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July 09, 2006

Nicholas Burns, Rep. Pete Hoekstra, James Woolsey, Wendy Sherman, Roundtable

Fox News Sunday

CHRIS WALLACE, HOST: I'm Chris Wallace. North Korea's leader vows no concessions to the U.S., next on "Fox News Sunday".

North Korea defies the world, launching a series of missiles. How will the world respond? We'll examine the military and diplomatic options with Undersecretary of State Nicholas Burns and a special roundtable of experts: The chairman of the House Intelligence Committee, Pete Hoekstra; former CIA director James Woolsey; and former presidential advisor Wendy Sherman.

Plus, this candidate gets the cold shoulder from some fellow Democrats, while this non-candidate can't get off the ballot in Texas. What gives? We'll ask our Sunday regulars, Brit Hume, Mara Liasson, Bill Kristol and Juan Williams.

And our Power Player of the Week takes you inside presidential finances, all right now on "Fox News Sunday".

And good morning again from Fox News in Washington. Let's get a quick check of the latest headlines. North Korean leader Kim Jong-Il says his country will never make any concessions to the U.S. In a statement Kim also vowed his country will counter any attack with one of its own.

A key Capitol Hill supporter of President Bush has accused the administration of failing to inform Congress of ongoing secret intelligence programs.

In a sharply worded letter written in May, the Republican chairman of the House Intelligence Committee, Pete Hoekstra, said the White House may have violated the law by concealing the activities. We'll talk with Hoekstra later in this program.

And in Iraq, three more U.S. servicemen have been charged with the murder and rape of an Iraqi teenager as well as killing her family. Another soldier was charged last week. The murders took place in March.

With North Korea topping a list of hot spots around the world, we turn now to the man who oversees U.S. policy in every region, Undersecretary of State Nicholas Burns, who joins us from Boston.

Mr. Secretary, our main diplomatic response to North Korea at this point is to push a resolution in the Security Council which would ban all countries from trading in weapons-related material with that regime.

Now, just today Japan's foreign minister has said that they plan to push for a vote on this resolution tomorrow. Is that the plan?

And, secondly, have we gotten an agreement from china that they will either support the resolution or at least agree to abstain from vetoing it?

NICHOLAS BURNS, UNDERSECRETARY OF STATE: Well, Chris, we're operating on multiple diplomatic tracks here in an attempt to try to get the North Koreans to come back to six-party talks, to give up their nuclear weapons, which is what they agreed they would do, and their weapons of mass destruction.

So, yes, we're operating at the Security Council. We have a very strong Chapter 7 resolution in place right now. It will be voted in the next couple of days, we hope.

We also have -- President Bush and Secretary Rice have been in contact with all of the major regional leaders. Our ambassador, Chris Hill, our assistant secretary of state, is in the region. He's in Japan today. He was in South Korea and China in the last two days.

And I think the most important step today is that China has decided to send a senior-level delegation to Pyongyang this evening. And it's time for China to exert its influence that it does have on North Korea.

So I think you're going to see over the next couple of days all these tracks proceeding forward with one intention, and that is to convince the North Koreans that they're isolated, that they have no support in the world, and they've got to come back to this six-party framework and the agreement they made with us, and that is to denuclearize.

WALLACE: Secretary Burns, you say it's time for China to exert its influence. Is China the key player in getting North Korea to bend on this? And in a sense is this a test of just how reliable a partner China will be for us in the diplomatic arena?

BURNS: China is certainly a key player. It has a relationship with Pyongyang.

WALLACE: The key player?

BURNS: It is certainly a key player -- I said "a key player" -- because it's got a relationship with North Korea, however complicated from the past, where it has more influence, certainly, in trade and in political relations than the rest of us have.

So Secretary Rice was on the phone with Foreign Minister Lee yesterday and has obviously pushed the Chinese to use that influence and to convince the North Koreans to cease and desist not just from these missile tests, but to redeem the commitments that they made to us nearly a year ago.

So we're trying to bring a great deal of pressure to bear on North Korea from China, from the U.N. Security Council. We're certainly using American influence in Asia, which is considerable, to press our allies to send the same messages to the north.

And I think we're beginning to see a congealing of this international effort, and we hope to have some success in the next several days.

WALLACE: Well, let me ask one marker of this, and this is a simple yes or no question. Has China agreed that it will not veto that U.N. resolution?

BURNS: I don't think we've heard the last word from China. I'm not sure the Chinese have figured out exactly what they're going to do. It may depend on what the Chinese hear in Pyongyang from the North Korean leadership.

So I don't think, with all due respect, the question is as simple as that. We're engaged now in a very complex series of diplomatic steps from multiple directions, all pointed in giving that same message to the North Koreans and having the same impact on North Korean behavior.

WALLACE: Mr. Secretary, what is the regime in North Korea up to? What do they want from us and the rest of the world?

BURNS: You know, Chris, we gave up a long time ago trying to divine the intentions of the North Korean government. We're just going to have to judge them on what they do. And we are obviously outraged...

WALLACE: You're saying seriously as...

BURNS: ... outraged by these missile tests...

WALLACE: You're saying as the undersecretary of state...

BURNS: ... over the last couple of weeks.

WALLACE: You're saying as undersecretary of state you don't know what they want?

BURNS: No, I answered the question the way I wanted to answer it. You said what does this regime want to do, what are their intentions. And you know, we don't have a diplomatic relationship. We don't have an ambassador in Pyongyang.

We have very limited contact with the North Korean government. So it's not in my interest to try to help you guess what's in Kim Jong-Il's mind. But I can tell you this: We have a very clear view of what American national interests are here, and that is to put the North Koreans back into a place where they denuclearize, where they dismantle their weapons of mass destruction.

They committed to that on September 19, 2005. They have an obligation now to the rest of us, including China and Russia, to make good on that commitment, and that's the basis of our policy. WALLACE: Well, let me ask you about that, because given the fact that we have made a number of agreements with North Korea over the years, and we're putting several of them up on the screen -- in 1985, in 1994, in 1999 -- and they have broken every single one of them, Mr. Secretary, if we could make a deal, what makes you think that they would abide by it?

BURNS: Well, it's not a question of trust here. It's a question of verification and of understanding exactly what the North Koreans are doing. So if we make -- we made a commitment and a deal with the North Koreans in the six-party framework back in September of last year.

Obviously, verifying if the North Koreans are in compliance is the first order of business, and right now they're not in compliance.

That's why we are suggesting and co-sponsoring this Chapter 7 resolution of the United Nations. That's why we have our lead diplomatic official, Chris Hill, in the region now. It's why Secretary Rice and President Bush have been so active over the last several days.

WALLACE: I want to play for you a clip from the president's state of the union speech back in 2002 in which he laid out part of the Bush doctrine on foreign policy. Here it is.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The United States of America will not permit the world's most dangerous regimes to threaten us with the world's most destructive weapons.

(END VIDEO CLIP)

WALLACE: Mr. Secretary, since then, by all estimates from intelligence sources, North Korea has only increased its nuclear stockpile. Iran has gone ahead and developed more of its nuclear program.

Is it the policy of this president that he will not leave office allowing those two dangerous regimes to still threaten us with the world's most dangerous weapons?

BURNS: And, Chris, since the president spoke those words in 2002, he has created and sustained two major international coalitions designed to prevent both of them from becoming nuclear weapons powers -- in the case of North Korea, to dismantle their nuclear apparatus; in the case of Iran, to deny them a nuclear weapons capability.

And you know, we have in the case of Iran now -- it will be a very important week. We have Iran fairly isolated. China and Russia and the European countries have all agreed that if Iran can't accept this conditional invitation to negotiations, that they can't suspend their nuclear programs, then they're going to face another path, action in the Security Council. We didn't have 15 months or 24 months ago this kind of international consensus on Iran that we have now, and that is certainly in our interest that we've been able to build that coalition.

The same is true of North Korea. We have a six-party framework. Five of the parties have a clear-eyed view of what the end result is here. So as the president said two days ago, sometimes diplomacy does take time, and it just isn't accurate to take a snapshot on a Sunday morning in July and say well, they're succeeding or they're failing, because the world is more complicated than that.

And we think we're on the right track in this diplomatic track with both North Korea and with Iran, and we think we're isolating both countries on the world stage.

WALLACE: But let me ask you -- we're not taking a snapshot, with all due respect, Mr. Secretary, on a Sunday in July. I mean, that was 2002. We're now in 2006. It's 4.5 years later.

Can you honestly tell the American people that the situation on the ground in Tehran and Pyongyang -- that they have fewer weapons, that they are less threatening to the rest of the world?

BURNS: I think we can certainly say that the situation with Iran is much better today. We're much better positioned to be influential with the Iranian government than we were four years ago.

The president has created this coalition with President Putin and with the Chinese leadership and the European leadership. The Iranians thought they could divide us, and they miscalculated.

Until very recently, they felt they were going to be able to steam forward with their nuclear research activities at their plant at Natanz, to engage in the kind of enrichment activities that would eventually give them the scientific knowledge to create a nuclear weapons capability.

We are now creating a coalition to stop them from doing that. So yes, I think we're far better off in dealing with Iran now than we were just a couple of years ago.

WALLACE: Well, let's follow up on Iran. A number of countries -- the E.U. and the U.S., China and Russia offered Iran a package of carrots and sticks on June 6th, and at that time your boss, the secretary of state, said that Iran had weeks, not months, to respond.

This Tuesday it will be five weeks, and Iran's top negotiator continues to reject any deadlines. Isn't Iran involved in a classic stall? And at some point isn't the west going to have to set a deadline?

BURNS: Oh, I think you're right that the Iranians are trying very hard now not to give us a clear and unambiguous answer. And they have a meeting on Tuesday with the Europeans. Secretary Rice is going to be in Paris to meet with the Europeans and the Russians and Chinese on Wednesday.

And the time has come for Iran to respond to the offer that was made on June 1st back in Vienna. And the Iranians need to understand that if they can't answer this question clearly, there is another path available to us, and that is to work in the Security Council to increase pressure and action against the Iranian government.

We offered them two paths, negotiations or Security Council action. The Iranians can choose, but the time to choose has come.

WALLACE: You say "the time to choose has come." Does that mean there's a deadline?

BURNS: The time to choose has come. There's going to be a meeting Tuesday. Let's see what Dr. Ali Larijani, the Iranian national security advisor, says to the Europeans on Tuesday. Secretary Rice will be in Europe the next day to evaluate that with her European, Russian and Chinese counterparts.

And I think by then we'll have a fairly good idea of whether or not the Iranians are serious, whether they're going to respond and accept this offer for negotiations or whether they're going to try to filibuster and delay things for months. We won't accept that. We have another option available to us, and we'll travel down that road if we have to.

WALLACE: Mr. Secretary, one final area I want to get into with you. We've got a little over a minute left. The president has decided to break with decades of U.S. policy and to allow Russia to store tons of spent nuclear fuel from around the world, which is a very profitable business.

Has Russian President Putin done so much to help the U.S. on Iran, on North Korea, on agreeing with us about democratic reforms in Russia, to deserve such a reward?

BURNS: Well, Chris, we are currently talking -- in fact, right now, talking in Europe today, Sunday, with the Russians about a variety of issues that we may or may not be able to agree on, so let's just see how successful those negotiations can be.

But certainly we have an interest to work as a nuclear power with Russia to try to limit the spread and the proliferation of nuclear materials in the world. That's in the American national interest, and that shouldn't surprise anyone.

And as the president goes to St. Petersburg to the G-8 summit over the weekend, we will be arguing to sustain and strengthen the fight against proliferation of all nuclear materials in the world, not just with Russia, but with all the other countries at that table.

WALLACE: Mr. Secretary, we want to thank you so much for joining us today. Thanks again.

BURNS: It's a pleasure, Chris. Thank you. WALLACE: Up next, we'll talk with a special roundtable of experts, including the chairman of the House Intelligence Committee, about what the U.S. can do about North Korea. All of that after this break.

(COMMERCIAL BREAK)

WALLACE: To help us sort out the crisis with North Korea, we've convened our own special roundtable of experts: Congressman Pete Hoekstra, chairman of the House Intelligence Committee; former CIA director James Woolsey; and President Clinton's point person on North Korea, Ambassador Wendy Sherman.

Chairman Hoekstra, let's start with the view from Pyongyang. What is our best intelligence about what the North Koreans want from the rest of the world? And what's the likelihood that they will fire more missiles to get it?

REP. PETER HOEKSTRA (R-MI), CHAIRMAN, INTELLIGENCE COMMITTEE: Well, I think, Chris, as the ambassador said earlier, we don't know enough about North Korea. We need to take this as an opportunity to get more insights into their leadership.

We know that they are belligerent. We know that they will negotiate. We know that they will reach an agreement. And then we know that they will cheat. That has been their pattern.

We also need to take this as an opportunity to take a much closer look at China. I do believe that the path to success in North Korea is going to have to go through Beijing.

WALLACE: Ambassador Sherman, let me bring you into this. You're the one person on our roundtable who has actually met with Kim Jong- Il. What do you think he's up to? And how far is he prepared to push the rest of the world? And what do you think of this idea which Ambassador Burns and Congressman Hoekstra seem this believe, that China is the key to this?

WENDY SHERMAN, FORMER AMBASSADOR: There's no doubt that China is very important to this process, and we all want China to put pressure on North Korea to come back to the table and get serious. But nonetheless, the United States is the last remaining superpower in this world, and so that gives us a special responsibility that we really can't escape.

And so we can't outsource everything to China. We have to be in this game, too. Kim Jong-Il wants our attention, but he also wants to come back to the negotiating table, and this is just a way to up the leverage.

It sounds like Ambassador Hill, who's out in the region, is ready to take him up on it in a series of informal talks, where there will be direct talks and the six-party talks. And that's not a bad way to go.

WALLACE: Ambassador Woolsey, let's take a bigger look at this. As I pointed out with Secretary Burns, North Korea has made a number of weapons deals since the Reagan administration in the 1980s, and it's broken every single one of them.

Why do we think that diplomacy can work, that any agreement we make with North Korea that they'll actually keep?

JAMES WOOLSEY, FORMER CIA DIRECTOR: I don't think we should think that they'll keep any agreement that they make with us. The only thing that's constant, as you said, from 1985 when they signed the non- proliferation treaty on, is that each time they've lied about what they're doing, they cheat on the treaty, and then when confronted, and not just by us -- by the International Atomic Energy Agency inspectors -- they bluster and have gotten concessions.

They got one from the first Bush administration. They got the '94 agreement from the Clinton administration. They got the continuation in groundbreaking for their nuclear reactors in 2002 from this Bush administration.

I don't think any recent administration has dealt with them very well. And each time they sign something, they lie about it and then they cheat.

WALLACE: Well, let me follow up with you on that, Ambassador Woolsey. If that's the case, why are we wasting our time with diplomacy?

WOOLSEY: Well, a certain amount of rallying the international troops is useful. But I think the only way that this can be brought without war to a reasonable conclusion is for China not just to lean on North Korea, but to lean very, very hard.

Right now the North Koreans are stealing the trains. China ships aid to them and the North Koreans steal the trains and won't give them back. I mean, China has to stand up here and take some responsibility. It's the only country that really has substantial leverage over the north with food and with energy.

And the way China is going now, they're going to end up with four new nuclear powers in East Asia, I think -- North Korea in time, South Korea in time, Japan, and in time maybe Taiwan. Why China thinks it's in its interest to have four new nuclear powers in East Asia is beyond me.

WALLACE: Ambassador Sherman, let's look back at the experience of your administration on this, which, as Ambassador Woolsey, who was a part of that administration, points out, didn't turn out to be all that -- let me just ask the question and then you can answer it.

WOOLSEY: All right. Sure.

WALLACE: The Clinton administration negotiated an agreed framework with North Korea in 1994 in which that country promised to freeze its nuclear program. It's generally agreed by 1997 it was already cheating on that agreement.

Then in 2000, you went along -- and here are some pictures -- with Secretary of State Albright to Pyongyang where she said -- and let's put it up -- "Step by step, we are moving toward a fundamental improvement in our relationship."

Just two years later, they announced they were a nuclear power. How can we trust them? How can we deal with them?

SHERMAN: We shouldn't trust them. We should never trust someone like North Korea. It's about verification. And in fact, the 1994 agreed framework was successful in that if it had not been in place by now, North Korea would have enough plutonium for 50 nuclear weapons. So I consider that a...

WALLACE: So they only cheated a little bit?

SHERMAN: Well, no. What happened is for several years they did not start up their reactor again. They did not unseal the spent fuel canisters and reprocess that spent fuel into plutonium.

At the end of the Clinton administration, we now know they were attempting to get centrifuge technology from Pakistan. They did not create a full-fledged highly enriched uranium program until the Bush administration. And it is, in fact, because the international community stepped away as well as not following through on some of our obligations under the agreed framework, to be frank, that we, in fact, had it all fell apart.

So I'm not saying that North Korea is to be trusted. It absolutely should not. And even with the former Soviet Union -- they cheated on arms control agreements, but it gave us a vehicle to go back and challenge that cheating, as we did around Kung Chon Nee (ph), a suspect nuclear site that we were allowed in and videotaped and found out that it was not what people suspected it to be.

WALLACE: Chairman Hoekstra, is this the failure of the Bush administration's diplomacy or is it just that you can't deal with the North Koreans?

HOEKSTRA: Chris, I really think what we need to do here is we need to stay away from trying to make short-term political gains. We need to keep our eye on the ball, which is North Korea, and not let North Korea divide us.

This is an awful regime. They are brutal to their own people. You cannot make agreements with them and expect them to keep them. We should not be in the blame game here in the United States about what the Clinton administration did or what the Bush administration did.

This is all about what North Korea is doing and the way that they behave in the international community.

WALLACE: Well, so let me ask you the question I asked Ambassador Woolsey. If you make an agreement with them and they break it, what do you do? HOEKSTRA: Well, I think as you heard continually, it is about verification. It is about putting international pressure on them. And that means the Chinese need to put pressure on them. South Korea needs to put pressure on them.

The South Koreans are developing economic development zones in North Korea. They need to really think about what their best interest is. You know, to believe that China, Russia and South Korea -- that we all have the same end game in mind today -- I don't think that's accurate.

South Korea has been focused on maintaining peace in the peninsula. China and Russia have been satisfied with North Korea creating some mischief for the United States, for Japan and South Korea.

South Korea needs to go back and reassess. China and Russia need to go back and reassess their positions.

WALLACE: Ambassador Woolsey, before North Korea launched its barrage of missiles on July 4th, you supported the idea of a preemptive military strike on their long-range missile. Isn't that taking an awfully big chance on a much wider conflict?

WOOLSEY: It was a chance. Former Secretary of Defense Bill Perry and Assistant Secretary Ash Carter, both very good friends of mine -- and we served in the Clinton administration together -- advocated that in an op-ed in the Washington Post.

Now, I endorsed it. I thought it was a good chance to take out an intercontinental missile that, had it flown its full flight pattern, could well have hit some portion of the United States -- not with a nuclear weapon, certainly. I think it's going to be years before the North Koreans are able to mate up their nuclear capability...

WALLACE: But how do you think North Korea would respond? And are you willing to take the chance that they wouldn't create a much wider conflict?

WOOLSEY: What worried me was that had the flight launched and gone a longer distance -- if a missile hits the United States, Hawaiian islands or Alaska, even with no warhead on it, from North Korea, it completely changes a lot in the world.

And I was especially worried that we would try to shoot it down and fail, because this ballistic missile defense system we've deployed, the land-based one, has not had a success really in four years and it succeeded about half the time before that.

The Navy system, I think, would be better, and a system to intercept in so-called boost phase, when the missile is slow and hot and early in its trajectory, would be a lot better. We need to do a lot more work on ballistic missile defense.

But if we tried to shoot that down and failed, you know, that would have been, I think, an international disaster absolutely of the first order.

WALLACE: Ambassador Sherman, you know, there's every possibility that they're going to put up another long-range missile on another launch pad. What do you think North Korea would do if we took that out?

SHERMAN: I think, unfortunately, North Korea would retaliate, and they might retaliate against our troops. We still have about 30,000 troops in South Korea. It would be catastrophic should they do it. They have a million-man army and probably 20,000 rounds of artillery.

But I do understand how Secretary Perry and Assistant Secretary Carter were frustrated with the situation, because North Korea has crossed one red line after another during the Bush administration. We've gone from them having enough plutonium for one to two nuclear weapons to probably having enough for four, six, eight or 10 nuclear weapons and may even have those weapons.

So although I didn't agree with them tactically, I did understand their frustration.

WALLACE: Chairman Hoekstra, I want to move -- we have a couple of minutes left -- to one other subject. As we reported earlier, you wrote President Bush a letter in May in which you charged that the administration may have violated the law by failing to inform Congress about various secret programs.

And let's put up some of what you had to say. You wrote, "The U.S. Congress simply should not have to play 20 questions to get the information that it deserves under our Constitution."

Mr. Chairman, I know that you supported and were briefed on the NSA warrantless wiretap program, on the tracking of terror finances. Are you saying that as the chairman of the House Intelligence Committee that you were not briefed about some other secret programs?

HOEKSTRA: Chris, that letter focused on three things that our committee has a passion about -- number one, getting the right people in the right leadership spots in the intelligence community.

The second thing is standing up the Office of the Director of National Intelligence to make sure that that reform effort moves forward.

And the third thing is doing complete and aggressive oversight of all of the programs in the intelligence community.

This is actually a case where the whistle blower process was working appropriately. Some people within the intelligence community brought to my attention some programs that they believed we had not been briefed on. They were right.

We asked by code name what some of these programs -- about some of these programs. We have now been briefed on those programs. But I wanted to reinforce to the president and to the executive branch and the intelligence community how important -- and by law the requirement that they keep the legislative branch informed of what they are doing.

WALLACE: Chairman, the president always says in these cases that congressional leaders, including you as the chairman of the House Intelligence Committee, are briefed. How do you explain this failure and how seriously do you take it?

HOEKSTRA: Well, I take it very, very seriously. Otherwise, I would not have written the letter to the president. You know, how do you explain it? There are lots of programs going on in the intelligence community. You know, we can't be briefed on every little thing that they are doing.

But in this case, there was at least one major what I consider significant activity that we had not been briefed on that we have now been briefed on, and I want to set the standard there, that it is not optional for this president or any president or people in the executive community not to keep the intelligence committees fully informed of what they are doing.

WALLACE: We're going to have to leave it there. Congressman Hoekstra, Ambassador Woolsey, Ambassador Sherman, we want to thank you all so much for being with us today.

Coming up, our panel of Sunday regulars on how the Bush administration is handling North Korea. You won't want to miss what Bill Kristol is saying. Stay tuned.

(BEGIN VIDEO CLIP)

BUSH: He not only fired one; he fired seven. Now that he made that defiance, it's best for all of us to go to the U.N. Security Council and say loud and clear here are some red lines.

(END VIDEO CLIP)

WALLACE: That was President Bush Friday in Chicago talking about getting tough with North Korea.

And it's time now for our Sunday gang, Brit Hume, Washington managing editor of Fox News, and Fox News contributors Mara Liasson of National Public Radio, Bill Kristol of The Weekly Standard, and Juan Williams, also from National Public Radio.

Well, as I said, the president talked tough this week about setting red lines for North Korea, lines that they can't cross. But Bill Kristol wasn't impressed. And in fact, here's what you say in the latest issue of The Weekly Standard. Let's put it on the screen. "The red lines, pink lines and mauve lines of U.S. foreign policy seem increasingly to be written in erasable ink."

Bill, what's the problem?

BILL KRISTOL, WEEKLY STANDARD: Well, the missile launch itself was supposed to be a red line. And then we're going to the U.N. Security Council to set some new red lines. North Korea is paying no price at all for doing something that we said is unacceptable, and that is a very bad precedent to set.

And I'm afraid that watching Nick Burns here tell you that the world is more complicated than you think, Chris -- I thought oh, my God, we're back to the Clinton administration. Nick Burns was actually a pretty good spokesman for Bill Clinton's State Department in the first couple of years.

And there's not a word he said today that couldn't have been said cheerfully by Clinton administration types -- everything's complicated, you know, North Korea is launching missiles and developing nuclear weapons, Iran is developing nuclear weapons, don't worry, things are better than they were four years ago, we've got three-party talks going in Europe and six-party talks going in Asia, and we're making concession after concession, but don't worry, we're less isolated than we were.

WALLACE: All right. One of the joys, Bill, of being a reporter is you can criticize without offering an alternative. What should the president do?

KRISTOL: He should walk away from the six-party talks. He should cancel them. North Korea has behaved in a way that's unacceptable for someone you're trying to have negotiations with. We should tighten the sanctions on North Korea.

North Korea has very few exports -- counterfeit money, narcotics and weaponry -- and we could do more to prevent that. And we should make this as a litmus test for our relations with China and with Russia. Are they going to stop cooperating with North Korea?

Instead, Russia, which has been an obstacle and which was just in -- one Russian official was in North Korea two weeks ago talking about transferring more technology. Russia is getting rewarded with spent nuclear fuel.

And we're very cheerful that China's doing -- we're thrilled China is sending a delegation to Pyongyang tonight. Isn't that wonderful? I mean, it's really pathetic.

WALLACE: Brit?

BRIT HUME, FOX NEWS WASHINGTON MANAGING EDITOR: Well, what strikes me about this is that North Korea has gotten an awful lot of mileage and attention out of what turned out to be six Scuds and a dud.

Yes, they did test-fire that missile, and I think the problem for diplomacy at the moment may not be so much weakness on the part of the players unwilling to do anything about it, but the problem was that the test was such an abject failure.

Now, yes, we hear that, you know, they will learn from this failure and it will advance the state of their technology simply to have conducted it. Perhaps so.

The problem, I think, though, for the countries in the region and elsewhere is that while it's scary that they're doing this and their intentions are certainly malignant, the test didn't do very much. It didn't go very far. It didn't threaten anybody.

You heard Jim Woolsey's expression of concern, what he and others were worried about and why they thought it ought to be taken out on the launch pad. Well, it was a fiasco. Now, obviously, we should be concerned about it. And I think working diplomatically makes sense, but let's not forget that that's what it was.

MARA LIASSON, NPR: Well, look. The test itself was a failure, but nobody doubts that North Korea is marching pretty inexorably towards increasing its arsenal of nuclear weapons and its ability to deliver them to the United States or to other countries in the region. That's what's scary. This launch itself might not have been the kind of terrifying thing that people thought it might be. But I think one of the problems for the Bush administration is that it has set its bar, at least rhetorically, so high. I mean, we're talking about two-thirds of the axis of evidence here, Iran and North Korea.

And President Bush was not going to let this stand. He wasn't going to let these countries have nuclear weapons, or at least expand their capacity. And when you set the bar so high, it makes you look even weaker and more impotent when you can't meet that.

But in terms of what Bill said in terms of increasing sanctions, one of the most -- players in the sanctions regime since North Korea is so isolated is China. And if you can't get China to stop giving it food and aid, you can't really put sanctions in very effectively.

WALLACE: Do we look weak and impotent?

JUAN WILLIAMS, NPR: Well, at the moment, I think we look preoccupied. We're preoccupied with Iraq. We're preoccupied with Iran.

In fact, it was the day after we announced that we wanted to have direct talks with Iran that you saw Kim Jong-Il issue an invitation to Christopher Hill, State Department emissary, to come over and talk. Of course, that was rebuffed. But the whole notion is that he wants attention now.

And you asked earlier, you know, what is he seeking. And I think what he's seeking is some kind of deal with the United States. I think he's feeling some of the pressure from these economic sanctions. And the problem we have is that we can't get the Chinese to respond.

And I think the Chinese see a more direct threat from the idea of potentially having chaos on their border with Korea than they do from his weaponry, because obviously he's not shooting at them. He's shooting at the Japanese. He's shooting at the Hawaiian waters. That's the threat.

And so, you know, Bill's position is we should turn away from them, but I think the Bush administration has tried that before. They tried to ignore them. And what we saw as the Bush administration was ignoring them was a build-up, an increase in the amount of plutonium they have for nuclear weapons. So I'm not sure that's an effective strategy.

KRISTOL: People say the test was the failure. The long-range missile was a failure. The short-range missiles work and they can hit Japan. We have a mutual defense treaty with Japan. It's kind of a problem, you know.

And Japan is going to go nuclear, incidentally. If we continue to -- Japan is now more hawkish than us. They want sanctions. But we're working with China and Russia.

WALLACE: South Korea has just -- let me just say, South Korea has just come out and said we think that Japan is creating too much of a crisis.

KRISTOL: Right. Right. So are we going to stand with Japan or are we going to accommodate China? I mean, it's that...

HUME: Bill, you can't get anything through the Security Council over China's veto. So to say that you're going to support sanctions and to do so without regard to China doesn't make any sense.

KRISTOL: Our policy with Iran and North Korea has been that we will insist on sanctions regardless at the end of the day of whether...

HUME: Well, we can insist on...

KRISTOL: ... other countries are...

HUME: I know, but how frightening is it to Pyongyang if you've got the United States insisting on something that it cannot deliver?

KRISTOL: Well, we can, in fact, deliver. Are we willing to make it a priority in our relationship with China their attitude towards North Korea? They have been utterly uncooperative. Are we going to let China stop sanctions? They're against sanctions.

Our whole Iran policy is premised on the fact that ultimately we can threaten them with sanctions.

HUME: We can threaten them. It seems to me we can...

KRISTOL: China won't accept sanctions against Iran. North Korea has behaved much more provocatively than Iran has. Iran hasn't launched missiles. Iran hasn't declared that they have nuclear weapons.

HUME: But, Bill, there's a very important distinction to be made in the real world about this, which is that Iran is a country which has lines out to the world in a way that North Korea does not.

Iran, though not entirely vulnerable, is still much more vulnerable to sanctions, sanctions that could be imposed by a coalition of willing nations without the United Nations' involvement.

That's really not true of North Korea. North Korea has got a lifeline from China and depends on almost no one else. So if China doesn't play, there's not a lot you can do. You can talk about tightening sanctions. We've done that.

We've tightened the sanctions on the bank that was allowing them to launder the fake money. And that was treated as a provocation by North Korea. I mean, they really are an outrageous, almost comically desperate regime.

WILLIAMS: Well, let me ask you a question, though, Bill. How much can we do as the world's superpower? I mean, given the fact that we are in Iraq, that we are trying to deal with the Iranians, we're in Afghanistan, given the idea that North Korea is now acting up, I don't think that -- you know, there's a limit to what we can possibly do.

And you're suggesting as though we take a hard line. I don't think you're suggesting in General Kristol mode that we start bombing the sites, you know, of their launch for missiles.

HUME: But that's something we could do. I mean, that...

WILLIAMS: If we do that, what are you inviting? What are you guys -- I mean, what are you guys suggesting here is the hard line with North Korea?

HUME: Well, the one thing about knocking the missiles out on the ground -- they're sitting there like, you know, the Washington Monument. They can be struck. That at least is something that we could do and it would make, it seems to me, a successful possible strategy, much more so than trying to...

WILLIAMS: What do you think the Russians and the Chinese response would be for us coming into their neighborhood and taking such an action?

WALLACE: Forget them, what would North Korea's response be?

Mara, you get the last word here.

LIASSON: Yes. Look, I think that the military option has been all but completely ruled out by this administration.

HUME: I don't agree.

LIASSON: I think that they have gone out of their way to say we're working diplomatically. I haven't heard them talking about all options on the table for weeks.

HUME: Well, that doesn't mean the options aren't on the table.

LIASSON: Well, they certainly have chosen not to talk as if they are.

WALLACE: All right. We're going to leave it here. Have to take a break, panel.

But coming up, Senator Joe Lieberman was on the Democratic national ticket just a few years ago. Now are some Democrats ready to write him out of his own party for supporting the Iraq war? Some answers from our panel in a moment.

(COMMERCIAL BREAK)

WALLACE: On this day in 1960, President Eisenhower responded to Russian threats to use missiles to defend Cuba. Eisenhower warned the U.S. would not condone a communist regime in the western hemisphere.

Stay tuned for more panel and our Power Player of the Week.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

U.S. SENATOR JOSEPH LIEBERMAN (D-CT): Ned Lamont seems just to be running against me based on my stand on one issue, Iraq.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

NED LAMONT (D-CT), CANDIDATE FOR U.S. SENATE: President Bush rushed us into this war. He told us it would be easy. And Senator Lieberman cheered on the president every step of the way.

(END VIDEO CLIP)

WALLACE: That's a sample of the contentious primary debate this week between Senator Joe Lieberman and his Democratic challenger, Ned Lamont, in which Lieberman's support for the Iraq war is the key issue in the campaign.

And we're back now with Brit, Mara, Bill and Juan.

So Joe Lieberman a U.S. senator for 18 years, the vice presidential candidate of the Democratic Party just in the year 2000, now fighting for his life in the Democratic primary in Connecticut on August 8th.

Brit, what does this tell us about the state of the Democratic Party right now?

HUME: Well, it tells us that even in relatively dovish Connecticut where Joe Lieberman, if nominated, would be an odds-on favorite to win re- election, his own party may deny him that nomination, which gives you an idea of the extent to which the Democratic Party has drifted to the left because of Iraq.

What has happened is that all the antiwar sentiments of a huge part of that party's base have been awakened by this war. They are emerging as the dominant force within the Democratic Party, pulling the party to the left on that and other foreign policy issues.

And the result is that a war that is going badly in the eyes of the public has been redounding amazingly in recent weeks to the benefit of the president who took us into that war, a remarkable achievement for the Democratic Party.

WALLACE: Mara, do you agree that this shows that the party, the base, the heart of the Democratic party is moving to the left?

LIASSON: Well, I think that on the war, the base of the Democratic Party is against it. I mean, I think there's no doubt about that. I mean, and that's what you see in Connecticut.

I mean, the Democratic Party -- the national leadership of the Democratic Party is firmly focused on defeating Republicans in the fall and trying to take back a majority in one house or both.

And now they've got this very difficult problem on their hands when the base of the party, at least in Connecticut, has kind of risen up and said we don't want to have a senator who is not only pro war -- I mean, Joe Lieberman is a special case.

He's not just like Ben Nelson or some other conservative Democrat. He has really led with his chin on this, and he has been, some Democrats feel, kind of rectitudinous about it. He has spoken out in favor of the president. He has been a real staunch defender of him all along. And I think that's been a problem for him. Now, the Democratic leadership is in a very difficult position even though people like Barbara Boxer, like Joe Biden, on two different sides of the war debate, are going to go and campaign for him. As a practical matter, if he loses the primary, his only chance is to run as an independent without the backing of the Democratic Party.

WALLACE: Bill, let's pick up on this question of the support or lack of support from some of his Democratic colleagues in the Senate, because it's been fascinating to watch how they scramble.

A number of them, including Senate Democratic leader Reid, Hillary Clinton, Joe Biden, have all agreed to support Lieberman at least through the primary. But two strong critics of the war, John Kerry and Russ Feingold, have refused to back their long-time colleague against a challenger in a Democratic primary. What do you make of that?

KRISTOL: Well, why should they? They disagree with Lieberman on the most important issue and, really, on a bunch of foreign policy issues confronting the country. And why should they support him, just because he's served with them in the Senate for 18 years? I respect them. In a sense, they're doing what they believe.

The bigger question is why Barbara Boxer is supporting Lieberman in the primary. The interesting thing, of course, is that Hillary Clinton said this week she would not support Lieberman in the general election if he did not get the Democratic nomination.

LIASSON: Which she didn't have to say, although...

(CROSSTALK)

LIASSON: ... nobody will.

KRISTOL: She went out of her way to say it because the left is winning the fight for the soul of the Democratic Party.

WALLACE: But if he loses, that would be traditional.

LIASSON: Yes. They're not going to support him.

WALLACE: If a fellow loses a Democratic Party and runs as an independent, you don't support him.

KRISTOL: Well, you could or you couldn't. But she went out of her way to say that she wouldn't, having left it ambiguous, because she might be running for president and she doesn't feel you can take on the left-wing base of the Democratic Party.

So we have a Clintonian Bush administration and a McGovernite Democratic Party. What a wonderful situation.

WALLACE: The conservatives are on the march.

KRISTOL: The conservatives are not -- this particular conservative is not happy.

WILLIAMS: You know, but people want to make this out somehow that the Iraq war is a problem for the Democrats. I think it is the issue. You've been saying it's the issue for the election. It's the issue for everyone.

And two-thirds of the American people now who think this war is a mistake, shouldn't have started, shouldn't be in it -- and the question is why is the opposition to slow to form, to coalesce, and here's an opportunity to do it.

And here's the base of the party saying we want someone who speaks to this key issue of our time. I don't see that as illegitimate. I think Joe Lieberman is a fantastic senator. I think he's been a good guy around this town for years. Hillary Clinton makes the point that she and Bill Clinton worked for him when they were in law school and the like.

But you can't go away from backing the party's candidate. In fact, you could argue that it's Joe Lieberman who is betraying the party by saying that he's going to run as an independent, because I think he will win re-election, potentially, as an independent, although the Republican...

WALLACE: So, Juan, do you think it would be better or worse for the Democratic Party and its prospects for November if the Democratic Party votes to make him the nominee, Lieberman the nominee, or votes for the antiwar candidate and says we are antiwar?

WILLIAMS: Well, I think it's up to the voters of Connecticut. There are other issues...

WALLACE: No, but I'm asking you which would be better for the party, just to go down and say we are antiwar and that's the big issue?

WILLIAMS: Well, no. If it's a matter of the party, the party has to be very clear in what it stands for, and I think the party is for someone who agrees, a candidate who agrees, to a date for a pullout. Let's begin an exit strategy.

LIASSON: Well, the party hasn't decided that. I think the Democratic Party in Washington is divided. Look, only six Democrats voted for that amendment.

WILLIAMS: Correct.

LIASSON: So how can you say that's what the party is for? There is no position.

WILLIAMS: No, I think that's what the base wants.

LIASSON: Oh, sure.

WILLIAMS: I think that's what the base of the party wants. That's what the people who vote Democrat in this country want. And I think if you don't speak that clearly, then you invite people like Brit Hume to say you guys are engaged in a shadow dance.

WALLACE: You're just sitting here minding your own business.

WILLIAMS: You know, you guys are engaged in a shadow dance, you're not saying exactly what you believe, you're hiding your true beliefs, you're trying to play a Hillary Clinton deal.

And Hillary Clinton is not, you know, consistent with her stand because she's looking towards the center for the general election.

HUME: I'm working with the Chinese and the Russians to formulate a joint response to what Juan has just said to me, and I have high hopes that after the mission to Pyongyang by the Chinese diplomats tonight that I'll have something in the morning.

WALLACE: All right. We've got a couple minutes left, and I want to change subjects here.

Mara, you watch congressional races very closely. Tom DeLay is trying desperately to get off the ballot in his district...

LIASSON: Right, and he's stuck on it so far.

WALLACE: ... in Texas so the Republicans can put a less controversial candidate on, and a federal judge this week said no, no, you got the nomination in the primary...

LIASSON: That's right. You went through the primary, you're on the ballot.

WALLACE: ... and although you're supposedly now living in Virginia, who's to say by election day you won't be living back in Sugarland. And now DeLay is saying you know, if I get elected, I might serve. So what do you make of all this?

LIASSON: Well, look. The Democrats were very happy about that. They want DeLay on the ballot, of course, because that would mean that Nick Lampson, their candidate there, has less of an opposition.

But there are still a few more legal hurdles to go through, and it's possible DeLay could get himself off. But that is a small piece of good news for Democrats because they have high hopes of getting that district, which is a Republican district, by the way.

WALLACE: Couldn't you, Bill, end up with Tom DeLay actually winning that seat and being returned to Congress?

KRISTOL: I think it's unlikely. It's unlikely. But Lamont could beat Lieberman. We didn't really discuss what's going to happen in the race. If you look at the polls, Lamont is closing. All the energy is with the challenger in that race. The incumbent is right now at 55 percent. He's sinking down, I think.

And he won the debate sort of as a debate, but I think if you watched it, I think, as a Democrat, Lieberman was very defensive -- I'm not like George Bush, I've been a good liberal, Lamont voted with Republicans when he was town selectman of Greenwich. I think Lamont beats Lieberman.

WALLACE: And in 15 seconds, if Lieberman runs as an independent, loses the primary, will George Bush campaign against him and for the Republican after Lieberman has carried his water on the Iraq war?

KRISTOL: No, he will not campaign against Lieberman, and he should not.

WALLACE: All right. We've got to leave it there. Thank you, panel. That's it for today. See you next week.

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