CHRIS WALLACE, HOST: Mr. Trump, good to see you again. DONALD TRUMP (R), PRESIDENTIAL CANDIDATE: Thank you. It becomes almost a cliche in this political cycle that people are fed up with politicians, but back when you announced in June, most of the so-called experts including me, thought you had no chance and that people would end up voting for somebody with political experience. How did you know that discontent, frustration with the system, would be the prevailing mood in 2015? I felt it. I mean I felt it from within. We have tremendous discontent in the country. We have tremendous problems in the country. And I felt it early on or I wouldn't have done this. But I see tremendous discontent. Before we dig down into some issues, I want to see how much of a disruptor you would be. And let's do a lightning round quick questions -- OK. -- quick answers. Would you be willing to use the debt limit and risk the possibility of the country going into default to get more spending cuts? I would use the debt limit. I don't want to say -- I want to be unpredictable, because, you know, we need unpredictability. Everything is so predictable with our country. But I would be very, very strong on the debt limit. And I would be asking for a very big pound of flesh if I were the Republicans. And the problem with the Republicans, they have two sides. The smaller side is very strong and the other side is always agreeing and, you know, you can't do that. Would you be willing to shut down the government in order to defund Planned Parenthood or to push some other key policy goal? I do not want to say that because I want to show unpredictability. You have to. You can't just go around and say that. But Planned Parenthood should absolutely be defunded. I mean if you look at what's going on with that, it's terrible. And many other things should be defunded and many things should be cut. You said in August that you're, quote, "fine" with affirmative action. What about conservatives who say the time for that kind of preferential treatment has come and gone. I'm fine with it, we have it, it's there. But it's coming to a time when maybe we don't need it. That would be a wonderful thing. I don't think we need it so much anymore. You know, it has served its place, it has served its time. Some people have loved it and some people don't like it at all. But I think there will be a time when you don't need it. You are one of the few candidates who has come out with a detailed tax plan. Let's drill down into that. You would cut the seven tax brackets to four. Zero, 10%, 20%, 25. You'd cut the corporate tax rate from 35% to 15. You would limit deductions for higher-income earners. And you would eliminate "carried interest" preferential tax treatment for hedge funders. What's the thinking? Well the thinking is we have the highest tax rate in the world. In the entire world, we have the highest tax rate. There's gridlock in Washington because there's no leadership. So what I'm doing is a large tax cut especially for the middle class and they're gonna- we're going to have a dynamic country. We're going to have dynamic economics. And it's going to be something really special. And people are going back to work. But there are 2 concerns. The conservative Tax Foundation, conservative Tax Foundation says that over 10 years you would create; you would add $10 trillion to the deficit. And there's also the question of who would benefit under your tax plan. The Tax Foundation says the middle class would see after-tax income increase 7.2%. The top 1 percent would see a spike of 21.6 percent. So between that and ending the estate tax the Trump family and folks like you would make out great. The estate tax has been a disaster. First of all it's double taxation, some people could even say it's triple taxation. But how about the idea that you're going to blow a hole in the deficit and that the top 1% going to make out a lot better than the middle class. Well they're going to make out better if the economy gets better. The economy is very sick. We're losing our jobs to China to Japan to every country. We're making horrible trade deals. We are losing jobs in this country. Hundreds and hundreds of thousands of jobs are being lost. And part of the reason is our taxes are so high in this country. I'm also cutting, you know they don't talk about that. And I'm doing that in a different, little policy segment that we're going to be announcing- Cutting spending. But we're going to be cutting tremendous amounts of money and waste and fraud and abuse. You know they had a case. Would you cut services? Would you cut departments? I'm not cutting services. But I'm cutting spending. But I may cut Department of Education. I believe common core is a very bad thing. I believe that we should be lo -- you know, educating our children from Iowa, from New Hampshire, from South Carolina, from California, from New York. I think that it should be local education. If you look at a Jeb Bush and some of these others, they want them to be educated by -- by Washington, DC bureaucrats. So Department of Education is one. Environmental protection, what they do is a disgrace. Every week they come out with new regulations. They're making it impossible... Who's going to protect the environment? -- they -- we'll be fine with the environment. We can leave a little bit, but you can't destroy businesses. You brought up trade. You would end NAFTA. You would kill the Pacific Trade Agreement. You would impose tariffs on some products like 35 percent on Ford cars made in Mexico. "The Wall Street Journal" says that you are running as, quote, "the most anti-trade candidate since Herbert Hoover." OK, so here's the deal. First of all, "The Wall Street Journal" was bought for $5 billion. It's now worth $500 million, OK. They don't have to tell me what to do. "The Wall Street Journal" has been wrong so many different times about so many different things. I am all for free trade, but it's got to be fair. When Ford moves their massive plant to Mexico, we get nothing. We lose all of these jobs. What do we get out of it? I don't want them to move their plants... But I want to pick up on that because... No, the -- the point is, I don't want them to move their plants. I want them to stay in Michigan. I want them to stay in all of the places where they are, or expanding to other places. But I want it to be in the United States. I don't want them to go to Mexico. I don't want them to go to China. This brings up the point, the conservative American Enterprise Institute says, look, Donald Trump, he owns a dozen hotels, properties, all over the world. Your Trump Collection clothing line, some of it is made in Mexico... It's true. -- and -- and China. That's true. And... I want it to be made here. I know. But the point they say is you're doing just what Ford is, you're taking... Sure. -- advantage of a global trading market. I never dispute that. I put it in my speeches. I say it -- the ties are made in China and different things. I don't want that. I just ordered 4,000 television sets. You know where they come from? South Korea. And yet we defend South Korea for practically nothing. We have 28,000 soldiers. They're making a fortune. I don't want to order them from South Korea. I don't think anybody makes television sets in the United States anymore. I don't want to order from South Korea. I want to order from here. I talk about it all the time. We don't make anything anymore. Now you look at Boeing. Boeing's going over to China. They're going to build a massive plant because China's demanding it in order to order airplanes from Boeing. So Boeing now is going to China, building a massive plant. I don't want that. I don't want that. You say that eminent domain is wonderful, and you -- I didn't say wonderful, I say eminent domain is something you need Chris. Eminent domain - if I build a highway - go ahead. I know exactly what you're saying. But if I build a highway, and if something's in the way of the highway, you're going to have to do something with that. I understand that. And that's the idea of using - taking private property for a public use. But - And by the way, people get paid for it. Everyone thinks they don't get paid. They get paid a lot of money. I understand. But in the Kelo case, the big Supreme Court case in 2005, they took somebody's home and they sold it and then paid - bought it. And then they gave it - sold it - to private entrepreneurs, private developers. And that's the question -- That's different. But that's the question I'm going to ask you -- But that's different. Do you support taking private property for private use? If somebody has a property in the middle of a 7,000 job factory, as an example, that's going to move into the town - but they need this one corner of this property, and it's going to provide 7,000 jobs in a community that's dying, of which we have many in this country, OK? I am for that. That's a big economic development. But remember this: all of these people that we're talking about, they're friends of mine. They all love the Keystone Pipeline, right? The Keystone Pipeline is all eminent domain. They're building that pipeline without eminent domain, you wouldn't be able to build. But let me ask you since you were involved in a case like this, as you know, in the 90s -- That's true. That was an economic development. -- in Atlantic City. Sure. You had your hotel, and you wanted to build a parking lot where some woman had her house -- She saved me a fortune. But I guess the question is why do you need to take her house, for a parking lot? I tell you what. Because I have a hotel, and in order to expand the hotel and add 2,000 rooms, I would have had to take her thing. Now, the 2,000 rooms would have provided about 2,500 jobs, Ultimately offered a lot of money, she didn't take it, I didn't build the job. I didn't do it. Saved me a lot of money because Atlantic City, you know, I had the good sense to leave 7 years ago. I got very lucky. Yeah, I think that would have been a good eminent domain because you would have provided thousands of jobs. And this is a woman who couldn't have cared less about her house. All she wanted was money. Something you said on Friday has stirred up some controversy about George W. Bush and the Twin Towers. Question: do you blame George W. Bush for 9/11? Look, look, Jeb said we were safe with my brother. We were safe. Well, the World Trade Center just fell down! Now, am I trying to blame him? I'm not blaming anybody. But the World Trade Center came down. So when he said, we were safe, that's not safe. We lost 3,000 people, it was one of the greatest - probably the greatest catastrophe ever in this country if you think about it, right? What would you have done? Well, I would have been much different, I must tell you. Somebody said, well, it wouldn't have been any different. Well, it would have been. I am extremely, extremely tough on illegal immigration. I'm extremely tough on people coming into this country. I believe that if I were running things, I doubt those families would have - I doubt that those people would have been in the country. So there's a good chance that those people would not have been in our country. With that being said, I'm not blaming George Bush. But I don't want Jeb Bush to say my brother kept us safe becauseSeptember 11 was one of the worst days in the history of this country. END OF FIRST SEGMENT CHRIS WALLACE, HOST: Let's look at the polls. According to the latest Real Clear Politics average, you are leading everywhere. You are leading, nationally, you're leading in all the early states. Nationally, you're at 23.8 percent, leading; down 7 points in the last month. In Iowa, 22.3 percent, down 6 points. New Hampshire; 26.3 percent, down 6 points. Let me make it clear, because I know this is important to you - [CROSSTALK] You are still leading. Why do you think your numbers have gone down a bit? DONALD TRUMP (R), PRESIDENTIAL CANDIDATE: I don't think they've gone down. I think they've gone up. We just had a Reuters poll come out. I'm at 33. We just had, as you know, Nevada come out. I'm 20 points ahead of second place. We had one come out in South Carolina where I'm 18 or 20 points ahead. The polls have been now better than they've ever been. And what you're doing is a little bit obsolete information. But that's OK. Look, I'm leading in everything. Late this week, you forced, I think it's fair to say - you and Ben Carson - forced CNBC to change the ground rules for their debate. And Carly Fiorina went after you and Carson. She said, first of all, what are they scared about, standing up for three hours? And then she said this: CARLY FIORINA/The Kelly File/Thursday They also apparently asked for prepared statements-you know prepared statements are what politicians do. So honestly, here are 2 outsiders supposedly, Donald Trump and Ben Carson, and they sound a lot like politicians tonight to me. [END VIDEO CLIP] Look, first of all, she's going nowhere. You talk about dropping in the polls, she's dropped like a rock. I could stand there for 12 hours. I could stand there for 20 hours. But the people can't take it. Who wants to watch a debate for three hours? I couldn't watch Hillary for an hour-and-a-half. And when I heard it was a three-hour debate that was only done to make more money for the company, for the network, I said, I'm not going to participate because I thought that the CNN debate was ridiculous. It was too long and people were turning off- who's going to watch a debate that long? You know, it used to be one hour when it started. It used to also get no ratings. And both CNN and Fox broke the all-time record on cable television. So I wonder why. Do you have any idea why? I think - it - maybe it was because of the moderators. I think so. (LAUGHS] I do think so. Great moderators. Which brings me to the question of temperament, which I think you would agree is important -- I think it's very important. -- in a president. First of all, what's the deal with the tweets? Why are you sitting there at night watching TV and tweeting out? Well, I think it's fine. It's a great way of getting my word out. I love Twitter and tweeting, and I have - between that and Facebook, I have like 10 million followers. It's a great way. Now if you do something bad to me, I can tweet about Chris. And the world will be seeing it. (LAUGHS) And you have. No, and you know what? Truthfully, it's an amazing way of getting the word out. But -- but does Mrs. Trump ever say, 'Donald, turn off the TV? Come to bed.'? Oh, I don't do that much. And usually it's not too late. No, I just think it's an amazing way - you know, we're in a modern age now. We have to get with it. Twitter and Facebook and all of this stuff is, to me, I mean it's, for some reason - I'm probably not the youngest person using it. But for some reason, it works very well. I'm setting records. In fact, for the debate, you know - I'm talking about the Democrat debate - and they use Democratic. It's really Democrat. You know that, OK? They called that wrong. It's really the Democrat. But the Democrat debate, I picked up more followers by many times than anybody else. And there were those that said I won the debate because I picked up all the followers. But no, I think it's a great, modern way of getting the word out. During the campaign, you have called Marco Rubio a puppet, Jeb Bush low energy, Rand Paul a lightweight. And just this week, you called Bernie Sanders a maniac. And a communist. (LAUGHS) And a communist. Do you think that's presidential -- Yes. Is that the way you would act in the White House? I'm running against a lot of people. And if they come out and attack me, very viciously, very viciously. I mean, Perry, I thought he was a nice guy. He was always a friend of mine. He had won campaign contributions. He was always very nice. All of a sudden, boom, I hit him very hard. I hit Rand Paul very hard. Look what happened to him. I'm a counterpuncher. I don't have a choice. If you look what they say about me, it's terrible. I mean, they say terrible things about me. Bobby Jindal - I mean, you talk about lightweights, this guy is a real lightweight. And he hit me - I don't even know this man - and he hit me because - and they're not hitting me on fact. They're hitting me in order to try to pick up something in their polls. The thing I'm most honored about is every single person that went after me, including Jeb Bush, who's down - boom. Every single person that went after me has gone way down. And I'm very honored by that. And that's what the country needs. The country needs a leader that when the country gets hit, we're going to come out on top, not keep going down. Because we're going down. Our country is going down. Then I want to bring up the subject - hear me out - of you and me. During the debate, I asked you a question about bankruptcy. Right. And you - I thought gave a fine answer. DONALD TRUMP/Fox Debate/Cleveland/August 6 First of all these lenders aren't babies, these are total killers - you know, I mean you're living in a world of the make-believe, Chris (crowd cheers), if you want to know the truth. [END VIDEO CLIP] I did. I thought it was my best answer. Then, for about a week, you go after me. You say blood's pouring out of my eyes, you compare me unfavorably to my father. And I agree - he's one of a kind. Here's the question: You're running for president. I mean, we talked to Chris Christie about Bridgegate. We talked to Carly Fiorina about -- Destroying the company. -- about (INAUDIBLE). She destroyed her company. So I guess the question is... No, it's not personal. -- are you a little thin-skinned? No, I'm only thin-skinned when somebody says bad things that are false. For instance, if you hit me about something that's true, all right, the bankruptcy -- I used that as a tool. I didn't ever file for bankruptcy. Out of hundreds and hundreds of... But it was just a question - it -- four times -- I've used it four times. But... But it was just a question. No, no, I know, but the way it was phrased, the way it was phrased. I could see the eyes, OK. [CROSSTALK] -- I don't even know what blood coming out of my eyes is? I used it as a tool brilliantly. And it was phrased incorrectly in my opinion, the question. And you wouldn't have asked these people about bankruptcy, but you asked me about it. And I've used it brilliantly... I asked Carly Fiorina about Hewlett Packard. And honest I -- well, that's easy. She destroyed the company, OK. That one is an easy one. So, I'm not thin-skinned when something is truthful. If I did something wrong and you said I did something -- I can handle that and if the press is bad, I -- it's when people hit me when I didn't do anything wrong. You know, it's like then -- then it's not a question of thin-skinned, I will fight back. You say my father covered you in a much fairer manner. So I decided to go back and look at your first profile on "60 Minutes." He talked a lot about your successes, but he also talked about the fact that you were in a controversy then. The allegation was that you were trying to throw middle class people out of the rent-controlled building so you could create condos for rich people. Here's a clip. MIKE WALLACE-DONALD TRUMP/CBS 60 Minutes/1985 When they call you arrogant and cruel - those tenants over there - Does that get under your skin? Trump: No, because you see, I think I'm right and when I think I'm right, nothing bothers me. [END VIDEO CLIP] First of all... I've been doing this for a long time. (LAUGHS) First of all, whatever happened to that nice soft-spoken young man? I know. I know. I know. But was that a fair question¦ And I'm very (INAUDIBLE)... -- for him to ask you? I thought it was fair because it was very controversial at the time and I thought it was fair. Not to press my luck, but true or false: you, at one point, considered and tried to put homeless people in some of those apartments to force the tenants to move out. No, I talked about doing it and I talked about doing it as a charity. That's right. We have a thing called... A charity? No, I was thinking about doing that and, you know, I would have done that and it would have been nice and it would have been charitable. But you have wealthy people living and paying like $200 rent on Fifth Avenue or Central Park South, I think it's unfair and it's been proven to be unfair. Finally, Hillary Clinton testifies before the House Benghazi Committee this week. What is it you would like to find out about both her role in Benghazi and about her e-mails? I think things will be revealed. Personally, I think that Hillary was one of the worst, if not the worst, I mean if you look at the record, secretary of States ever, ever in this country. I think that's the bigger problem that she's got. I don't think Benghazi is as big a problem for her as her past and what's happened. The world blew up around her. You look at the world, it just blew up around her. Everything went bad, whether it's Libya, whether it's her tenure in Iraq. And there's been plenty of bad tenures having to do with Iraq because of the length. Things that happened during her tenure were a disaster. I think she's... but would... -- probably going to go down as the worst secretary of State in the history of this country. And I think that will be -- what I will tell you, that will be what I will be campaigning on. Now, what's going to happen with Benghazi? It will be very interesting. I look forward to it. If you end up as the Republican nominee and she's the Democratic nominee, how would you take her on? I'd take her on tough. I'd just take her on, on her record. I'd discuss her record. I think her record is abysmal. And I would take her on, on her record. Mr. Trump... Thank you very much. Thank you, Chris -- A great honor.