CHRIS WALLACE, HOST: I'm Chris Wallace.
With just over a month when the votes are cast one candidate is going all in, in New Hampshire.
Will the Granite State deliver for a long shot? We'll continue our 2012 one-on-one interviews with Republican presidential candidate Jon Huntsman.
Then, the super committee fails. Now, there's a legislative mess to clean up.
What's next for Congress as it tries to put country's fiscal house back in order? We'll ask two Senate leaders: Illinois Democrat Dick Durbin and Arizona Republican Jon Kyl.
Plus, Newt Gingrich's front runner standing takes a hit. We'll ask if a possible misstep on illegal immigration could cost Gingrich in Iowa.
And our power player of the week offers a patriotic idea for Christmas shopping
All right now on "Fox News Sunday."
And hello again from Fox News in Washington.
Well, we are finally entering the home stretch and the run up to real people casting real vote in the Republican presidential race. Continuing our 2012 one-on-one series of interviews, we are joined by former Utah Governor Jon Huntsman, who comes to us from Whitefield, New Hampshire, a state where he's been spending a lot of time.
And, Governor, welcome to "Fox News Sunday."
JON HUNTSMAN, REPUBLICAN PRESIDENTIAL CANDIDATE: Chris, it's an honor to be with you. Welcome from Coos County, New Hampshire.
WALLACE: There you go.
Let's start, Governor, if we can, with the polls. Looking first nationally, you are still trailing the field all the way back as you can see there at 2 percent in last place. But in New Hampshire, you are starting to make gains, in fourth place, at 9 percent, though you are still -- according to this poll at least -- far behind Mitt Romney.
You say that defeat is not an option in New Hampshire. You've held more than 100 events in that state. Don't you have to win there?
HUNTSMAN: Well, we have to beat market expectations and we have a message that will allow us to beat market expectations, Chris. People here want to talk about our economic deficit and they want to talk about our trust deficit. Yesterday, we had two town meetings here in the western far reaches of the state. Today, we'll have three town hall meetings. Preseason is over and we're now on the final stretch. I like our position, I like where we stand in the polls.
More importantly, the people of this great state, they love an underdog. And I am an underdog right now. If you can be an underdog and have a message that begins to connect with people on the ground, you can make things happened.
Do I believe we're going to beat market expectations in New Hampshire? I absolutely believe we will. And that will translate down market to South Carolina and then ultimately to Florida.
So, I like our position here, Chris.
WALLACE: Well, you talk about market expectation and perhaps the Huntsman stock took a hit today because the New Hampshire "Union Leader" -- perhaps the most influential, the biggest newspaper in the state of New Hampshire has this morning endorsed Newt Gingrich. Isn't that a set back for you, sir?
HUNTSMAN: Well, no. You know, it once again it proves, Chris, how fluid and unpredictable New Hampshire is. People are just beginning to pay attention and coalesce around the candidates. I think, more than anything else -- I mean, a month ago for Newt Gingrich to have been in the running to capture the Manchester "Union Leader" endorsement would have been unthinkable.
So, I think it reflects, more than anything else, the fluidity, the unpredictability of the race right now. But if you're talking about stocks and I like the free market -- you know, I just have to refer you from Intrade where we've gone from the back of the pack to number three, which I think they do a pretty good forecasting what the future trend is going to be in this race.
So, we are in a solid position here in New Hampshire. But you've got to have a message that resonates with the voters here. We have a message that resonates. We have a background that people have looked out. It's a background that speaks to job creation and the ability to expand our economy and a background that speaks to addressing the trust deficit as well.
WALLACE: Let's talk about message and we're going to get to the specific issues in a moment. But your record -- let's big picture -- your record as governor of Utah was not of a strong conservative. But your strategy in this race has been to run -- and I put this kind of in quotes -- as a "relative moderate" -- you are the one who was saying that we need to pull, not all, but most of our troops out of Afghanistan sooner than anybody else on the stage, except for Ron Paul. You are the one who's been tweaking the other candidates, saying that you believe in science issues like global warming and evolution.
When the Republican Party is moving -- and I think it clearly is -- to the right, perhaps fueled by the Tea Party, does it make practical political sense to position yourself as the most centrist candidate in the race?
HUNTSMAN: Listen, I'm not positioning myself at all. I'm simply drawing upon where I have been as a leader. I'm not going to contort myself into a pretzel and become something that I am not. I have an established record as governor of the state of the Utah. I have a record for my service overseas.
When people look at my record as governor, they're going to find what may surprise some people when they begin to reflect on it. I am pro-life and I always have been. I am pro-Second Amendment and I always have been. I am pro-growth.
I delivered tax cut in the history of that state. We delivered health care reform without a mandate. I signed the second voucher for education in this entire.
So, people begin to look at my record, they may have discounted us early on, you know, when I worked for this administration as U.S. ambassador to China. Some people may have, you know, thrown us to the back of the pack. But now, they're saying, I get the part of the Huntsman guy who puts country first. I think we can relate to that.
And then further reflection on my record, I think there's no surprise there for the people who are giving us maybe a first look finally. And as they look at our record and say, look at our track record of service and my years as governor, they're going to come to the conclusion that I am -- I've got a conservative record on the issues that are absolutely applicable to this country and where we need to go.
WALLACE: But let's talk about some of the issues. Newt Gingrich, a lot people thought got into trouble this week when he said that he would support legal status for some long-time illegals in this country. Rick Perry got in trouble a few weeks ago for saying that he supported in-state tuition for the children of illegals.
In fact, you support both of those positions, don't you, sir?
HUNTSMAN: Well, I support first and foremost securing the border. I don't think this discussion has any credibility or intellectual honesty at all until we can actually take --
WALLACE: Wait, wait -- wait a minute, Governor. I mean, records are records. And the fact is, that you are long on record supporting the idea, which was a fact in Utah, of in-state tuition for children of illegals?
HUNTSMAN: That's right. That's right. That was supported by the people of my state. That was supported by the legislature and I supported that as well. I'm not running from that at all.
All I'm saying that, you know, we got to be honest about the first step as it relates to illegal immigration, and that is to secure the border. And I would work for the four border state governors and insure that between fencing and technology and boots on the ground, we can get the job done. It's completely doable, and once that is established, and once we build a little credibility with the people of this country, we can then move on in addressing the needs, the reality of 11 million or 12 million people who are living in the shadows in this country.
WALLACE: All right. Let's turn to the budget issues. In the wake of the failure of the super committee, you now say that the road map to debt reduction is the Bowles-Simpson Commission, which had a $4 trillion dollar fix over the course of the next decade.
Let me ask you about one aspect of that, because the Bowles- Simpson Commission called for $1 trillion in increased tax revenue. They said, let's lower all of the rates as low as 28 percent as a top rate, but let's also eliminate almost all of the deductions and loopholes and they were going to take $1 trillion or rather, $100 billion a year for 10 years, $1 trillion in total, and use that as added tax revenue to try to shrink the deficit.
Would you support that part of Bowles-Simpson?
HUNTSMAN: Well, my plan is not Simpson-Bowles. I took their text tax measure which I thought was a good one. But my plan for debt spending is the Ryan plan.
I'm the only candidate in the race who's actually embraced in total the Ryan plan. I think the super committee is a joke for the simple reason that they are targeting $1.5 trillion over 10 years, 2.5 percent of our total spending in 10 years. I mean, that's not even a serious attempt at all.
I think what Ryan is talking about with $6.2 trillion cut out of the budget over 10 years is exactly where the country needs to be. We've got to get down to 19 percent spending as a percentage of GDP to get anywhere near a sustainable level.
So, the Simpson-Bowles report I thought represented a pretty good body of work. I don't agree with the tax increase portion. I've looked at their tax reform proposal, which I've taken and I combined with some of what I did. I delivered a flat tax as governor.
WALLACE: But, Governor, if I may, and I hate to interrupt but we have just limited time -- their tax reform proposal, yes, it called for lower rates. But it also called for taking some of the eliminated deductions, what they call tax expenditures and using them.
HUNTSMAN: That's right.
WALLACE: You are sort of a truth teller or you position yourself as that on the stage saying some of your candidates -- some of your rivals are engaging in political theater. Isn't it political theater to say, I want a solution -- particularly, just given the political realities in this country -- that has no tax revenue increase?
HUNTSMAN: Well, what I'm calling on tax reform, Chris, is a phasing out of all the loopholes and deductions on the individual income tax side, and the phasing out of all the corporate welfare and subsidies on the corporate side.
HUNTSMAN: Which allows us to lower the rate, broaden the base and to simplify -- which is exactly what I did as governor of the state of Utah.
WALLACE: But you'd be revenue neutral on that, wouldn't you, sir?
HUNTSMAN: It would a revenue neutral exercise, absolutely. I think raising the revenue, which some people might be against. But reinvesting it into the tax code, which would lower the rate, both on the individual side and on the corporate side, is exactly what this country needs.
WALLACE: I want to --
HUNTSMAN: We haven't touched tax reform in meaningful ways since 1986. And it's high time we get busy doing it.
WALLACE: Sir, I want -- we've got three minutes left. I want to get to two issues with you. First of all foreign policy, which obviously is one of your strong suits.
The Pakistan military says that NATO airstrikes hit two border checkpoints this weekend, killing at least 24 of the soldiers. In response, they ordered the U.S. to shut down one air base, drone operations at a key air base, and closed the two main supply routes into Afghanistan, which supply about 40 percent of NATO equipment and supplies.
What would President Huntsman do in this very serious situation with Pakistan?
HUNTSMAN: Well, first of all, I offer condolences on the losses of the 25 Pakistani soldiers. Second of all, I would recognize exactly what the U.S.-Pakistani relationship has become, which is merely a transactional relationship. I would figure out what the contours of the relationship really are and what we can expect from the Pakistani government, realizing full well that the politics playing out domestically in Pakistan are very complicated between the Islamist side, between government, between military, between the ISI.
And I think our expectations have to be very, very low, in terms of what we can get out of the relationship. I think we thought we could get more and we've proven wrong time and time again.
And then I would tie whatever aid money we are giving to Pakistan, if they deserve any at all -- to access drone base, keeping the supply lines open, working rigorously with us on counter terrorism.
HUNTSMAN: And if that isn't going to work, I'm going to look for a new partner in the region, because we do have an interest in Southwest Asia and that is a counter-terror effort, a robust counter- terror effort, we need to be collecting intelligence, we need to fortify our Special Forces capability, and knock them down where they stand up. This is clearly in America's interest to do it right.
WALLACE: Governor, finally, a political group called American's Elect is bound to determine to put a third candidate on the ballot in the 2012 election. Have you talked to any member of that organization?
HUNTSMAN: I haven't talked to any member of the organization. I am a Republican. I am running as a Republican and I fully intend to be running as a Republican.
WALLACE: Well, you have been very critical of President Obama's policies, and you've been very critical of Mitt Romney's, what you call, flips on issues, not to say that that's going to be the race. But the question is, can you flatly state right now and some say this is the game we played -- but can flatly say right now that you will support the Republican nominee and that you will not run as an independent?
HUNTSMAN: Well, I'm running as a Republican and that's where I am today. That's where I've always been, and that's where I fully expect to be during this race.
WALLACE: Well, just to play the game one last time. "I'm running as a Republican" is not a denial, sir. Can you flatly state that you're going to support the Republican nominee?
HUNTSMAN: Chris, I am running as a Republican and I will support the Republican nominee. I've stated that before and I state it again for you.
WALLACE: Thank you, Governor. We're going to leave it there. Thank you so much for coming in and talking with us on this holiday weekend, sir. Safe travels on the campaign trip.
HUNTSMAN: Thank you, Chris. I appreciate that.
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