Barack Obama on Fox News Sunday with Chris Wallace April 27, 2008. Transcript.

WASHINGTON–Sen. Barack Obama (D-Ill.) continues to distance himself from William Ayers on Fox News Sunday interview with Chris Wallace. Transcript at the click.

“FOX NEWS SUNDAY” HOST CHRIS WALLACE: I’m Chris Wallace, and this is “Fox News Sunday.”

Barack Obama his candidacy changed the Democratic race for president as he moved from contender to frontrunner. But recently, he suffered a series of big defeats.

Now Obama sits down for an exclusive interview. We’ll ask him questions he’s never faced before about his campaign and what he would do as president, only on “Fox News Sunday.”

Then after Hillary Clinton’s big win in Pennsylvania, what are her real chances of winning the Democratic nomination? We’ll ask our Sunday regulars Brit Hume, Mara Liasson, Bill Kristol and Juan Williams.

And the going gets even tougher “On the Trail,” all right now, on “Fox News Sunday.”

And hello again from Fox News in Washington. Well, as most of you know, six weeks ago we started something called the “Obama Watch,” the amount of time that had passed since the senator promised me he would come on “Fox News Sunday.”

It has been 772 days, but now it’s time to stop the clock. Yesterday, we traveled to Indiana for an exclusive “Choosing the President” interview with the frontrunner for the Democratic nomination.

We caught up with Obama after a rally at a high school in Marion, Indiana.

(BEGIN VIDEOTAPE)

WALLACE: Senator Obama, welcome to “Fox News Sunday.”

OBAMA: Thank you for having me.

WALLACE: Long time no see.

OBAMA: Well, you know, it takes me about 772 days to prepare for these questions, but although I think there was a this was a leap year in there, so I think it’s only 771.

WALLACE: No, I think we checked that.

Anyway, your defeat in Pennsylvania raises new questions about your candidacy and especially about some of the pillars of the Democratic base.

Let’s take a look at the numbers. Among white union households, Clinton beat you 72 percent to 28 percent. Among white Catholics, again, same margin 72 percent to 28 percent.

Senator, why are you having such trouble convincing white working class voters that you’re their guy?

OBAMA: Well, keep in mind that Senator Clinton was well regarded in the state of Pennsylvania, just as she was well regarded in the state of Ohio. The fact that they voted for her shouldn’t come as a huge surprise.

We started out 20 points down in that race, just like we started 20 points down in Ohio. And we actually made significant progress there.

And when you look at the polling that’s now being done post- Pennsylvania, about how we match up in a general election, I think Senator Clinton maybe does a couple of points better than I do, but it’s not substantial.

Most of the voters will vote for me. But you know, they are more familiar with her. She’s from a bordering state. On the other hand, in Wisconsin, I won those same voters over Senator Clinton. In Virginia, I won those voters over Senator Clinton. In Iowa, I won the voters over Senator Clinton.

So I think that, you know, I am confident that when you come to a general election, and we are having a debate about the future of this country how are we going to lower gas prices, how are we going to deal with job losses, how are we going to focus on energy independence that those are voters who I will be able to appeal to.

WALLACE: But some observers, and some liberal observers, say that part of your problem is that you come off as a former law professor who talks about transforming politics when the lunch bucket crowd really wants to know what you’re going to do for them.

Bob Herbert, columnist for the New York Times, happens to be a black man, says that Hillary Clinton seems tougher than you do.

OBAMA: Well, look. After you lose, then everybody writes these anguished columns about why did you lose. After Iowa, everybody was saying Obama’s transforming folks because he’s bringing in all these voters who we never expected would vote for a black guy.

This is the nature of politics. The fact of the matter is that, you know, we have done well among every group because people are less interested in dividing the country along racial lines or regional lines. They’re really focused on how are we going to solve these big problems right now.

WALLACE: But when you see yourself among these groups losing 70 percent to 30 percent, you aren’t troubled by that? Don’t you think to yourself, “Maybe I need to have a different message or a new message, or a different way of reaching out to them?”

OBAMA: Look. You know, what we’ve done has been successful throughout. I mean, it’s not like I’ve been winning in states that only have either black voters or Chablis-drinking, you know, limousine liberals. I mean, we’ve been winning in places like Idaho. We’ve been winning in places like Colorado.

There is this selective memory about how this campaign has proceeded. There’s a reason why we won twice as many states and won more delegates and won a larger popular vote.

Now, what I think is absolutely true is that Senator Clinton ran good campaigns in Ohio. She ran good campaigns in Pennsylvania. She deserves credit for that.

What I also think is true is that I am less familiar with some of these blue-collar voters than she is less familiar they are less familiar with me than they are with her, and so we probably have to work a little bit harder.

You know, I’ve got to be more present. I’ve got to be knocking on more doors. I’ve got to be hitting more events. We’ve got to work harder because although it’s flipped a little bit, we’ve always been the underdog in this race.

I mean, think about it. When we started off, I think nobody thought that we would ever be where we are today. And part of the reason is because I’m relatively new to the national scene, and I’m running against the best brand in Democratic politics.

WALLACE: There’s something else that we saw in Pennsylvania, and take a look at this. Whites backed Clinton 63 percent to 37 percent, while blacks voted for you 90 percent to 10 percent. And if anyone has any doubts, 12 percent of those whites admitted that race was a factor, and they went for Clinton by more than three to one.

Senator, for all your efforts to run a post-racial campaign, isn’t there still a racial divide in this country that is going to make it very hard for you to get elected president?

OBAMA: Well, Chris, if you look at the general election polls, we are doing better against John McCain than Senator Clinton is. We are putting states in play like Colorado and Virginia that have not been in play for a very long time.

Here in Indiana, we just you just saw polling by the Indianapolis Star showing me beating John McCain. And so, look. Is race still a factor in our society? Yes. I don’t think anybody would deny that.

Is that going to be the determining factor in a general election? No, because I’m absolutely confident that the American people what they’re looking for is somebody who can solve their problems.

What they’re looking for is somebody who can pull the country together and push back some of the special interests that can have come to dominate the agenda, who will tell them the truth about how we’re going to bring down gas prices, how we’re going to bring back jobs.

And if I fit the bill, then they will vote for me. If I lose, it won’t be because of race. It will be because, you know, I made mistakes on the campaign trail, I wasn’t communicating effectively my plans in terms of helping them in their everyday lives.

But I don’t think that race is going to be a barrier in the general election.

WALLACE: Congressman James Clyburn, one of the top African American politicians in this country, said this week that blacks are furious with Bill Clinton for playing the race card.

Do you agree with him that there’s been a deliberate effort by the former president and some Clinton supporters to make race an issue in this Democratic race?

OBAMA: I don’t think there’s been a deliberate effort. You know, I take the president at his word that, you know, he is…

WALLACE: Which one?

OBAMA: Well, oftentimes, you know, I think that he’s been going after me hard. He may not have intended it in a racial way. I think he just sees me as competition against his wife. And that’s what, you know, husbands do, hopefully, or spouses do in…

WALLACE: Lumping you in with Jesse Jackson…

OBAMA: … political contests. Well, you know, I thought that that was probably somewhat dismissive, you know, after we had won that contest pretty handily.

But look, you know, I’m confident that once this primary is over, the Democratic Party will come together. And I know that everybody’s feeling anxious right now and fretful and, you know, all these articles are being written about, you know, isn’t the base being divided.

But the fact of the matter is that come August, that convention, whoever is the nominee, I think the Democratic Party will say, “Look, we’ve got a big fight ahead of us in November, and we are going to be unified to take the country in a different direction.”

WALLACE: I wasn’t sure whether I was even going to ask you about your former pastor, Jeremiah Wright, but he made it easy for me because he’s now begun this…

OBAMA: Right.

WALLACE: … public campaign to redeem his reputation. The other night he said to Bill Moyers that he has been the target of a smear campaign.

(BEGIN VIDEO CLIP)

JEREMIAH WRIGHT: I felt it was unfair. I felt it was unjust. I felt it was untrue. I felt that those who were doing that were doing it for some devious reasons.

(END VIDEO CLIP)

WALLACE: Question: Do you think that Reverend Wright is just the victim here?

OBAMA: No. I think that people were legitimately offended by some of the comments that he had made in the past. The fact he’s my former pastor I think makes it a legitimate political issue. So I understand that.

I think that it is also true that to run a snippet of 30-second sound bites, selecting out of a 30-year career, simplified and caricatured him and caricatured the church.

And I think that was done in a fairly deliberate way, and that is unfortunate, because as I’ve said before, I have strongly denounced those comments that were the subject of so much attention. I wasn’t in church when he made them.

But I also know that, you know, I go to church not to worship the pastor, to worship God. And that ministry, the church family that’s been built there, does outstanding work, has been, I think, applauded for its outreach to the poor.

He built that ministry, and I think that, you know, people need to take a look at the whole church and the whole man in making these assessments.

WALLACE: Did you talk to reverend Wright recently about his decision to make a series of public appearances at this particular point?

OBAMA: You know, I didn’t talk to him about that. I had talked to him after all this had happened, partly because I regretted I always regret people who are civilians, essentially, being dragged into these political fights.

And I expressed to him I said, “Look, we have very strong differences. I do not agree with the comments that you made. On the other hand, I regret that you have drawn so much attention.”

And I also regretted the church drawing so much attention. I mean, you had reporters who were coming in and taking church bulletins, you know, the sick and the shut-in, and they were getting phone calls from reporters, and so that was something that I regretted, and I talked to him about that.

WALLACE: But you didn’t try to discourage him from going public? It obviously isn’t helpful to your campaign to have him on the public scene right now.

OBAMA: Yes, I understand, but look. He is a former pastor of mine. He is somebody who has obviously been the subject of, you know, some pretty sharp attacks over the last month. And it’s understandable that somebody, after an entire career of service, would want to defend themselves.

WALLACE: By the way, in your speech on race, you said that while you hadn’t heard these remarks that have been public, that you had heard controversial remarks from the pulpit.

OBAMA: Right.

WALLACE: But you’ve never said what those were.

OBAMA: Well, you know, I didn’t have any particular examples.

WALLACE: I mean, can you tell us anything you heard him say that was…

OBAMA: Well, you know, I think that he has oftentimes talked about some of the problems in the black community in very controversial ways. I mean, I think or in sharp ways, in ways that are provocative.

You know, he will talk about the failure of fathers to look after their children in ways that sometimes people might be taken aback by. He can use street vernacular in his sermons in ways that people wouldn’t expect to hear in church.

WALLACE: But did he ever say anything about America or about white racism that troubled you?

OBAMA: Well, I think that, you know, he has certainly preached in the past when I was there about the history of race in this country in very blunt terms, talking about slavery, talking about Jim Crow.

The problem and I pointed this out in my speech in Philadelphia where oftentimes he would err, I think, is in only cataloging the bad of America and not doing enough to lift up the good.

And that’s probably where he and I have the biggest difference, but some of…

WALLACE: Did you ever go to him after a sermon and say, you know…

OBAMA: Well, but keep in mind, it’s not as if his sermons were constantly political. I mean, I think most of the time he was talking about church, and family, and faith and scripture. And that’s what I got out of church.

So I don’t want to exaggerate this notion that somehow he was on the soap box each and every day. But the important point, though, that I tried to make in Philadelphia is that some of this is generational.

I mean, some of it is he went through experiences that I had never went through. I’m the beneficiary of the civil rights movement. I mean, people have, I think, noted that if you run back some of Dr. King’s speeches we always play “I Have a Dream.”

But if you look at his sermon in Riverside Church, for example, when he spoke out fiercely against the Vietnam War, there are some pretty jarring comments there as well. And part of it has to do with a very specific experience of a generation that was raised under Jim Crow, saw a lot of violence, saw a lot of racial discrimination.

I have a different experience and, in part, have a much more hopeful vision of where America has been and where it can go in the future.

WALLACE: Senator, you say a lot of this stuff Reverend Wright, flag pins are distractions from the real issues. But especially for someone like you, who’s a newcomer to the national scene, who people don’t know a lot about…

OBAMA: Right.

WALLACE: … don’t voters have a legitimate interest in who you are and what your values are?

OBAMA: Absolutely. And so the question becomes how do how do voters draw conclusions about my values? Do they talk about do they look at the 20 years in which I have devoted my life to community service?

Do they talk about the work I did as a community organizer working with Catholic parishes and churches to bring people together to set up job training programs for the unemployed and the poor? That’s a reflection of my values.

Do they look at how I’ve raised my children, and how I speak about my family? That’s a reflection of my values.

I don’t think that the issue of Reverend Wright is illegitimate. I just think that the way it was reported was not, I think, a reflection of both that church that I attend and who I am. I don’t think let me just use another example.

On flag pins, you know, I’ve worn flag pins in the past. I will wear flag pins in the future. The fact that I said that some politicians use flag pins and then aren’t acting in a particularly patriotic way, for that to somehow be translated into me being antipatriotic or antiflag I think that is a distraction.

I think that that is not reflective of me or the love that I have for this country. Keep in mind, I came on the scene nationally at the Democratic Convention, giving what I would say was about as patriotic a speech about what America means to me and what this country is about as any speech that we’ve heard in a long time.

WALLACE: Let me ask you one other question in this regard, which some will call a distraction, some will call values.

In the last debate, you were asked about your relationship with William Ayers, the former ’60s radical, and you said that you were no more responsible for what he did back in the 1960s than for your friendship with Tom Coburn, senator from Oklahoma, pediatrician, who has made comments about possibly taking the death penalty for cases of abortion.

Do you really see a moral equivalency between what Ayers did and what Tom Coburn said?

OBAMA: No, of course not. The point I was making and I actually called Tom Coburn afterwards, because I thought that people were suggesting that I had drawn a moral equivalent, so that’s what I was wasn’t what I was doing.

All I was saying was is that the fact that I know somebody, worked with them, have interactions with them, doesn’t mean that I’m endorsing what they say.

And, Chris, I’m sure you’ve got people who you serve on a board with or have dinner with who, you know, you would never expect to somehow have that seen as an endorsement of their views.

Now, you know, Mr. Ayers is a 60-plus-year-old individual who lives in my neighborhood, who did something that I deplore 40 years ago when I was 6 or 7 years old. By the time I met him, he is a professor of education at the University of Illinois.

We served on a board together that had Republicans, bankers, lawyers, focused on education. He worked for Mayor Daley, the same Mayor Daley, by the way, who, when he was a state’s attorney, prosecuted Mr. Ayers’ wife for those activities in the ’60s.

So the point is that to somehow suggest that in any way I endorse his deplorable acts 40 years ago because I serve on a board with him…

WALLACE: Now, I’m just surprised that you brought Coburn in, because it seems to me it’s so apples and oranges.

OBAMA: No, no, no, no, no. The point I was making was that I’ve got a lot of nobody is saying, “You know what? Barack he’s got a bunch of Republican friends,” or, “He’s got a bunch of people who are considered on the religious right who he gets along with, who he shares stories with, who he does work with.”

The focus is on this one individual whose relations with whom I have a relationship that is far more tangential than it is with somebody like a Tom Coburn, who I’m working with all the time, and who I consider a close friend, and yet that’s the relationship that gets the focus.

WALLACE: Senator Obama, we have to step aside for a moment. But when we come back, we will ask Barack Obama about his plan to change the way Washington works. Back in a moment.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

WALLACE: And we are back now with Senator Barack Obama.

Senator, one of the central themes of your campaign is that you are a uniter who will reach across the aisle and create a new kind of politics. Some of your detractors say that you are a paint-by-the- numbers liberal, and I’d like to explore this with you.

OBAMA: Right.

WALLACE: Over the years, John McCain has broken with his party and risked his career on a number of issues campaign finance, immigration reform, banning torture.

As a president, can you name a hot-button issue where you would be willing to buck the Democratic Party line and say, “You know what? Republicans have a better idea here?”

OBAMA: Well, I think there are a whole host of areas where Republicans in some cases may have a better idea.

WALLACE: Such as?

OBAMA: Well, on issues of regulation. I think that back in the ’60s and ’70s a lot of the way we regulated industry was top-down command and control, we’re going to tell businesses exactly how to do things.

And you know, I think that the Republican Party and people who thought about the markets came up with the notion that, “You know what? If you simply set some guidelines, some rules and incentives, for businesses let them figure out how they’re going to, for example, reduce pollution,” and a cap and trade system, for example is a smarter way of doing it, controlling pollution, than dictating every single rule that a company has to abide by, which creates a lot of bureaucracy and red tape and oftentimes is less efficient.

I think that on issues of education, I’ve been very clear about the fact and sometimes I’ve gotten in trouble with the teachers’ union on this that we should be experimenting with charter schools. We should be experimenting with different ways of compensating teachers that…

WALLACE: You mean merit pay?

OBAMA: Well, merit pay, the way it’s been designed, I think, is based on just a single standardized test I think is a big mistake, because the way we measure performance may be skewed by whether or not the kids are coming into school already three years or four years behind.

But I think that having assessment tools and then saying, “You know what? Teachers who are on career paths to become better teachers, developing themselves professionally that we should pay excellence more.” I think that’s a good idea, so…

WALLACE: But, Senator, if I may, I think one of the concerns that some people have is that you talk a good game about, “Let’s be post-partisan, let’s all come together,” just a couple of quick things, and I don’t really want you to defend each one. I just want to speak to the larger issue.

OBAMA: Right.

WALLACE: The gang of 14, which was a group, a bipartisan coalition, to try to resolve the issue of judicial nominations. Fourteen senators came together. You weren’t part of it.

On some issues where Democrats have moved to the center partial birth abortion, defense of marriage act you stay on the left and you are against both.

And so people say, “Do you really want a partnership with Republicans, or do you really want unconditional surrender from them?”

OBAMA: No, look, I think this is fair. I would point out, though, for example, that when I voted for a tort reform measure that was fiercely opposed by the trial lawyers, I got attacked pretty hard from the left. During the Roberts…

WALLACE: John Roberts, the Supreme Court.

OBAMA: … the John Roberts nomination, although I voted against him, I strongly defended some of my colleagues who had voted for him on the Daily Kos and was fiercely attacked as somebody who is, you know, caving in to Republicans on these fights.

In fact, there are a lot of liberal commentators who think I’m too accommodating.

So here’s my philosophy. I want to do what works for the American people. And both at the state legislative level and at the federal legislative level, I have always been able to work together with Republicans to find compromise and to find common ground.

That’s how I was able to provide health care for people who needed it in Illinois. That’s how I passed ethics reform both at the state and the federal level.

That’s how, you know, I’ve worked with people like Dick Lugar from here in Indiana on critical issues like nuclear proliferation.

It is true that when you look at some of the votes that I’ve taken in the Senate that I’m on the Democratic side of these votes, but part of the reason is because the way these issues are designed are to polarize. They’re intentionally designed to polarize.

On an issue like partial birth abortion, I strongly believe that the state can properly restrict late-term abortions. I have said so repeatedly. All I’ve said is we should have a provision to protect the health of the mother, and many of the bills that came before me didn’t have that.

Now, part of the reason they didn’t have it was purposeful, because those who are opposed to abortion and I don’t begrudge that at all. They have a moral calling to try to oppose what they think is immoral.

Oftentimes what they were trying to do was to polarize the debate and make it more difficult for people, so that they could try to bring an end to abortions overall.

So the point I’m simply making is that as president, my goal is to bring people together, to listen to them, and I don’t think that’s any Republican out there who I’ve worked with who would say that I don’t listen to them, I don’t respect their ideas, I don’t understand their perspective.

And I do not consider Democrats to have a monopoly on wisdom. And my goal is to get us out of this polarizing debate where we’re always trying to score cheap political points and actually get things done.

WALLACE: I want to ask you about one more area during this segment, tax and spending. The Republicans are keeping a running total of all your plans. They say it’s $662 billion over four years.

OBAMA: Right.

WALLACE: They say for all your promises not to raise taxes on the middle class, that, in fact, you want to raise the cap on the Social Security payroll tax, and you also want to increase capital gains.

Question: John McCain is going to go after you as another classic liberal tax and spender.

OBAMA: Well, I’m going to go right back at John McCain, because look at his tax proposals. He just went out there and not only wants to continue some of the Bush tax cuts for the wealthiest Americans and corporations, he actually wants to extend them, and he hasn’t told us really how he’s going to pay for them.

It is irresponsible. And the irony is he said it was irresponsible. When George Bush initiated these tax cuts in 2001, he said, “This is shameful.” He said that it offended his conscience, he said, for us to give tax breaks to the wealthy, particularly at a time of war.

Well, somewhere along the line, you know, his conscience took flight because he was looking to get nominated for the Republican as the Republican nominee.

And so I’m happy to have that debate. If you look at my approach to taxation, what have I said? I said I would cut taxes for people making $75,000 a year or less. I’d cut taxes for seniors who are making $50,000 a year or less.

It is true that I would roll back the Bush tax cuts on the wealthiest Americans back to the level they were under Bill Clinton, when I don’t remember rich people feeling oppressed.

In terms of capital gains, I’ve suggested we might go back up to 20, because…

WALLACE: You suggested 28.

OBAMA: Well, what I’ve said is I certainly would not raise it higher than it was under Ronald Reagan, but the fact is that I’m mindful that we’ve got to keep our capital gains tax to a point where we can actually get more revenue.

But that’s not something that’s going to affect the average person with a 401(k) when people start talking about how, “Well, there are, you know, millions of Americans who own stock,” most of them own stock in 401(k)s where their taxes are deferred and they pay ordinary income taxes when they finally cash out.

And in terms of raising the payroll tax raising the cap on the payroll tax, right now everybody who’s making $102,000 or less pays 100 percent of payroll tax on 100 percent of their income.

There are about 3 percent to 4 percent of Americans who are above $102,000 in income every year. So if you want to talk about who’s middle class, me giving cuts to folks making $60,000 or $70,000, and potentially asking more from friends of mine like Warren Buffett, who I have no idea what he made last year you know, that’s a debate I’m happy to have with John McCain, because it’s the people making $75,000, $50,000, $60,000 who are hurting.

And when John McCain promises tax cuts to corporations that are not paid for, then what we are doing is loading up this nation with debt. And if we’re not paying for it now, our kids and our grandkids are going to have to pay for it. And I think that’s objectionable.

WALLACE: Senator, we have to take one more break.

But when we come back, we’ll ask Barack Obama some questions about foreign policy and also how he thinks this long, tough Democratic campaign will finally get resolved. Stay tuned.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

WALLACE: And we are back for one final segment with Senator Barack Obama.

Senator, this week President Bush named David Petraeus, the commander of U.S. forces in Iraq, to be the head of Central Command, which controls oversees military operations across the Middle East and Central Asia. Will you vote to confirm his nomination?

OBAMA: Yes. I mean, I think Petraeus has done a good tactical job in Iraq. I think as a practical matter, obviously, that’s where most of the attention has been devoted from this administration over the last several years.

I was also a big respecter of Admiral Fallon, who Petraeus is now replacing, and I think it was unfortunate that the administration wasn’t listening more to the observations of Fallon, that we have to think about more than just Iraq, that we’ve got issues with Iran and Pakistan and Afghanistan, and our singular focus on Iraq I think has distracted us.

My hope is that Petraeus would reflect that wider view of our strategic interest.

WALLACE: I want to ask you about presidents and listening to generals. Petraeus, as I don’t have to tell you, is the architect of the troop surge, a strong advocate of our continued engagement in Iraq.

If you become commander in chief, and he says your plan to get out of Iraq is a mistake, will you replace him?

OBAMA: I will listen to General Petraeus given the experience that he has accumulated over the last several years. It would be stupid of me to ignore what he has to say.

But it is my job as president, it would be my job as commander in chief, to set the mission, to make the strategic decisions in light of the problems that we’re having in Afghanistan, in light of the problems that we are having in Pakistan, the fact that Al Qaida is strengthening, as our national intelligence estimates have indicated, since 2001.

And so we’ve got a whole host of tasks. And I’ve also got to worry about the fact that the military has no strategic reserve right now. If we have an emergency in the Korean peninsula, if we had an emergency elsewhere in the world, we don’t have the troops right now to deal with it.

And that’s not my opinion, that’s the…

WALLACE: So would you replace him or would you just say, “I’m the commander in chief, follow my order?”

OBAMA: What I would do is I would say what I will do is say, “We have a new mission. It is my strategic assessment that we have to provide a time table to the Iraqi government. I want you to tell me how best to execute this new assignment, and I am happy to listen to the tactical considerations and any ideas you have, but what I will not do is to continue to let the Iraqi government off the hook and allow them to put our foreign policy on ice while they dither about making decisions about how they’re going to cooperate with each other.”

WALLACE: Senator, we sometimes do a lightning round here quick questions, quick answers.

OBAMA: I’ll try and be quick.

WALLACE: So let’s clear up some…

OBAMA: That’s always tough.

WALLACE: … campaign business. Why are you ducking another debate with Hillary Clinton?

OBAMA: You know, I’m not ducking one. We’ve had 21. And so, you know, what we’ve said is with two weeks, two big states, we want to make sure that we’re talking to as many folks as possible on the ground, taking questions from voters. You know, we will be…

WALLACE: No debates between now and Indiana.

OBAMA: We’re not going to have debates between now and Indiana.

WALLACE: You say it’s premature to discuss running mates. Are you at least open to the possibility of running with Hillary Clinton with the places on the ticket to be determined?

OBAMA: I am going to punt on that question until I’m actually the nominee.

WALLACE: That’s quick.

If the voting ends in June and you’re still leading in the popular vote and delegates, and the superdelegates hand the nomination to Hillary Clinton, do you think that the young people, the African American people, the young first-time voters you have brought into this campaign aren’t they going to be awfully angry?

OBAMA: Well, I think there would be some frustration there. It’s not just young people, by the way. This event that we just had here in Marion, Indiana, I had a 48-year-old white woman come up to me and say she’s voting for first time. Never voted before. She probably would not vote. It’s possible.

But here’s my strong belief. Democrats are going to be unified. I think we should find that person who is going to be best able to not just defeat John McCain, but also lead the country. I happen to think I’m that person.

I will make that argument forcefully to the superdelegates prior to the convention.

WALLACE: The Wall Street Journal says that you are prepared to run the first privately financed campaign presidential campaign since Watergate. True?

OBAMA: Well, look. We’ve done a wonderful job raising money from the grass roots. I’m very proud of the fact that in March or in February, for example, 90 percent of our donations came over the Internet. Our average donation is $96.

And we’ve done an amazing job, I think, of mobilizing people to finance our campaigns in small increments. I have promised that I will sit down with John McCain and talk about can we preserve a public system as long as we are taking into account third-party independent expenditures, because what I don’t intend to do…

WALLACE: If you can get that agreement, you would go for a publicly financed campaign?

OBAMA: What I don’t intend to do is to allow huge amounts of money to be spent by the RNC, the Republican National Committee, or by, you know, organizations like the swift boat organization and just stand there without…

WALLACE: But if you get that agreement…

OBAMA: I would be very interested in pursuing public financing, because I think not every candidate is going to be able to do what I’ve done in this campaign, and I think it’s important to think about future campaigns.

WALLACE: Finally, and we have about a minute left, what have you learned in this campaign? And I don’t mean, “Gee, what a great country it is,” answer.

What mistakes have you made? What have you learned about running for president? What have you learned about yourself?

OBAMA: I have learned that I have what I believe is the right temperament for the presidency, which is I don’t get too high when I’m high, and I don’t get too low when I’m low. And we’ve gone through all kinds of ups and downs.

People forget now that I had been written off last summer. People were writing many of the anguished articles that they’re now writing after I lost in Pennsylvania.

On the other hand, after Iowa when everybody was sure this was over, I think I was more measured and more cautious. That, I think, is a temperamental strength.

In terms of what I’ve learned or mistakes that I have made, I’m making them all the time. And usually it has to do with me talking too much instead of listening.

And you know, what I’ve also learned is how much I miss my family, and my kids and my wife. And that’s been the biggest hardship of this campaign. I knew I’d miss them, but sometimes you’re just physically, you need those two little girls in your arms. And so that’s something that I’m looking to fix in the months to come.

WALLACE: Senator Obama, thank you so much for talking with us.

OBAMA: I enjoyed it.

WALLACE: Don’t be a stranger.

OBAMA: I won’t.

(END VIDEOTAPE)

WALLACE: Up next, we’ll discuss the Obama interview and where the Democratic race stands now after Hillary Clinton’s convincing win in Pennsylvania.

Some answers from our Sunday regulars when we come right back.

(COMMERCIAL BREAK)

WALLACE: On this day in 1973, acting FBI director L. Patrick Gray resigned after it was revealed he handed over files on the Watergate burglary to the Nixon White House. Gray was never indicted for Watergate-related crimes.

Stay tuned for our panel and “On the Trail.”

(COMMERCIAL BREAK)

WALLACE: And it’s time now to convene our Sunday group Brit Hume, Washington managing editor of Fox News, and Fox News contributors Mara Liasson, of National Public Radio, Bill Kristol of The Weekly Standard, and Juan Williams, also from National Public Radio.

Well, let’s start with the Obama interview.

And what struck me, Brit, was how much he wanted to reach out to the people who watch Fox and to re-establish what people originally thought of him, which is that he was going to be a problem-solving moderate.

HUME: He certainly came across that way, particularly in his demeanor. He was as engaging and genial and reasonable and attractive as we all remember.

And here and there, it seemed to me, he did touch some hit some notes that might resonate a bit with conservatives and moderates the discussion of his feelings about Petraeus.

I think, however, that when you you know, what you take away from this interview is that he kind of got he kind of skated past a couple of things his record on bipartisanship. I thought his answers there were you know, they were sort of defended effectively.

When you asked him that series of questions about how now does he propose to reach out to the kinds of voters who are against him, he seemed to be answering by telling you that he really wasn’t doing so badly with those voters after all, and that his record was really pretty good…

WALLACE: By the 70-30 margins.

HUME: Well, exactly. I mean, there was a little bit of defending rather than reaching out there. But I think, all in all, it was an impressive performance.

And I think, you know, you look at him and you think, “Well, you know, why did he not take advantage of this forum sooner?” It just seems, you know, inexplicable after the interview.

LIASSON: Yes. I mean, Hillary Clinton has been reaching out to those voters for some time, and I think that Barack Obama actually has a case to make to them, but for some reason he hasn’t tried hard enough to make it.

I mean, he did say to you that he’s confident that during the general election these voters will come home you know, white working-class Democrats will come home, and he’ll be able to appeal to them. I think that’s true.

I think the Clinton camp has been exaggerating Obama’s problems with these voters. A lot of them will come home.

But why not start trying right now during these primaries to craft a message that’s a little less about process, how I’m going to bring change and get rid of lobbyists, and more about how I’m going to fight for you, how my background equips me to understand your problems, and how I’m going to help you in your life?

And I don’t think he’s quite done that enough. The fact is that right now in this race, Senator Clinton is desperate. She has to win Indiana or else she’s out.

The problem for Barack Obama is he’s never been desperate. He doesn’t actually need to win the rest of the states in order to still get the nomination. But I think he has to start acting like it’s a do or die thing for him.

WALLACE: You know, it was interesting because in a piece in the Wall Street Journal this week, that noted Obama supporter Karl Rove, Bill, talked about the fact that he needs to freshen his message.

I mean, when he’s getting clobbered among blue-collar voters the way he is, 70 percent to 30 percent, that he needs to find a way to, exactly as Mara says, reach out to them. I certainly gave him plenty of opportunities, but he was kind of like, “Well, look, she’s the Democratic brand, but against John McCain I’ll do fine.”

I was surprised, too, that he didn’t more aggressively and assertively say, “Here’s why I am going to be your representative in Washington.”

KRISTOL: Yes, it was an eloquent and attractive performance, but pretty substance-free, I would say.

I think if you had Hillary Clinton on and I hope we do have her on again soon for 36 minutes, she would give you lots of particular reasons why she should be president of the United States, and John McCain shouldn’t, or even why Barack Obama shouldn’t. And they would have to do with tax policy, and health care, and foreign policy and the like.

You know, he’s too laid back to actually get into these boring details, I guess, so we’re supposed to like him. And he’s a likable man. But I really wonder how that wears.

WILLIAMS: Well, I mean, clearly, he’s the guy who understood right from the start he’s running to the left-wing base of the party, and that’s why he’s ahead and why she’s behind, because he has really appealed, and I think he continues to do so in this interview.

I think the goal of the interview and the decision to come on Fox had to do with a desire to somehow make amends with that white constituency in the Democratic Party, so-called Reagan Democrats.

But again, he just said, “You know what? It’ll come. Don’t forget Iowa. Don’t forget Wisconsin,” don’t forget places where whites have voted for him, but I don’t think he comes back to the specifics of the Reagan Democrats, people who are conservative and who live in states where there are large populations of black voters, where there are racial tensions. And those are states where he doesn’t perform as well.

So I come, then, to the second thing, which is I think the conversation shifted in Washington this week from, “Why doesn’t she get out of the race,” to “Barack Obama is a weak candidate,” and people saying, “You know, he could be an Adlai Stevenson or a Mike Dukakis come the fall,” and Republicans saying, “We’d rather run against Barack Obama than run against Hillary Clinton,” with the key being that, you know, I think it’s something like 15 percent or 8 percent maybe 15 percent of white voters say they would have difficulty voting for a black candidate.

That’s a tremendous drag on the whole ticket down the line, whether it’s for city hall or Congress. And that’s a problem the superdelegates are going to have to confront.

WALLACE: Well, so let’s turn to the person that actually won in Pennsylvania, Hillary Clinton.

Brit, after her astonishing well, not astonishing, but, I mean, very sizable win in Pennsylvania nine point whatever points and, among these core Democratic groups, 20 points, 30 points, where does the Democratic race stand now?

HUME: Well, she’s still behind, and she faces a more daunting challenge ahead, and obviously, nobody expects her to win North Carolina, which has emerged now as a pretty big state, which would allow Obama to make up some of the ground he lost in the popular vote and also add to his delegate lead, which is going to be difficult, if not impossible, for her to overcome.

But on sheer doggedness, she certainly gets some points here. I mean, this is an amazing I mean, she’s hanging in there. Apparently, you know, she’s about out of money, or at least they’re in debt to some extent, and Obama is, of course, flush with cash.

So she has, you know it gets harder and harder for her every time, even after Pennsylvania, I think, and you look ahead, it’s still harder. So you know, she’s got to draw to an inside straight about three times in a row here in order to pull this out, but it’s not impossible.

And there’s always this X factor that Obama could stumble in way that nobody could have imagined before Reverend Wright, and no one would have imagined before the unfortunate San Francisco comments.

A couple more of those, and it’s not impossible. Suddenly, the superdelegates might have a real reason to say, “Wait a minute, this guy is going to appeal only to African Americans and lace cup (ph) liberals, and we can’t afford to nominate him.”

WILLIAMS: It sounds like Reverend Wright’s working for her, doesn’t it? I mean, I don’t know why he’s out there. I mean, there’s a theory out there that somehow he wants Barack Obama to lose so it will confirm his view that whites won’t vote for a black president.

But it just makes no sense that he keeps coming out and damaging Barack Obama.

HUME: I know, but he doesn’t it’s very clear to me that Reverend Wright does not exist for the purpose of supporting the presidential campaign of Barack Obama.

He has his own reputation to defend, his own belief in the good work that he and his parish have done out there, which are real things, so you know, it’s kind of hard to blame a guy for defending himself.

WALLACE: But, Mara, let’s go back to Hillary Clinton. What is her path to the nomination, and how likely is it right now?

LIASSON: I think it’s not too likely, but she could win Indiana. She could come within single digits of him in North Carolina. She could win Oregon and Montana. She’s expected already to win West Virginia, Kentucky and Puerto Rico, so those will be more or less discounted.

And don’t forget, she got a bigger bounce out of Pennsylvania than I think almost was warranted, and I was surprised at that. To call it astonishing it wasn’t astonishing. She was always ahead. People were talking about a 15-point, 17-point win at one point. She came in right around the number where it was solid. It was solid and…

WALLACE: But you don’t think, Bill, that her winning among Catholics 70 to 30…

LIASSON: That wasn’t astonishing. She did it in Ohio.

KRISTOL: He’s ahead. Primary voters usually like to finish the deal and sort of go with the winner. He outspend her 2.5 to one in Pennsylvania, and she beat him by 10 points. She is a better candidate than he is. That is the fact.

He has run a better campaign than she has. He has won the caucus states. She has gotten more votes in primaries than he has. When voters actually go to the polls, for all the talk about Obama’s bringing out unprecedented new voters, blah, blah, blah, she beats him. She’s better than he is.

LIASSON: But you know what? That comes back to…

KRISTOL: There’s sexism here. You know, I really do think this, incidentally. She is not getting I don’t know if it’s sexism. I like to be on Hillary’s side.

She is not getting enough credit. She is a good candidate.

WALLACE: The feminist Bill Kristol.

KRISTOL: I am with her. I am with her.

LIASSON: You know what? Bill is right on that count. And she is a much she has been ill-served by her campaign, and he’s been well-served by his campaign.

But I do think going forward he would do well to take at least one page out of her book, which is she fights like crazy. He can still be cool and calm and collected and still fight like crazy, and act as if this is do or die for him, because I think Indiana if he doesn’t win Indiana, he will not be dead, but he will really be damaged. He will still be the nominee, but he will…

HUME: You know, looking back on this, if there was I thought that the turning point of this race was when Bill Clinton acted the way he acted and she got so badly trounced in South Carolina.

I’m beginning to think now that the real turning point in this race was when the strategic calculation was made by the Obama campaign to really contest the caucus states, which he has done successfully.

I mean, you look at it. It accounts for most of his lead.

WILLIAMS: Yes. I think Clyburn’s saying, though, this week that the nomination is not worth anything if you know, if it’s damaged, if she continues to damage him.

WALLACE: Thank you, panel.

Thank you, Juan.

See you next week.

Up next, we go “On the Trail.”

(COMMERCIAL BREAK)

WALLACE: Well, another big primary is in the books but there’s no end in sight for the Democrats. So we can count on a few more weeks of rough and tumble campaigning “On the Trail.”

(BEGIN VIDEO CLIP)

CLINTON: I thank you, Pennsylvania, for deciding I can be that president.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

OBAMA: In the end, this election is still our best chance to solve the problems we’ve been talking about for decades. Fourteen months later, that is still what this election is about.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

CLINTON: I’m very proud that as of today, I have received more votes by the people who have voted than anybody else.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

OBAMA: If we’ve won the most delegates from the voters, it seems to me that it might be a good idea to make me the nominee.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

MCCAIN: I want to assure the people of the Ninth Ward, the people of New Orleans, the people of this country, never again will a disaster of this nature be handled in the terrible and disgraceful way that it was handled. Never again.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

CLINTON: I’m Hillary Clinton, but tonight in honor of the WWE, you can call me Hill Rod. The last man standing may just be a woman.

(END VIDEO CLIP)

WALLACE: And just think, we could have five more weeks of primaries and then the battle for the superdelegates.

And that’s it for today. Have a great week,