Justice Antonin Scalia on issues facing SCOTUS and the country

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Flashback: Scalia talks issues impacting the Supreme Court

Justice Antonin Scalia's 2012 appearance on 'Fox News Sunday'

This is a rush transcript from "Fox News Sunday," July 29, 2012. This copy may not be in its final form and may be updated.

CHRIS WALLACE, HOST: I'm Chris Wallace.

Supreme Court Justice Antonin Scalia speaks out on some of the biggest issues facing the court and the country. It's a "Fox News Sunday" exclusive.

(BEGIN VIDEOTAPE)

(MUSIC)

WALLACE: We'll discuss the court's recent decision upholding ObamaCare.

Didn't Justice Roberts do what a good judge should do?

In the wake of the Colorado massacre, can government pass new gun laws?

Can a legislature ban semi-automatic weapons without violating an individual's constitutional right to bear arms?

And just how political is the court?

Will you time your requirement so that a more conservative president can appoint a like-minded justice?

Antonin Scalia, only on "Fox News Sunday".

Then, there are exactly 100 days until the election.

Mitt Romney tries to recover from a misstep in London. We'll have a report from his next stop in Israel.

And we'll ask our Sunday panel about the risk and reward of campaigning overseas.

And our power player of the week -- a champion athlete builds a new life right after the Olympics.

All right now on "Fox News Sunday".

(END VIDEOTAPE)

WALLACE: And hello, again, from Fox News in Washington.

Recent rulings by the U.S. Supreme Court on health care reform and immigration demonstrated once again what a central role the court plays in our government. The justices rarely do interviews or talk outside of the court about how they reach their decisions. But in a new book called "Reading the Law: The Interpretation of Legal Text," Justice Antonin Scalia, longest serving member of the court, as well as law professor Robert Garner, explain what they believe is the right way to decide cases.

And we are delighted Justice Scalia has agreed to join us today to talk about it.

Justice, welcome to "Fox News Sunday".

SCALIA: Thank you very much, Mr. Wallace. Glad to be here.

WALLACE: You -- in your book, you explain your approach to judging, which is called textualism or originalism. What exactly is that?

SCALIA: Originalism is sort of subspecies of textualism. Textualism means you are governed by the text. That's the only thing that is relevant to your decision, not whether the outcome is desirable, not whether legislative history says this or that. But the text of the statute.

Originalism says that when you consult the text, you give it the meaning it had when it was adopted, not some later modern meaning. So --

WALLACE: So, if it was the Constitution written in the 18th century, you try to find what those words meant in the 18th century.

SCALIA: Exactly, the best example being the death penalty. I've sat with three colleagues who thought it was unconstitutional, but it's absolutely clear that the American people never voted to proscribe the death penalty. They adopted a cruel and unusual punishment clause at the time when every state had the death penalty and every state continued to have it. Nobody thought that the Eighth Amendment prohibited it.

WALLACE: All right. You criticize and this gets to, as you say, some of your colleagues, another approach using a word I have to admit that I did not know existed prior to reading your book -- purposivism. Did I pronounce that correctly?

SCALIA: Yes, you did. It's a nice long word. I didn't make it up.

WALLACE: What does it mean?

SCALIA: [INAUDIBLE] What it means is -- and it's probably the most popular of form of interpretation in recent times. It means consulting the purpose of the statute and deciding the case on the basis of what will further the purpose. Now, textualists consult purpose as well, but only the purpose that is apparent in the very text.

I have to give you an example or you will not understand the difference. Let's assume a statute which provides that the winning party in litigation will obtain attorney's fees.

The issue is whether that includes the fees paid to expert witnesses which can, you know, amount to thousands of dollars. The purpose of this would be inclined to approach that by saying, you know, what's the purpose of the statute? The purpose is to make the plaintiff whole, so that the money he receives for winning the case is money he can keep and he doesn't have to spend half of it on expert witness. The textualist would not say -- would not say that. He would say what -- what is the understood meaning of attorney's fees. And, in fact, it was never thought to include expert witness fees.

WALLACE: All right. In a couple of years ago, one of your colleagues, who I think you would say is on the other side of the judicial divide, Justice Stephen Breyer on the show, and he said it is impossible to apply the law as it was written. Take a look.

(BEGIN VIDEO CLIP)

STEPHEN BREYER, U.S. SUPREME COURT JUSTICE: The Founders didn't know that commerce included airplanes. They didn't know about the Internet, or even television.

And so the difficult job in open cases where there is no clear answer is to take those values in this document which all Americans hold, which do not change. And to apply them to a world that is ever changing.

(END VIDEO CLIP)

WALLACE: Is Justice Breyer wrong?

SCALIA: Yes. Yes, that's -- that's a common and totally erroneous description of what originalism means. What originalism means is that you give the Constitution the meaning that it had with respect to those phenomena that were in existence at the time, say, the death penalty.

WALLACE: But there are a lot of phenomena that aren't existence at the time.

(CROSSTALK)

SCALIA: It weren't for those. Of course, you have to decide what the meaning ought to be. But the criterion for deciding what the meaning today ought to be is what was the understood meaning as applied to criteria at the time. For example in the death penalty. When the electric chair comes in, it's a new phenomenon. What did the framers think of the electric chair? Who knows? There wasn't any electric chair. But they had the death penalty and they did impose death by hanging.

So, what the originalist would say is, is the electric chair more cruel and unusual than hanging was? And of course it isn't because it was adopted to be less cruel. And the same thing with lethal injection.

WALLACE: OK. In your book you lay out, beyond this general argument, 57 specific canons, principles for judging.

SCALIA: Right.

WALLACE: Here is number 38. You have 57. It is like the Heinz Varieties. "A statute should be interpreted in a way that avoids placing its constitutionality in doubt." In other words, try to find a way to avoid judicial conflict with the legislature, canon number 38.

SCALIA: Right.

WALLACE: But you voted to strike down ObamaCare which the legislature, in this case the Congress, was -- debated for a year. And in your dissent, you criticized Chief Justice Roberts for following cannon 38, by finding that --

SCALIA: No.

WALLACE: You are shaking your head -- for finding that the individual mandate is a tax. Didn't Justice Roberts do exactly what you say a good judge should do, try to find a way to avoid striking down the law?

SCALIA: I don't think so. If you read the rest of the section, you would say, to find a way to find a meaning that the language will bear that will uphold the constitutionality. You don't interpret a penalty to be a pig. It can't be a pig. And what my dissent said in the --

WALLACE: Affordable Care Act.

SCALIA: -- Affordable Care Act was simply that there is no way to regard this penalty as a tax. It simply doesn't bear that meaning. You cannot give -- in order to save the constitutionality, you cannot give the text a meaning it will not bear.

WALLACE: Let's turn to an issue that is the news right now with the massacre in Colorado. And that is gun control.

You wrote in 2008, the opinion in District of Columbia v. Heller, the majority opinion that said the Second Amendment means what it says, people have a right to bear arms. Question: how far does that constitutional right go? Can a legislature ban semiautomatic weapons or can it ban magazines that carry 100 rounds without violating an individual's constitutional right to bear arms?

SCALIA: What the opinion Heller said is that it will have to be decided in future cases. What limitations upon the right to bear arms are permissible. Some undoubtedly are, because there were some that were acknowledged at the time. For example, there was a tort called affrighting, which if you carried around a really horrible weapon just to scare people, like a head ax or something, that was I believe a misdemeanor.

So yes, there are some limitations that can be imposed. What they are will depend on what the society understood was reasonable limitation. There were certainly location limitations where --

WALLACE: But what about these technological limitations? Obviously, we're not talking about a handgun or a musket. We're talking about a weapon that can fire a hundred shots in a minute, SCALIA: We'll see. I mean, obviously, the amendment does not apply to arms that cannot be hand-carried. It's to keep and bear. So, it doesn't apply to cannons. But I suppose there are handheld rocket launchers that can bring down airplanes that will have to be -- it will have to be decided.

WALLACE: So, how do you decide if you're a textualist?

SCALIA: Very carefully. My starting point and ending point probably will be what limitations are within the understood limitations that the society had at the time. They had some limitation on the nature of arms that could be born. So, we'll see what those limitations are as applied to modern weapons.

WALLACE: There is one Supreme Court decision, reading a lot of your writings and speeches over the years, that seems to distress you more than any other. And that is Roe versus Wade, the 1973 decision that says that women have a constitutional right to abortion. You say that it is it a lie. And, in fact, while generally willing, you say, to accept long standing precedents, you say you will continue to press to overturn Roe.

Question: why?

SCALIA: Well, I'm not sure if I could say this distresses me more than any other. It is in my mind the clearest example of being a non-textualist and non-originalist. No one ever thought that the American people ever voted to prohibit limitations on abortion. I mean, there is nothing in the Constitution that says that.

WALLACE: What about the right to privacy that the court found in known 1965?

SCALIA: There is no right to privacy. No generalized right to privacy.

WALLACE: Well, in the Griswold case, the court said there was.

SCALIA: Indeed it did, and that was -- that was wrong. In the earlier case, the court had said the opposite. Look, the way the Fourth Amendment reads that people shall be secure in their persons, houses, papers and effects against unreasonable searches and seizures.

And the first time my court had a case involving wiretapping. It said that's not covered by the Fourth Amendment. There can be state laws against it and most states had laws. But it's not persons, houses, papers and affects is not covered by the Fourth Amendment. The court reversed that, I don't know, 20 years later or so in a wave of non-originalism. Constitution means what it ought to mean. Well, it simply doesn't cover that, which means that it's left to -- it's left to democratic choice, as most things are, even important things like abortion.

WALLACE: When you say democratic, that's small d meaning let the legislature decide.

SCALIA: Exactly. Exactly. Even the important questions and not just insignificant stuff, but even important questions like abortion.

WALLACE: Have you ever changed your mind in a case from casting your original vote in conference to when it is finally announced by the court?

SCALIA: I have not only done that, I have changed my mind after have been assigned to write the majority opinion. I've written the opinion the other way, it just wouldn't write.

WALLACE: And, clearly, you think there's nothing wrong with that?

SCALIA: There is in nothing wrong with that.

WALLACE: Did Chief Justice Roberts change his mind in the ObamaCare case?

SCALIA: I don't know. You'll have to ask him.

WALLACE: Did -- were -- let me ask you, did you at one point in that case in the majority to strike down ObamaCare?

SCALIA: I don't talk about internal court proceedings.

WALLACE: Just this once?

SCALIA: No, never ever. Never ever.

WALLACE: OK.

SCALIA: And, listen, those who do, you shouldn't believe what you read about internal court proceedings, because the reporter who reports that is either: A, lying, which can be done with impunity, because as you know, we don't respond. It's the tradition of common law judges to lay back and take it. You don't respond in the press. Or B, that reporter had the information from some who was breaking the oath of confidentiality, which means that's an unreliable person.

So, either way, you should not -- you should not put any stock in reports about what was going on in the secrecy of the court.

WALLACE: Finley Peter Dunne, the famous Chicago humorist, once wrote, "The Supreme Court follows the election returns." How political is the court?

SCALIA: Oh, I don't -- I don't think -- I don't think the court is political at all. I've -- people say that because at least in the recent couple of years. Since John Paul Stevens and David Souter had left the court, the break out is often five to four, with five --

WALLACE: Republican appointed judges.

(CROSSTALK)

SCALIA: -- and four Democrats on the other side. That doesn't -- that doesn't show they are voting politics. It shows that they had been selected because of their judicial philosophy. The Republicans have been looking for, you know, originalist and textualist and restrained judges for 50 years. And the Democrats have been looking for the opposite, for people who believe in Roe versus Wade.

Why should it be a surprise that after, you know, assiduously trying to get people with these philosophies, they end up with this philosophies?

WALLACE: Willingly or not, the court has certainly been dragged into the political arena. In his 2010 State of the Union speech, President Obama called out the justices seated right in front of him in the well of the House chamber, for the court's decision on Citizens United.

Let's take a look at that.

(BEGIN VIDEO CLIP)

PRESIDENT BARACK OBAMA: Last week, the Supreme Court reversed the century of law that I believe will open the floodgates for special interest, including foreign corporations, to spend without limit in our election.

(APPLAUSE)

(END VIDEO CLIP)

WALLACE: Chief Justice Roberts said that he found that spectacle troubling. Do you?

SCALIA: That's a very mild adjective. I wasn't there and it's yet another reason why I will not be there in the future. I stopped going to what is essentially a political spectacle some years ago, as did John Paul Stevens and I think Bill Rehnquist didn't go.

WALLACE: Do you think when a president directs comments at the Supreme Court when they have to sit there like potted plants -- as one said in a hearing -- and everybody else is standing or jeering, do you think that's unseemly?

SCALIA: You can look at it and come to your own judgment. I don't publicly criticize the president and he normally does not criticize me.

WALLACE: He did in that case.

SCALIA: I wasn't there.

WALLACE: He still did.

Then there was the president's statement in April after the oral arguments in the ObamaCare case did not go well before the Supreme Court when he seemed to be jawboning the court. Take a look at this.

(BEGIN VIDEO CLIP)

OBAMA: I'm confident that the Supreme Court will not take what would be an unprecedented, extraordinary step of overturning a law that was passed by a strong majority of a democratically elected Congress.

(END VIDEO CLIP)

WALLACE: Justice, what did you think of that?

SCALIA: It's unusual. But as I say, I don't criticize the president publicly and he normally doesn't criticize me.

WALLACE: Did you feel any pressure as a result of that to vote a certain way?

SCALIA: Yes. What can he do to me? Or to any of us? We have life tenure and we have it precisely so that we will not be influenced by politics, by threats from anybody.

WALLACE: Did you view that as a threat?

SCALIA: I didn't view it as a threat. I'm not even sure I heard it.

WALLACE: Well, you heard it now.

SCALIA: You brought it to my attention.

WALLACE: And now, you -- come on, you heard it.

As a matter of just fact, as a legal scholar, was the former constitutional law lecturer correct how unprecedented is it for a court or as the president put it there an unelected group of people to overturn an act of Congress.

SCALIA: Oh, I'm not going to engage in that debate with --

(CROSSTALK)

SCALIA: Well, we have overruled Mayberry versus Madison, a very old case. We did just that and done it in a large number of cases since then. It's part of the function of the court.

Look, the most role we play and the reason we have life tenure is precisely because now and then, we have to tell the majority, the people that they can't do what they wanted to do. That what they want to do was unconstitutional and therefore go away.

Now, that's not going to make us popular. And you can say, oh, it's very undemocratic and in a small sense it is. In the larger sense, it isn't however, because it's the American people who gave us the power. It's the American people who said, no, there are some things we're not going to let future legislators do, even if they want to do it.

And we are simply applying the judgment of the American people over time.

WALLACE: Some people say that you crossed the line last month in your dissent in the Arizona immigration case. You brought upon the fact that the president, after the case had been argued, certainly after the law had been passed, the fact that the president, in an unrelated decision, had decided not to deport the children of illegal immigrants.

Let's take a look at your dissent. You wrote this, "To say, as the court does, that Arizona contradicts federal law by enforcing applications of the Immigration Act that the president declines to enforce boggles the mind."

To which conservative Judge Richard Posner wrote about your dissent, "It gives that part of the opinion the air of a campaign speech."

Your response?

SCALIA: He is a court of the appeals judge, isn't he?

WALLACE: Yes.

SCALIA: He doesn't sit in judgment of my opinions as far as I'm concerned.

WALLACE: You sit in judgment of his opinion?

SCALIA: That's what happens.

WALLACE: Well, what about the argument though --

(LAUGHTER)

WALLACE: And people wonder why you push people's buttons every once in a while.

SCALIA: It's fun to push the buttons.

WALLACE: Is it?

SCALIA: Yes.

WALLACE: Why?

SCALIA: When Richard Posner comes out with a statement like that, I should fire back a statement equally provocative.

WALLACE: OK. But here's the point that he's making -- the president's decision months later, after the case has been argued, after the law has been passed, what to do about immigration and deporting --

SCALIA: Have you read the whole opinion?

WALLACE: No. Of course, you know haven't read the whole opinion.

SCALIA: Neither have the people who read that quote.

The context in which it was the solicitor general had argued to the court that the only reason the Arizona was suffering the incursion of immigrants that there was not enough funding for immigration enforcement and the executive had to make decisions about where to allocate the funning.

Now, I said in my opinion that even that is no justification for letting -- for refusing to let Arizona supplement the enforcement. So long as it's only enforcing federal law, not going beyond federal law. I said even if that were the reason, but I added, I don't know the solicitor general's representation is any longer correct in the light of the statement by the president which didn't talk about lack of funding, but just simply said we're not going to enforce these provisions of the law. I didn't criticize. I didn't say he had not authority to do it. I said he may well be right in doing it. But it demonstrates the point that Arizona is being prevented from enforcing federal immigration law even when the executive rightly or wrongly simply chooses not to enforce it.

WALLACE: You have a reputation and some would say we've seen it today of being cantankerous on the bench and I would like to do, if I may, sir, a textual analysis.

SCALIA: You're going to talk about my book?

WALLACE: I have talked about your book. This is a textual analysis.

SCALIA: All right.

WALLACE: All right. You wrote Sandra Day O'Connor's decision in the 1989 abortion case, quote, "cannot be taken seriously."

You called an opinion by Chief Justice Rehnquist in 1988 case "a short sighted exercise if folly."

In 2007 dissent, here's what you wrote about Justice Breyer's opinion. "The sheer applesauce of the statutory interpretation should be obvious."

Are you cantankerous?

SCALIA: No, I express myself vividly. Those criticisms are criticism of opinions, not of my colleague. I'm a good friend of Steve Breyer. I like him a lot -- and of Sandra Day O'Connor. And whoever else whose opinions I criticize.

WALLACE: And if they call one of your opinion sheer applesauce?

SCALIA: That's fine, so long as they can demonstrate that it's true.

WALLACE: I actually think applesauce is something good.

SCALIA: Well, it's not good in opinions.

(LAUGHTER)

WALLACE: You are 76 years old. Will you time your retirement so that a more conservative president can appoint a like-minded justice?

SCALIA: I don't know. I haven't decided when to retire.

WALLACE: But I mean, does it go through your mind, if I retire, I'd like to see, since you talk about Republicans appointing one kind of justice and Democrats another, that you would want somebody who would adhere to your view, as in your book "Reading Law"?

SCALIA: No, of course, I would not like to be replaced by someone who immediately sets about undoing everything that I've tried to do for 25 years, 26 years, sure. I mean, I shouldn't have to tell you that. Unless you think I'm a fool.

(LAUGHTER)

WALLACE: I was in the White House briefing room back in 1986 when Ronald Reagan -- you remember me there? No, you don't.

SCALIA: I don't remember.

WALLACE: I was over, if you look at that picture, I was over to the left, as you take a look at that picture --

SCALIA: OK.

WALLACE: -- when Reagan named you to the court. And over the years, at various points, you've admitted to being discouraged as starting to repeat yourself.

SCALIA: Yes.

WALLACE: After 26 years on the job, how do you feel about it these days?

SCALIA: Oh, I'm no discouraged than ever. You know, win some, lose some. I think we are fighting a good fight. And I think things are better as far as the Supreme Court's jurisprudence is concerned. By my likes, they are better today than what they were 26 years ago. So, you know, it's all right.

WALLACE: Any thoughts about stepping down?

SCALIA: No immediate, no immediate -- no immediate thoughts about it, no. My wife doesn't want me hanging around the house, I know that.

WALLACE: I can understand that.

(LAUGHTER)

WALLACE: Justice Scalia, the name of the book is "Reading Law", it is fascinating -- you are fascinating. Thank you so much for coming in today to discuss judging. It's been a real treat. You have an open invitation to come back any time you would like.

SCALIA: Thank you very much. Enjoyed being here.

WALLACE: Thank you, sir.

Up next: a live report on Mitt Romney's overseas trip and our Sunday group assesses how he is doing on the world stage.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

MITT ROMNEY, R - PRESIDENTIAL CANDIDATE: As we face the challenges of an Iran seeking nuclear capability, we must draw upon our interest and our values to take them on a different course.

(END VIDEO CLIP)

WALLACE: Mitt Romney today in Israel, meeting with Prime Minister Netanyahu on the second stop of his foreign trip.

For more, let's bring in Fox News chief political correspondent Carl Cameron, who is traveling with Mitt Romney, and reports now live from Jerusalem -- Carl.

CARL CAMERON, FOX NEWS CHIEF POLITICAL CORRESPONDENT: Hi, Chris.

Well, Mr. Romney met with Israeli Prime Minister Benjamin Netanyahu earlier today. They'll dine again later this evening. But before this morning's meeting, Romney aides say he would support Israel should it decide to use military action in order to prevent Iran from developing nuclear weapons.

(BEGIN VIDEOTAPE)

ROMNEY: Your perspectives with regards to Iran and its efforts to become a nuclear-capable nation are ones which I take with great seriousness and look forward to chatting with you about further actions that we can take to dissuade Iran from their nuclear folly.

CAMERON: Netanyahu seemed to criticize Obama policy toward Iran.

BENJAMIN NETANYAHU, ISRAELI PRIME MINISTER: We have to be honest and say that all the sanctions and diplomacy so far have not set back the Iranian program by one iota. And that's why I believe that we need a strong and credible military threat coupled with the sanctions to have a chance to change that situation.

CAMERON: The Israeli newspaper "Haaretz" reported today that the Obama administration has briefed Netanyahu on U.S. contingency plans to attack Iran's nuclear program should diplomacy fail.

(END VIDEOTAPE)

CAMERON: But there are -- there are conflicting reports about whether or not those briefings actually occurred. Anonymous Israeli officials today said that they did not. But Mr. Netanyahu's cabinet minister on Israeli radio said, in fact, they had -- Chris.

WALLACE: Carl Cameron with Mitt Romney campaign in Israel -- Carl, thanks for that.

And it's time now for our Sunday group.

WALLACE: The Wall Street Journal's Kimberley Strassel; Liz Marlantes of the Christian Science Monitor; Republican strategist Chip Saltsman; and Fox News political analyst Juan Williams.

Kim, it seems that Romney has put himself on a bit of a tightrope on this -- on this trip, on the one hand trying to set forth his foreign policy but studiously, carefully not criticizing the president's policy while he's overseas.

Given all of those constraints, what does Romney need to do today in Israel and then starting tomorrow in his final trip in Poland?

STRASSEL: Well, the entire point of this, the Romney campaign -- they chose these countries for very specific reasons, which is to show the strongest possible contrast with President Obama on foreign policy.

It's not going to be a huge part of this election, but voters need to feel comfortable at it. And so Romney's out there with all of these trips he's chosen, Israel, Poland and Britain, to say my view is peace through strength; America has to return to a strong leadership position.

And part of that is we back our allies. So he chose Israel to go and say, you know, the president has lectured Israel; I'm not going to do that. What you need to do vis-a-vis Iran, I'm there for you.

He chose Poland, the same thing. One of the president's first decisions was to pull the plug on the missile defense system that Eastern Europe had been looking for America to protect it. And so he's going to go do that, and the goal is to go out and say I am here; I am going to return us to that traditional standpoint of America strength and backing our allies.

WALLACE: Liz, how substantial do you think the difference in foreign policy between the president and Romney?

And to what degree do you think that Romney can make it clear to voters in a way that they would care about that he would run a different foreign policy?

MARLANTES: Well, that's the Obama administration's criticism of Romney right now is that the difference seems to be largely one of tone, that it's not clear, when you look at what he's proposing in terms of policy, that there is that big a difference, even, for example, on Iran, where he's really offering up a lot of tough talk, but, you know, the Obama administration has not ruled out military action. Romney's saying it would be a combination of sanctions with the threat of military action, which is exactly what the Obama administration is doing also, including, as Carl Cameron reported, you know, this report that they briefed Israel on a contingency plan for military action.

So the criticism is that there's really not a lot of difference when it comes to substance. And I think even, you know, on the tough talk, one of the real, sort of, trademarks of Romney personally has been, throughout this campaign, that he's, kind of, a pragmatist, you know, he's got this business experience, and that he tends to be, sort of, cautious.

And so, to some extent, even the, sort of, tough talk, the sweeping rhetoric that we saw in the VFW speech, seems a little at odds with what we tend to think of as Romney's personality and character and how he might govern as a leader.

WALLACE: The VFW speech was to the Veterans of Foreign Wars here in Nevada before he left, and we're going to get back to that in a minute.

But first, as we start to move backwards, London -- the trip started with a difficult stop for Mitt Romney, I think it's fair to say, Chip, in London, memorable for Romney's bewildering comment that he wondered whether or not the Brits were ready for the Olympics and then the blistering reaction from British politicians and the media.

And let's take a look back at some of that.

(BEGIN VIDEO CLIP)

ROMNEY: You know, it's hard to know just how well it will turn out. There are a few things that were disconcerting.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

BORIS JOHNSON, LONDON MAYOR: There's a guy called Mitt Romney who wants to know whether we're ready -- whether we're ready.

(BOOING)

JOHNSON: He wants to know whether we're ready. Are we ready?

(APPLAUSE)

Are we ready?

(APPLAUSE)

Yes, we are.

(END VIDEO CLIP)

WALLACE: And he said that to a crowd of about 60,000 people in Hyde Park.

(LAUGHTER)

WALLACE: Chip, as someone who managed Mike Huckabee in 2008, has managed other political candidates, how do you explain Romney's -- and I've been thinking of how I'm going to phrase this -- inartful performance in London?

SALTSMAN: Well, since the Olympics started, maybe you can call it unforced error. And unforced errors usually lose you the match. And although this is -- you know, the good news is those 60,000 people were not voters...

(LAUGHTER)

... or at least we hope not. It depends on Chicago's voting strategy, I guess.

But at the end of the day, this should have been a lay-up trip. When you go to London -- he's got the Olympic experience, you'd think the guy writing the memo would say, "and be positive." I mean, this is an exciting time for London.

But I think what you saw there is, kind of, CEO Mitt Romney come out, which is, kind of, his default position, and say, you know, it looks pretty good, but, you know, there's problems; there could be problems, and we need to work on this.

And people are, like, going, huh? And this, unfortunately, reinforces the, kind of, the Mitt Romney image of, kind of, aloof and not always understanding the situation.

Look, this is it a wonderful time for Great Britain and they are super-excited about the Olympics, just like they were in Salt Lake. And they didn't need somebody coming in there and trying to criticize them, no matter even if they need it, that's not Mitt Romney's job at this point.

WALLACE: You know, I wonder, Juan, and just picking up on that, whether that's part of Romney's problem in this campaign is that too often he reacts as the business executive he used to be or the Olympic organizer he used to be and not as the potential president he now is?

WILLIAMS: Well, I think that's right. But in defense of Mitt Romney, let me say that the point of criticism that he raised is legitimate. I think the British were concerned about security in advance of the Olympics. The problem is here you don't come into somebody else's house and start criticizing them.

And I think that Romney's purpose on this trip, to get back to what was said earlier, was to emphasize that he had a tremendously successful Olympic experience in Salt Lake City, that he came in and he was the savior of those Olympics. So he goes over there and I think he wanted to burnish that image by saying, as compared to what I did, look at these folks, they're not fully prepared.

The problem is that then there was all this come-back including from the prime minister, David Cameron, who said, yeah, you go out and do that in the middle of the desert, in Utah...

WALLACE: No, he said, the Middle of nowhere.

(LAUGHTER)

WILLIAMS: Well, yeah...

WALLACE: Given the fact that it was the Winter Olympics...

(LAUGHTER)

WILLIAMS: But then as compared to doing it in an urban environment like London. So I think that's a problem.

And one last point. This whole notion that the president somehow is timid on foreign affairs just doesn't play out in the minds of the voters. I mean, this is the guy who got bin Laden. This is the guy who got the troops out of Iraq. This is the guy who successfully, you know, took Qaddafi out without getting American troops involved.

WALLACE: You know, we were talking about the VFW speech. Before Romney had left, Kim, he did speak to the Veterans of Foreign Wars convention in Nevada, and he had no problems attacking the president on foreign policy. And his main target was this idea that the Obama White House leaked national security -- sensitive national security secrets to try to boost the president's reelection. Let's take a look at some of that night.

(BEGIN VIDEO CLIP)

ROMNEY: This conduct is contemptible. It betrays our national interests. It compromises our men and women in the field. And it demands a full and prompt investigation by a special counsel, with explanation and consequence.

(END VIDEO CLIP)

WALLACE: Kim, can Romney and the Republicans -- can they make the voters care about the leaks and the question as to whether or not top secrets have been -- have been divulged in a way that may damage U.S. operations or U.S. personnel for the political advancement of the president?

STRASSEL: They can. I think this is a problem for the Obama administration.

Unfortunately for the Republicans, there isn't likely to be a resolution to this prior to the election. There isn't really any mechanism by which you can probably get to the bottom of these leaks and deal with this before the election.

I think what was more interesting -- and disagree, a little bit, with Liz a bit on the contrast. I think there is a huge contrast, which you saw laid out in that speech, which is, again, contrast between Romney talking about strong American leadership and what he portrayed as the Obama administration's multilateralism, leading from behind, sort of, spinning its wheels.

The other huge point of...

WALLACE: But just to pick up quickly on that, when they did take down bin Laden; Qaddafi is out of power, leading behind or whatever, is that something that the voters really feel?

STRASSEL: Well, I think that you have to also put that next to Syria, for instance, and what is happening there. But I think, quickly, one of the other big points of contrast Romney made in that speech was also the economy. A strong American economy is vital for strong national security.

WALLACE: Speaking of which, we're going to get there. Let's take a break right now. When we come back, how are the campaigns dealing with the latest set of bleak economic numbers?

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: Still in the position where we are pulling ourselves out of the deep holes caused by the great recession. And there is still of course, a great of anxiety in the country about the economy.

(END VIDEO CLIP)

WALLACE: White House Press Secretary Jay Carney reacting to new GDP numbers, indicating the weak economic recovery is getting even weaker. And we are back now with the panel.

Let's put these GDP numbers in context. In the final quarter of 2011, the economy grew 4.1 percent. Then, for the next three months, the first three months of this year, it grew at only 2 percent. And for the latest quarter ending in June, just 1.5 percent.

Kim, you do not have to be a Nobel Prize winning economist to see that's heading in the wrong direction.

STRASSEL: Well -- moreover, this is the third such dip in as many years. And I think problem with the Obama administration is that it begins to chips at that narrative which you just heard Jay Carney say, which is we have been in this big hole. It's hard to get out. The problem is, if look back historically, actually the deeper the recession the faster the recovery, because there was more ground to make up.

So what you are seeing in this is that the economy gets a bit of confidence and then it slides back down. And that leads to a strong impression that this has to do with Obama policies and that's hard for them.

WALLACE: Well, let's pick up on that, because Liz, the White House pushback as they say, when you've got a financial bubble, and this particular kind of economic crisis, that it takes longer to dig out of it. And they say the specific solution, the policies are more spending, more stimulus and that congressional Republicans are blocking it. Can they sell that to the voters?

MARLANTES: I don't know. I am not an economist, but economic forecasts right now for what's going to happen in the next quarter range from either it's going to be maybe slightly better than this one to some people saying maybe we could have another recession on our hands. So I think they're going to be -- the economic picture is not good for them. And it's pretty hard for them to send -- their one defense I think is that it is true what the president said earlier to some extent which is that the private sector is doing slightly better, that a lot of the problem has come from the public sector as state and local governments have been really, really hurting.

And so there is that. And the president said that his job plan would directly address that, because it would go towards hiring more teachers, more firefighters, more cops, that sort of thing.

But no, the economy is obviously the number one problem facing the president and to that extent and the fact that Mitt Romney was over in London making some unforced errors at a time when really this is issue that his campaign should be hammering was not helpful.

WALLACE: Well, they are still hammering it.

And in fact, speaking of the private sector, there are, Chip, those four words that the president said you didn't build that, which continues to resonate. And let's take a look at how this week the Romney and Obama campaigns played that.

(BEGIN VIDEO CLIP)

OBAMA: When you have a business -- that, you didn't build that. Somebody else made that happen.

TERRI: I am an owner of the small business. And this is how I built up from nothing without any help from anyone.

OBAMA: Those ads, taking my words about small business out of context, they are flat out wrong. Of course Americans build his own businesses.

(END VIDEO CLIP)

WALLACE: Chip, how big of a deal you didn't build that. How potent of a weapon is it for the Romney campaign? And how significant is it that Obama -- because that's a big deal when the president, instead of just showing things, talks directly to camera. You can only do that so many times in ads, that they pulled out the big gun, the president himself.

SALTSMAN: This is a huge issue. And as I have been out working in Tennessee and some other states on some campaigns, this is what everybody is talking about, because the blood, sweat and tears from these small business owners -- I have heard more time than once, the president said something like that because he has never signed the front of a paycheck. He doesn't know what it's like to start from nothing and start a mom and pop business and work from the ground up. Whereas that's Mitt Romney's strongest suit and that's where he's really got to drive it home.

Whether it was out of context or not, 100 days, there's nothing out of context. Everything is in context. And this is the one issue that really, really hurts Obama as the unemployment is still at 8.2 percent, GDP going down. They feel like there's a double dip recession coming. This is the one that every day average voters understand that the president just doesn't get it.

WALLACE: Juan.

WILLIAMS: Well, I don't think that's right. I think that what people know is a matter of policy is the president has cut taxes for small business in this country, that going back to 2010 in the small business tax act. But it goes beyond that in my mind, Chris, because the president in the Saturday radio address went on to say, he said, you know, the Republican position is taken in terms of the tax cuts that were voted on this week on Capitol Hill is that if you cut taxes for the rich it's going to produce jobs. It will create jobs.

But in fact, what he said was that you know, it's not going to produce jobs if you then go on to cut education, training plans, if you go about hiking taxes on the middle class. And that is a winning argument for the president, because overwhelmingly polls show the American people think.

WALLACE: They're not going to hike taxes for the middle class. What they're saying is extend all the tax cuts.

WILLIAMS: They would say go ahead and raise -- the Republican -- raise -- do not raise taxes on the rich. And therefore block tax cuts for the middle class. And if you do that, the Democrats were.

WALLACE: No, no. They're saying extend...

WILLIAMS: They're saying extend all the Bush tax cuts.

WALLACE: Right, but they're -- but Chris the reality is, that if you don't buy into this package that allows for tax hikes on the very rich you will get tax hikes for everybody, because the Democrats will block it.

WILLIAMS: Well, is that the Republicans fault?

WALLACE: Yeah, because they are blocking the plan that would allow tax cuts to into place for 98 percent of Americans.

STRASSEL: I think the problem here is -- I mean, Juan is very sensibly talking about policy. The problem for the president on this issue is that it goes beyond politics, it goes beyond academics, it is about a gut feeling people have. This is why he is out there responding is because this is about identifying. And there are people who look. And it is on context, it's not just four little words, it's also the demeaning comments he made about, oh, a lot of people work hard, a lot of people are smart.

People see this and they go, is this the kind of guy who won the White House? Does he understand what I do every day? That's the problem that the administration has...

WILLIAMS: You know, I just -- I just think what's going on this country when I hear things like on the gun control thing, there are all these suspicions, oh, you know, he really wants to take your guns. Or Michele Bachmann talking about, oh, you know what, there are Muslims who are infiltrating the government and sabotaging. And on this one, they take his words, and they really are out of context, he really was talking about bridges and about building roads, and they say, oh, this is evidence that he hates small business when the policies, Kimberly -- you know, he has cut taxes for small business.

STRASSEL: It is more about world vision. It's about do you think government creates jobs, do you think government does this? Or do you think the private sector does. That's why people are reacting to this.

WALLACE: Chip.

SALTSMAN: I was about to say I have poured concrete and tied steel. I built those bridges. I know I did that.

WALLACE: But that doesn't mean you built Apple.

SALTSMAN: No, but somebody had an idea out of a garage and two people put their life into it. And they built Apple.

WALLACE: All right. We're going to have to leave it there. Thank you, panel. See you next week.

Don't forget to check out Panel Plus where our group picks right up with the discussion on our website FoxNewsSunday.com. We'll post the video before noon eastern time. And we're going to talk about Antonin Scalia in that extraordinary interview in the first segment. So you may want to tune in.

And also make sure to follow us on Twitter @foxnewssunday.

Up next, our power player of the week.

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

WALLACE: Still to come, our "Power Player of the Week."

MICHELLE KWAN, OLYMPIC MEDALIST: Seven years old, all the way to competing until 25 years old. That's what I did. That was my schedule.

WALLACE: But three years ago, while training for another Olympics, she chose a different passion.

KWAN: It's sort of that identity, you're trying to figure out who you are.

WALLACE: Stay tuned.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

WALLACE: With the Olympics now in full swing, we want to tell you about one of America's greatest athletes who we first met in May. She's building a life after the Olympics and she is doing it in Washington. Here is our "Power Player of the Week."

(BEGIN VIDEOTAPE)

KWAN: Life after skating is fantastic. It is one adventure after another.

WALLACE (voice-over): Michelle Kwan is the most decorated figure skater in American history. For decades her life revolved around competitions.

KWAN: Nations in January, then March World Championships. Olympics maybe in February. So everything was very planned out since, 7 years old all the way to competing until 25 years old. That's what I did. That was my schedule.

WALLACE: But three years ago while training for another Olympics, she chose a different passion. She went to graduate school to get her Masters degree in international relations.

KWAN: It was so scheduled. And then to actually wake and say, oh, what do I have to do today? It is sort of that identity, you're trying to figure out who you are.

WALLACE: Kwan started down this path in 2006 when she attended a White House event and made an offhand remark to Secretary of State Condoleezza Rice.

KWAN: I said, if there is anything that I could do with the State Department, please let me know. And, you know, a few months later I was appointed as a policy envoy.

(BEGIN VIDEO CLIP)

CONDOLEEZZA RICE, FORMER SECRETARY OF STATE: And I know that you are going to play an important and valuable role for our nation.

(END VIDEO CLIP)

WALLACE: Since then Kwan has traveled the world, engaged in soft power, meeting with government leaders and young people and trying to make connections.

KWAN: Perhaps when they go into their government, or when they go into their business, they have a different impression of America.

WALLACE: She is just as driven as she was on the skating rink.

KWAN: I like winning.

WALLACE: She is now a member of the President's Council on Fitness, and deeply involved in the Special Olympics.

All of these things are unpaid, correct?

KWAN: Mm-hmm.

WALLACE: How do you support yourself?

KWAN: I have been very, very fortunate in my skating career. I have toured for 14 years and financially, I am OK.

WALLACE: Since last summer, Kwan has been living here in Washington almost totally under the radar. But she finds D.C. just as exciting as skating.

KWAN: Now just being here in Washington and being surrounded by people who want to make a difference and think-tanks, non-profit, government, it's just so inspiring.

WALLACE: At age 32, Michelle Kwan is remarkably well-adjusted. While she won nine national championships and five worlds, the best she could do at the Olympics was a silver and a bronze.

Do the two defeats in the Olympics still sting?

KWAN: I mean, it was not exactly the color that I was looking for. But, hey, sometimes it can't be perfect.

WALLACE: But you get the feeling the best is yet to come.

KWAN: In figure skating, I felt in some ways that I was selfish, my coaches, choreographers all helping me. Now I sort of approach life differently where I'm trying to help others. I also see it as just a chapter in my book. And that although my skating career is only one chapter and I am sort of turning the page to the next chapter.

(END VIDEOTAPE)

WALLACE: Michelle Kwan says she may run for office someday, after all, she spent years on the ice with nine judges watching every move she made. Facing voters, she says, wouldn't be all that different.

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