really are the center of gravity. And that leads to an environment that supports elections later this August. That's a big milestone in that country. And we want them to be open and free and fair and be able to provide as much security as we possibly can between now and then.

WALLACE: You talked about troop levels. I want to talk about not just in southern Afghanistan but throughout the country...


WALLACE: ... because there seem to be mixed messages this week about our troop level policy for Afghanistan.

National Security Adviser James Jones was quoted this week as telling U.S. commanders they are not to expect any more troops beyond what the president has already promised.

You were quoted the next day as saying the top new commander, General McChrystal, is going to make a review, and he can ask for as many troops as he wants. Admiral, which is it?

MULLEN: I've had -- I've had discussions with General Jones, also with the president, and I think we're all committed to making sure we resource this correctly.

President Obama has committed the forces that we've asked this year. General McChrystal, who is the brand-new leader there, is in the middle of an assessment. He'll come back in about 45 days with his assessment in terms of what he needs.

My guidance to him had been, "Tell us what you need, and then come back and we'll work that." And it's guidance that both General Jones and the president understands and support.

I think one of the points is we have to make sure that every single American that is there is one that we absolutely need.

In addition, the commander on the ground has to assess with a new strategy, and he's a -- and new leadership -- really zero base -- not just what's there, but what he needs for the future, and we expect that sometime the end of July or middle of August.

WALLACE: What's the latest about the missing American soldier? Who's holding him? And have they made any demands?

MULLEN: Well, I wouldn't get into any details about that, but -- in terms of the kinds of things that could compromise the efforts. Clearly, we've got a full court press on trying to find him. We're doing everything we possibly can. And obviously, it's a very difficult situation, but we're very focused on it.

WALLACE: In our last minutes, I'd like to do, to the degree that you're comfortable with this, a lightning round of quick questions and quick answers.

Vice President Biden has told Iraqi leaders that if that country returns to sectarian violence that the U.S. is likely to end its commitment. Do we mean that?

MULLEN: What I've seen with our troops coming out of the cities in the last week has been very positive. The politics are really critical in Iraq between now and over the next, certainly, months as they look to elections in January.

So I think the message there is clearly that the political leadership in Iraq has to do as much as they possibly can to make sure security is sustained.

WALLACE: But if they were to devolve back into sectarian violence, we are prepared to just wipe our hands of it?

MULLEN: Well, that's a decision, obviously, for the administration, certainly for the president. But we're not there right now, and I don't see the trends -- anything at this point leading in that direction.

WALLACE: Given the political repression in Iran in the last few weeks with the election and then the crackdown, the brutal crackdown in some cases, on the protests, do we want to keep trying to engage the Iranian regime?

MULLEN: That's a decision for the president to make. Very clearly, I'm -- as everyone was, I'm -- and is -- troubled by the level of violence and what happened but wouldn't comment extensively on the political events inside a country like this.

But I remain concerned about Iran. On the military side, they still continue to develop nuclear weapons. They still support terrorism. And I think they're a country that we're going to have to deal with.

WALLACE: A report in the Washington Times this week said that you believe that a military strike against Iran would spur Iran's nuclear facilities, would spur a bloody retaliation against U.S. interests in the Middle East and around the world, and that you have come to believe we're going to have to learn to live with an Iranian nuclear weapon. Is that true?

MULLEN: Well, actually, I honestly didn't even -- I didn't see that report. I've been one who have been concerned about a strike on Iran for some time because it could be very destabilizing, and it is the unintended consequences of that which aren't predictable.

That said, I think it's very important as we deal with Iran that we don't take any options, including military options, off the table. And that's something that the president is certainly both aware of and he obviously has to make decisions about how he's going to continue to approach Iran.

WALLACE: Which would be more destabilizing, the blowback from a military strike against the nuclear establishment in Iran, or Iran having a nuclear weapon?

MULLEN: I think -- I think both outcomes are really, really bad outcomes. And that speaks to the very narrow space that we have to try to resolve this so that neither one of those things occur.

WALLACE: Admiral Mullen, we want to thank you. Thanks for coming in today. Safe travels to Russia later this -- later today.

MULLEN: Thank you, Chris.

WALLACE: Coming up, the two House leaders on health care reform and what can be done to kick-start the economy. Back in a moment.


WALLACE: Joining us now to talk about the economy, health care and more are the two top men in the House of Representatives. Democrat Steny Hoyer is the majority leader, and Republican John Boehner is the minority leader.

Congressmen, welcome back to "FOX News Sunday."

HOYER: Good to be with you, Chris.

BOEHNER: Hello, Chris.

WALLACE: Back when the Obama team was pushing its stimulus plan, it said that it would keep unemployment below 8 percent. This week we all learned it's now 9.5 percent, and the Republicans have put out a video about a bloodhound searching for stimulus jobs. Let's watch.


NARRATOR: Finally, the dogs tracked down something. In North Carolina, they used stimulus money to hire one new state worker. His job -- apply for more stimulus funds from the taxpayers by the way of the federal government.


WALLACE: Congressman Hoyer, can you honestly say you're satisfied with the stimulus?

HOYER: I don't think anybody can honestly say that we're satisfied with the results so far of the stimulus. But we believe the stimulus was absolutely essential. Mark Zandi, as you know, who was one of McCain's economic advisers, says it's going to create 2 million jobs by the end of next year, and...

WALLACE: But why hasn't it done more faster?

HOYER: Well, we're disappointed that it hasn't done more faster. John and I were talking earlier about getting money out more quickly. We need to do that. We're disappointed.

But after all, the ad's being run by a crowd that created about 4,000 jobs per month, the worst job creation performance in 75 years, and lost 2 million jobs the three months before the Obama administration came in, so they haven't had such a hot track record. We're disappointed that we inherited such a tanking economy. But we're trying to do everything we can to get it moving again.

WALLACE: I think, Congressman Boehner, he's talking about you as he says that. President Obama defended the stimulus this week. Let's take a look.


OBAMA: The recovery act was designed to make sure that local school districts didn't lay off teachers, and firefighters, and police officers, and it's done its job.


WALLACE: Congressman Boehner, the Democrats say that unemployment would be a lot higher without the stimulus package.

BOEHNER: Listen, we argued early in the year when this bill was being debated that the way to help the economy grow is to help small businesses and American families keep more of what they earn, because at the end of the day they're the ones who can get the economy going again.

This was supposed to be about jobs, jobs, and jobs. And the fact is it turned into nothing more than spending, spending, and more spending on a lot of big government bureaucracy.

In Ohio, the infrastructure dollars that were sent there months ago -- there hasn't been a contract let, to my knowledge. And the fact is -- is I don't believe it will create jobs.

The president said earlier this year we're not going to see unemployment above 8 percent if we pass this bill. And the fact is we have.

And, Steny, the real question is where are the jobs. You can't spend $800 billion of taxpayer money and not create jobs when you say that's what the goal was. We haven't seen the jobs yet.

HOYER: We have obviously invested in health care. We've invested in education. I think the president's absolutely right. We would have lost more jobs but for this investment, and economists agree with us.

As a matter of fact, a lot of economists on John's side of the aisle agreed with the stimulus package. But this...

BOEHNER: No, no, no. They agreed...

HOYER: John, let me just finish.

BOEHNER: They agreed that we needed a stimulus bill.

HOYER: Let me just finish. John's message is the same message we heard in 2001, the same message that supported an economic policy that led us to the worst economic times that we've...

WALLACE: Gentlemen, let's look forward, not backwards. And I guess the question becomes -- because you say -- you both say you're disappointed with the stimulus, and that it hasn't created jobs, so...

HOYER: Disappointed with the results so far, Chris...


HOYER: ... not with the stimulus.

WALLACE: So is the answer a second stimulus? Is it to revamp the current stimulus? What are you going to do to get money out and create jobs faster?

HOYER: Well, we have to get the money that is already in the stimulus bill out, and we're looking at that. Jim Oberstar is looking at that from the infrastructure standpoint.

We're looking at that in all the areas, through the cabinet officers, that we need to get this money out more quickly.

John's right. I'm disappointed, he's disappointed, that the money hasn't gotten out more quickly. And we're disappointed...

WALLACE: But would you favor a second stimulus? Because some Democrats are already saying the problem with the stimulus was it wasn't big enough.

HOYER: Well, I don't say that at this point in time. We'll have to see. We certainly want to see how this develops over the next few months.

But we've got to understand we inherited 2 million jobs being lost in the three months before we took office. The policies that were put in place were put in place about 130 days ago -- not eight years ago, but 130 days ago.

BOEHNER: Come on, Steny, you sound like the kid who showed up without his homework every day...

HOYER: Come on.

BOEHNER: ... and he wants to blame the dog for eating his homework. The president said unemployment wouldn't get above 8 percent. We said early this year that this plan was not going to work.

WALLACE: Well, can they fix the...

BOEHNER: We agreed that we needed a stimulus plan, and our plan...

WALLACE: Looking forward...

BOEHNER: ... cost half as much and, according to the same economists, would have created twice as many jobs.

WALLACE: Congressman Boehner, looking forward, can they fix the current stimulus, the $787 billion stimulus plan that Congress passed?

BOEHNER: All it does is fund more government. If you really want to get the economy going, you have to trust small businesses and the American people to reinvest their own money. So we (inaudible) into this bill and allow them to keep more of what they earn.

HOYER: John's plan was what they proposed in 2001. Chris, I don't want to look back.

BOEHNER: It created 5 million new jobs.

HOYER: No, no.

BOEHNER: Five million jobs.

HOYER: No way.

BOEHNER: Yes, sir.

HOYER: No way.

BOEHNER: Five million jobs it created.

HOYER: Your figures are dead flat wrong.


HOYER: Less than 2 million. While Clinton -- and during the Clinton administration, we created almost 21 million jobs.

WALLACE: Gentlemen, let's -- forgive me. Let's move to another subject.


WALLACE: Health care reform -- Congressman Hoyer, will the House pass a bill before the August recess? And what are you going to do about the two biggest problems, which are -- one, increasing coverage, increasing coverage to all of the uninsured without spending another trillion dollars?

HOYER: Well, first of all, the American people understand that the health care system in this country is in real trouble. They like what they have, about 75 percent of them, but about 87 percent of them think we need significant reform. And the answer to your question is yes, we're going to pass significant reform.

WALLACE: Before the August recess?

HOYER: Before the August recess in the House of Representatives, because we need to bring costs down. We need to bring costs down for government. We need to bring costs down for families. And we need to bring costs down for individuals.

And we need to assure a system that is affordable, accessible by all Americans for quality health care. They need that security, and we're going to do that. And that's what they asked for during the course of the election.

WALLACE: Let me -- and I promise you're going to get your chance here, Congressman Boehner.

Let's go through a quick checklist of some of the key issues.


WALLACE: Public health insurance option to compete with private insurers -- must have in the plan?

HOYER: We think there's going to be a public option. Yes, we think we need that. We need to make sure that there is an option available for public that can't get through at the private insurance. We think that's essential if you're going to have access.

WALLACE: Congressman Boehner, is that a deal breaker?

BOEHNER: It is for us. I think having the government have a plan to compete with the private sector is unfair, because the government has no cost of capital.

It will drive, according to the Congressional Budget Office, 23 million Americans out of the current health care plan into the government option. It's not the way to go.

WALLACE: Mandate for both...

HOYER: Chris, can I just say something? When they adopted a prescription drug program, they provided for the possibility of a public option in their own plan if it wasn't available.

What we're saying is, "Look, you've got to keep everybody honest and get costs down." And we believe that competition will help.

WALLACE: Mandate on both individuals and employers to participate -- must have in the Democratic plan?

HOYER: As you know, the draft plan that's been put on the table provides for everybody to have coverage, just as you have to have automobile insurance coverage. We want everybody in the system. Actuarial -- that will bring costs down.

And we believe that if the employers don't participate, then they need to -- by having their employees covered by their own insurance, then they need to participate in helping to pay for the system.

Walmart, by the way, as you know, and many other businesses, support that proposition.

WALLACE: Congressman Boehner, is that a deal breaker?

BOEHNER: Absolutely. They're going to shift $400 billion of the cost of this new program onto the backs of employers with this mandate. You know what that means? The cost of employment goes up. When the cost of employment goes up, the number of jobs created goes down. That's not what the American people want.

And secondly, there's an individual mandate that you must buy health insurance, and if you don't, we're going to fine you, and we're going to fine employers if they don't offer health care. What this is going to do is lead to higher costs, rationing, and lower quality health care delivery in our -- in our system. The American people want reform.

WALLACE: We're doing a quick checklist here, so let me move to the -- to the last area in health care reform.

Congressman Hoyer, how are you going to pay for it specifically? What taxes are you willing to raise? And are you going to tax health care benefits?

HOYER: I'm not going to go into -- that's a proposal on the table in the Senate, not in the House, as you know. The pay-fors are going to be tough. Nobody wants to pay for what we're buying. And very frankly, our financial status in America has gone down.

During the last eight years, we inherited a 5.6...

WALLACE: All right. We got the inherited part.

HOYER: I understand that.

BOEHNER: It's kind of like that kid with his lost his homework again.

WALLACE: All right.

HOYER: That's cumulative homework. It's something you want to forget. You don't want the homework. I understand that.

BOEHNER: Well, I did my homework and brought it to school.

HOYER: There you go.

The fact is that we're going to make sure that this program is paid for, unlike the programs we've seen adopted in the past, so we don't make the deficit worse.

BOEHNER: The president says the problem with our health care system is we spend too much as a nation on health care. So how do you spend another trillion to $2 trillion in order to spend less?

And we're going to tax the American people, raise our taxes once again, at a time when the economy's not doing well. If we're trying to create jobs in America, you can't do it by imposing more taxes on a big government-run health care plan.

You can't do it by raising energy taxes on every American with their cap and trade system, and then you go out and spend a trillion dollars, with interest, on a -- on a stimulus bill that's not working.

WALLACE: Finally -- and we've got about -- a little over a minute left, so you're going to both have to be quick about this.

We are coming up on the end of the first six months of this new Congress and this new president.

Start with you, Congressman Hoyer. How's it going?

HOYER: I think this has been the most productive six months that I've served in the Congress of the United States.

I think the president put down the program and the Democrats in the Congress have has supported the program, which is exactly responsive to the last election, what the American people wanted.

They wanted change we could believe in. They wanted us to address the economy. We've done that. They wanted us to address energy. We've done that to make ourselves independent and secure, provide for cheaper energy, and addressing the climate challenge that confronts our country.

We're also going to address the issue, and have addressed the issue, of education. So we are doing what the American people asked us to do.

WALLACE: Congressman Boehner?

BOEHNER: Chris, it's been nothing short of breathtaking. This giant move to build more government here in Washington, to take more money from the American people -- and at the end of the day, what we're going to end up with is higher taxes, bigger government and less freedom for the American people.

It's breathtaking, this big move to the left. And at the end of the day, while we're going to continue to offer what we think are better solutions, our members are going to continue to stand up for freedom, because you can't grow the family budget when Washington's budget is growing. You can't grow the business budget when Washington's budget is growing.

And we're going to have a real fight for how much freedom we're going to have left in America.

WALLACE: Well, gentlemen, I'm glad we were able to settle all of that...

HOYER: Right, Chris.

WALLACE: ... in this -- in this short time.

Congressman Boehner, Congressman Hoyer...


WALLACE: ... thank you both. Thanks for sharing part of your holiday weekend with us.

BOEHNER: Thank you.

HOYER: Thank you, Chris.

WALLACE: Thanks, gentlemen.

The Sarah Palin chronicles -- does she want to run for the White House, or does she want to be left alone? Our Sunday group looks at that story from all angles when we come right back.


WALLACE: On this day in 2006, the United Nations Security Council held an emergency meeting on North Korean missile tests. The Security Council later adopted a resolution demanding North Korea halt its missile program.

Stay tuned for more from our panel.



SARAH PALIN: It would be apathetic to just hunker down and go with the flow. We're fishermen. We know that only dead fish go with the flow.


WALLACE: Sarah Palin giving one explanation for her stunning decision to step down as governor of Alaska.

And it's time now for our Sunday group -- Bill Kristol of The Weekly Standard; Jennifer Loven, who covers the White House for the Associated Press; Stephen Hayes, also from The Weekly Standard; and Juan Williams, of National Public Radio.

So, Bill, you are our resident Palin watcher and booster. You've gotten a fair amount of attention since Friday afternoon for saying that she's crazy like a fox and this is an interesting and perhaps successful strategy to win her the presidency. Explain.

KRISTOL: It's a high-risk move, but the truth is for those who are doubtful about her -- she wasn't going to do anything in the next 18 months as Alaska governor -- to convince them that she was more qualified than they thought for high office -- and this does give her a chance to travel the country, campaign for Republicans in 2010 in a way that's difficult when you're the sitting governor of a state that's pretty far away, study up on issues that it's hard for her to get fully up to speed on as a full-time governor of Alaska.

And I think she could have a very strong year and a half here if she's disciplined, if she's imaginative, if she picks the right issues to focus on and to quarrel with President Obama about, but it's high risk. I mean, she's -- this is -- she's really all in here and it -- she has no safety net.

You know, most -- Bush ran for -- George W. Bush ran for president as governor of Texas with the whole Bush machine behind him. McCain had his campaign machine from a previous round. Romney had a very professional team. She's really just getting out there, and it's going to depend on her talents and abilities.

WALLACE: Do you believe that -- because we heard Lieutenant Governor Parnell basically say she left because she just felt that she was getting bogged down by all the attacks.

Do you believe that story or do you believe what you're saying, which is that this is a strategy to make herself a national political figure and perhaps be president?

KRISTOL: I don't know, but I think both. I mean, I do think the attacks were amazing. I mean, she has been the object of more hatred, I would say, and more hatred that has been sort of treated respectfully by the mainstream media, than any politician I can remember.

And I'm sure it wears on her, and she probably thinks it makes it hard for her to be an effective governor, and she does feel that she can now sort of get out and be sort of on her own.

You know, she's depending on her own arms here, and she's -- she is going to take it on, and she's had an interesting political career and I don't rule her out. The odds are against her, but the odds were against her anyway if she had served out her term.

And given that, I think it wasn't a bad idea to go all in, and just depend on herself, put together now a team in Washington that can help her, and go for it.

WALLACE: But, Jennifer, here's somebody who already had a gravitas issue. Is she up to the job? How does stopping -- stepping down in the middle of your term during a hastily called July 4th weekend news conference -- how does that help with that?

LOVEN: Well, I'm not sure it does. I don't think I can argue that. I think she hit a couple notes that I think are going to hurt her. One, she's -- she hit the victim note, which doesn't usually go over well in -- with the public.

You don't want to be -- you want to be a politician selling something good, something positive, a platform to run on, and she hit the victim note pretty hard. And what she's going to get is just more of the same.

She's not -- it's not like here she's going to step out of the Alaska governorship and step into a kinder, friendlier, gentler territory. She's going to have incredible scrutiny, perhaps even more scrutiny.

And the other note that she hit that I think she's going to have some trouble with is this notion that she's sort of unpredictable and flighty. And again, if you're talking about national leadership, you're talking about running the country, that's not an image you really want to take forward.

WALLACE: Steve, not to put too fine a point on it, but I know that Bill Kristol is your boss. Are you buying his take on the Palin announcement?

HAYES: You know, Bill is probably the finest magazine editor in the country. (LAUGHTER)

HAYES: And he's a snappy dresser, a wonderful husband and father.

No is the short answer, I'm not. I think -- look, Sarah Palin had one problem. Since we've known her publicly on the public stage, she's had one problem in particular, and it's that she was not -- she didn't have a substantive policy base.

She didn't have that in the campaign. She hasn't had it in the seven or eight months since then. And I think that is and has been and will be her big concern going forward.

What I think she did since the election is really of a missed opportunity. She could have gone out and made herself the chief Republican spokesman on smart energy policy. And this is something she knows well. She lives in Alaska. It has consequences for her state, national ramifications. We're in the middle of a cap and trade debate.

She could have positioned herself as somebody who really knew something about that and, you know, sort of taken over a role as a national spokesperson. She didn't do that.

I think now the pressure will be on her to do that, but she won't have the stature or she won't have the office from which to make those arguments.

WILLIAMS: Well, you know what? I mean, she can't even say that she was the one-term governor of Alaska, I mean, because she didn't stand by Alaska.

I mean, I think it's -- she was in line, it seems to me, as one of the possibilities to run against Lisa Murkowski for the Senate, and Murkowski can now run ads that -- repeating what she said in her statement, that Governor Palin abandoned the citizens of Alaska, who gave her the privilege of serving as their governor.

So I mean, the political class around here is all thinking, you know, what could this be about, because Palin is the most popular Republican right now. She's more popular than Mitt Romney. People don't know Tim Pawlenty , the governor of Minnesota.

So if you're looking at Republican opposition to President Obama as he seeks a second term, you're thinking, "Oh, Sarah Palin might be the ticket," but Sarah Palin has taken away her platform as governor that was giving her the opportunity to respond to critics by developing, you know, not only experience, but demonstrating leadership.

And you know, it seems to me then -- so what's the answer? It has to be money. It has to be that she's after book deals. She has to be...

WALLACE: She already had a book deal. WILLIAMS: She has a book deal, but she's got to do the book. Maybe she wants to give more speeches for more money. I don't know. Maybe she -- I read somewhere that NBC might be talking to her about doing a TV show.

But if that's the case, then it's just a star turn. She's just got stars in her eyes. And it's all about her and the base that she wants to appeal to and has success with, which is an evangelical, pretty much southern base in the Republican Party.

I wonder how they're going to respond to someone who's not reliable, not traditional in terms of fulfilling obligations, being steady. It just doesn't seem like the -- a smart move. That's why it's so puzzling.

That's why everybody in town is just talking about it. It's like -- what could she be up to? Is it a strategy, as you were asking, or is it just about her?

KRISTOL: Barack Obama ran for the Senate in 2004, was elected to the Senate, and the moment he was sworn in began running for president of the United States.

He had no Senate leadership record to speak of. He didn't spend much time in the Senate. Certainly, for the last two years of his term he effectively was -- had left the Senate by the time he started living in -- you know, visiting Iowa and New Hampshire, et cetera, in early 2007.

And everyone said, "Ooh, he can't compete with these people with these long records," and, "What's he ever done?" And Republicans like me were all, "Oh, he was a community organizer, come on, a one-term senator." He seems to have gotten elected president of the United States.

I don't think it is foolish for Palin to think, "You know what? If that's the world we live in now, where people," maybe correctly, incidentally, "don't value years of experience in Washington or two terms counts for more than 2.5 years as governor of Alaska," maybe she thinks she gets out there and she becomes a leader of the conservative movement, and then a leader of the Republican Party, and then conceivably a nominee of the Republican Party, and conceivably a president just as Obama did.

WILLIAMS: Well, you know what? Barack Obama had ideas. Barack Obama said he was opposed to the war, for whatever that -- that's what he said, right? Barack Obama said he was going to get the troops out. All right.

What is Sarah Palin 's critical idea, Bill? What is it that you say independent voters...

KRISTOL: Well, no, that's -- that is the test. But what did Obama have in the -- this is, again, the equivalent, just to get back in time, of this middle 2005. Obama had given one good speech at the Democratic Convention in 2004. Palin gave an effective speech at the Republican Convention in 2008. She -- I totally agree that she needs to be serious about taking on a couple of issues, getting even -- you know, getting well briefed on them, becoming the chief spokesman against the Obama administration on something like energy.

WALLACE: Well, let's let -- let's let Jennifer in, since she covers the Obama administration full time.

LOVEN: Well I was just going to say one thing. I think what she wanted out of this was a game changer, and I don't think she got that, because she -- the people who like her are still going to like her. They're still going to think she has all this moxie and this -- you know, this sort of fresh face and these positions that they really like.

The people who have doubts about her are just going to have the same doubts. All this did was reinforce that. So I'm not sure how she took the game beyond where she was on any strategy, and it...

WALLACE: Jennifer, I want to -- I want to follow up on this. The White House is absolutely saying nothing publicly...

LOVEN: That's right.

WALLACE: ... about Governor Palin. What are you hearing behind the scenes? They've got to be saying something.

LOVEN: Well, I think they're entertained. And you know, they look at not only what happened with her, but what happened in the last couple of weeks with Senator Ensign and Senator -- and, I'm sorry, South Carolina governor Sanford.

And they're looking at the field and they're kind of shaking their heads. But they know as well as the rest of us do that it's a very long way until the 2012 race starts in earnest, and there could be someone out there that nobody's even talking about yet that they're going to have to face and really be scared by.

WALLACE: Steve, you get the last word.

HAYES: Well, I think, to go a little further than...

WALLACE: Mostly to attack Bill Kristol.


HAYES: I will not attack Bill Kristol.

I think it actually could be worse, potentially, for Sarah Palin than Jennifer says. This could be a game changer in a negative way, because it could take people who were willing to sort of suspend their doubts about her and say, "OK, this is why I was concerned."

WALLACE: All right. We're going to have to leave it there.

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