Transcript: Rudy Giuliani and Richard Gephardt

The following is a transcribed excerpt from 'FOX News Sunday,' September 5, 2004:

CHRIS WALLACE, FOX NEWS: Labor Day (search) weekend used to be the traditional start of the presidential campaign. Of course, President Bush and Senator Kerry have been hammering each other for months, but we thought this is still a good time to look at where the race stands now.

First up, the man who gave a rousing speech last Monday night at the convention, former New York City Mayor Rudy Giuliani (search), who joins us from our Fox News studios in New York.

And, Mr. Mayor, welcome. Thanks for coming in today.

RUDY GIULIANI, FORMER NEW YORK MAYOR: Good morning, Chris.

WALLACE: Let's start with the two new polls taken during and after the Republican Convention. Time magazine finds that in a three- way race, President Bush now leads Senator Kerry 52 percent to 41.

GIULIANI: Right.

WALLACE: And a Newsweek poll has exactly the same results, Mr. Bush leading by 11 points — that, incidentally, a 13-point swing in the last month.

Mr. Mayor, what's happened to this race?

GIULIANI: Well, I think, you know, a lot of that, I'm sure, people will attribute to the convention, but I saw that kind of happening maybe a week and a half before. I was campaigning with the president in New Mexico about a week before the convention, and it seemed to me at that point that the whole thing had turned already.

And the crowds that the president had were almost like pre- election crowds. It was almost as if we were in the four or five or six days before the election.

So I think that, you know, the momentum is going in the president's favor. The convention was usually successful. I mean, it was a convention about which there was a certain amount of concern because it was in New York, because of the issues of terrorism and protests and all this other stuff, Democratic stronghold. Turned out to be one of our most successful conventions ever.

And the president's speech on Thursday night was like a State of the Union speech, except with a lot more emotion, you know, particularly in the second half of it.

He laid out a very specific agenda, or as specific as you're going to get in an acceptance speech, much more so than John Kerry did. It was almost as if he was the challenger and John Kerry was the incumbent.

WALLACE: But, Mr. Mayor, if you say that you think the dynamics changed during August, the only thing that happened then was the Swift Boat controversy. Do you think had...

GIULIANI: It's not so much the controversy itself; it's the way in which John Kerry handled it, which was kind of fumbling it, first not answering it, then answering it too much, and then turning it into an attack on President Bush and trying to make a connect-the-dots sort of argument to President Bush when, in fact, it doesn't work.

I mean, this is an independent thing that's going on. It shouldn't go on; I'm against it. I don't think those ads should be out there, particularly with regard to his record, because I believe he was a hero and he's entitled to that. And President Bush does, and President Bush has made this point.

But, I mean, now he's become kind of really personal, you know, really strong attacks on both the president and vice president. So I think the whole way in which it's moving is moving very much in the president's favor.

Plus, the president, you know, on the fundamentals, the president, I think, is — every time he gets his case out, we're going to do better and better. We were getting pounded for six, seven months, $70 million in negative commercials. This was the first chance that we really had to lay out the president's case, and it's a very powerful one, after all.

WALLACE: Mayor, let's go back to your speech on Monday night in which you talked a lot about the events after 9/11 and the decisions that the president has made since 9/11. And you took us back to that moment when the president visited Ground Zero and then said, as he was speaking to that crowd, that the whole world, the terrorists especially, are going to hear from all of us. Let's watch a clip from that speech.

(BEGIN VIDEO CLIP)

GIULIANI: So long as George Bush is our president, is there any doubt they will continue to hear from us?

(APPLAUSE)

We owe that much and more to the loved ones and heroes that we lost on September 11th.

(END VIDEO CLIP)

WALLACE: You seem to be saying that we owe it to the victims of 9/11 to re-elect George W. Bush.

GIULIANI: No, to conduct the war on terror. And then, at least the way I see it, my opinion is that the best way to conduct that war on terror to its successful conclusion is to elect President George W. Bush. It would be no different than saying in the middle of the Civil War that the best chance of winning the Civil War was to re-elect Abraham Lincoln.

WALLACE: Let me switch, if I can, from the national security side to the domestic side, because there was less emphasis on that in the convention. And Democrats say that the president has a lot to answer for on the Democratic side. Let me give you a couple of examples here.

1.3 million more people living in poverty last year; 1.4 million more without health insurance; 900,000 jobs lost since Mr. Bush became president.

Mr. Mayor, is that a record to run on?

GIULIANI: Sure, I mean, because you have to look at the rest of the record. The rest of the record is we've been gaining jobs steadily now for 10 months or more, I think it is. Certainly the last month, a good, solid gain.

Our economy is growing at levels that are better than most of the rest of the world. We're at about 4, 5 percent. Unemployment keeps going down. This month it went down again.

So you have to understand where the president, you know, took over. He took over in the middle of an economic downturn. Then we got hit horribly on September 11, 2001. Obviously, the human part of it being much worse, but the hit to our economy, you know, very, very substantial, dramatic. In fact, you wonder how a economy could recover this quickly after what happened to us on September 11. Then the corporate scandals, a lot of other things.

Well, he's gotten us through it. His tax cuts have helped. His tax cuts are fueling our economy and we're growing again.

So I think it's a very strong record, given in actuality what happened. Again, it's like going back to Franklin Roosevelt during the Depression. You know, Franklin Roosevelt was re-elected in the midst of the Depression, and we hadn't gotten out of the Depression. He had just made progress. We didn't get out of the Depression until really until the Second World War.

WALLACE: Let me ask you about another domestic issue, if I can. The administration announced it late on Friday of Labor Day weekend, but Medicare premiums are going to go up 17.5 percent next year, which is the largest increase in 15 years. Is that a record to run on?

GIULIANI: Well, also the coverage is going to be expanded, and the fact is that those are formulas in which there are uncontrolled costs. And this has been the biggest expansion in health care that anyone has ever been able to accomplish.

GIULIANI: So, I think, you know, what you have to look for in a president is realistic progress. Our economy is making substantial progress, given the situation that it is. You would have to regard our economy now as growing. Jobs are growing. The whole economy is coming back.

And then, really, it's a choice for the American people: Do you agree with the philosophy that it's better to put money back into the private economy, or do you agree with Senator Kerry and Senator Edwards that the best thing to do is to raise taxes?

And you know they're going to raise taxes on everybody, because they can't possibly pay for what they're promising, even come close to it, without raising taxes substantially.

WALLACE: Mr. Mayor, we've got about a minute left. I want to ask you about one other part of the Newsweek poll, if I can.

Fifty percent of registered voters and 65 percent of Republicans say they'd like to see you run for president in 2008. And that, you'll be happy to note, puts you ahead of John McCain and even Arnold Schwarzenegger, if the Constitution would change to allow foreign-born citizens to run.

(LAUGHTER)

So, Mr. Mayor, my question is, when you look in the mirror, do you see a potential president?

(LAUGHTER)

GIULIANI: I haven't — actually, I rushed so hard to get here this morning, I didn't get a chance to look in the mirror. You know, I had to be here on time.

But John McCain and Arnold Schwarzenegger are two people I admire very much. I'm not — the race for the presidency four years from now is so far away, I'm not thinking about it, I'm not running against anybody.

Right now there's only one race. It's get President Bush and Vice President Cheney reelected.

And, you know, Arnold Schwarzenegger's doing a great job as governor of California, and John McCain is one of my heroes. So I don't want to be in any kind of contest with them.

2008 is such a long way away. We'll see who runs, and we'll see who the best candidate is. You know, it'll be some time from now.

WALLACE: All right. Mr. Mayor, thanks so much. We appreciate it.

GIULIANI: Hope to see you soon, Chris.

WALLACE: Yes, please, come on back.

GIULIANI: Thank you.

WALLACE: Joining us now for the Democratic side is Congressman Richard Gephardt.

And welcome. Good to have you with us.

GEPHARDT: Good to be here, Chris.

WALLACE: Let's talk first about these new polls which show the president with a double-digit lead. How do you account for them?

GEPHARDT: Well, I always expected that President Bush would get a bounce out of his convention. He is, after all, president of the United States. People watched all of that, and I think he was always going to get this bounce.

I think a week from now this race is going to be right where it's been. It's going to be tied. And I believe that because people in this country want to move in a new direction. They think we're moving now in the wrong direction with President Bush, and they want to move in a new direction.

GEPHARDT: They see his policies on jobs, on education, on health care, on Medicare and on Iraq as being failed policies. And they want change. And I think you're going to see that reflected in the polls in just a few days.

WALLACE: All right. I want to get some of those specifics in a moment. But less than an hour after the president spoke at his convention, John Kerry held a midnight rally in Ohio. And here's part of what he said at that rally. Take a look.

(BEGIN VIDEO CLIP)

SEN. JOHN KERRY, D-MASS.: The vice president called me unfit for office last night.

AUDIENCE: Boo!

KERRY: Well, I'm going to leave it up to the voters to decide whether five deferments makes someone more qualified than two tours of duty. We'll decide about that.

(APPLAUSE)

(END VIDEO CLIP)

WALLACE: First of all, the vice president did not call him unfit for office. I looked at the speech and he never says those words.

Secondly, why on earth would John Kerry go back to Vietnam and attack the running-mate of his opponent?

GEPHARDT: Chris, this was the most negative convention — the Republican Convention — the most negative convention I've ever seen. It was one attack after the other from speaker after speaker about John Kerry. So, sure, he's going to fight back and rebut these charges.

And it angered me that some of the speakers at the convention said Democrats, including John Kerry, including Democratic leaders, had more of a concern about beating George Bush as their motivation than in fighting against terrorism. That's a horrible charge for people to make. We were together in this war on terrorism and still are. This was the worst attack on our soil in our history.

So the attacks have been relentless against John Kerry and John Edwards in this ticket. And so it's right that he fight back and set the record straight.

But now we need to talk about exactly what the failed policies of this administration had been, and the new direction in which John Kerry and John Edwards are going to take this country.

WALLACE: All right. You said today what the Kerry camp has been saying all this last week, which is the that the Republican Convention distorted his record. Let's look at some of that record.

Vice President Cheney says that Kerry opposed Ronald Reagan's military build-up in the 1980s. What's wrong with that?

GEPHARDT: Well, I'm sure you can find votes both for weapons systems and against weapons systems.

Dick Cheney, when he was secretary of defense, was against most of the weapons systems he accused John Kerry the other night of being against.

Look, John Kerry is a military hero of this country. He was a United States senator and worked to make our defenses better. There are obviously disagreements over weapons systems as you go along. But his consistent effort through his entire time in Congress was to make this country stronger.

And he supported the president on going to Iraq. He disagreed with the way the president went to Iraq. He believes the president has made a mess of Iraq by the way he did it. But that is certainly patriotic, in my view, in setting out your views about what should be done.

WALLACE: But let's look, for instance, at the 1980s and the Reagan build-up, because I have a copy here of a press release that John Kerry, the Senate campaign in 1984, put out, in which he said he wants to cancel the MX missile, he wants to cancel the B-1 bomber, he wants to cancel Star Wars.

Now, we have a lot of more perspective now than we did then. But it turned out those were precisely the weapons that helped defeat the Soviet Union and led to the end of the Cold War.

I mean, at a critical point in the 1980s, John Kerry, wasn't he wrong on the national security and what the central issue was at the time?

GEPHARDT: Well, I don't want to back and debate what was going on in the 1980s...

WALLACE: But it does speak to his judgment, sir.

GEPHARDT: Well, the truth is the Soviets defeated themselves. Even without the MX missile, we...

WALLACE: But don't you think it was under pressure from the U.S.?

GEPHARDT: Well, it certainly was under pressure from the U.S. But their main problem was their economy fell apart because they had a bad system that decayed them from within.

I don't think you can argue that if we hadn't had the MX missile, we would not have been able to defeat the Soviets. We were way ahead of them in most of the '80s.

But the point I'm trying to make is: John Kerry has consistently, from his days in Vietnam, been a patriot, supported this country, fought for his country, has had good defense policies supporting weapons systems that would keep our people safe. And he's done the same in the fight against terrorism.

GEPHARDT: This idea that we will not pursue the terrorists if John Kerry is president is absolutely ridiculous. He will be relentless in keeping the people of this country safe.

WALLACE: I want to ask you about the domestic side, but I do have one more national security question. And it's not back in the '80s; it's much more current. And that's the question about voting for going to war in Iraq but voting against the $87 billion.

I want to show you a clip of some criticism of that vote. Here it is.

(BEGIN VIDEO CLIP)

GEPHARDT: I can't find it within myself to not vote for the money to support the troops. Our young men and women who are over there protecting us, dodging bullets in a very tough and difficult situation. And so I felt the right thing to do was to do that.

(END VIDEO CLIP)

WALLACE: You said supporting the troops was the right thing to do. I got to tell you, it's the same thing Dick Cheney said at the convention.

GEPHARDT: But John's decision, I think, was based on the fact that he could not get the president to listen, to finding room in the budget for that $87 billion. I, frankly, had trouble making the vote for the very same reason. And I'll — well, let me tell you why.

WALLACE: But you did make the vote.

GEPHARDT: I went to the president after 9/11, and I said, "Mr. President, surely we can change this budget, now that we've had terrorism on our soil. The American people will understand."

And I said to him, "I can't get everything I want. You can't get everything you want, but let's sit down and come up with a new budget, given the new world that we're in."

The president adamantly refused.

What John Kerry was saying with his vote was, "Hey, if we're going to have to spend all this money in Iraq" — and now, incidentally, it's $200 billion taxpayer dollars that we're spending in Iraq because we didn't get the help that we needed in Iraq — he was simply saying let's cancel the tax cuts for the wealthiest, not the middle class, to pay for Iraq.

I think that's a rational, sensible position.

WALLACE: I have one question I want to ask you about domestic agenda. The president talks about an ownership society. You own a piece of your medical health savings account; you own a piece of your retirement account.

What's wrong with giving people more control over their own lives?

GEPHARDT: We're for that. Democrats, John Kerry, is for doing that. We're for a savings plan above your Social Security. We think that's a good idea, always have.

Let me tell you something. What the president talked about the other night were the same promises that he made four years ago. There was nothing new in that speech. It was the same warmed-over material.

He's failed. He hasn't done any of those things. Where has he been for four years? If he believed so strongly in these, why didn't he get the Social Security reform, which I disagree with, through the Congress?

So, there was nothing new. It was more of the same old stuff. He has failed in his policies. We've lost over a million jobs. Forty-five million people in this country don't have health insurance. Gasoline prices are going through the roof.

I guess if you don't have a record, you just go back to what you promised four years ago.

WALLACE: Congressman, thank you. Always a pleasure to talk with you. I'll talk to you again during the fall. Appreciate it.

GEPHARDT: Thank you.