then, mounting debt, an economy stuck in neutral and no signs of progress on capitol hill. we'll get a read on what kind of deal the g.o.p. will accept when we are joined by the g.o.p.'s top republican, mitch mcconnell. plus, the president lays out his vision for a new middle east, but alienates israel. we'll ask our sunday panel if the obama plan will help or hurt the peace process, all, right now, on fox news sunday. >> chris: and, hello, again from fox news in washington. early sunday morning, we learned indiana governor mitch daniels, a favorite of many establishment conservatives, will not enter the 2012 republican race for president. he cited family considerations in making his decision. but, on saturday, in atlanta, herman cain, the former ceo of godfather's pizza, made it official, he is running for the g.o.p. presidential nomination. as part of our continuing series, 2012, one-on-one we are joined by mr. cain for his first interview since becoming a candidate and, welcome to fox news sunday. >> thanks, chris. it is my pleasure. >> chris: you ended your announcement yesterday, talking about what will happen to america once you are elected. >> we'll all be able to say, free at last, free at last! thank god, almighty, this nation is free, at last! [cheers and applause]. >> again! >> chris: mr. cairn? >> yes? >> chris: free from what. >> free from rising debt. free from legislation forced down the throats of the american people, like obamacare, free from an arrogant disregard of the american people as it relates to things that the people want. free from a stagnant economy, when, in fact, we have the ability to grow a lot faster, if we lower taxes, if we get rid of the -- lower the capital gains tax, and spend taxes on foreign repatriated profits and providing direct stimulus, a real tax holiday for employers and employees and free from dependence on foreign oil, which is only going up because we don't have a really energy independence plan. >> chris: let's drill down on some of your views. on the debt limit, you say don't make a deal, even john boehner who says let's cut spending, at least as much, dollar for dollar as we raise the debt limit, you say that is not anything but a stall tactic. >> yes, it is. >> chris: let's look. >> raise the debt ceiling and pay for the stuff that is critical and the other things, are going to have to be mandatory cuts. >> chris: under the cain plan you would pay our chinese creditors first, while substantially, sharply cutting service, programs for americans. >> yes. but not -- pay the debt on -- interest on the debt first, make sure we take care of our military and and their families and thirdly, making sure people get paid their social security checks and fourth, make sure people's medicare bills get paid and then you look at everything else, and that is where you start cutting. you don't start cutting until after we take care of those things, now -- >> a lot of serious cuts for people, paying the chinese creditors first. >> yes, because the amount of interest we'll have to pay will go up and i'm sure there are penalties there if we don't pay that on time, here's the corner, quite frankly, representative boehner and others painted themselves in to, if you do those things you need to of have done that at the beginning of the crisis, before getting this close. what has happened now, is that they have allowed the timing to get so close to the end, they may not be able to do the cain plan, the fours things i talked about and may have allowed themselves to get into a corner where they may be forced to and i call that -- they should have seen it coming, which they did and didn't move fast enough. >> chris: but, even your plan, if they had been able to take care of it sooner, federal reserve chairman ben bernanke says your idea -- you are not the only one who offered it, it is too dangerous and said even if the debt is paid there is the issue of market confidence and how the markets would respond to the risk of default, or, even the default on nondebt obligations and he says that it will end up just as you suggested, costing the u.s. more even if you pay the debt, will cost the u.s. more to borrow from other countries which will increase the deficit and that will filter down into higher interest rates, when you want to get a new home, get a new mortgage or a new car loan. >> he's absolutely right but i also think raising the debt ceiling is also going to be a negative against market economy. theory stuck between the rock and the hard place now and the reason they got there, they waited too long to deal with the issues. and that is compounding the problem, not helping it. >> chris: but ben bernanke says, at this point, you have to make a deal, and, raise the debt ceiling and if you don't and pay off the debt it will frighten the markets. >> i would agree with him. i agree. >> chris: and, you said the cain plan is wrong. >> no, i didn't, they allowed themselves to get into the hole and allowed themselves to get between a rock andy and a hard place, if they had done this a year ago and take then pain it would have worked. he's right. >> chris: but is the cain plan right or wrong now. >> the cain plan cannot work now. it cannot work now, simply because they waited too long and this is part of the problem. they wait until a problem is at a disaster point, and, then, go to the american people and say, we have no choice. that is not leadership and, is not a good decision. >> chris: let me ask you about another of your ideas and we talked about this during the south carolina debate. you say, abolish the irs, abolish the income tax and replace it weather a fair tax. a national sales tax of 23%. now, first of all, according to the way the plan is laid out, people would have to pay a national sales tax on almost every new good or services, you buy a new home, you pay a mortgage payment and rent and 23% national sales tax and buy food, medical care, you have to pay a 23% national sales tax. are you okay with is that a. >> yes, because, every time you describe it say this: it replaces all federal income taxes and replaces the payroll tax. in other words, that 23%, will collect the same amount of tax revenue from federal income taxes, corporately and personally, and will also collect the amount of money that is being raised through the payroll taxes. when a person gets their pay stub you will not have a federal tax deduction or a fica deduction. it will be included in the 23% that you paid. now, part 2 of this, in addition to being a replacement tax, now on top of anything, in addition to that, there is a pre-bate provision, collected in the 23% such that every family gets the sales tax on basic necessities, before you have to go to the grocery store. >> chris: here's the problem. george w. bush had a commission on tax reform, in 2005. and they looked at the fair tax and said it will not work. here's why: they said to create the revenue that you are talking about, it would have to be a 34% tax rate, not 23%. and, with the pre-bates they say it would benefit low and high income taxpayers and would raise taxes for the entire middle class, anyone making between 15 and $200,000. >> chris, they were dead wrong. here's what happens. >> chris: this is president bush -- >> i know this is his commission, when i heard the commission make that assessment of the fair tax i was screaming, other people who knew something about the fair tax were screaming. we never got an opportunity to explain. what they did is, they changed some assumptions in the actual deal. this is why they come up with these outrageous numbers. so, if you changed the assumption of what is in the bill you will come up with outrageous numbers, like that. in order to kill it and defeat it. go talk to the people like john lender and if given an opportunity to refute it he would have said exactly what i said and leo lindback, one of the gentleman who did the research on it. and there are a lot of people -- if you do it according to the assumptions in the legislation hr-25 you don't come up with that, they changed the assumptions. >> let's turn to foreign policy. you say president obama threw israel under the bus, your words with his plan, this week for, as a baseline, israel to return to the 1967 borders, you say the cain doctrine is don't mess with israel, you mess with israel you are messing with the u.s. question, what would president cairn offer the palestinians? to make peace? >> nothing. because, i'm not convinced that the palestinians are really interested in peace. if the palestinians come to the table with israel, with a genuine offer, that the two of them can sit down and negotiate, the united states would, in fact, try to facilitate that discussion. but, if we look at history, it has been clear that the palestinians have always wanted to push the israelis and push israel for more and more and more. i don't agree with that. and i respect prime minister benjamin netanyahu for taking a stand and saying they cannot give that up. secondly, it is israel's decision, not president obama's decision, as to where the borderlands ought to be. >> chris: where do you stand on the right of return? >> the right of return? the right of return? >> chris: the palestinian right of return. >> that is something that should be negotiated. that is something that should be negotiated. here -- >> do you think the palestinian refugees, the people who were kicked out of the land in 1948, should be able or should have any right to return to israeli land? >> yes, but not under palestinian conditions. they should have a rate to come back -- right to come back, but it comes back to, it is up to israel to determine the things they'll accept. prime minister benjamin netanyahu made it clear in his statement, following the statement that president obama made. they are willing to make some concessions. they are willing to give on a lot of things. they are willing to be compassionate. i don't think they have a big problem with people returning. the issue is, that there are some things they simply do not want to give in on. >> chris: we haven't war in afghanistan, for almost ten years. and yet you say, you say quite proudly you have no plan for what to do in afghanistan, you'd have to waited until you got into office, and met with the experts and the military officials and then you would decide. don't you owe it to people who are thinking of voting for you to give them some idea about what you would do about a major u.s. military involvement in afghanistan. >> i do. and here's what i owe them. i owe them the right approach to make the right decisions, such as we're not there ten more years. >> chris: what is the right approach. >> heather: the day i'm elected president i'll start on that plan, the dame i'm sworn in i will implement the plan. >> chris: do you support counterinsurgency or counterterrorism. >> chris, let's go back to the fundamental question. we have to work on the right problems and i think it is disingenuous to tell the american people what i would do when i don't have the intelligence information. i don't have all of the factors that are affecting this particular situation i'm owe the american people a responsible decision, and a responsible plan, and, i don't think any candidate can say what they would do, if they are elected president. >> chris: finally i want to ask you pluses and minuses about your campaign and it striking. in the daily "gallup poll," 29% of republicans even though who you are but you have the strongest support among those who do recognize you, 24%. on the other hand you have been campaigning for months and you your hermanator pact raised $16,000, this year and at the end of march had $13 cash on hand. question, is your campaign broke? >> no, the hermanator-pact, we ceased at the end of january. and people looking at that account, it is inactive. we opened up a new one called, friends of herman cain and we'll file, july 15, according to the fcc. >> chris: can you tell us how much money you have in that. >> i could, but i won't. i don't want my competition to know but i can tell you, we are not broke. we are in the broke. the pact account ended in december and that is why it shows $13, friends of herman cain is doing just fine. but we need more! >> chris: mr. cain, thanks for coming in, always a pleasure to talk to you and good luck on the campaign trail, sir. >> thanks, chris, i've enjoyed it. >> chris: up next the senate's top republican on the nation's debt and the president's new policy, in northeasts. -- in the middle east. ♪ you say ♪ flip it over and replay ♪ we'll make everything okay ♪ walk together the right way ♪ do, do, do, do that's ever happened to cinnamon. introducing cinnamon burst cheerios. 20% daily value of fiber bursting with the delicious taste of cinnamon. new cinnamon burst cheerios. prepare your taste buds. so let's plant some perennials that'll turn up every year. trees and shrubs give us depth. and fill it out with flowers placed in just the perfect place. let's spend less, but plant more. what do you say we plant a weeke, water it, and watch a summer spring up? more saving. more doing. that's the power of the home depot. right now, roundup weed & grass killer or ortho weed-b-gon max is ju $8.88. >> chris: joiveng us -- pa paefpaef. >> chris: joining us now, mitch mcdonnell, welcome to fox news sunday, president obama offered a new plan for the middle east that sets as a baseline the idea israel should go back to the 1967 borders but in the oval office friday, israeli prime minister netanyahu flatly rejected that. question: is president obama wrong? >> well, he certainly, i think, made a mistake in the comprehensive speech about the middle east. i mean, everybody knows that the 67 lined are not tenable. there has been a lot of movement around the last 44 years and everybody knows the palestinians are not in the end going to have a right to return and wouldn't even be a jewish state if that happened and everybody knows, jerusalem in the end will not be divided. so, i think the old maxim, that the parties to the conflict need to be the parties to the settlement, still holds. the u.s. ought not to be trying to push israel into a deal, that is not good for israel and i think the president made a mistakes and has been trying to backtrack, as well he should. >> chris: some senate republicans say they will introduce a plan, a resolution on the senate floor, opposing the obama plan, will you push that for a vote in the senate and if this isn't the right answer, how should the country reach out to the arabs and the new changing world of the arab spring. >> this is the worst time to be pushing israel into making a deal. you have all kinds of uncertainty, egypt, syria and, you know, i think looking at it from israel's point of view, they are going to expect, and have a right to expect, at the end of any such settlement, sip employ -- diplomatic recognition from countries like saudi arabia and syria and could anybody envision that happening today? i don't think so. there are times when it would make sense and times when it wouldn't and it seems to me the israelis, correctly, understand that all of this turmoil, going on in so many of their neighboring countries, is the worst time to be making a final settlement with a group, by the way, that now includes hamas. fatah and hamas have gotten together and hamas is not even in favor of israel's existence. how do you make a deal with a group like that? >> chris: i want to touch briefly on two other countries and we'll get to domestic issues. there is a request pending in congress, for another $4 billion in aid, to pakistan. do you support any cuts in funds to tell the pakistani officials we are not going to put up with them, continuing to play a double game with our enemies? >> let me tell you what i don't support. is complete disengagement from pakistan. i went down to fort campbell the last friday morning, to greet some of the elements of the 101st, that were coming back from afghanistan and had an extremely interesting conversation with a brigade commander, who told me that at their level, the tactical level, the cooperation with the pakistan military was really excellent and they were on both sides of the border and communicating back and forth and going after terrorists, together. so, pakistan is very much a mixed bag and you have elements in the intelligence service that seem to be on our side and some who are on the other side. and, elements in the government and elements in the military, and it is mixed bag but it is country with nuclear weapons and i don't think pulling back from pakistan is a good idea, would you support a cut in the $4 billion in aid. >> i haven't decided that yet. but, i don't think disengagement from pakistan is in america's best interest. >> chris: one other country. u.s. operations in libya, passed the 60-day mark on friday. and, under the war powers act, the president either has to get a renewal of support from congress or has to pull out troops. are you going to do anything about that? >> i don't know what we are going to do on the war powers act. the administration is going to have to decide whether it thinks it was triggered and we'll have to respond to that. senator mccain has been to benghazi as everyone knows, is keeping us posted on what he thinks ought to be done and, frankly, it is a bit confusing now and would like this see the administration clear it up. >> chris: senate democratic leader harry reid says that he intends to bring up this coming week a vote on the house republican budget including paul ryan's plan to overhaul medicare. and turn it into a voucher system within ten years and you say you will vote for it but also you will not push your republican colleagues. is that because it is bad politics? >> let me tell you, in the senate we have other budgets that republicans are pushing, pat toomey of pennsylvania has a thoughtful ten-year proposal he likes and he, like i, also support the ryan budget and my kentucky colleague, rand paul has a budget and what i said to our members is we will not be able to coalesce behind just one and may well vote on the ryan budget and i'll make sure the democrats get to vote on the obama budget which the -- my counterpart, harry reid thought was terrific in february and there will be votes on several different budgets in the senate and candidly, chris, none of these budgets will become law and the real action, on deficit reduction, is down at the white house, and, the meetings headed by the vice president. >> chris: i want to play a clip -- get a good drink of water there. i want to play a clip from an ad a liberal group is running now which shows a -- what seems to be a paul ryan look-alike, pushing a granny in a wheelchair. here it is. ♪ ♪ ♪ >> chris: i wouldn't say it is subtle, but, question, what do you think of the ryan plan, on anybodying? -- on medicare. >> paul has implemented a supreme support proposal at the end, of the period, which is a very sensible way to go, to try to save medicare. and i think what we need to be talking about here is medicare is in trouble. and, several of the president's own cabinet members who make up this trustees of medicare and social security, declared last week that we have to change medicare and change it quickly. the president would do that, too, and would do that with a board that would ration health care, and, let's stipulate nobody is trying to throw grandma off the cliff and medicare is in serious trouble, and, serious trouble, and, the president would ration care which will adversely impact grandma. and what paul ryan would do would be to empower grandma, in the private market. to shop and get the best possible deal. but, regardless of which approach you take, medicare is going to change or it will not be there for anyone and, so it is tomorrow for an adult conversation, about that, and, that is going on, in the group headed by the vice president, where, to get my vote, on raising the debt ceiling, i can only speak for myself, we are going to have to have significant changes to both medicare and medicaid. >> chris: i want to get back onto medicare, because, it is a big issue, a hot issue and newt gingrich stepped in it last week. do you support the idea of turning medicare -- i think it is your -- you're exactly right, everybody will agree it will change and there will be cuts of hundreds of billions of dollars, either way. do you support the ryan concept of turning medicare from a fee-for-service plan to a voucher plan which, quite frankly, under the congressional budget office, analysis, nonpartisan cbo means in the long run seniors will pay more out-of-pocket for their health care. >> paul ryan would say it's not about the plan, it's the premium support plan. >> chris: what is this difference? >> he says it is different. the point is this, chris: medicare is going to change. under the president's plan the government would ratchet down health care for grandma. under paul ryan's plan, it would, premium support and options, like we currently have. >> chris: i understand, they are not willing to say you support the -- >> what i'm willing to say is we have to change medicare and it will happen soon, in connection with the talks with the vice president going on right now and will happen in connection with raising the debt ceiling which the president has asked us to do. and all of these budgets are interesting to discuss and debate, but, none of them will pass, what is going to pass, at some point, is something, chris, related to medicare and medicaid, in connection with raising the debt ceiling, this summer. >> chris: i want to talk now, finally about that. because the country has a little over two months, until, according to treasury secretary geithner, we will flat run out of money and he will not be able to shift it around anymore and we'll have reached the final point at which we go into default. the gang of 6, 6 bipartisan senators, is deadlocked. in fact now the gang of five, because tom coburn dropped out and your man on the biden panel, vice president's panel, says so far all they are playing is small ball, what he said here last week, a couple of hundred billion dollars. realistically, what they're chances for a deal before august 2nd? >> there will have to be a deal and let me just say what it would take to get my vote, for example, i'm just one member of the republican conference but, to get my vote we'd have to do something significant, both short-term and long term and long term means medicare and medicaid. which is why i keep leading you back to this discussion. this is the one that is going to create law, it will be signed by the president of the united states. it will have to make a difference. look, we have a $14 trillion debt which is as big as our economy and if we -- we look like greece and we have all of these unfunded liabilities, 50 trillion of them, medicare, medicaid and social security and the president's own cabinet member said a week ago, both social security and medicare were in trouble and medicare sooner. we have to act. we have to act now and, the time to do that, the opportunity to do it is in connection with the debt ceiling and the fact they've only dealt with peripheral matters in the discussions right now doesn't mean that is where it will end up. it will have to be a significant and credible deficit reduction effort and will have to standard -- standard & poor's has to look at that and say, wow these guys are going to take us in a different direction and in order to get the votes to raise it. >> chris: you basically said what the democrats have to give in this and they have to agree, which is politically tough for them. to substantial cuts in domestic spending programs, including entitlements which they have resisted over the years, and what will republicans have to give, because i think you would agree, to get a big agreement, to avoid going into default tot will have to be a bipartisan compromise. >> it will and i outlined what it would -- >> you say what the democrats have to -- >> i don't know what the democrats are going to have to give in the end and i can tell you the republicans control the house, we have a robust minority in the senate. we believe that we have a spending problem, not a taxing problem and had this problem because we spend too much and not because we tax too little. and, you cannot get anywhere. if you start raising tax rates. and, the way to grow out of this, is to get the economy going and the worst thing you can do, and the president conceded that in december when he agreed with myself and others to continue the current tax rate. >> chris: you say tax rates and, you know, i listened to what you say, what you say is carefully formulated. what about more revenue? for instance, taking away tax deductions and tax breaks and subsidies. >> we will not do the deal here this morning, it is impossible and you'd like for us to structure -- >> i think you and i could work it out. >> the president is not here now and he is the most important person in america and only he can sign something into law. only the president can sign something into law and all of these discussions going on, all of these budgets talked about are interesting. but the president is only at the table one place, and that is in the deficit reduction talks and something significant is going to come out of that, frankly or you will not be able to get the votes to raise the debt ceiling. >> chris: senator mcconnell, we have to leave it there. can't blame me for trying. always a pleasure, thank you, please come back, sir. up next our sunday panel on the tense on-camera stand off over u.s. policy between president obama and israeli prime minister netanyahu. >> good try. >> chris: always a pleasure. >> chris: always a pleasure. thank you, please come b delicious gourmet of gravy. and she agrees. with fancy fest gravy lovers, your cat can enjoy the delicious, satisfying taste of gourmet gravy every d. fay feast, the best ingredient is love. you 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negotiations are going nowhere and needlessly stuck the thumb in the eye of an ally. >> chris: let me bring that up with evan byah. there is no practical difference between what the president proposed and what the basic policy was under president clinton and george bush and they are trying to offer the arabs something, they say, because the palestinians are headed to the u.n. in september to have a unilateral declaration of a palestinian state and are trying to head off that vote, does that make sense to you. >> a lot of it makes sense, chris. nobody believes the 1967 lines while be where we end up and everybody knows you have to take realities on the ground into consideration and that means -- >> chris: why didn't the president say that? >> well, he did. in -- he said there would be land swaps we have to take, the realities into consideration and a lot is nuance and semantics but it has been focused on and you put your finger on an important point and there is a vote in the u.n. coming up and unless we are willing to stand alone, if we have to, we'll veto the resolution but we ned to get support for avoiding that and we have this unfortunate case, is a couple weeks ago of palestinians, coming across the borders and the israelis had to shoot them and we need a process in place to give them some kind of hope so you don't see represeetition of that and the circumstances now for successful negotiation are slim because of the presence of hamas in the palestinian government. >> chris: that brings me to the question i wants to ask you, liz, i know you don't like what the president said but does it mack a practical difference, neither the palestinians nor israelis seem interested in a peace negotiation now. >> i think the question is whether or not you will respond to, you know, what we have seen happen, interment of the agreement with hamas and the palestinians saying, unilaterally, they'll go to the u.n. and whether we in the u.s. respond to that by saying, okay. okay. okay. we'll give you preemptive concessions and force the israelis into a sayings where they have to accept indefensible borders or approach it by saying we'll go to the palestinians and say you have to choose, if you align yourselves with hamas we cannot back your hopes -- >> the president made the points. >> he said the palestinians have to explain. he didn't say they need to say they stand for peace and are not going to align themselves with hamas and we have to be clear we will the not stand for a palestinian state built on terror and what the president did was the farthest thing from that. >> i heard a different speech, liz i'm heard him say that, clearly the arabs and specifically the palestinians and hamas have to acknowledge that israel has a right to exist, and, seems to me he was clear about saying it should be a two state solution and the palestinian state has to be nonmilitary and cannot be able to attack israel. and, so all of that was said and, yet, here he says to the israelis, the status quo is unacceptable and we have been cursing each other and adding fuel to the fire, in terms of arab discontent for so long, let's change the dynamic and show israel is aggressive and affirmative in saying we want peace and, if -- i can't believe, i want to repeat what chris wallace said. it is unbelievable that he'd have the arrogance to come into the oval office an lecture an american president? -- and lecture an american senate that is way out of line. >> chris: i didn't say that, those are your comments. i said he lectured. >> he certainly did and you have been at the white house, ever see anything like that before? >> chris: no. >> it was not -- it did not seem to me to be a lecture. in all honesty. when you watch that tape, maybe what happened, in washington we are so used to the diplomatic gobbledygook but i thought what the prime minister did was lay out what is really a nonnegotiable position for the israelis and i think everything you have said, juan, we all want peace, but we have to be realistic about the fact that the palestinians have aligned themselves with hamas and the israelis now are in the midst of a very, very tenuous situation, i want to move on to something else, the president talked about syria and despite the fact that the regime of bashar al-assad reportedly killed close to a thousands protesters, mr. obama offered him in his speech another chance. >> president barack obama: president assad has a choice, lead the transition or get out of the way. >> chris: and in the days after, since the thursday speech, assad seems to have given his answer by killing dozens of more demonstrators. why give him -- hasn't he shown he's as much of a thug as muammar qaddafi. >> he has, chris and unfortunately is likely to do neither, lead the change or get out of the way and, the sect that he heads, with his family, is likely to kill as many syrians as it takes to try and remain in power. >> chris: why didn't he say he has to go the same way he said about qaddafi. >> the circumstances are entirely different, unfortunately and syria has a much larger military and would be a war the europeans would probably not support us in and the u.n. probably not support us in. so, the circumstances are just different in terms of praguematics and doing something about that, the unfortunate reality. >> they continue to think they can peel syria away from eastern and hoped that from the beginning and the administration, still believe it and still believe that syria, somehow, can be pushed into a negotiation with israel and, somehow syria can control hezbollah in lebanon and it is doing none of those things, and i think we have seen after two years, none of those things are going to happen. so, it strikes me as a forlorn hope but that is what they believe and what strikes me about the president's speech, was that the israeli parts really didn't add too much, move the ball and they really preempted some of the other very good points he made in the speech. >> chris: i wanted to ask you, the "wall street journal" editorial page which you run and which is not generally a pillar of support for obama on a lot of the speech, you were supportive. >> i thought, for a while there i thought i was listening to a speech given by another president in about 2005. he endorsed essentially his own freedom agenda and said we'll put self-determination -- and has a hard time saying democracy but self-determination at the middle of american policy in the middle east, and top priority and, that was good to hear and the difficulty we'll have is how do you put specific policies to back that up? and the sentiments were excellent. >> he has no credibility at this point on it, because the policies we have seen since the arab spring has become leashed is completely incoherent and we'll have a no-fly zone, in libya and then, we'll leave -- >> feign, they didn't say -- >> someone on background, a presidential aide. >> chris: hold him to account, for what someone -- >> a senior administration official, said leading from behind. and, i said -- >> and i'm saying, an unnamed official in an article in "the new yorker" magazine. >> actions confirmed that that is their approach and, then not to be able to do anything, apparently with respect to syria and although the rhetoric may have changed, the credibility and the actions -- >> senator, one other thing, you'll learn is nobody gets the last word. we have to take a brake, but when we come back the ups and downs of the g.o.p. presidential contest as things heat up. although the rhetoric may have the 3.6-lite pentastar engine in the jgrand cherokee has a best in class driving range of more than 500 miles per tank. which means you don't have to worry about finding gas station. which is good... because the just might not be one. producing products that save on fuel and emissions like ecopia tires... even making parts for solar panels that harness the sun's energy... working on social activities like clean up programs on beaches in many locations... and regional replanting activities that will help make a better world for all of us. ♪ one team. one planet bridgestone. >> i'm the kind of person when asked by my president to stand up and serve my country, when asked, i do it. >> i want to make sure america is put back on the right track and we don't do that by defeating obama in 2012. i have that fire in my belly. >> any ad which quotes what i said on sunday is a falsehood, and, i said publicly, those words were inaccurate and unfortunate. >> chris: just some of the highlights of the week, that was on the republican campaign trail and we're back with the panel, let's start with the man who will not be in the race, mitch daniels who, overnight, surprised a lot of us at least with the timing if not the decision. saying he is not going to run for president and citing family decisions. first of all, are you surprised and does it open up the race for a late entry like chris christie or paul line or someone even in the fall. >> i was surprised and i thought he'd get in, so many others had not and there was so much support for him, particularly, a lot of the funders who were unhappy with the republican party, unhappy with the field and wanted him to get in and i take him at his word it was for personal reasons and i think it opens up the field for somebody else. probably helps in the short-term, mitt romney, and tim pawlenty and the people who are in the race. but, i think this is going to open it up for chris christie and paul ryan, and paul ryan will think hard about this and he said he wanted to pass his budget to term the debate for the 2012 election and if nobody takes up the mantle, he's going to think, well, makes i should and the third person i would say you have to think about now is jeb bush, because -- >> really? >> despite the brand name damage i think people feel too early for him he might feel that and i think he does, and also think that look, if the field doesn't change and nobody else gets in there will be pressure for one of those three to get in. >> chris: senator bayh, what do you make of the -- you have a cheshire cat grin on your face! what do you think of the high profile republicans? mitch daniels, mike huckabee, donald trump, because we ran out of... holy baaley barbour. >> how much things changed since last november and the president was on the ropes and the republicans had a victory and now, establishment republicans are running from the race, as fast as they can and this is good news for the president, it will be a protracted contest in which they'll dissipate resources while he builds the war chest and they have to appeal to the tea party movements in iowa, south carolina and new hampshire while he can move to the middle and appeal to independents and moderates around, so, the establishment republicans are left with pawlenty and mitt romney and are unhappy with that and that raises the prospect of perhaps an outside person coming in and you see a repetition of what happened in delaware and to a lesser stents in delaware, a nom the who doesn't apuppeal to the middle. >> chris: is there someone like christie or ryan, who might run. >> ryan, has continuing budget wars going on and has no foreign policy experience. >> chris: it was said about barack obama -- >> and mitch mcdonnell distanced himself, though he'll personally support the ryan budget, that is a cudgell waiting to hit him over the head on it, it is a referendum on jobs and the gasoline prices and the deficit and ises the president's to lose and the republicans will have a messy primary situation. >> chris: should we call off the election... >> sounds like it, don't you think? look, i think that it is early and i think if you look at the electoral map, it was interesting to watch, last summer, president obama could run on hope -- last time he ran on hope and now has to run on a record and there are states like indiana which will be difficult for him to carry. virginia, north carolina. you will be facing a different situations. no president since fdr has been reelected with an 8% unemployment rate which is the best obama can hope for, coming next year. so, i think this is what happens every year, before we get into an election with the party that is out of power and i think it is haealthy and we'll have a -- >> is there someone you look to, that you might say you'd like them to get in. >> the people mentioned are interesting and mitt romney and pawlenty and santorum, i think we have good folks in now and i'm sorry that mitch daniels will not run. i think he would have been a good candidate but i understand the family considerations involved. so i'm excited. i also would say, though, it seems to me the real action is on the hill right now. and this real action is whether or not you will see the leaders like senator mcconnell and boehner and paul ryan really hold the president accountable for spending cuts in exchange for the debt -- >> let's go back to the 2012 race, juan and i want to ask you about jon huntsman, former governor of utah, just stepped down, for a couple of years as the obama ambassador to china, and i think it is fair to say he has zero name recognition, but, white house officials seem to take him seriously as a potential contender. should they. >> they have to because he'd appeal to the middle. but the problem is, he's not -- running in a republican primary and has to appeal to tea party types in iowa, and, he has to make an impression with social conservatives and he doesn't have those credentials, in addition not having name rec is in but as a repository for the big bucks which are yet to be deposited in any accounts, despite mitt romney's claim he got $10 million en one day, and you look at the bush money and money that comes after the citizens united decision which -- has yet to flow into support any one republican and everybody is looking at that and mitch daniels would have been the lodge call place and he has the experience and can make the argument in terms of the poor economic performance and gas prices and the like and he's to the going and i think right now, i wrote a column for fox news.com this week and it is lie like, please, mr. custer, i don't want to go and there are republicans what are unhappy -- >> those are your republican friends you are talking to. >> you are my friend! and most republicans are not happy with this. >> chris: it is interesting we keep brushing past this, mitt romney continues to fall under the radar, strong, name recognition and doing very well in the polls and raised $10 million, despite brother juan's comments of claiming to have raised $10 million in one day -- >> you believe he raised $10 million in one day, it is possible, yes. >> how long have you been around. >> chris: in any case... and i know you guys have had troubles with him at the "wall street journal," because of romney care and similarities with obamacare. can he get bast that past that primary -- >> he has a lot of organization and wants it bad and that is half the battle in running for president but,y would have helped him, had he said we tried to pass a health care reform in massachusetts and it didn't work and i learn lessons and now, pivot and say, here's -- >> he's not going to say that. >> and this is a big problem. it takes health care offer the table for him and that, for republicans they want -- >> that is a fatal problem? >> i think it is -- fatal? the voters will decide. i think it has a potential to be fatal for him as a candidate, in the primaries and raises doubts in my mind about what kind of president he'd be. what does he believe? or is he a technocrat who thinks we can get the smartest people in the room, left, right center and they can agree and work that out. there are differences that cannot be parsed and one of those is, what is the role of government in health care? he has never really stated what that role is. >> chris: senators bayh, let's assume, as a miracle that he ends up winning the republican nomination. if the economy continues to be in the doldrums and we have high gas prices and over 8% unemployment, this is a guy who has run a business, met a pay roll, wouldn't he be a tough candidate. >> i think romney care is an issue for him. >> chris: but, an issue with the republicans, right, not one -- >> it is taken -- >> there are plenty of other issues. >> and, a track record of certain inconstantsy of positions will trouble him but with an incumbent president, it is a referendum on the incumbent and if we get progress on the deficit an energy prices stabilize it is barack obama's election to lose and as long as the republicans don't nominate one who is fatally flawed, it is a place holder. >> chris: and your thoughts about mitt romney as a potential g.o.p. nominee. >> he has real potential to wind the nomination and to be able to challenge president obama and i think that it is true, it will be a referendum on president obama and i think there's a difference in our views how he has done, demonstrates where we are, differ in terms of what will happen in 2012. >> chris: all right, thank you, panel, see you next week. don't forget, check out panel plus where our group picks up with the discussion on our web site, foxnewssunday.com and we'll post the video, before noon, eastern time. up next, we hear from you. week, panel. panel. check out panel plus w ♪ one, two, three, four ♪ ♪ you say ♪ flip it over and replay ♪ we'll make everything okay ♪ walk together the right way ♪ do, do, do, do ♪ [ female announcer ] mini, meet berries. introducing new kellogg's frosted mini-wheats with a touch of fruit in the middle. helloooooo fruit in the middle. pnc virtual wallet gathers your spending and saving in one place. credit and debit purchases, checks, bills, and other financial information. it lets you see the details as well as the big financial picture. so you can do more with your money. see what a complete view of your money can do for you at pncvirtualwallet.com. ♪ pnc bank. for the achiever in y. so let's plant some perennials that'll turn up every year. trees and shrubs give us depth. and fill it out with flowers placed in just the perfect place. let's spend less, but plant more. what do you say we plant a weeke, water it, and watch a summer spring up? more saving. more doing. that's the power of the home depot. right now, roundup weed & grass killer or ortho weed-b-gon max is ju $8.88. >> chris: time for comments that you posted to our blogwal is watch. most of you weighed in on ron paul. sandy sent this. most you weighed in on ron paul. but one questioned his constitutional philosophy. >> chris: finally, one wrote this two other candidates in mind, bright human for president 2012. >> chris: please keep your comments coming to u