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WALLACE: Carl, thanks for that.
Now, the candidate who is at or near the top in most recent polls, Congressman Ron Paul who comes to us from Texas.
Congressman, happy New Year and welcome back to "Fox News Sunday."
REP. RON PAUL, R-TEXAS, PRESIDENTIAL CANDIDATE: Thank you. Same to you, Chris.
WALLACE: Four years ago, you were running for president and you got 10 percent of the vote in the Iowa caucuses. As we say, in the latest Des Moines Register poll, you are at 22 percent. Why do you think you are getting so much more traction here in Iowa this time?
PAUL: Well, it isn't because I've changed my message, Chris. My message has been the same for 30 years and it's same as four years ago. But the world has changed and the country has changed.
I've talked about economic policies for a long time, warned about financial bubbles and the correction that was coming. And that has arrived and people now are saying the economy is a big deal. Spending is a big deal. The debt is a big deal.
This is what I worked for whole my career on trying to warn people about.
But also in foreign policy, I get tremendous support on my position, which the other candidates say it is dangerous believing in the Constitution that shouldn't go to war unless you declare the war.
So, this is the kind of thing -- people come around here are tired of the wars. Seventy percent of the American people want us out of Afghanistan. It's bankrupting us. We spent $4 trillion that went into the debt in these 10 years.
And I'm deeply, you know, concerned about civil liberties.
So, these issues strike a chord with the people and I think that is a reason, more so now that even four years ago, but a lot more than maybe 20 or 30 years ago, because right now, the evidence is loud and clear that government is failing in what they pretend they are going to do for us. And that's why the people are looking for different answers.
WALLACE: On the other hand, Congressman, in the latest Des Moines Register poll, on those final two days, it shows some evidence of a slide. And, in fact, Santorum passes you and you fall into third.
What can you do about that slide, sir?
PAUL: I think the dye has been cast. And the ups and downs of the other candidates have been characteristics. They come and they go, and they all belong to the status quo.
The one is, is the people who make a commitment to the campaign for liberty and the Constitution, limited government and going after the Feds, once they put this all together, how liberty and free markets and a sound foreign policy come together, they don't desert. So, our numbers aren't going to go down. The number of people, they're not going to leave us. As they have on the other ones, they come and they go.
So, I think our numbers will continue to grow even in these last couple of days and the caucuses are going to treat us well. But the real test is going to be on Tuesday night. So, we'll have to wait and see how it turns out.
WALLACE: Not surprisingly, Congressman, with your new strong standing in polls, has come new scrutiny, especially about some newsletters that came out under your name in the '80s and '90s, in which there were comments made that were quite frankly racist and homophobic. Now, you say that you were the publisher of those newsletters, not the editor, and so, you didn't know everything that was in them.
But I want to ask you about a book that you wrote back in 1987 called "Freedom Under Siege." And I want to ask you about some of the comments in that. In that book, you wrote this, "The individual suffering from AIDS certainly is a victim, frequently a victim of his own lifestyle, but the same individual victimizes innocent citizens by forcing them to pay for his care."
Question -- Congressman, do you still feel that same way?
PAUL: Well, I don't know how you can change science. I mean, sexually-transmitted diseases is caused by sexual activity and promiscuity it spreads diseases. That's been known, you know, about 400 or 500 years, that somehow these diseases are spread.
So, if a fault comes with people because of their personal behavior -- in a free society, people do dumb things -- but it isn't to be placed on a burden on other people, innocent people, why should they have to pay for the consequences? I'd say a sort of a nationalistic or socialistic attitude. But in a free society, people are allowed to act the way they, but they are responsible for their actions --
PAUL: They should be rewarded --
WALLACE: Congressman, do you think someone who suffers from AIDS should not be entitled to health insurance as opposed to let's say somebody who has a heterosexually transmitted disease?
PAUL: No, I never said that. I am just saying that people --
WALLACE: When you talk about that they victimize other people by making us pay for them, what do you mean, sir?
PAUL: Well, it depends on what the insurance company does that. They are the ones who determine. But there shouldn't be a law that says they're denied. There's no way. I mean, the market should handle this. You know, people who are pregnant nine months can't go in and buy insurance. Insurance is supposed to be insurance.
So, if people are smokers, don't they have to pay more? Sometimes, you get your insurance cheaper if you are a nonsmoker. That's what I'm talking about, and let the markets sort this out and insurance sort it out, but not having dictates by the government saying thou, you must do this and your behavior doesn't matter, you know?
If you drink too much, you go out and you harm to somebody, you have to suffer the consequences. Same way with health matters. You don't have the right to demand that someone else take care of you because of your habits.
WALLACE: Let me -- sir,
PAUL: That doesn't mean that, you don't have laws --
WALLACE: Let me just interrupt, I'm sorry but we have limited time and we want to get to the other two candidates as well. I want to ask you about one other thing that you wrote back in your book in 1987 about sexual harassment in the workplace.
You wrote this, "Why don't" -- this is about the victims of sexual harassment. "Why don't they quit once the so-called harassment starts? Obviously, the morals of the harasser cannot be defended, but how can the harassee escape some responsibility for the problem?"
You said that sexual harassment should not be a violation of someone's employment rights?
PAUL: Well, the whole thing is, is you have to get a better definition of sexual harassment. If it's just because somebody told the joke and somebody was offended, they don't have a right to go to the federal government and have a policeman to come in and put penalties on those individuals. I mean, they have to say, well, maybe this is not a very good environment, and they have the right to work there or not there.
But if sexual harassment involves violence as libertarians, we are very opposed to any violence. So, if there is any violence involved, you still don't need a federal law against harassment. You just need to call the policeman and say there's been an assault or there's been attempted rape or something.
So, you have to separate those two out. But because people are insulted by, you know, rude behavior, I don't think we should make a federal case out of it. I don't think we need federal laws to deal with that and people should deal with that at home.
WALLACE: Congressman, you have an ambitious -- a very ambitious agenda as what you would do as president. You say you would cut $1 trillion in spending in the first year. You say you would shut down five cabinet level departments.
But I want to look at your record of effectiveness as a member of Congress for more than 20 years. "The Washington Post" found that you have sponsored 620 measures over your years in Congress, just four made it to the House floor for a vote and only one of those 620 measures, only one was signed into law -- the sale of a Galveston custom house to a historical society.
With that record, why are you suddenly going to become so effective as a president?
PAUL: Well, you just made my point. The American people are sick and tired of Washington and the people who have been in charge have been passing all these bills and I've been voting no all of the time and vote no on these appropriation bills. So, I am the individual that has pointed out this.
And now, the people are saying the government doesn't work. The debt is too big and it doesn't work.
But the country has to change. To elect me, the country has to change. They have to go back to believing in the Constitution and personal liberty and a different foreign policy, which means that Congress will change.
But just the fact that you can elect a president like myself, the pressure then is on the current Congress, but Congress, you know, don't have strong beliefs. And as long as the pressure from the people are in the right direction, and this is where our campaign is excelling, whether it's the Tea Party movement or the disgust among the American people. They're sick and tired of all this.
So, I represent that. So, of course, why would they pass my laws? I wanted to stop this a long time ago. That's why I went to Washington for.
But the tide has changed. Now, the opportunity is there. And now, I'm a serious contender. So, this is there is optimism in our camp and so much excitement.
WALLACE: Congressman, we have about less than 30 seconds left. I want to ask you one final question. You and congresswoman Bachmann is about to be -- got into quite a flap this week when her state chair, State Senator Kent Sorenson, jumped ship from her campaign to your campaign. She alleges he said that your campaign was paying him to jump ship.
Simple question: did your campaign or anyone connected with your campaign or anyone speaking on behalf of it or any third party vendor, did any of them offer money to Kent Sorenson to come on board your campaign?
PAUL: No. And if she has the evidence, she should bring it forth. Because if she makes charges like that, she should be able defend it. But no, that did not happen.
WALLACE: Well, she's going to get an opportunity right now. Congressman Paul, we want to thank you so much for talking with us today. Happy New Year again. We'll see you back here in Iowa tomorrow. Thank you, sir.
PAUL: Thank you very much.
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