going to do it over next 10 days and i am looking forward to... >> sean: you're not going to campaign on christmas day, are you? >> not christmas day or christmas eve. city, iowa, for the debate. take it away, bret baier. [ applause ] >> bret: thanks, bill. welcome to the sioux city convention center. the site of our republican debate, first ever in iowa. how about that? this crowd is fantastic. it's sponsored by fox news and the iowa republican party. besides watching us on fox news channel, we are being streamed on foxnews.com and heard on fox news radio. now this is the final debate before the january 3 iowa caucuses. the closing arguments for the now familiar seven candidate on the stage. former senator rick santorum. texas governor rick perry.

former massachusetts governor mitt romney. former speaker of the house, newt gingrich. congressman ron paul. congresswoman michele bachmann. former utah governor jon huntsman. [ applause ] joining me at the big desk my fox news colleague, neil cavuto, chris wallace, and megyn kelly. our rules are similar to the previous fox debate. one minute for answers. 30 seconds for follow-ups. if the candidates run too long, we'll politely remind them it's time to wrap up with this sound. after a long string of debates we trust you know the drill and we won't have to use it much. we have an enthusiastic crowd here tonight and we welcome that. but we do have a limited amount of time here.

we ask you to honor the fact we're trying to keep valuable time for candidates throughout the debate. tonight's event obviously comes amid an extraordinary backdrop. the struggling american economy now further threatened by financial turmoil in europe, gridlock on capitol hill. a real threat to world security posed by iran. even as we pull the last u.s. troops out of iraq. we have received thousands of tweets and facebook messages and e-mails with suggested questions. and the overall majority of them had one theme. electability. people want to know which one of you on this stage is able to be in the best position to beat president obama in the general election. that is the number one goal for republican voters obviously. speaker gingrich, since our last debate, your position in this race changed dramatically. you are now physically at the center of the stage, which means you are at the top of the polls. yet, many republicans seem conflicted about you.

they say that you are smart, that you are a big thinker. at the same time, many of same republicans worry deeply about your electability in the general election, saying perhaps governor romney is a safer bet. can you put to rest once and for all the persistent doubts that you are indeed the right candidate on the stage to go up and beat president obama? >> well, first of all, let me say to you and to all of our viewers, merry christmas. this is a great time for us to be here. and i hope that everybody across the country has a very joyous christmas season. i have been around long enough that i remember at this exact time in 1979 when ronald reagan was running 30 points behind jimmy carter. and people said gosh, electability is the number one issue, they wouldn't have nominated him. what they said is he believes what he is talking about. he has big solutions. he can get the economy growing.

he understands foreign policy and he is the person i want to have debate jimmy carter. he carried more states against carter than fdr carried against herbert hoover in 1932. i believe i can debate barack obama and i think in seven three-hour debates, barack obama will not have a leg to stand on in trying to defend a record that is terrible and an ideology that is radical. >> bret: mr. speaker, governor romney just yesterday said you are an unreliable conservative. obviously, he is your opponent. isn't iowa governor terry branstad said today he respects you greatly but he openly questioned if you had the discipline or focus to be president. >> those are two different questions. let me take them one by one. quickly. i have a 90% american conservative union voting record for 20 years. it balanced the budget for four straight years, paid off $405 billion in debt, pretty conservative. the first wealth entitlement

reform of your lifetime, the only one now is welfare. two out of three people went back to work or school. pretty conservative. the first tax cut in 16 years. largest capital gain in american history. unemployment came down to 4.2%. conservative. on the conservative thing, sort of laughable to suggest that somebody who campaigned with ronald reagan and with jack kemp and has had a 30-year record of conservatism is somehow not a conservative. >> bret: what about the concerns from iowa governor branstad? >> i think people have to watch my career and decide. i spent 16 years to create the first republican majority in 40 years. it spent years helping to create the first balanced budgets. i am the longest serving teacher in the military, serving one or two-star generals in art of war. i think it's fair to say my commitment to discipline systemic work is fairly obvious.

people set it aside. part of the difference is i change things when conditions change. part of the difference is i strive for large changes a i'm prepared to lead the american people to get this country back on the right track. that is a very large change. >> bret: now to my colleague, megyn kelly. >> megyn: similar question to you, congressman paul. you have some bold ideas, some fervent supports and probably the most organized ground campaign in iowa. but there are many republicans inside and outside the state who openly doubt whether you can be elected president. how can you convince them otherwise? if you don't wind up winning the nomination, will you pledge here tonight that you will support the ultimate nominee? >> fortunately for the republican party this year, probably everybody up here could probably beat obama. [ applause ] so the challenge isn't all that great in how we are going to beat obama. he is beats himself. the question is what do we have to offer? and i have something different

to offer. i emphasize civil libertys and pro-american foreign policy, which is a lot of different than policeman of world. i emphasize monetary policy and the things that the other candidates don't talk about. the important thing is the philosophy i talk about is the constitution and freedom. that brings people together. independents in the fold and democrats over on some of the issues. therefore i see this philosophy of being

>> bret: chris wallace? >> chris: thank you. i want t folw up bref >> i want to follow-up on his line of questioning.th none are saying they supported newt gingrich because they t inid he would be tougher than you in taking the fight to barack obama and next fall's than the speaker? >> well, let's step back and talk about what is happening in the country. we're finding across america a lot of people are hurting. 25 million people out of work. stop looking for work or part-time work that need full-time jobs. a lot of people in the middle

class who have seen the incomes go down as the cost of the living gone up and up and up. the american people care deeply about having a president who can get america right again. all of us on the stage spoken in the last several debates government doesn't create jobs but the private sector does. it spent my life, my career in the private sector. it understand by the way from my successes and failures what it will take to put americans back to work with high-paying jobs. it can debate president obama based on that understanding. i have credibility on the economy when he doesn't. my successes include businesses that were successful, like staples and bright horizon children center and a steel mill in the middle of indiana, things i learned from. and failures. i remember when founders of jetblue came to me and said invest in us. i said that will never work. kind of wrong. now one of my favorite airlines. i know what it takes to get the economy going. the president doesn't. the proof is in his record. it's terrible. my record shows i can get

america working again. >> chris: congresswoman bachmann, no one questions your conservative credentials. but what about your appeal to independents who are so crucial in a general election? if you are fortunate enough to become the republican nominee, how would you counter the efforts by the barack obama campaign to paint you as too conservative to moderate voters? >> well, it's very clear in the last five years i have won four elections as the first republican woman ever to win out of the state of minnesota. i did that by attracting not only republicans by independents and democrats as well. people wanted to know who could they trust? they knew that in me they may not always agree with me but they knew i was a woman who said what she meant and meant what she said. and they respected that level of authenticity and sincerity. they also knew i was an action person. that i wasn't just going to sit on my hands. i was going to work and serve them. that is what i've done. i have worked very hard in the

united states congress in the brief time i have been there. i'm 55 years old. it spent 50 years as a real person. now five years going toe to toe with barack obama. taking him on, on every issue from dodd-frank to cap and trade and illegal immigration to obamacare. and i will do that as president of the united states. that is my proven track record. >> bret: neil cavuto? >> neil: thank you, bret. governor perry, by your own admission you are not a great debater. you have said as much. downplayed debating skills in general. but if you were to become your party's nominee, you would be going up against an accomplished debater in barack obama. there are many in this audience tonight, sir, who fear that possibility. and don't think you are up to the fight. allay them of their concerns. >> i want to share something with you. as each one of these debates -- i'm kind of getting where i like the debates. i hope obama and i debate a lot. i'll get there early. we will get it on and we will

talk about our differences which are great. i'll talk about what we have done in the state of texas and talk about passing a balanced budget amendment to the united states congress. i'll talk about having, the type of part-time congress that i think americans are ready for. you know, there are a lot of people out there, i understand it. there are a lot of folks that said tim tebow wasn't going to be a very good n.f.l. quarterback. there are people that stood up and said well, he doesn't have the right throwing mechanisms, or he doesn't -- you know, he is not playing the game right. you know, he won two national championships. and that looked pretty good. we're the national champions in job creation back in texas. but am i ready for the next level? let me tell you, i hope i am the tim tebow of the iowa caucuses. >> neil: governor huntsman, your campaign has been praised by moderates but many question your ability to galvanize republicans, energize the

conservative base of the party. they are especially leerily of your refusal to sign on to a no tax-hike pledge. how can you reassure them tonight? >> i think people, neil, are coming around to finding that i am the consistent conservative in this race. they are coming around to find that i am not going to pander. i am not going to contort myself in a pretzel to please any audience i'm in front of. i'm not going to sign the silly pledges. you know what else? i'm not going to show up at a donald trump debate. this nation has been downgraded. this nation is on the cusp of the third government shutdown. we have been kicked around as people. we are getting screwed as americans. i'm here to tell you, we are going to lead charge in doing what must be done in addressing the two deficits we have. we have an economic deficit in this country, and is it going to shipwreck the next

generation unless we deal with it. we have a trust deficit. people in this country don't trust the institutions of power anymore. we need to go to congress and we need to say you need term limits. we need to go to congress and say you need to close that revolving door that allows members of congress to file on out and lobby. we need to go to wall street and say no trust there either. because we have banks that are too big to fail. i'm telling you, neil, i'm the person that is going to leave the charge on all of the above and fix the economic deficit but i'll fix this country's trust deficit. we're too good as people to be in the hole we're in. we deserve better. >> bret: as governor huntsman mentioned there is a real drama playing out real-time in washington right now with the threat of yet another government shutdown, the possibility that millions of americans could see their payroll taxes go up. if you're president, as is the case now, and you are at lagerhead with one chamber of

congress, how would you hand this situation? 30 seconds down the line. start with senator santorum. >> well, you do what leaders do. they go out and try to bring people together. they tell a narrative and remind americans who we are and how we solve our problems. this country is a great country because we believe in free people. in 2008, the american public were convinced by barack obama that nay needed someone to believe in, that they could believe in. we now understand what we need is some president who believes in them. that is the narrative. go out and motivate the american public. have them talk to their representatives in washington. to pass solutions that believe in bottom up, how we built america, free market, free people. >> bret: governor perry? >> after three years, you would think this president could learn how to work in washington, d.c. if there has ever been a greater example of on-the-job training, this is it. couldn't have been at a worst time for america. we need a president who has

the governing executive experience and someone who understands how to work with both sides of the aisle. frankly, we should never have gotten this point at all. the idea he walked away from the work at hand and we had a supercommittee, that was put in place, that was going to fail on its face. that is the type of leadership that this president has been an absolute failure at and the type i have been working at as the governor of texas for the last 11 years. >> bret: governor romney? >> this is a question that ought to take longer than 30 seconds or even 60 seconds. the question of the presidency. what is leadership? i had the disadvantage of some respects becoming governor of a state with a legislature 85% democrat. turned out to be a blessing in disguise. to get anything done, i had to learn how to get respect of the speaker of the house and the senate president and democratic leaders. i found a way to do that. to find common ground from time to time. when crisis arose, we were able to work together. that is what has to happen. there are democrats who love america, as republicans do. but we need to have a leader in the white house, that knows

how to lead. i have had four leadership experiences in my life where i lead enterprises. i want to use that experience to get america right again. i will do it as president. >> bret: we will have many more questions about gridlock in washington and the topic overall. speaker gingrich? >> i want to start by reinforcing what governor romney just said. leadership is the key. when you have a sal alinsky radical doesn't do the job of president because he's running for re-election, the constitution can't work. it helped ronald reagan when tip o'neil was speaker to get enough votes to pass the reagan program despite democratic majority. as speaker, one reason some people aren't happy with my leadership i worked things out with bill clinton to get welfare reform, tax cut and four balanced budgets signed in a way that required bipartisanship, because you couldn't get anything done otherwise. leadership matters immensely in getting this done. >> bret: congressman paul?

>> the main problem we have is the government is too big and debt is too big and you have to cut spending so you have to get people to come together. they have been coming together to increase spending for decades. we have to get them to come together to do the opposite. two factions up there. one wants welfare and the other wants warfare around the world and pleasing the world. if you go to people who like warfare you say give me half of the cuts that have to be in the welfare. go to welfare people and say give me the cuts to cut the oversea warfare spending and bring people together and live up to what they say. >> bret: congresswoman bachmann? >> as p of the united states i would have called all 535 members of congress to come sit down in washington last summer looking at the debt ceiling crisis. what i would have done is said there are three principles we are going to follow, because the first one needs to be no new taxes. we're taxed enough already. the second principle needed to be the government can't spend any more money than what it is taking in. the third principle had to be that we were going to follow the constitution of the united

states. what that would have meant we would have looked at $15 trillion debt in the eye and said we are not going to add one more cent to it. we are going to prioritize the spending and put the reform in the long-term programs now. not wait eight months or five months. we are going to reform right now. >> bret: governor huntsman? >> leadership is action, not words. it learned a very important lesson about this when i ran for governor in 2004. i promised the people of my state as governor we would create the finest state in america for business. i ran on a flat tax proposal. it took us two years, we got it delivered. flat. i hear a lot of people talk about tax reform and flat tax, we actually got one done. the finest business in the united states we delivered to the people. healthcare reform without mandate. the list went on and on and on. i ran for re-election. i got almost 80% of the vote. not because i'm a great politician, but i learned some lessons in leadership. people want to be told where you can take them and then

they want you to deliver. >> bret: thank you. we have many more interesting questions coming up. we have a new feature for you tonight. how well are the candidates answering the questions. we are asking you to weigh in on twitter. tweet the candidate's last name and #answer if they are answering it or #dodge if you think they are avoiding it. go to foxnews.com/debate to see results. in the break, head there to check it out. if you have a suggested question or a followup to something you have heard, tweet @bretbaier. we will use some of those suggested questions tonight. after the break, the candidates on the increasingly sharp tone of this campaign, the economy and a topic that has not been raised in any of the debates so far. stay with us.

♪ ♪ ♪ ♪ >> good evening from sioux city in northwest iowa. i'm matt strawn, chairman of the iowa g.o.p. four years after propelling barack obama to the white house, iowa has seen a surge of new republican voters as iowa republicans posted 33 straight months of voter registration gain. as the republicans prepare to vote in 19 days, we understand the responsibility that comes with the privilege of being first in the nation. because the fight to reclaim the white house extends far beyond iowa's borders we want you to be the first to know. so text iowa to 91919 to know the result and other updates. thank you.

now let's return to the final debate before the january 3 iowa caucus. >> bret: thank you, mr. chairman. welcome back to sioux city, iowa, and the republican presidential debate. for next round of questions, i turn to my colleague chris wallace. >> chris: thank you, bret. candidates, i will call this section for lack of a better word "d.c. culture." governor romney, i will begin with you. speaker gingrich says you should give back the millions of dollars you made in his words bankrupting companies and laying off employees. you responded that he has in your words an extraordinary lack of understanding of how the economy works. his comments dovetail with daringmentarguments you hear fre democrats on your belief of the creative destruction of capitalism, shows a hard heartedness. what do you think of what speaker gingrich said about you and are you vulnerable to that attack? >> it's a great opportunity for us. i think the president will level the same attack. he will go after me and say in businesses that you have

invested in, they didn't all succeed. some failed. some laid people off. he will be absolutely right. but if you look at all the businesses we invested in, over 100 different businesses, they added tens of thousands of jobs. in the real world that the president has not lived in, i actually think he doesn't understand that not every business succeeds, and not every entrepreneur is lucky now have to do as well as entrepreneurs at bright horizons, staples and the steel company and many others. i, myself, have had the chance to lead four different organizations and each of those was highly successful. in part because of hard work and in part because of good luck. in the real world some things don't make it. i believe i learned from the successes and the failures. the president i'll look at and say mr. president, how did you do running general motors of the president? took it over. gee, you closed down factories. you closed down dealerships. he said i did that to save the business. same with us, mr. president. we did our best to make the businesses succeeded. i'm pleased they did and i

learned the lessons of how the economy works. this president doesn't know how the economy works. i believe to create jobs it helps to have created jobs. >> chris: thank you. speaker gingrich, on the freddie mac website in 2007, you said this -- "i like the gse, or government sponsored enterprise, like freddie mac model. making homeownership more affordable is a policy goal that i believe conservatives should embrace." now in an earlier debate, recent debate you said politicians like barney frank, who in your words profited from the environment that led to the financial meltdown should go to jail. now that it turns out that you were on the freddie mac payroll to the tune of more than $1.6 million, how do you answer critics who say you are being hypocritical? >> i think pretty straightforward. barney frank was in public office, with direct power over freddie mac. he exploited that power, just as chris dodd was in public

office when he got special bargains from countrywide, a firm which went broke. they were using power. i was a private citizen engaged in a business like any other business. now, if you read the whole thing that they posted i said they need more regulations, and i want to go back to my point about helping people buy houses. it work for years with habitat for humanity. it is a good conservative principle to find ways to help families right at the margin learn how to budget. learn how to take care of a house. learn how to buy a house. i am not going to step back from an idea that we should have as a goal helping as many americans as possible, be capable of buying homes. when you look for example at the electric membership coopts and credit unions, there are a lot of government sponsored enterprises that are awfully important and do an awfully good job. >> chris: congressman paul, you are, having been in this town for 48 hours now, you are all over iowa tv these days.

with a negative ad about speaker gingrich. you accuse him of selling accession and playing the corrupt revolving door game. what about the explanation you just heard he is in the private sector and this is free enterprise? >> he has a different definition of private sector than i have. it's a g.s.e. government sponsoredder is prize. that iprize -- sponsored enterp. it's a government agency. it gets mixed up. the worst kind of economy. pure, private enterprise more closely to what governor romney is involved with. if it's government sponsored it is a mixture of business and government. some say if it goes to extreme it becomes fascism, because big business and big government get together. they get money. i was talking about that for a long time. line of credit, excessive credit from the reserve, community reinvestment act for ten years. the austria economist knew there was a bubble. at this time, nobody was listening or doing anything in

the congress. then to go to work for them and get money from them, it literally is coming from the taxpayer. they went broke. we had to bail them out. indirectly that was money he ended up getting. they are still getting money from a government sponsored enterprise. it's not a free market enterprise. >> chris: speaker gingrich, 30 seconds to respond. >> go back to what i said a minute ago. the term "government sponsored enterprise" has a wide range of things that do good. go across the state and talk to people in electric membership coopt or talk to people in the credit unions. there are a lot of good institutions that are government sponsored. frankly the idea that anything that ever touched government could raise questions about doctors dealing with medicare and medicaid and a range of other government activities. there are many things that governments do. i did no lobbying of any kind for any organization. that was a key part of every agreement we had. >> chris: well, let me pick up with that with you,

congresswoman bachmann, because you accuse speaker gingrich of peddling his influence with the congressional republicans to help companies that paid him tens of millions of dollars since he left office. given his denial over time and again tonight that he denies ever having lobbied, what is your evidence, hard evidence that he engaged and influenced peddling? >> the fact that we know he cashed paychecks from freddie mac. that is the best evidence you can have. over $1.6 million. frankly, i am shocked listening to the former speaker of the house because he is defending the continuing practice of freddie mac and fannie mae. there is a big difference between a credit union and freddie mac and fannie mae. they were the epicenter of the mortgage financial meltdown. i was trying to see these two entities put in bankruptcy because they frankly need to go away when the speaker had his hand out and he was taking $1.6 million to influence

senior republicans to keep the scam -- -- [ loss of audio ] thbuilt up. >> chris: speaker gingrich? >> well, the easy answer is that is just not true. what she just said is factually not true. i never lobbied under any circumstance. i never went in and suggested in any way we do this. in fact, i tried to help defeat the housing act when the democrats were in charge of the house. if you go back and talk to former congressman rick lazio, they said while we were passing housing reform when i was speaker i never tried to slow down the reform effort. i helped him pass the reform bill. some of the people should have facts before they make the wild allegations. >> chris: go ahead. congresswoman? >> well, after the debates

that we had last week, it was said that everything i said was true. evidence is that speaker gingrich took $1.6 million. you don't need to be within the technical definition of being a lobbyists to still be influence peddling with senior republicans in washington, d.c. to get them to do your bidding. and the bidding was to keep the grandiose scam of freddie mac going. that is something that our nominee can't stand for. we have to shut down the government enterprises. we have to end them. it's shocking that he is saying that. >> bret: speaker gingrich quickly. >> two things. first, my policy is to break up both fannie mae and freddie mac. it's not anything like what you just described. second, i want to state unequivocally for every person watching tonight. i have never once changed my positions because of any kind

of payment. because the truth is i was a national figure who is doing just fine, doing a whole variety of things including writing best-selling books, making speeches, and the fact is i only chose to work with people whose values i shared and having people have a chance to buy a house is the value i believe still is important in america. >> bret: now to neil cavuto with questions about the economy. >> neil: speaker gingrich, not to make you a target. but you. >> it goes with being right here. >> neil: you just responded this morning, tweeted originally and follow-up statements of a major break through of the plan on the part of republican congressman paul ryan working with democratic senator ron white to find a sort of updated way to keep medicare solvent. this would involve a choice. those who like the program as it is can stick with it. they will be a private option, et cetera. but earlier on, this might

have confused congressman ryan and others for whom you had said was the initial medicare fix it was right wing social engineering. later on you backed off that comment and said there was much you could find in mr. ryan's plan to like. can you blame governor romney for saying you have a consistency problem on this issue? >> i'm not in the business of blaming romney. i f you go back to look at the "meet the press" quote did i want reference him. i'll say it again. a free society should make very big decisions with the support of the people. now you can earn that support, you can win a communications argument. reagan was very, very good at that. the only point i was making on meet the press is when you are going to have a major change, you have to communicate with the american people to ensure that they are for you. governor romney came up frankly with a very good variation on the ryan plan allowed the maintenance of the current system. paul has adopted that.

i think did a very brave act by senator ron widen you have a democrat willing to cosponsor the bill. i endorsed the concept today. it's a big step forward. governor romney deserves some of the credit to help figure out a way to make this thing workable. it's a nice thing to actually have a bipartisan plan in washington that we could look at in a positive way. and hope would help save medicare. >> neil: governor romney do you want to respond to that compliment? >> thank you. yeah, i hope people understand just how big today is for this country. we have all understand that the spending crisis is extraordinary with $15 trillion now in debt, with the president that racked up as much debt as all the other presidents combined. but there is another problem we have. which is our national balance sheet. which of the obligations that we have made, that we have no funding behind. it adds up to $62 trillion. today republicans and democrats came together. with senator widen and congressman paul ryan to say

we have a solution to remove the $62 trillion. this is a big day for our kids and grand kids. enormous achievement. it means we finally have the prospect of dealing with somebody which has the potential of crushing our future generations and a good democrat and a good republican came together. this is the impact of people on both sides of the aisle that care about america in a critical time. i applaud him. good news. >> neil: congressman paul, as you have been warning, we are on the brink of another government shutdown because of the spending that you call out of control. but having you contributed to that spending problem yourself, sir, supporting over the years earmarks that have benefited your district and your state? back in 2009, you explained this by saying if i can give my district any money back, i encourage that. i don't think that the federal government should be doing it but if they are going to allot the money, i have a responsibility to represent my

people. isn't that what they call a mixed message? >> it's a mixed question is the problem, because the real message is you should include in your question also you have never voted once for an earmark. it's a principle that i deal with. because if the government takes money from you and you throw out your tax form, you take your deductions. i look at that the same way in our communities. they take our money, they take our highway funds. and we have every right to apply for them to come back. as a matter of fact, it's a bigger principle for me than that. i think the whole thing is out of control on the earmarks, because i think the congress has an obligation to earmark every penny. not to deliver that power to the executive branch. what happens when you don't vote for the earmarks it goes in to the slush fund, the executive branch spends the money. then you have to grovel to the executive branch and beg and plead and say oh, please return my highway funds to me. so if this whole principle of

budgeting that is messed up, but i never vote, i never voted for an earmark. but i do argue the case for my, the people i represent to try to get their money back if at all possible. >> neil: but isn't that the same thing of having your cake and eating it too? you can complain about earmarks but then if there are provisions there that help your district or your state, that is different. 434 felt the same way, how would we ever fix the problem? >> i don't complain about the earmarks. it is the principle of the congress meeting their obligation. if everybody did what i did, there would be no earmarks. the budget would be balanced and we'd be cutting 80% of the spending. so that would be the solution. but you also want to protect the process. you have want to emphasize the responsibility of the congress, and not delivering more power to the president. it would be a different kind of president. i wouldn't be looking for more power. everybody wants to be a powerful executive and run things. i, as the president, wouldn't

want to run the world. i don't want to police individual activities and their lifestyle. i don't want to run the economy. that is an entirely different philosophy but it's very much in our tradition and tradition of our constitution. >> neil: governor perry, you said the only way to stop our spending problem is to get congress to stop spending. quoting you, sir, you said i vetoed 82 bills in my first year as governor of texas. i have a railroad of keeping spending under control. but as texas agricultural commissioner you oversaw a loan guarantee program that as the "austin american statesman" reported at the time had so many holes that the state had to stop guarantee bank loans to startup in the agri business and bailed out the program with the taxpayer money. aren't you guilty of the same behavior you rail against as presidential candidate? >> two things. don't believe everything you read in the "austin american

statesman." the second time is we had that program put in place and the state did not bail out those programs work as they were supposed to work. just like in any bank or business, you will have some that fail. but i want to go back and talk about just a second the issue of where we had a big back-and-forth about whether newt was involved in untoward activity. the issue we ought to be talking about on the stage is how you overhaul washington, d.c. the idea that you can't tell the difference between lobbying and consulting. the idea that we have congress staying there as many days as they do and the salary they have. that is the reason i have called for a part-time congress. cut their pay in half. cut their time in washington in half. cut their staff in half. send them home. let them get a job like everybody else back home has and live within the laws of which they passed. we do that and pass a balanced budget amendment of the united states constitution and the

conversations we've been having up here will be minor. >> neil: by the way, they work 151 days last year. how much more would constitute part-time? >> i would suggest to you maybe 140 days every other year like we do in texas. >> neil: governor huntsman, as you're probable familiar, the chinese just left huge tariffs up to 22% on imports of some american sports utility vehicles, larger american cars. now as a former ambassador to china and one who argued for adult conversation with beijing, how would you respond to what some are calling a childish move on the part of a country that routinely averts the international trade rules? >> it's a large complicated rule. part pakistan, part burma and part south china sea and military to military engagement. you move one end of the relationship and it impacts

the other. best thing to do is find a few dissidents seeking freedom and expand democracy in china to the united states embassy. the kind of thing i used to do. that is what matt torres chinese people who are looking for change and -- that is what matters to the chinese people looking for change and reform. that is the kind of thing that over time is going to create enough swell of change in reform in that country that will make a u.s. -china relationship successful longer term. because eventually, we need more than just a transactional relationship. we need shared values infused in this relationship. let's face it, the 21 z century will only have two relationships that matter. the united states and china. for that to succeed we need shared values. that is democracy, human rights. that is recognition of the role of the internet in society. that is greater tolerance toward religion and so much more. as president of the united states, i would drive that home. i would make it a relationship that worked. >> neil: senator santorum, right now american companies have trillions parked overseas

because of the very high tax rate here. would you support a tax holiday to bring that money back, but only under as some democrats suggested the condition that the companies hire workers with that money? >> yeah, what i proposed in the made in the usa plan is that if money has been made overseas, that it can come back at 5.5% rate, which is what we did in 2004 and it did cause a lot of money to come back. but i put a special rate, 0%. if they bring it back and invest it in equipment in america. we need to rebuild the manufacturerring base of the country. when i travel around to all of the counties in iowa, i went to a lot of small towns. like sydney and ha hamberg in fremont county and the other day in newton where they lost jobs overseas. why? we are not competitive. we need our capital competitive and come here free to invest it. cut the corporate tax, manufacturerrings to zero. why? there is a 20% cost

differential between america and the nine top trading partners. that is excluding labor costs. we need to get the taxes down and repeal the regulations. i promise to repeal every single obamacare regulation. every single obama regulation that cost businesses over $100 million. i can repeal it. i can't repeal laws but as a president you can repeal regulations, and i will repeal every single one of them so business can get going in this country. >> bret: thank you, neil. this question is from twitter. it's for you, governor romney. @alreadyeonjamespage tweets over the next ten years in what sector or industries will most of the new jobs be created? >> the great thing is the free market will decide that. government won't. we have a president, someone who doesn't understand how the economy works. and thinks that as a government, he can choose for instance which energy sector will be successful.

so he invests as a venture capitalist in certain car companies with electric battery power. not understanding that perhaps toyota and g.m. could do a better job than tesla and fisker. the president goes into solyndra because he thinks that solar power is the future. let the markets determine what the future course of our economy will be. what do i happen to be the future? i think manufacturing is going to come back. for some of the reasons that rick indicated, manufacturing will come back to the u.s. i think high-tech is going to be extraordinary source of growth for a long time in this country. and energy. we have extraordinary energy resources in this country. opening those up, our president holds them off, doesn't give them the permits to start drilling and getting the natural gas and oil. those are some of the areas that are extraordinarily powerful. this economy has every potential to continue to lead the world. our president thinks america is in decline. it is if he is president. it's not if i'm president. this is going to be an american century. >> thank you, governor romney.

now to megyn kelly with the next round of questions. this is a new topic. >> megyn: this is something we have heard pressure little about in the election, but something that is an important issue for a lot of voters. speaker gingrich, let me start with you. you have proposed a plan to subpoena judges to testify before congress about controversial decisions they make. in certain cases you advocate impeaching judges or abolishing courts altogether. two conservative former attorneys general criticized the plan saying it alters the checks and balances of the three branches of government. they used words like "dangerous," "outrageous" and "totally irresponsible." are they wrong? >> the first half is right. it alters the balance because the courts have become grotesquely dictatorial, far too powerful and arrogant in the misreading of the american future. there is an entire paper at

newt.org,vy been working on this project since 2002 when the ninth circuit court said one nation under god is unconstitutionable in the "pledge of allegiance" and i decided the judges that are so radically anti-american they thought "one nation under god" was wrong, they shouldn't be on the court. i taught a course in this at the university of georgia law school and testified in front of sitting justices at georgetown law school and i warned them, if you keep attacking the core base of the american exceptionalism and you will find an uprising against you which will rebalance the judiciary. we have a balance of three branchs. not a judicial dictatorship in this country. that is what the "federalist" papers promised us. like jefferson, jackson, lincoln and fdr i'd take on the judiciary if it did not restrict itself in what it was doing. >> megyn: these are conservative former attorneys general that criticized the plan as dangerous, ridiculous,

outrageous, totally irresponsible. >> sure. first, did they study jefferson? abolished 18 of 35 federal judges. 18 were abolished. >> megyn: something highly criticized. >> not by anybody in power in 1802. jefferson himself asked the supreme court supreme? he said that absurd. that would be aligacky. lincoln in the first inaugural address in 196 1861 said no nine people can make law. that would be end of the freedom. as a historian, i understand this better than lawyers, and as lawyers the two attorneys general are behaving like law schools with overly empowered lawyers to think they can dictate to the rest of us. >> megyn: congresswoman bachmann, you heard speaker gingrich, you heard speaker gingrich reference the ninth circuit court of appeals. that is one of courts he has suggested abolishing.

a left-leaning court, and as he points out and has done before he believes it's an activist court because in part it was a court that issued a ruling striking down "under god" in the pledge years ago. decision reversed by the supreme court later. do you agree that the ninth circuit should be abolished? and if so, what would then happen if a democratic president came in office and we had a democratically controlled congress that later took aim at the right-leaning federal courts? where would it end? >> where it needs to end is under the constitution of the united states. that is the real issue. are the courts following the constitution or aren't they following the constitution? it isn't just congress that gets it wrong. it's the courts that get it wrong as well. >> megyn: what do you do about it? >> what we need to do about it is have both the president and the united states congress take their authority back. and i would agree with newt gingrich, that i think that the congress and the president of the united states have failed to take their authority. because now we have gotten to the point where we think the

final arbiter of law is the court system. it isn't. the intention of the founders was that the courts would be the least powerful system of government. and if we give to the courts the right to make law, then the people will have lost their representation. they need to hold on to their representation. that is why i commend iowans because they chose not to retain three judges that decided that marriage would be in their residence -- [ applause ] iowans decided to take their constitution back. that is what the american people need to do. take the constitution back. and as president of the united states, i would only appoint judges to the supreme court who believe in the original intent of the constitution. >> megyn: congressman paul, let me ask you. do you believe what the two candidates have said, that it would be okay to abolish courts like the ninth circuit court of appeals entirely or

judges, impeach them if congressmen don't decide they like the ruling? >> the congress can get rid of the courts say if a judge misbehaves or is unethical and gets in trouble, the proper procedure is impeachment. but to subpoena judges before the congress, i'd really question that. and if you get too careless about abolishing courts that could open up a can of worms. there could be retailiation. so it should be serious, yes, we are frustrated with this. but the whole thing is if you just say well, we are going to -- okay, there are ten courts. let's get rid of three this year because they ruled a way we didn't like. that to me is i think opening up can of worms for us. would lead to trouble. but i really, really question this idea that the congress could subpoena judges. and bring them before us. that is a real affront to the separation of the powers. >> megyn: governor romney, many people believe that the way to rein in activist judges

is to be careful in appointing or nominating the judges in the first place. as governor of massachusetts, you passed over republicans for three quarters of the judicial vacancies you faced. instead nominating democrats or independents. with that track record, why should republicans believe that you will appoint conservatives to the bench if you become president? >> well, i have to let you know in massachusetts i actually don't get to appoint the judges. i get to nominate them. they go before something known as the governor's council. it consists of, i believe, seven members, all of whom are elected democrats. and so to be able to get my appointments through i had to have people of both parties. the people i put forward all were individuals who i vetted very carefully to make sure they would follow the rule of law. these are largely people going in criminal courts. i chose overwhelmingly people who had been prosecutors in their prior experience. so we had that kind of justice. let me note that the key thing the president is going to do is going to be with the longest legacy, appointing supreme court and justices throughout the judicial system. as many as half of the

justices in the next four years are going to be appointed by the next president. this is a critical time to choose someone who believes in conservative principles. i don't believe that it makes a lot of sense to have congress overseeing justices. the only boot that has less credibility than justice is congress so let's not have them in power of overseeing the justices. however, we don't call it we the judges. we call it we, the people. we do have the ability to remove justices that need to be impeached. we also have the ability to pass new amendments if we think a justice is taken the nation in the wrong direction. and if a statute is misinterpreted congress can write a statute to clarify that point. we have ability to rein in excessive judges. >> megyn: go down a name, favorite supreme court justice. current. >> vy to say of these folks over here have been talking about taking on the courts. i have done it. i campaigned in iowa. against the justices. i was the only one on this

panel that did it. number one. number two, when the partial birth abortion status struck down by the supreme court, george bush got elected we went back and i worked with henry hyde and passed another bill, told the supreme court they were wrong. passed it, george bush signed it and it was overturned. we can talk about reform and doing something to confront the courts, or you can actually go out and make it happen. i made it happen. and it's tops. >> megyn: quickly down the line. favorite current supreme court justice. >> as quickly as i can, but when i talk about overhauling washington, d.c., one of the things i talk about besides a part-time congress is no longer having lifetime terms for the federal bench. i think that is one of the ways that you keep these unaccountable legislators from rogues to try to dictate to the rest of us. i say you pick alito, roberts, thomas. pick one. >> megyn: all right. would you pick one, please. >> roberts, thomas, alito,

scalia. >> i think that is a darn good list. i would sign up for the guys. scalia is probably the most intellectual of the four. they're all four terrific judges. we had nine judges as good as those four we would be happy with the supreme court. >> megyn: congressman paul? >> from my point they're all good and all bad. our country a long time ago split freedom up to two pieces. personal liberty and economic liberty. the judges as the congress and the nation think it's two issues. it's but one issue. therefore, congress is on this issue as well as our judges. >> megyn: last chance to say a name. >> no, i'm not going to -- all of them are good and all of them are bad. >> megyn: congresswoman bachmann? >> i do think that there are good justices. i would put antonin scalia at the top of the list. i would also include clarence thomas and john roberts and alito. they are all marvelous. it could be easy topy any one of them. >> one of the reasons i'm

optimistic about the future of this country is because we have rule of law. let's face it. one of the great things that this country has that very few other countries have. so judiciary is critically important. it's also important to note that governors actually some experience appointing judges. you got to make the hard decisions. as i reflect on those today serve i'll say justice roberts and justice alito fit the bill nicely. >> megyn: thank you, all. >> bret: valueian value -- a vat effort. >> megyn: i tried. >> bret: coming up, the threat from iran and other foreign policy hot spots. up-and-down oil prices. border issues. controversial social issues. stay with us. remember, tweet @bretbaier with a question or followup. we'll be right back. >> announcer: if you think identity theft is scary, just wait till you try to fix it. >> 58 different individuals are using... absolutely using my old social security number. >> announcer: identity theft has topped the federal government's list of consumer complaints for the last 11 years.

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