>> i'm chris wallace, the latest on sarah palin's future, next on on sarah palin's future, next on "fox news sunday." captioning made possible by fox news >> the governor of alaska drops a political bombshell. >> i'm not seeking re-election. >> is her life in politics over or getting a jump-start? we'll ask her soon-to-be successor lieutenant governor sean parnell. u.s. interests are at stake around the world. we'll hear from admiral mike mullen, chairman of the joint chiefs of staff. then unemployment goes up again.

is another governor stimulus needed? we'll ask steny hoyer and john boehner, plus our sunday panel looks at what the palin announcement means for her and the republican party and one more look at a spectacular fourth, all right now on "fox news sunday." hello again and happy fourth of july weekend from fox news in washington. and what a weekend it's been. with sarah palin's stunner of an announcement that she's leaving office later this month. saturday palin posted a statement on facebook that cited a higher calling to advance the country along conservative principles. to help sort out why palin is stepping down, we welcome from anchorage alaska's lieutenant governor sean parnell, karl

rove, and former governor mike huckabee who ran for president last year. lieutenant governor parnell, sarah palin called you into her office to drop the bombshell. in a couple of sentences, because i'm sure a lot of people are still a little bit confused, why did she say that she is dropping out? >> well, good morning. you know, i think what i heard from the governor really had to do with the weight on her, the concern she had for the cost of all the ethics investigations and the light that -- the way that weighed on her with respect to her inability to just move forward alaska's agenda on behalf of alaskans in the current context of the environment. so that's what i saw. >> so basically she was saying that all of the personal attacks, all of the ethics attacks, that that was preventing her from doing her job. that's why she decided to quit. >> well, and the fact that it was costing just about $2 million of state, taxpayers'

dollars to fund the staff to deal with the records requests and the like and that that was just over the top and i think she used the word insane in her remarks. >> lieutenant governor, i know there's bad blood between palin and alaska's republican senator lisa murkowski, but i want to put up her full statement about this. i am deeply disappointed that the governor has decided to abandon the state and her constituents before her term is concluded. douse senator murkowski have a point? >> i was actually disappointed when i saw the senator's rele e release. does she have a point? i don't think so. i think what the governor did was look out for alaskans in this. she made the comment, i need to pass the ball when i have the full court press on me so we can

move alaska forward. governor palin accomplished more in 2 1/2 years than most governors do in one or two terms here. in that context, i don't think so. >> karl rove, you're as plugged in to republican politics as anyone in this country. what are you hearing from insiders that you're talking to about why sarah palin decided to step down? >> well, they're a little perplexed because she -- if she wanted to escape the ethics investigations, and save the taxpayers' money, she's now done that, but it is -- it sort of sent a signal if you do this kind of thing to a sitting governor like her, you can drive her out of office. she's not going to be able to escape media attention. if she thinks she's going to be able to protect her family against the kinds of things that she's suffered over the last couple of months from david letterman and others and seek a role for leadership for effective change for our country as she said in her speech, she's not going to be able to do it.

the media, if she runs for president, will be following her intensely for the next three years. >> governor huckabee, are these the actions of somebody who wants a career in national politics or somebody who wants to get out? >> well, it's a risky strategy, and nobody knows whether it's going to pay off or not. even if she did get out, primarily because of the -- a feeling of being chased, that's not going to stop if she continues in politics. the only way for that to stop is for her to completely exit the stage and the spotlight. i totally agree with karl. one thing i wondered about was hastily calling a news conference that raised more questions than it answered. you don't call a press conference that creates question. you call one to resolve them. >> governor huckabee, almost every politician is on the firing line. you may not have been to the degree as governor of arkansas

was that sarah palin was. but what about the argument i'm doing this for my state because the attacks against me are getting in the way? >> if that were the case for me, i would have quit in the first month. 89% of my legislature were democrats. i had constant ethics complaints filed against me even by newspaper editors and a lot of it was because if they can't attack you on policy, what they do, they absolutely bombard you with personal attacks and keep you tied up in court, make you hire lawyers. been there, done that. arkansas was a tough political environment, period, even tougher for a republican, and one of the things you have to do is just decide, look, they're not going to chase me out. what they do, they throw all that stuff at you and say, oh, there's a pattern of ethical issues. actually, what the pattern is is a pattern of phony charges being filed by the opposition party. the danger that sarah palin faces -- and let me be very quick to tell you -- i'm a sarah palin fan.

i like her personally. i like her points of view. i think she's right on the issues. the challenge that she's going to have is that there will be people who say, well, look, you know, if they chase you out of this, it won't get any easier for you at other levels of the stage. >> all right. let's talk about those other levels. karl, let's talk about sarah palin's future. does her decision to step down in the middle of her term, not serve out her full four years, does that help her or hurt her if she has any hopes of becoming president? >> i think it hurts. when you're a sitting governor, you have the tactical advantage if you're thinking about running for president of turning down a lot of things with an excuse that people will accept. i've got a job to do as governor. she's now removed that. now the expectations are going to be she's going to be fully available, she's going to be able to come to the lower 48 and she's going to be able to do whatever people ask her to do and that's going to be a problem. it raises the expectations. it's also unclear what her strategy is. again, she said she wanted to

lead effective change outside of government. now people will be saying what is it you mean by that and how are you demonstrating effective leadership for change around america? i'm like governor huckabee. i'm a fan of sarah palin's, but the effective strategies in politics are ones that are so clear and obvious that people can grasp it. it is not clear what her strategy is exiting the governorship and putting herself on the national stage that she may not yet be prepared to operate in. she did a great job during 63 days during the fall campaign of 2008. 63 days from her emergence in ohio to the election date. but now she's going to have hundreds and hundreds and hundreds of days between now and the 2012 election and she's going to raise expectations about how well and how visible she's going to be early on in those -- in that struggle. >> governor huckabee -- >> chris, can i jump in? >> sure, go ahead. >> i appreciate being able to jump in here finally. governor huckabee made a point. he was comparing his experience

as governor of arkansas as governor of alaska. they're miles apart. she became a national figure, an international figure during the last presidential race. that's a clear dis tintinctiodi. she not only had the local press and party after her, she had the national party after her, international perhaps even. beyond that, can she has plenty of time in which to define how she will further her core values. i have to tell you, when she went to kosovo and visited our guard members and wounded soldiers there and in germany, she saw she doesn't need a title to effect change and bring hope to people who need it. >> i'd like both karl and governor huckabee to respond to that. let me throw one other point into the mix in support of lieutenant governor parnell's comments and that is our very own bill kristol, who was pushing palin as mccain's running mate before mccain had

seriously considered it, said that this is a risky strategy, but it's crazy like a fox. she doesn't -- she's not going to convince the skeptics with another 18 months as governor. this gives her an opportunity to write a book, make speeches and travel around the country. governor huckabee? >> i think there's -- there's some wisdom to that. it could be a brilliant strategy. the point is we don't know. it's risky in that there's no forgone conclusion as to whether it will play out as to give her some sort of reprieve from the national stage or simply to give her opponents -- let me be very clear. in a primary, this is going to be an issue she'll have to face. will she be able to withstand the pressure? and i think that governor parnell's comments regarding the arkansas stage, i'll be honest with you. the experience i had in arkansas politics was far more brutal than running for president. in a primary, it may not be quite the same. i'm telling you, when your opponents within your own team spend millions of dollars to

redefine you, it's very, very difficult. and she'll have to face that if she runs in 2012. >> karl? >> well, she can't be a conventional candidate. she's never been one. she's putting herself in a place where unless she comes up with something new and novel that demonstrates leadership for effective change outside of government, as she said in her speech, then she's going to be conventional. she cannot simply count on going around and collecting chits by campaigning for republican candidates in 2010. she has lost control of her time. she had the excuse of saying i'm the governor. now people will be clamoring for her and the expectations will be out of sight. she went to kosovo as governor. she had a platform there as governor. the question now is what kind of idea does she have about the platform she will have during the next three years? this is a personal decision. it's a risky strategy. she -- she marches to the beat of her own drum and it's going to be very interesting to see how she pulls this off.

>> governor huckabee, less than a minute left. when you take a look at governor sanford confessing his personal affairs, john ensign confessing his personal affairs, sarah palin dropping out as governor, as a possible candidate in 2012, do you feel like you're gaining by standing on your feet? >> i thought you were going to ask me if i have something to confess here. >> we all do. >> i just resigned my deal with fox for the next three years. right now i'm very comfortable doing what i'm doing. i know everybody assumes that i'm going to make another shot at it, but, honestly, it's a brutal experience. i'm not sure that that's in my future. i just don't know at this point. but right now i know that, you know, it's going to be a wide open field and it may be a lot more narrow in the sense of the number of candidates, but the field itself is wide open. i think we'll see other people emerge we haven't heard from. >> lieutenant governor parnell, karl rove, governor huckabee, thank you so much for joining us

this holiday weekend. i bet we'll be talking about sarah palin some more. >> thanks, chris. >> thank you. >> up next, news out of afghanistan, russia and north korea has the u.s. military on watch. we'll get the latest from the u.s. highest ranking officer right after the break. playing throughout ) ( clunks ) ( coins splashing ) why toss out your money? switch to sprint. save $475 a year with the simply everything plan and get the blackberry curve 8330 smartphone for just $49.99. deaf, hard of hearing and people with speech disabilities access www.sprintrelay.com. [ door closes ] [ footsteps ] [ man sighs ]

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>> joining us now, the chairman of the joint chiefs of staff, admiral mike mullen. admiral, welcome back to "fox news sunday." and happy fourth of july weekend, sir. >> good morning, chris. happy fourth to you. >> you joined the president in moscow tomorrow for a summit with russian leaders. they have agreed to open their airspace to flights of u.s. troops and weapons over russia into afghanistan. how much will that help with the war effort? >> well, any effort in terms of being able to support the kind of logistics effort that is significant is very helpful.

and as we were talking just before we -- i came on, i was just in russia last week, met with my counterpart, first time that i'd been there to meet with him, to discuss -- to renew, move towards renewal of military relationship with russians. and that will be an important part of this summit as well. >> well, i want to pick up on the state of u.s.-russian relations. here's what president obama said this week about the message that he intends to bring to moscow. here it is. >> the old cold war approaches to u.s.-russian relations is outdated, that it's time to move forward in a different direction. >> from your meetings, do the russians agree that the cold war is over or, as mr. obama said about prime minister putin, that they have one foot in the old way of doing business and one foot in the new way?

>> i met with my counterpart twice. the indications i get from him are he's anxious to move forward. we have things in common that we need to work on. afghanistan, neither country wants to see the taliban return to afghanistan. the kind of efforts we share in counterpiracy, counterterrorism, focus on iran, and we obviously have areas of difference. missile defense is a big one. >> do you have a sense that the cold war is over in their minds or not? >> well, i think -- i think they want to move forward. that's -- from my counterpart,ing certainly the indication is they do want to move forward, and they want to do it in a way where we look -- basically deal with each other from positions of respect and certainly that's how i've approached my interaction with him. >> you pointed out one of the areas where you're disagreeing and that's missile defense and particularly the russian objection to the setting up of a missile defense system in eastern europe. there's nothing in the obama budget for that system.

is the president committed to installing it in eastern europe, or could he conceivably make a deal with the russians? >> he's directed us to undertake an extensive review. that is ongoing and won't be done until this year. the whole issue of missile defense is based on defense of europe. obviously, the russians see it differently. we're going to have to work our way through that. i visited poland. they're anxious to see us move forward. clearly, we've had engagements with czechoslovakia as well. all of that is part of what will be determined later this year. >> but i'm just trying to get a sense. as the president sits down with the russian president and prime minister, is missile defense in eastern europe negotiable? >> from my perspective, that's something that they'll have to work their way through and the details of that will obviously be part of the discussions that

they undertake later this week. >> speaking of missile defense, the north koreans fired seven -- seven missiles -- >> right. >> -- on saturday and four missiles on thursday. what are they up to, admiral, and do we think that they're still going to launch a long-range missile towards hawaii? >> well, they certainly still have that potential. these seven missiles that were fired yesterday were relatively short-range. it's similar to what they did in 2006. he's clearly trying to send a message. that said, i think -- and it's a clear violation of the united nations security council resolution. >> what do you think is the message they're trying to send? >> i believe that the international community has to continue to come together. the international community has stayed strong with respect to the security council. >> what do you think the north koreans are up to?

>> he's not predictable historically. he clearly wants to continue to be belligerent and thumb his nose at the international community. beyond that, it's difficult to tell. but it's very destabilizing potentially. >> admiral, as i just said, 11 missiles fired in three days. is this any time for the president to be cutting missile defense as he does in his new budget? >> i'm comfortable. we've worked our way through the missile defense readiness we need right here and i'm comfortable with preparations we've taken and that we can defend our interests very specifically. again, i think the long-term future with respect to missile defense will be determined in how we move forward with this review and the various pieces, the navy piece, the land-based piece, the air side of this that we put together in the long run. >> in afghanistan, the u.s. has launched a new offensive with 4,000 marines in helmand

province. how certain are you that this strategy based on the troop surge in iraq is one that will work and they will be able to hold presidential elections in afghanistan next month? >> i'm very comfortable we have the troop numbers about right in the south. that offensive just started. the whole goal of this is to provide security for the people of afghanistan. they really are the center of gravity and that leads to an environment that supports elections later this august. that's a big milestone in that country. and we want them to be open and free and fair and be able to provide as much security as we possibly can between now and then. >> you talked about troop levels. i want to talk about not just in southern afghanistan, but throughout the country, because there seem to be mixed messages this week about our troop level policy for afghanistan. national security adviser james jones was quoted this week as telling u.s. commanders there not to expect any more troops

beyond what the president has already promised. you were quoted the next day as saying the top new commander, general mccrystal, is going to make a review and he can ask for as many troops as he wants. which is it? >> i've had discussions with general jones and the president. president obama has committed the forces that we've asked this year. general mccrystal, who is the brand-new leader there, is in the middle of an assessment. he'll come back in about 45 days with his assessment in terms of what he needs. my guidance to him had been tell us what you need, and then come back and we'll work that. and it's guidance that both general jones and the president understands and support. i think one of the points is we have to make sure that every single american that is there is one that we absolutely need. in addition, the commander on the ground has to assess with a new strategy, and new leadership, really zero base,

not just what's there, but what he needs for the future, and we expect that sometime end of july or middle of august. >> what's the latest about the missing american soldier? who's holding him and have they made any demands? >> i wouldn't get into any details about that. in terms of the kinds of things that could compromise the efforts, clearly, we've got a full core press on trying to find him. we're doing everything we possibly can. obviously, it's a very difficult situation, but we're very focused on it. >> in our last minutes, i'd like to do to the degree that you're comfortable with this a lightning round of quick questions and quick answers. vice president biden has told iraqi leaders that if this country returns to sectarian violence that the u.s. is likely to end its commitment. do we mean that? >> what i've seen with our troops coming out of the cities in the last week has been very positive. the politics are really critical

in iraq between now and over the next certainly months as they look to elections in january. so i think the message there is clearly that the political leadership in iraq has to do as much as they possibly can to make sure security is sustained. >> but if they were to devolve back into sectarian violence, we are prepared to just wipe our hands? >> that's a decision obviously for the administration, certainly for the president. but we're not there right now and i don't see the trends, anything at this point leading in that direction. >> given the political repression in iran in the last few weeks with the election and then the crackdown, the brutal crackdown in some cases on the protests, do we want to keep trying to engage the iranian regime? >> that's a decision for the president to make. very clearly, i, as everyone was, i am and is, troubled by

the trouble of violence and what happened, but wouldn't comment extensively on the political events inside a country like this, but i remain concerned about iran. on the military side, they still continue to develop nuclear weapons. they still support terrorism. and i think they're a country that we're going to have to deal with. >> a report in the "washington times" this week said you believe a military strike against iran would spur iran's nuclear facilities, would spur a bloody retaliation against u.s. interests in the middle east and around the world and that you have come to believe we're going to have to learn to live with an iranian nuclear weapon. is that true? >> well, actually, i honestly didn't see that report. i've been one who have been concerned about a strike on iran for sometime because it could be very destabilizing, and it is the unintended consequences of that which aren't predictable. that said, i think it's very important as we deal with iran

that we don't take any options, including military options, off the table. and that's something that the president is certainly both aware of, and he obviously has to make decisions about how he's going to continue to approach iran. >> which would be more destabilizing, the blowback from military strike from nuclear establishment in iran or iran having a nuclear weapon? >> i think both outcomes are really, really bad outcomes. and that speaks to the very narrow space that we have to try to resolve this so that neither one of those things occur. >> admiral mullen, we want to thank you. thanks for coming in today. safe travels to russia later today. >> thank you, chris. >> coming up -- the two house leaders on health care reform and what can be done to kickstart the economy. back in a moment.

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>> joining us now to talk about the economy, health care and more are the two top men in the house of representatives, democrat steny hoyer is the majority leader and republican john boehner is the minority leader. congressmen, welcome back to "fox news sunday." >> good to be with you, chris. >> back when the obama team was pushing its stimulus plan, it said it would keep unemployment below 8%. this week we all learned it's now 9.5% and the republicans have put out a video about a bloodhound searching for stimulus jobs. let's watch.

>> finally the dog tracked down something. in north carolina, they used stimulus money to hire one new state worker. his job, apply for more stimulus funds from the taxpayers by the way of the federal government. >> congressman hoyer, can you honestly say you're satisfied with the stimulus? >> i don't think anyone can say we're satisfied with the results of the stimulus so far. mark zandi, one of mccain's economic advisers, says it's going to create two million jobs by the end of next year. >> why hasn't it done more faster? >> we're disappointed. john and i were talking about getting money out more quickly. we need to do that. we're disappointed. the ad is run by a crowd that created about 4,000 jobs per month, the worst job creation performance in 75 years.

and lost two million jobs the three months before the obama administration came in. .so they haven't had such a had track record. we're disappointed we inherited such a tanking economy. >> i think he's talking about you. president obama defended the stimulus. let's take a look. >> the recovery act was designed to make sure that local school districts didn't lay off teachers, firefighters and police officers and it's done its job. >> congressman boehner, democrats say unemployment would be a lot higher without the stimulus package. >> we argued early in the year when this bill was being debated that the way to help the economy grow is to help small businesses and american families keep more of what they earn because at the end of the day, they're the ones who can get the economy going again. this was supposed to be about jobs, jobs, and jobs. and the fact is it turned in to

nothing but spending, spending and more spending on all big government bureaucracy. in ohio, the infrastructure dollars that were sent there months ago, there hasn't been a contract let, to my knowledge. and the fact is that i don't believe it will create jobs. the president said earlier this year we're not going to see unemployment above 8% if we pass this bill. we have. steny, the real question is where are the jobs? you can't spend $800 billion of taxpayer money and not create jobs when you say that's what the goal was. they haven't seen the jobs yet. >> we have obviously invested in health care. we've invested in education. i think the president's absolutely right. we would have lost more jobs but for this investment and economists agree with us. as a matter of fact, a lot of economists on john's side of the aisle agreed with the stimulus package. >> no, no. they agreed that they needed a stimulus bill. >> let me just finish. john's message is the same message we heard in 2001.

the same message that supported an economic policy that led us to the worst economic times -- >> yes, let's look forward, not backwards. i guess the question becomes, because you say -- you both say you're disappointed with the stimulus, it hasn't created jobs, so -- >> disappointed with the results so far. not with the stimulus. >> so is the answer a second stimulus, is it to revamp the current stimulus? what are you going to do to get money out and create jobs faster? >> we have to get the money that is already in the stimulus bill out, and we're looking at that. we're looking at that from the infrastructure standpoint and all the areas through the cabinet officers, that we need to get this money out more quickly. john's right. i'm disappointed, he's disappointed that the money hasn't gotten out more quickly. >> do you favor a second stimulus? some democrats are saying the problem with the stimulus was it wasn't big enough. >> i don't say that at this point in time. we have to see. we certainly want to see how this develops over the next few months. but we've got to understand, we

inherited two million jobs being lost in the three months before we took office. the policies that were put in place were put in place about 130 days ago. not eight years ago. but 130 days ago. >> come on, steny, you sound like the kid who shows up every day without his homework and wants to blame the dog for eating his homework. we agreed we needed a stimulus plan. >> congressman boehner, can they fix the stimulus plan that congress passed? >> all it does is fund more government. if you want to get the economy going, you have to trust small businesses and the american people to reinvest their own money. so we haven't tried the risk end of this bill. >> john's plan is what they did

in 2001. >> five mill jobs. >> no way. >> yes, sir. >> your figures are dead flat wrong. less than two million. during the clinton administration, we created almost 21 million jobs. >> health care reform. will the house pass a bill before the august recess and what are you going to do about the two biggest problems, which are, one, increasing coverage, increasing coverage to all of the uninsured without spending another trillion dollars? >> well, first of all, the american people understand that the health care system in this country is in real trouble. they like what they have. about 75% of them. about 87% of them think we need significant reform. and the answer to your question is, yes, we're going to pass significant reform. >> before the august recess? >> before the august recess in the house of representatives. we need to bring costs down for govt, for families, and we need

to bring cost down for individuals and we need to ensure a system that is affordable, accessible. they need that security and we're going to do that, and that's what they asked for during the course of the election. >> i promise you'll get your chance here, congressman boehner. let's go through a quick checklist of some of the key issues. public health insurance option to compete with private insurers. must have in the plan? >> we think it's going to be a public option. yes, we think we need that. we need to make sure there is an option available for public that can't get through private insurance. that's essential if you're going to have access. >> is that a deal breaker? >> it is for us. having the government have a plan to compete with the private sector is unfair. there's no cost of capital. it will drive 23 million americans out of their current plan into the government option. it's not the way to go. >> mandate for -- >> chris, can i say something? when they adopted a prescription

drug program, they provided for the possibility of a public option in their own plan if it wasn't available. what we're saying is, look, you've got to keep everybody honest and get costs down. we believe that competition will help. >> mandate on both individuals and employers to participate. must have in the democratic plan? >> as you know, the draft plan that's been put on the table provides for everybody to have coverage just as you have to have automobile insurance coverage. that will bring costs down. we believe if employers don't participate, then they need to -- by having their employees covered by their own insurance, then they need to participate in helping to pay for the system. wal-mart, by the way, as you know, and many other businesses, support that proposition. >> congressman boehner, is that a deal breaker? >> absolutely. they're going to shift $400 billion of the cost of this new program onto the back of employers with this mandate. that means the cost of employment goes up. when the cost of employment goes up, the number of jobs created

goes down. that's not what the american people want. secondly, there's an individual mandate that you must buy health insurance and if you don't we're going to fine you and we're going to fine employers if they don't offer health care. this will result in lower quality health care in our system. the american people want reform. >> we're doing a quick checklist. let me move to the last area. congressman hoyer, what taxes are you willing to raise and are you going to tax health care benefits? >> i'm not going to go into -- that's a proposal on the table in the senate, not in the house, as you know. the pay fors are going to be tough. nobody wants to pay for what we're buying and our financial status in america has gone down. during the last eight years, we inherited a 5.6 -- >> we got the inherited part. >> i understand that. >> it's the kid who lost his homework again.

>> that's something you don't want to forget. you don't want the homework. >> i did my homework and brought it to school. >> we'll make sure this program is paid for unlike programs adopted in the past so we don't make the deficit worse. >> the president says we spend too much as a nation on health care. how do you spend another trillion to two trillion dollars in order to spend less? and we're going to tax the american people, raise our taxes once again at a time when the economy's not doing well. if we're trying to create jobs in america, you can't do it by imposing more taxes on a big government-run health care plan. you can't do it by raising energy taxes on every american with their cap in trade system and then spend a trillion dollars with interest on a stimulus bill that's not working. >> finally, and we have a little over a minute left, so you're going to both have to be quick on this. we are coming up on the end of

the first six months of this new congress and this new president. start with you, congressman hoyer. how's it going? >> i think this has been the most productive six months i've served in the congress of the united states. i think the president put down the program and the congress has supported the program which is responsive to what the american people wanted. they wanted change. they wanted us to address the economy. we've done that. they wanted us to address energy. we've done that to make ourselves independent and secure, provide for cheaper energy, and addressing the climate challenge that confronts our country. we're also going to address the issue and have addressed the issue of education. so we're doing what the american people asked us to do. >> congressman boehner. >> chris, it's been nothing short of breathtaking. this giant move to build more government here in washington, to take more money from the american people, and at the end of the day, what we're going to end up with is higher taxes, bigger government and less freedom for the american people.

it's breathtaking, this big move to the left, and at the end of the day, while we're going to continue to offer what we think are better solutions, our members are going to continue to stand up for freedom, because you can't grow the family budget when washington's budget is growing. you can't grow the business budget when washington's budget is growing. and we're going to have a real fight for how much freedom we're going to have left in america. >> gentlemen, i'm glad we were able to settle all of that in this short time. thanks for sharing part of your holiday weekend with us. >> thanks, chris. >> the sarah palin chronicles. does she want to run for the white house or does she want to be left alone? our sunday group looks at that story from all angles when we come right back.

>> on this day in 2006, the united nations security council held an emergency meeting on north korean missile tests. the security council later adopted a resolution demanding

north korea halt its missile program. stay tuned. fios guy! where ya headed? ah, just installed fios in the whole building. now everyone has the fastest upload speeds. and we're giving them a mini netbook. well, i'm sticking with cable. so's ted. (voice) no i'm not! he's just goofing. (voice) no i'm not! (sighing) ted has betrayed me. (announcer) unlike cable, fios brings 100% fiber optics straight to your home and when you switch now, you can get a free compaq mini netbook. just pay shipping, handling and taxes. with fios, you'll get razor-sharp tv, blazing fast internet and crystal-clear phone service all for just... sign up today. call the verizon center for customers with disabilities at 800.974.6006 tty/v, and for a limited time, get an incredible compaq mini, to get the most out of your fios internet.

get it all together with a great deal on fios tv, internet and phone plus get a free compaq mini netbook. just pay shipping, handling and taxes. call the verizon center for customers with disabilities at 800.974.6006 tty/v before time runs out on this astonishing offer. >> it would be apathetic to hunker down and go with the flow. we're fishermen. we know only dead fish go with the flow. >> sarah palin giving one explanation for her stunning decision to step down as governor of alaska. and it's time now for our sunday group, bill kristol of "the weekly standard," jennifer loven who covers the white house for the associated press, stephen hayes also from "the weekly standard," and juan williams of national public radio. so, bill, you are our resident palin watcher and booster. you've gotten a fair amount of

attention since friday afternoon for saying that she's crazy like a fox, and this is an interesting and perhaps successful strategy to win her the presidency. explain. >> it's a high-risk move. the truth is for those who are doubtful about her she wasn't going to do anything in 18 months as alaska governor to convince them she was more qualified for high office. this gives her a chance to travel the country, campaign for republicans in 2010 in a way that's difficult when you're sitting governor of a state that's far away. study up on issues that is hard to get up on as full-time governor of alaska. if she's imaginative, picks the right issues to quarrel with president obama about, but it's high risk. she's all in here. and she has no safety net. you know, most -- bush ran -- george w. bush ran for president as governor of texas.

mccain had his machine from a previous round. she's just getting out there and it's going to depend on her talents and abilities. >> do you believe -- we heard lieutenant governor parnell say she left because she felt she was getting bogged down by all the attacks. do you believe that story or what you're saying, that this is a strategy to make herself a national political figure and perhaps be president? >> i don't know, but i think both. i do think the attacks were amazing. she has been the object of more hatred, i would say, and more hatred that has been sort of treated respectively by the mainstream media, than any politician i can remember and i'm sure it wears on her and she thinks it makes it hard for her to be an effective governor and now she can get out and be on her own. she's depending on her own arms here and she's had an interesting political career. the odds are against her but the odds were against her had she served out her term. given that, it wasn't a bad idea to go all in, put together a team in washington that can help

her and go for it. >> jennifer, here's somebody who already had a gravitas issue. is she up to the job? how does stopping -- stepping down in the middle of your term during a hastily called july 4 weekend news conference, how does it help with that? >> i don't think it does. i don't think i can argue that. she hit a couple notes that i think are going to hurt her. one, she hit the victim note, which doesn't usually go over well with the public. you want to be a politician selling something good, positive, a platform to run on, and she hit the victim note pretty hard. what she's going to get is just more of the same. she's not -- it's not like she's going to step out of the alaska governorship and step into a kinder, friendlier, gentler territory. she'll have more scrutiny. and the other note she hit that i think she's going to have some trouble with is this notion that she's sort of unpredictable and

flighty. if you're talking about national leadership, running the country, that's not an image you want to -- >> steve, i know bill kristol is your boss. are you buying his take on the palin announcement? ? bill is probably the finest magazine editor. [ laughter ] he's a wonderful husband and father. no is the short answer, i'm not. sarah palin had one problem. since we've known her publicly on the public stage, she's had one problem in particular, and she didn't have substantive policy base. she didn't have that in the campaign. she hasn't had it in the seven or eight months since then, and i think that is and has been and will be her big concern going forward. what i think she did since the election is really a missed opportunity. she could have gone out and made herself the chief republican spokesman on smart energy policy. this is something she knows well. she lives in alaska. has consequences for her state,

national ramifications. we're in the middle of a cap and trade debate. she could have positioned herself as somebody who knew something about that and taken over the role as a national spokesperson. she didn't do that. now the pressure will be on her to do that, but she won't have the stature or she won't have the office from which to make those arguments. >> well, you know what? she can't even say she was the one-term governor of alaska because she didn't stand by alaska. i think it's -- she was in line, it seems to me, as one of the possibilities to run against lisa murkowski for the senate and murkowski can run ads repeating what she said in her statement, that governor palin abandoned the citizens of alaska who gave her the privilege of serving as their governor. the political class around here is thinking what could this be about because palin is the most popular republican right now. she's more popular than mitt romney. people don't know tim pawlenty, the governor of minnesota. if you're looking at republican

opposition to president obama as he seeks a second term, you're thinking, oh, sarah palin might be the ticket, but sarah palin has taken away her platform as governor that was giving her the opportunity to respond to critics by developing not only experience, but demonstrating leadership, and, you know, it seems to me then so what's the answer? it has to be money. it has to be she's after book deals. >> she already had a book deal. >> she has a book deal. but she's got to do the book. maybe she wants to give more speeches for more money. i read that nbc might be talking to her about doing a tv show. if that's the case, it's just a star turn. she's got stars in her eyes. it's all about her and the base she wants to appeal to and has success with, which is an evangelical southern base in the republican party, i wonder how they're going to respond to someone who's not reliable, not traditional in terms of fulfilling obligations, being steady. it just doesn't seem like a smart move. that's why it's so puzzling.

that's why everybody in town is talking about it. what could she be up to? is it a strategy that she's up to or just about her? >> barack obama ran for the senator in 2004, the moment he was sworn in, started running for president of the united states. he didn't spend much time in the senate. the last two years of his term, he basically left the senate when he was visiting iowa. people said he can't compete. what's he done. he's a community organizer, a one-term senator. he seems to have gotten eelectriced -- elected president of the united states. maybe two terms doesn't count for more than two terms as governor of alaska, maybe she becomes a leader of the conservative movement, conceivably a nominee of the

republican party. >> barack obama had ideas. he said he was opposed to the war. barack obama said he was going to get the troops out. what is sarah palin's critical idea? >> this is the equivalent of the middle 2005. obama had given one good speech at the democratic convention in 2004. palin gave an effective speech at the republican convention in 2008. i agree. she needs to become the chief spokesperson against the obama administration. >> i think what she wanted was a game changer. the people who like her are still going to like her. they're still going to think she has all this moxie and fresh face and these positions they like. the people who have doubts will have the same doubts. all this did was reinforce that.

i'm not sure how she took the game beyond where she was. >> jennifer, i want to follow up on this. the white house is absolutely saying nothing publicly. >> that's right. >> -- about governor palin. what are you hearing behind this? they've got to be saying something. >> i think they're entertained. they look at not only what happened with her, but what happened in the last couple of weeks with senator ensign and -- south carolina governor sanford. they're looking at the field and shaking their heads. they know it's a very long way until the 2012 race starts in earnest and there could be someone out there that nobody's talking about yet, but they're going to have to face and be scared by. >> steve, you get the last word. >> i think to go a little further -- >> mostly to attack bill kristol. >> i will not attack bill kristol. i think it could be worse potentially for sarah palin. as jennifer said, this could be a game changer in a negative way. it could take people who were willing to suspend their doubts about her and say, okay, this is why i was concerned.

>> all right. we're going to have to leave it there. the thing about her, she's the gift that keeps on giving whether you love her or hate her. we are fascinated by her and i expect we'll talk about her some more. don't forget to check out the latest edition of panel plus where our group continues the discussion on our website, foxnews.com/fns. and for those viewers who we get a lot of e-mails from right after the show eager to see more of the panel, the site will tell you when we're going to post the feature. up next, the fourth of july like you've never seen it. (voice 2) how bad is it? (voice 1) traffic's off the chart... (voice 2) they're pinging more targets... (voice 3) isolate... prevent damage... (voice 2) got 'em.

(voice 3) great exercise guys. let's run it again. ♪ who's watching? ♪ tell me who's watching. (muffled music) ♪ who's watching... (announcer) it's right here. it's easy. ♪ i always feel like somebody's watching me. ♪ it's the money you could be saving with geico. >> before we go, a couple of notes. next sunday, senators dianne feinstein and john cornyn join

us. there's something else we're excited about. ment our blog called wallace watch launches today. you can find it at foxnewssunday.com. check it out. it wasn't my idea for the name. that's it for today. enjoy the rest of your holiday weekend as we leave you with the sights and sounds of july 4, 2009. and we'll see you next "fox news sunday." ♪ [ playing "1812 overture" ]

[ playing "1812 overture" ] fios guy! where ya headed? ah, just installed fios in the whole building. now everyone has the fastest upload speeds. and we're giving them a mini netbook.

well, i'm sticking with cable. so's ted. (voice) no i'm not! he's just goofing. (voice) no i'm not! (sighing) ted has betrayed me. (announcer) unlike cable, fios brings 100% fiber optics straight to your home and when you switch now, you can get a free compaq mini netbook. just pay shipping, handling and taxes. with fios, you'll get razor-sharp tv, blazing fast internet and crystal-clear phone service all for just... sign up today. call the verizon center for customers with disabilities at 800.974.6006 tty/v, and for a limited time, get an incredible compaq mini, to get the most out of your fios internet. get it all together with a great deal on fios tv, internet and phone plus get a free compaq mini netbook. just pay shipping, handling and taxes. call the verizon center for customers with disabilities at 800.974.6006 tty/v before time runs out on this astonishing offer.