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Fox News "Fox News Sunday" -Transcript

Interview

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WALLACE: A lot of Republicans wanted Indiana Governor Mitch Daniels to run for president this year. Now, a lot of Republicans want Mitt Romney to choose Daniels as his running mate.

Joining us from Indianapolis to talk about that and an economic recovery that seems to be stalling is Governor Daniels.

And welcome back to "Fox News Sunday", sir.

GOV. MITCH DANIELS, R-IND.: Glad to be here.

WALLACE: You finally endorsed Mitt Romney this week. But here's what you said in an interview with the "Indianapolis Star." We're going to put it on the screen.

"You have to campaign to govern, not just to win. Look at everything through the lens of folks who have yet to achieve. Romney doesn't talk that way."

Question -- is Romney out of touch with Americans who are struggling in this economy?

DANIELS: No, I think he is much more in touch honestly than the president, apparently will ever be. He's been out there. He's been roughed up in the primaries. He's been face to face with a really serious, lingering economic difficulties America faces. If anybody is, you know, detached from the lives of real Americans, if anybody is disconnected from where jobs and wealth comes from, it's our president. So --

(CROSSTALK)

WALLACE: If I may, though, sir, what did you mean when you said Romney doesn't talk that way?

DANIELS: I'm just saying that he's got the right prescription for America, he is meeting the objective that I hoped our party would meet of offering specific, positive, constructive remedies for our debt problem and our slow growth problems. As things go along, I just want to encourage him to express these very same principles more often from the standpoint of the young, the poor, those that have yet to start up the ladder of life. It's the very same principles, but aimed in a slightly different way. I know he'll do that.

WALLACE: The polls are pretty clear at this point that the horse race between Obama and Romney is very close.

WALLACE: But they're also clear that maybe perhaps because of the primary process and positions he took during the primaries, that Romney trails the president by significant margins among women, among Hispanics, among lower-income workers.

How does he reach out to them?

DANIELS: Again, I think simply by identifying with the real problems they're facing. I don't think he wants to trade problems with the president this fall.

This economy is in a lousy shape, everyone knows it. The only surprise to me is that anyone is surprised that it's still sputtering. And I don't see it. I hope I'm wrong, but I don't see it much better a few months from now.

And so, Governor Romney, I believe is already getting good marks for his superior point of view on the thing that bothers Americans most. It bothers everyone, all the groups you just mentioned, as much as anyone. And so, he's got a great opening, I think. I predict he'll seize it.

WALLACE: All right. I'm going to get to the economy in a moment, but I want to talk about the specific groups, because -- for instance, with the Hispanics, and yes, of course, the economy is the overwhelming issue. But during the campaign, Romney said he opposes the DREAM Act. He supports the Arizona crackdown on illegals. He said that the illegals should self-deport.

A lot of Hispanics are expressing concerns about those positions. He can't just say I didn't mean it.

DANIELS: I don't think he has to at all. I think that, you know, he has nothing -- he gives away nothing here with regard to the president who's been, I believe, very duplicitous sometimes on this very same subject. But I think he's got to speak the language honestly, not of narrow broadcasting, to narrowcasting let's say, to individual groups as much as the language of unity that talks about the issues that unite us all, the threats that menace us all and try to bring Americans together.

You know, that quote you put up, Chris, the most important part to me is the notion of campaigning to govern. Meaning, try to assemble people who may disagree about other things, about the largest national challenges and objectives we have.

WALLACE: Let's deal -- I know you are not going to particularly enjoy this. Let's deal with a question of you as a possible running mate for Romney. During the run-up to the primary campaign, you made it clear that your wife and your daughters were not especially enthused at the idea of you running for president.

Would they feel differently about your running for vice president, which is a shorter and less intrusive campaign?

DANIELS: We haven't had the conversation and I don't expect to have it. You know a lot went into that decision not to run. Very specifically, that I promised the people of my state eight full years and I like living up to that commitment, showing that it was real.

So, no, I don't -- I think this is a hypothetical question that will probably stay that way.

WALLACE: All right. But let me ask you directly, if Romney asks you to be his running mate, will you accept?

DANIELS: Chris, you will remember what William F. Buckley said when he ran for mayor of New York and asked what he would do if he won. He said, "Demand a recount."

I think I would demand reconsideration, and send Mr. Romney a list of people I think could suit better.

WALLACE: All right. Let me ask you who would be at the top of the list. Who should he pick?

DANIELS: I have seen a lot of names and I like them all. I don't want to ruin anybody's chances this morning by singling him or her out. You know, there is a lot of talent in the Republican Party. A lot of new governors and young legislators have joined our ranks in the last few -- just few years.

And I think he has a wide range of people to pick from. I have full confidence he'll find the best one.

WALLACE: Let's turn to the economy, which you touched on earlier and where it is right now. There seemed to be signs for last few months that the economy and the recovery was picking up, more jobs were being created each month. The employment rate was steadily coming down.

But now, in the last month, there seems to be a sense from a variety of signs -- job creation, housing -- that the recovery is stalling.

What's your sense of where the national economy is now?

DANIELS: That it's stalling and it never had much momentum. Even when consumption seem to be going up, if you look one level deeper, people were digging in savings to make those purchases. Last year, income in America rose slower than inflation. People actually lost purchasing power. You know, our state happens to be one where the workforce is growing, but all around us there are states, Chris, where people have simply given up looking for work. Everyone now knows if we had the same size workforce we had when this all started, unemployment as reported would be 11 percent. Not 8.x.

So, you know, this is still a very tough slog in most of America. And honestly, I can't name one thing that this administration has done that hasn't leaned against jobs and against growth. So, to that extent -- to the extent national policy has an affect, it's not really a surprise.

WALLACE: Well, let me pick up on that, though. What about the Obama argument that he inherited a mess from George W. Bush, and that if Romney gets in to office and enacts the policies he's espousing, that he will simply return us to that mess?

Governor Romney has endorsed Paul Ryan's budget. In principle, Ryan cuts tax rates for the rich without specifying which loopholes he would close. Ryan cuts nondefense discretionary spending by 19 percent in 2014, which the Obama campaign says would mean major cuts in Head Start, medical research and healthcare for the poor.

So, how about the Obama argument, what Romney will do is give tax cuts to the rich and spending cuts to the poor and the middle class?

DANIELS: First of all, the president did inherit a mess but it's not the first time it's ever happened. He's done less with the mess than anyone else ever did. Ronald Reagan inherited a bigger one and had a roaring economy already by this stage.

This is the weakest recovery, at least in the post-war period, if not ever, given the depth of the recession that we were in. With regard to how we get out of it, you can start by saying we couldn't do worse than the policy mix of this president -- gigantic new spending, gigantic new taxes, a takeover of 18 percent or 19 percent of the economy in the Obamacare bill. Anything would be better than that.

Now, with regard to the Ryan budget, it's certainly a much better starting point than what we have now. Yes, fill in the blanks. Yes, let's describe exactly where or at least the extent to which the tax loophole should be closed.

But you know, the president -- apparently, nothing in his life has acquainted him with where jobs and wealth come from. He has no ear at all for the small business of this country. They're the ones on the receiving end of all of his new taxes. And, you know, frankly, I guess he never is going to get it.

WALLACE: Finally, Barack Obama won Indiana four years ago, the first time that any Democrat had won your state since Lyndon Johnson in 1964. What are the chances that Barack Obama can win Indiana again this November?

DANIELS: Slim and none. I want to give credit to a very savvy strategy in 2008. They were in a very competitive primary here. They spent a lot of time and money, had a running head start, saw an opportunity and capitalized on it.

But it will take a massive change, I believe, in the view of Hoosiers for him to repeat that this year. The kind of policies he's pursued have been very, very hard on people out here in the middle of the country. And my fellow citizens seem to see that. Every indication I have seen says they are open to change and a new direction in favor of more limited government and more pro-growth economic policy.

WALLACE: So you think that Indiana is basically locked up pretty tight for Mitt Romney in November?

DANIELS: I think you got to go earn it, of course. And I hope he will do that. But you asked me what the president's chances are, and I'll just -- I think I'm on firm ground saying they're not too good.

WALLACE: Governor Daniels, we're going to have to leave it there. Thank you so much as always for talking with us and please come back, sir.

DANIELS: I'd like that.

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