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May 27, 2007

Mike Huckabee, Arlen Specter, Kay Bailey Hutchison, Roundtable

Fox News Sunday

CHRIS WALLACE, HOST: I'm Chris Wallace. A deadly weekend for U.S. forces in Iraq, next on "Fox News Sunday."

He's not a frontrunner yet, but he's moving up. We'll sit down with former governor and Republican candidate Mike Huckabee to find out his plan for victory as we continue our series Choosing the President.

Then the battle over immigration reform within the GOP. We'll talk with Senators Arlen Specter, who helped write the plan, and Kay Bailey Hutchison, who says it's still amnesty.

Plus, the president gets a win in Congress on spending for the Iraq war. What will the Democrats do now? We'll ask our Sunday panel, Brit Hume, Nina Easton, Bill Kristol and Juan Williams.

And our Power Players of the Week offer some words of wisdom to the class of '07, all right now on "Fox News Sunday."

And good morning again from Fox News in Washington. Here's a quick check of the latest headlines. Eight U.S. troops in Iraq have been killed this weekend in several incidents. Since last Memorial Day, almost 1,000 Americans have died. That's up more than 200 from the previous year.

Ayman al-Zawahiri, Al Qaida's number two in command, has urged his followers in Iraq to expand their holy war to other nations in the region. In a letter to supporters, Zawahiri also claims Al Qaida is winning in Iraq.

And in Baghdad on Monday, U.S. and Iranian officials will meet to discuss the situation in Iraq. Experts predict no breakthroughs.

Joining us now, as we continue our series Choosing the President, is Republican candidate and former governor of Arkansas, Mike Huckabee.

Governor, Welcome back to "Fox News Sunday."

MIKE HUCKABEE, FORMER GOVERNOR OF ARKANSAS: Well, thank you, Chris. Happy Memorial Day to you.

WALLACE: Thank you. Same to you, too, sir.

Let's start with one of the centerpieces of your campaign. You say you want to put the IRS out of business and to replace the income tax with a national sales tax, which you call a fair tax. How would that work? HUCKABEE: It works primarily by replacing the current very complicated tax structure, that is not only burdensome but is extremely expensive -- and it's also filled with hidden ways in which Americans pay tax and never think about it.

I'd love to say April 15th become just another beautiful spring day. I'd like to be the president that nails the going-out-of- business sign on the Internal Revenue Service doors, a $10 billion a year industry.

We spend half a trillion dollars on compliance, and the real issue is that many folks at the bottom of the economic scale -- they don't have 35,000 lobbyists in Washington working for them like other people do, working over 535 members of Congress.

Here's how the fair tax works. You get rid of income tax. You get rid of all the withholding. You get rid of corporate taxes completely, totally, because those taxes are not really paid by the corporations. They're passed on to the customer with a 22 percent embedded tax in the system.

You eliminate that, which means the prices of what you purchase will go down. You replace it with a 23 percent consumption tax. Now, that sounds expensive, but here's what happens. You only pay when you purchase something new, whether it's a product or it's a service.

And the point is it's a completely transparent tax system. It doesn't increase taxes. It's revenue neutral. But here's what it will do. It will bring business back to the United States that's leaving our shores because our tax laws make it impossible for an American-based business to compete.

WALLACE: But a bipartisan commission that was appointed by President Bush in 2005 looked at this idea, and they found if you eliminate the income tax -- and they retained the payroll tax, which you would do away with, as well as the estate tax -- they retained that.

If they keep them, you would need a sales tax not of 23 percent but of 34 percent. They also found that the only two groups that would end up paying lower taxes under your plan are people making less than $30,000 and people making more than $200,000.

HUCKABEE: Well, I think some of their findings were flawed in part because you've got to remember some of the people working on that commission have a vested interest in keeping the power center in Washington rather than in the purse strings of the average American.

The fair tax was designed by economists from Harvard and Stanford and some of the leading think tanks across the country who didn't come in with an agenda.

They came in with an idea of take a blank slate and say what would be the fairest, most equitable way to create a tax structure that Americans could not only live with, but that would spur real growth in the economy. And the result was the fair tax. So I'm convinced that there's a reason 80 percent of the American people think we need a major overhaul of the tax structure. And, Chris, only 2 percent of the American people like it the way it is.

WALLACE: But let me give you an example. Let's say a person, a very lucky person, makes $2 million a year. He lives very well off the first $1 million and he banks the second $1 million. He doesn't pay a cent of taxes on that second $1 million. How is that fair?

HUCKABEE: Well, why would we penalize his productivity? Why is that right to penalize a person's productivity?

The genius of the fair tax is that there is a prebate, so that every month a check comes that would be the equivalent of what a person would pay in their basic necessities. That's why it's really fair. In fact, I think it's a progressive tax for people at the lower end of the economic spectrum.

But the fairness of it is across the board. It's fair to the people at the lowest end. It gives them a real shot to reach up to the next rung on the ladder, a much fairer system than the current one, which penalizes them for trying to do better.

But the best part is that if you don't consume a whole lot -- if you, for example, want to save money -- you're not penalized for saving money like our current system.

But the best thing about it is that when you get your paycheck, you get the whole thing. You get the entire paycheck. The government doesn't take it out.

The average American doesn't understand exactly what's going on with his paycheck, because April 15th -- if he gets a refund, he says, "Look, look how much I'm getting back." The question is but how much did you pay in.

WALLACE: For all the talk about cutting taxes, you have come under fire for your record in your 10 years as governor of Arkansas.

Here's what the Cato Institute, which is a conservative think tank, said about your record as governor of Arkansas on taxes. "Mike Huckabee went from being one of the best governors in America to one of the worst. He receives an "F" for his current term and a "D" for his entire tenure."

And Americans for Tax Reform, another conservative group, says you were responsible for a 37 percent higher sales tax, 16 percent higher fuel taxes and 103 percent higher cigarette taxes.

Governor, a tax cutter?

HUCKABEE: Well, I am. Ninety-four times we cut taxes in Arkansas, including the first ever broad-based tax cut in the history of my state in 160 years. And I did that with a Democrat legislature.

WALLACE: But how do you answer those figures? HUCKABEE: But as we talked about in the debate, when I was attacked by one of the other candidates, the fact is the fuel tax was a part of a road program that was voted on by the people of my state by an 80 percent margin.

Most every politician I know would love to be with 80 percent of the people, because we needed roads. We needed them desperately.

And the amount of money that we spent on our roads more than made up for the amount of money people were spending in car repairs from the disrepair of our road system and the lack of economic activity.

Now, the sales tax was one that was in response to a Supreme Court order in education. We had an equity adequacy issue in our state.

Let me suggest to you, though, that one of the differences -- in fact, one of my critics in the debate suggested that the tax issues were a problem.

But when I left as governor, I left the next administration with nearly $1 billion dollars in surplus, giving them the opportunity to cut the taxes even more, as opposed to leaving somebody with a huge deficit and forcing them to have to...

WALLACE: Obviously, there are numbers -- and you know the numbers a lot better than I do.

HUCKABEE: Sure.

WALLACE: But on the other hand, the Club for Growth, another conservative group, says this -- and let's put it on the screen -- about your 10 years as governor. They looked at the record, and they said, about you, "His history includes numerous tax hikes, ballooning government spending and increased regulation."

HUCKABEE: Well, once again, you know -- the Club for Growth, with all due respect, tends to take a template and apply it over all 50 states without looking at the unique nuances.

For example, if they talk about government growth, the part of government that I actually had control over as a governor, not the federal pass-throughs, not the various programs that maybe were controlled strictly through the legislature, was .6 of 1 percent per year over a 10.5-year period.

I would suggest that that's a pretty darn good record of holding down the level of growth in government by anybody's estimation except theirs, because, again, they don't want to do the depth of homework necessary to really drill into the fact that each state has a different way in which it conducts its budget.

WALLACE: You say that you are a clear, consistent, proven conservative; in fact, the most so in the field. Let's do a lightning round. Quick questions, quick answers...

HUCKABEE: OK. All right.

WALLACE: ... about your rivals in the Republican field. And let's talk specifically about the conservative credentials or lack of same for the Republican frontrunners in the field.

Rudy Giuliani. Why isn't he a conservative?

HUCKABEE: Well, his stand on some of the social issues, I think, are going to be very problematic for conservatives -- his position on the sanctity of human life, same-sex relationships.

I have a lot of respect for him. I don't want to minimize that. And he's a strong individual. But those are issues that are certainly going to be problematic within the Republican primary.

WALLACE: Now, you, before the debate, had compared his stand on abortion to slavery, saying, "You know, it would be like saying well, I'm against slavery, but if other people want to do it --" He said that's bogus because nobody is for slavery.

HUCKABEE: Well, but here's the point. He made the reference that he was opposed to abortion personally and -- here was the catch -- thought it was morally wrong.

Now, my point was logically -- and I'm an old debater from high school and college, Chris, so you always try to follow something to its logical conclusion. If something is morally wrong, then you should oppose it because of its moral impropriety.

Now, if you say I don't think it's morally wrong, therefore I can logically conclude that it's OK to have it.

But once something has been deemed to be morally wrong, then it's like Wilberforce felt about slavery. And he didn't have a choice. He had to take the position of opposition.

So that's why I think that you have to either say, "I don't have a moral objection to it, and therefore I can conclude that abortion is OK, it's tolerable," or, if it's morally wrong, then we ought to do something to make sure that it really doesn't happen.

WALLACE: John McCain.

HUCKABEE: A lot of respect for John McCain. In fact, you know, he's one of the targets. A lot of people are after him. But let's not forget something. He's an authentic American hero.

On this Memorial Day weekend, I'm not going to say anything bad about a man who spent years of his life being tortured in a Vietnamese prison. And for him, I have the highest regard and esteem and respect.

WALLACE: But why do you think -- and we all share your sentiments.

HUCKABEE: Yes. WALLACE: Why do you think he's not a reliable conservative?

HUCKABEE: He's been in the Senate too long. You know, governors run something. They don't just make speeches and work on bills. They have to actually manage things. I think that's why four out of five of the last presidents have been governors.

Again, I appreciate even -- though I disagree with some of the elements of the bill, Senator McCain has at least worked on the immigration issue and has been pretty bold in putting a stake in the ground over it. You know, he's taking some political risks.

But I think that anyone with a Washington address does not have the advantage going into this presidential race.

WALLACE: Mitt Romney.

HUCKABEE: Good friend, good colleague as a governor. Again, the challenge Mitt's going to have is defending the various positions he has.

We have a saying in Arkansas that if you don't like the weather, hang around five minutes, it will change for you. And I think the perception is that Mitt's position on guns, his position on same-sex relationship, his position on the Bush tax cuts, his position on sanctity of life are all issues that there's been, you know, literally 180 degrees difference in those issues.

WALLACE: He says he's learned. His says his position is involved and he's learned from experience.

HUCKABEE: Well, we all can have adult epiphanies, but I'm not sure how many we can have before at some point people begin to question are we going to have another one in another couple of years.

WALLACE: And let me ask you about one candidate who isn't in the race but apparently may be getting in soon, and he says he's going to be the true conservative, Fred Thompson.

HUCKABEE: Fred Thompson certainly will have a real presence in the race. You know, and I don't know enough about his record in terms of the issues but, you know, I think any of us who are running have to recognize that there's going to be room even for more than the 10 who are already on the stage.

WALLACE: You didn't use the word flip-flopping, but that's, in effect, what you were saying about Mitt Romney.

Some of your Republican rivals accuse of you flip-flopping. You opposed the immigration plan now in the Senate. You call it amnesty. But here's what you proposed for illegals in March. "You're going to pay the fine. We're going to have a system that can be done in an orderly fashion, and you'll be able to be legal, but we're not going to let you off scot free."

As governor, you opposed making children of illegals -- rather, you supported making children of illegals eligible for state support and scholarships.

You said that a bill cutting them off from welfare was race- baiting. Aren't you a liberal on immigration?

HUCKABEE: No, not at all. I think that the first big mistake we've made is we haven't secured the border, which is the first and most important single step we need to take in immigration reform.

You know, every time I get on an airplane at the Little Rock airport, I'm forced to show my photo I.D., go through several layers of security. I don't just get to walk through, even though everyone knows in Little Rock who I am and they call me by name.

I take my shoes off and put them in the little plastic bucket and go through the whole drill. Now, the reason I do that is because that's the law and they make me go through one at a time.

We have porous, open borders where people jump and run across at will. That's really the fundamental problem with the immigration issue.

Now, in Arkansas, we had a situation where we had kids who had been in our public schools since kindergarten, and when they had worked hard, they had made good grades, my point was this: If you want to punish their parents, that's fine. But you do not punish a child for the crime of a parent.

That's just something we have not historically done.

WALLACE: Finally, and we have about two minutes left, let's talk about your position in this race for the Republican nomination.

You raised just $500,000 dollars in the first quarter, while Mitt Romney raised the most at $20 million. You're still at single digits in the polls in all the key states.

How do you get from here where you are now to the Republican nomination? What's the Huckabee scenario?

HUCKABEE: Well, the key thing is to make sure that I continue to articulate issues that I don't think other candidates are really focused on.

When I talk about education, I've got a record to back it up, but I'm talking about the importance of music and art programs to create a creative economy. People aren't talking about that, but to understand why that's important -- to develop both left and right brains of kids so that there is a sense of creativity.

We've got a health care system that needs to be called a sick care system because it has to change culturally from one in which we put the focus on disease to put a focus on health and prevention.

We need to be talking about tax reform. We need to be talking about the infrastructure of our country. I truly believe, Chris, that once we get beyond sort of the how much money have you raised to what kind of issues and ideas you've raised, people will start making a real concerted effort to look at a candidate.

WALLACE: Real quickly, they're holding a big straw poll in Iowa in August. You have said if you don't show well there, it's going to be a tough go.

HUCKABEE: Yes.

WALLACE: How well do you have to do in Iowa?

HUCKABEE: Well, I have to do...

WALLACE: I'm talking about the straw poll.

HUCKABEE: Yes. Better than expected, which means if I don't finish in the top three -- if the margins of four and five are real tight together with one, two and three, then maybe I'm still in.

But clearly, that's a break point not just for me. That's going to be, I think, a break point for a number of us in the race. It's one of the reasons I'll be spending most of my summer in Iowa.

WALLACE: So you're saying if you don't finish in the top three or real close, you're out?

HUCKABEE: Well, I may not decide that, but you know, it may be that you're counted out at that point. But let's see.

First of all, I think what's really critical for me is to continue focusing not on just the money chase and the money race, but the idea race and the chase, because I do think Republican voters are sophisticated enough not to turn the presidency into a plutocracy that makes it only about how much money you've raised.

They want to know, "Do you have any ideas that bring true leadership to this country?"

WALLACE: Governor, we're going to have to leave it there. We want to thank you so much for coming in on this holiday weekend...

HUCKABEE: Thank you.

WALLACE: ... as well as your wedding anniversary. We apologize to Mrs. Huckabee for taking you away from her.

HUCKABEE: I think she's grateful. Thirty-three years of me, and she's probably glad I'm gone for the weekend.

WALLACE: Well, get back home and make it good and safe travels on the campaign trail, sir.

HUCKABEE: Thank you, Chris.

WALLACE: Up next, the split over immigration among Republicans. We'll talk with two key senators with sharply different views about the way forward.

Back in a moment.

(COMMERCIAL BREAK)

WALLACE: As Congress continues to battle over immigration reform, we're joined now by two key Republican senators with very different views.

Arlen Specter, who is in Kansas today, helped write the compromise plan. Kay Bailey Hutchison, who comes to us from Texas, is a strong critic.

Senator Hutchison, under the compromise, illegal immigrants have to pay a fine. They have to go back to their home country to apply for permanent legal status. And this whole process is going to take up to 13 years. How is that amnesty?

SEN. KAY BAILEY HUTCHISON (R), TEXAS: Chris, it is because the vast number of the estimated 10 million to 12 million will never have to go home if they don't want a green card.

And I think that is what is causing the amnesty outcry, that you can stay here, you will never have to go home, as long as you don't want the permanent green card.

And I think we can fix this, Chris, and we are working with others who are trying to get a bill that will have more support, to take this amnesty portion out, by requiring that the touchback -- the going home and applying -- happens in the beginning for the temporary visa, rather than only if you want the permanent card.

WALLACE: Senator Specter, let's talk about this, because it is something that the critics say is a big loophole in your plan.

As it now stands, illegal immigrants get probationary -- not permanent, but probationary -- legal status right away without paying a fine, without going home, and if they don't want to apply for a green card, they can stay here indefinitely. Isn't that amnesty?

SEN. ARLEN SPECTER (R), PENNSYLVANIA: I don't think it is. The cry about amnesty comes up if you give them citizenship. But the program which would not require their going home would be one without citizenship. Look here. We've got 12 million undocumented immigrants in this country, and we have to deal with them one way or another. And right now it is anarchy.

And a key part of the legislation to provide -- handling the 12 million provides for tightening up our borders, fixing our broken borders, imposing very tough employer sanctions, and it's an overall plan.

But I'm prepared to listen to what Senator Hutchison has to say, if we can find a modification which will get a stronger vote and get this plan through.

My basic point, Chris, is that the system is broken very badly, and we need to correct it. And I'm open to modifications.

WALLACE: Senator Hutchison, we'll talk about the triggers in a moment, but let's get to this point that Senator Specter just brought up.

Michael Chertoff, the secretary of homeland security, said that if you don't do anything, if you don't pass this plan, you end up with what he calls silent amnesty because the millions of illegals who are already here will just stay here. Doesn't he have a point?

HUTCHISON: Yes, he does have a point. And I do think that this bill is better than the status quo. I think that it has been difficult because it didn't go through the committee process.

The Senate leadership decided to bring it up on the floor. And as Arlen, who has been in the Senate longer than I have, can tell you, writing a bill on the Senate floor is very difficult.

There are good parts of this bill. Part of it is what you said. The border security is something we really need. And we do need to regularize the process so that there isn't amnesty for people just being able to stay here without documentation and encouraging others to do the same thing.

We could have 20 million the next time we address this issue if we don't really say this is going to be the law going forward and stick to it.

So I think we do have a bill that should be worked. I hope that in the end we have a comprehensive reform that is better than the present law.

WALLACE: Senator Specter, one of the other criticisms which we touched on is the idea that these enforcement triggers that you have in the plan now are too weak.

As the plan now stands, you would build about 400 miles of fences. You'd double the number of border patrol agents.

But some critics are saying instead of bureaucratic input as the triggers, why not make it results-oriented triggers, that you could not have any of the reforms -- the path to legalization, all of that -- until you had demonstrated that the borders were secure, that the number of people crossing the borders is now under control.

SPECTER: Well, Chris, it's a very vague concept till you demonstrate that the borders are secure. We have tightened up the requirement.

Senator Gregg offered an amendment for additional barriers for additional border patrol, for additional fencing.

I think you may have sort of a breakthrough on your program here on Fox News, Chris, between Senator Hutchison -- Kay and myself. Kay says that the bill is better than the current system, which is a significant step forward for passage.

I'm prepared to negotiate with what Kay has to say on when the touchback occurs. And I think she is right that it would have been preferable to go through committee.

Last Congress, when I chaired the Judiciary Committee, we had many hearings, many sessions, and crafted a bill. This year the leadership, Senator Reid, decided to bring it to the floor directly.

But we were in many, many hours of negotiations, almost like the committee process. Kay was there. Senator Kyl was there. Senator Martinez was there -- Senator Salazar, Senator Kennedy. And we put together a bill which withstood some very tough amendments.

We rejected an amendment which would have eliminated citizenship path for the 12 million. It was a big vote, 69-22. More Republicans wanted to keep the citizenship path than rejected it. We made some real progress last week.

WALLACE: Senator, let me just, if I may, sir, just bring in Senator Hutchison here. Since I'm trying to broker a deal between the two of you, I'll continue here.

SPECTER: Go ahead.

WALLACE: What do you think, Senator Hutchison, about this idea of toughening the triggers so it becomes less a question of building miles of fences and more results-oriented, some way of certifying that, in fact, you do finally have control over the borders?

HUTCHISON: Chris, that was the original proposal that many people thought would be the right one, have it results-oriented.

The problem is you can't tell if you have secured the border just by the number of apprehensions. There is no way to know if someone has just gotten a better system to skirt the law.

So that's why we decided OK, in order to make this absolute, we have to say here's what you have to certify has happened, the number of fences, the number of border patrol agents, the whole -- just trying to make it more absolute than someone's judgment. WALLACE: Senator Specter, at the end of this week, after, as you say, beating back a number of amendments from both the right and the left, you predicted that this bill is going to get through the Senate, that there are no roadblocks out there that you see that can't be overcome.

But in the House, Democrats are saying they need at least 50 to 70 GOP votes to help them pass the bill. In the end, isn't this bill and the chances of it getting to the White House going to depend on the president working House Republicans?

SPECTER: Well, I think so. But the president had a meeting last week with a number of Senate Republicans who were opposed to the bill, and the president has weighed in on it very, very forcefully.

He wants this bill. He's put the weight of the White House behind it. The secretaries of commerce and homeland security have helped on it.

We have some tough issues coming up, Chris, on family unification, and if I had my druthers, I would like to have more elements of family unification. But we're going to debate that.

And we have to have a bill that will appeal to very broad, diverse interests. There are very different points of view on the far left and on the far right.

But as you see with what Kay and I have talked about here today, I think we can get enough Republican support in the Senate and that will give it a boost in the House.

But the president's going to have to get into the nuts and bolts here, and based on the conversation that I had with him, I think he's prepared to do just that.

WALLACE: Senator Hutchison, I know the president invited you to the White House this past week and apparently didn't persuade you. What's he going to have to do better to get it through the house?

HUTCHISON: Well, I think the president is just trying to keep the issue going.

But I do think that this bill has to have some elements of change before it will be acceptable to the majority of Republicans in the Senate and the Republicans in the House.

I do think it can be done, but it's not there yet. The amnesty has to be addressed, and the Social Security has to be addressed. And those are two major issues that I think could be improved in the bill.

I think the balance -- remember, when Arlen talks about the chain migration, the family unification -- the balance in this bill is that you're trying to reward workers the green cards so that you have more space for workers for our economy, and that has cut back on the chain migration of adult brothers and sisters, and grandparents and parents, and allowed the nuclear family, spouses and minor children, only, so that you have more green cards.

This is more along the lines of every other country in the world, where you have two-thirds workers, one-third family. And we're the opposite in this country.

WALLACE: Excuse me, Senator.

We have about 30 seconds left, and I want to touch on one last subject with you, Senator Specter. Last Sunday, you predicted that Attorney General Gonzales might resign on his own before a vote of no confidence.

Now that's been postponed until after the immigration vote, but it looked for a while like it was going to happen this past week, and we saw no budging from either the president or Gonzales.

Do you still think Gonzales is going to leave the scene on his own?

SPECTER: I do. I think there's a distinct possibility of that. The action is characteristically taken, as we put it in litigation, on the courthouse steps, and I wouldn't expect any budging until we're right up to the vote.

But I do not think, when all is said and done, that Attorney General Gonzales will want to go down in history with a black mark on his name to have been the subject of a vote of no confidence.

But it's not going to happen until the focus is in and it's the last minute, if it happens at all.

WALLACE: We're going to have to leave it there.

Senator Specter, Senator Hutchison, we want to thank you both so much for talking with us, and we hope to see you both soon again.

HUTCHISON: Thank you, Chris.

SPECTER: Nice being with you. Thank you, Chris.

(COMMERCIAL BREAK)

WALLACE: Coming up, our Sunday gang on that big Iraq war vote in Congress this week. President Bush got his way. What do the Democrats do now? Some answers when we come back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. HILLARY RODHAM CLINTON, D-N.Y.: But I voted against that, because I did not think they had enough conditions or requirements that was actually going to change the president's mind.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA, D-ILL.: And what I know is that what our troops deserve is not just rhetoric. They deserve a new plan.

(END VIDEO CLIP)

WALLACE: Those were the two frontrunners in the Democratic presidential race, Hillary Clinton and Barack Obama, defending their votes this week against continued funding for our troops in Iraq and Afghanistan.

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

Well, before we get to the overall vote on Iraq war funding, let's talk about Obama and Clinton and their votes this week.

During the Senate vote Thursday night, they both waited, and you can see it there, till the very end of the roll call. Obama voted first, then Clinton, both very quietly.

Brit, is this just the price of doing business if you're serious about winning the Democratic nomination?

BRIT HUME, FOX NEWS WASHINGTON MANAGING EDITOR: I think so at this stage. And I think that virtually every week when we discuss these things, we find Clinton and Obama have climbed a little farther out onto this antiwar limb. Now, it may prove strong enough to hold them and they may end up being very glad they did. But it once again emphasizes that the outcome of all of this and the outcome of this issue, and perhaps the outcome of '08 politics in general, rests in the hands of not anybody here in Washington, maybe not anybody here in the continental United States, but on David Petraeus.

If he succeeds, these votes look bad. If he doesn't succeed, they look a look better.

WALLACE: The enemy's going to have something to say about that as well.

HUME: You bet. You bet.

NINA EASTON, FORTUNE MAGAZINE: I think for Hillary Clinton, this is really the start of her focus on the primary campaign as it has to do with the Iraq war as opposed to looking to the general election.

If you had been a fly on the wall in those debates among her consultants this week, I'm sure it was intense. They must have been thinking about John Kerry's war funding vote in contrast to his pro- war vote, what that was going to mean in the general election.

But at the end of the day, Barack Obama is the real threat. We're going to see her tied at the hip with him, because the antiwar faction of the party -- they like John Edwards, but they love Obama. And I'm not sure she would have cast the vote this way if Obama wasn't in the race.

WALLACE: Bill, I mean, let's talk about this, because this completes quite a turnaround for Senator Clinton.

After the president announced his troop surge in January, here's what Hillary Clinton said -- and let's put it up on the screen. "I don't support cutting funding to our troops."

And of course, she stood up to war critics saying that she refused to apologize for her 2002 vote authorizing the use of force.

Now, I understand it's one thing, if you feel that way, to vote to set a timetable for withdrawing troops. She did something different here. She was voting to actually let the money run out for the troops on the front lines in Iraq and Afghanistan.

BILL KRISTOL, WEEKLY STANDARD: And voted with the minority of Senate Democrats. It is very much like 2003 when John Kerry, having supported the war, under pressure from Howard Dean -- John Kerry and John Edwards, actually, voted against the $87 billion appropriation.

Now, Kerry won the nomination. Edwards was the vice president. So it worked for the primaries. Lieberman and Gephardt, who were on the other side, who voted for the appropriation, lost in Iowa and New Hampshire.

So maybe she's doing the right thing from a primary point of view, but I do think it is going to be hard to defend voting against a four-month appropriation. She's not committing the U.S. to war for the next four years.

She's voting against a four-month appropriation for our soldiers in Afghanistan and Iraq. Why? Because it doesn't have timetables that she'll have an ability to bring up again in four months and that wouldn't have kicked in anyway in the next four months.

I think it is a very hard vote to defend substantively. And I think it hurts her and Senator Obama in the general election.

WALLACE: How do you feel, Juan? I mean, is it a hard vote to defend, to literally let the money -- I mean, if she had won, the money runs out while the troops are still on the front lines.

JUAN WILLIAMS, NPR: Well, now, she had both sides of the issue, Chris, because she said she would have voted for it if it really would have made a difference, but she saw that it wasn't going to make a difference, so she wanted to make a statement.

WALLACE: Well, what does that say?

WILLIAMS: Well, it says that she's playing politics, just like what you just heard from Bill. I mean, she's playing primary politics, not general election politics.

And in primary politics, she's making it clear that she stands with a base that in some cases was saying that Democrats have capitulated to this president, that the president had a total victory -- no deadlines, no real benchmarks.

The benchmarks in there come from Senator Warner, and they're benchmarks on the Iraqi government, not on U.S. military participation.

And if you look at the polls out this week, it's now just overwhelming. Even most Republicans say that the additional troops, the escalation, is not going to help.

So what exactly are we doing when we wait for General Petraeus? The likelihood is General Petraeus will say, "Well, in some areas we're improving, some we're not." But things don't look great.

The president this week in his press conference said violence is likely to increase over the summer -- more deaths, more devastation. So you know, is this a smart move? From the Democrats' perspective, they're waiting now for September.

And they think the next appropriation -- that will be the big fight. And as Rahm Emanuel says, this is the beginning of the end.

WALLACE: Let's look at the overall picture, not just Obama and Clinton, Brit. How do you assess the overall dynamics of what's happened over the course of the last three months? How big a victory for the president and how big a defeat for the Democrats?

HUME: Well, it would have been a bigger defeat than it was a victory. This is a reprieve, in a sense, for the president.

It's only, as Bill pointed out, four months' worth of funding. And this issue's going to come up again. And the Democrats are going to continue to try to impose restrictions on the way the president can fight this war.

And a lot of them will vote to defund it completely, which is what we were just talking about. So this is just a -- this is a battle. He won it. That's nice for him. But there's another one coming in just a few months.

And of course, what we have now is this whole idea that has taken hold and it's out there in the public parlance about September being the big month -- not helpful to the president's cause or to General Petraeus' efforts.

You know, we're not going to have all the troops on the ground until next month. And then basically they get the balance of the summer to try to fix the situation. Probably unrealistic, which means September is going to be a tough month around here.

EASTON: But underneath that White House victory, there was also a kind of White House conceding that they are looking now at Plan B.

We have Republican majority leader in the Senate Mitch McConnell saying we're going to see some different strategies by September.

We have this leak to the news, to the New York Times, which seemed like a conscious leak by the White House saying we're looking at possibly a one-third to one-half reduction in troops by next year.

So I think that the president clearly, and possibly dating back to when these House moderates, the GOP moderates, went and met with him -- we're seeing some shift in strategy by the White House as well.

KRISTOL: I think the leak to the New York Times Saturday was a leak by one faction in the administration.

WALLACE: Why don't you explain what the leak was?

KRISTOL: It was that the president's going to move toward a withdrawal at maybe the end of 2007 or very early in 2008.

WALLACE: Well, it said that that was one of the contingencies that's being discussed.

KRISTOL: Right, which even the New York Times acknowledged has not been discussed at all with General Petraeus or General Odierno, who are in charge of running the war.

It's a little shocking and really irresponsible for people in the State Department, or the Defense Department, or even in the White House to be leaking this stuff which -- they have no idea whether it's practical.

The president apparently was furious about the New York Times article Saturday, and quite a senior White House official went out of his way to call me Saturday and left me a voicemail saying that.

So since they don't do that normally on Saturdays, I figure maybe it's even true, or they certainly want the impression to be that the president was furious.

Look, there's a fight in the administration about how much they need to look as if they sort of are laying the predicate for getting out. And of course, ultimately everyone wants to withdraw troops and plans to.

Petraeus and Odierno assume that if they can sustain the surge through the beginning of 2008, at that point, maybe there will be enough Iraqi forces that we could begin to draw down.

But the idea that you help yourself now by talking about drawing down -- that was the mistake, in my view, that the president and Secretary Rumsfeld made for the first three years. It's the last thing they want to do now.

I think the task for the next three months is for the president to get control over his own administration in terms of the message. Let Petraeus and Odierno fight the war.

Make the case for why we can't afford to lose and why we can win, and stop this internal, you know, leaking and signaling which they may -- some of the people there may think helps them politically, but I think it hurts.

WILLIAMS: It's late in the game.

WALLACE: But, Juan, let me...

WILLIAMS: It's late in the game to get control.

WALLACE: Juan, let me just...

WILLIAMS: Let me just make a quick point, Chris, that the president also says aid he's going to look at the Iraq Study Group report again. I guess he found...

HUME: No, he didn't say that.

WILLIAMS: Yes, he says he wants to look...

HUME: Juan, I'm sorry, that's...

WILLIAMS: What did he say, Brit?

HUME: He has said that there are things in the Iraq Study Group that he agreed with all along, and he has said that publicly and privately, if you listen to him. And the only problem was you couldn't...

WILLIAMS: Well, you'd have to listen pretty...

HUME: Well, remember, the Iraq Study Group's idea was that you get to a place where your mission becomes principally training.

WILLIAMS: Yes.

HUME: And the president has said -- and he said it -- I've heard him say it -- Chris, you've heard him say it -- that he liked that, but that we couldn't get there from here, which is why we had to build up first to try to restore some security.

That's been in his mind all along. And in fact, if you look back at it, the reception the Iraq study group got at the White House was a lot warmer than anybody believed.

WILLIAMS: What? Come on. This is historical revisionism. They disparaged the Iraq Study Group, said it was a bunch of old men, Baker and Hamilton, making noise.

HUME: Who said that? Who said that?

WILLIAMS: White House officials were saying...

HUME: Which one? Name one.

WILLIAMS: Stop this game. What you saw was...

HUME: It never happened, Juan. You're making this up.

KRISTOL: I'll take that position, even if the president didn't.

(LAUGHTER)

WILLIAMS: But the point was all of a sudden now we have a renewal of interest in the Iraq Study Group.

And why, Brit? It's for just the same reason that we had this leak to the New York Times about pulling down, and Mitch McConnell saying the president has to do something else to help, because, look, the strategy is failing.

HUME: This whole idea of what you say the president is up to, and what Nina is suggesting, will, I guess, last till maybe Wednesday.

WALLACE: All right. You guys can continue it in the commercial. We have to take a break here.

Coming up, the stormy debate not just here but on Capitol Hill over immigration reform. Is it going to pass? Our panel will tell you. Stay tuned.

(COMMERCIAL BREAK)

WALLACE: On this day in 1972, Presidents Nixon and Brezhnev signed the Strategic Arms Limitation Talks agreement, known as SALT. At the time, it was the most far-reaching attempt to control nuclear weapons.

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

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. EDWARD M. KENNEDY, D-MASS.: No one believes that this is a perfect bill, but after weeks of negotiation and years of debate, this bill accomplishes our core goals.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

SEN. ROBERT MENENDEZ, D-N.J.: Right now this bill is unfair and nonsensical, capriciously punishing those who followed the rules and legally applied for green cards. What message to them do we send?

(END VIDEO CLIP)

WALLACE: As you can see there, it's not just Republicans who are divided over immigration reform, but Democrats as well.

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

Well, at the end of this first week of Senate debate, the bipartisan coalition has beaten back attempts from both the right and the left to amend this immigration compromise deal to death, Nina.

Where does the compromise stand now? And is the greater threat from the right or the left?

EASTON: I think absolutely the greater threat is from the right. And I think the big question here is whether the center of the party, of both parties, can stand up to their wings.

It's really important to note in this a poll that came out this week showing that not only a majority of Americans support something along these lines, a majority of Republicans, 66 percent of Republicans.

But the noise that you're hearing from the right and calling this amnesty doesn't bode well for those lawmakers as they go home this week, and that's what a lot of them are going to be hearing.

On the other hand, you've got Senator Hutchison, for example, saying - - who was supposedly a foe of this bill, saying to you this morning this is better than the status quo. So I think there's hope for it in the Senate, certainly.

In the House, I think you're going to have -- the House Republicans are going to have to be led, as it were, by President Bush. I mean, he's going to have to throw his weight behind this in a big way to make this happen.

WALLACE: Bill, what's your sense of the overall situation? And this is obviously a question that I asked Specter and Hutchison -- does President Bush in year seven of his term have the clout to be able to get 50 Republicans, 70 Republicans to go along in the House?

KRISTOL: I don't know that he has the clout to get it through the Senate. And I don't think it's a matter of the right and left. I would have answered those New York Times questions "yes", so to speak, on the liberal side. Do you believe people should have a path toward citizenship...

WALLACE: Yes, because you are a liberal on immigration.

KRISTOL: I am, but I'm against this bill, because I think it is absolutely impractical, and the fact that they get the temporary "Z" visa right away means you're right away legalizing 12 million people and you're giving huge incentives now for people to come across the border before it's secured.

They can't verify that people were here before January 1st, which is allegedly the cutoff for legalization. So I think the moment this passes the Senate, we have people coming across the border, one forged document, "I was here before January 1st," and we have much more of a problem.

I sort of agree that we need to do border security first. So I think the more people look at the bill, the less attractive it is, the more the status quo plus more border security looks attractive for the next two or year.

And I think it doesn't become just a bunch of right-wing nativists who are against it. I think lots of people who are open in principle to this kind of legislation think this is not good legislation.

WALLACE: But Democrats aren't going to go with a border enforcement bill, are they?

WILLIAMS: Sure.

WALLACE: Alone? WILLIAMS: Oh, alone, no, not alone. I mean, alone -- what does it mean? In fact, you know, the polls show most Americans, most Republicans, are opposed to just building fences. They don't see it as effective.

The question is on the Republican side, you know, sort of the Rush Limbaugh wing of the party says it's going to destroy the party because it allows more Hispanics in, and they're going to vote Democratic, or that these people are illegal.

Look, this idea of somehow you're going to deport people, deport this -- it's just not practical, Bill. And so the idea that you want to do something before the '08 election, before it becomes totally politicized, it seems to me is imperative, if you really care about this issue, if you really want to do something about being here illegally.

HUME: You know, I think that if you pass this bill through both houses, and it were -- the bill were rewritten or amended so that it was a clear case of border security first, and legalization and all of its forms after that, you might be able to pass it.

But the most interesting moment for me in your discussion with the two senators here was on the discussion of well, why not have -- instead of being all of these bureaucratic goals, you would meet a certain number of new agents and so forth, and all of those things being your standard for border security, why not have it be a certification that the security, in fact, had happened.

And Kay Bailey Hutchison's answer to that was we started out there and we realized that that was too vague, too hard to define, so we went to these as a specific measure, which gives you an idea of the difficulty in legislating in this area.

But if they can find a way to do that, I think you can pass the bill, because there's too much in it for the people who are pro- immigration, deeply pro-immigration, particularly the Democrats who really want to see these immigrants legalized.

And that would put a lot in it for the other side, the opponents, mostly Republicans, who are more preoccupied with border security.

WALLACE: But, Nina, what about the problems -- you know, we keep talking about it from the right. What about from the left?

I mean, there was a lot of opposition from -- and in fact, the closest this bill came to going down this week was when the left wanted to cut in half and then do away with the guest worker program. There's a lot of fire from the liberals on this.

EASTON: There's fire from unions, and there's some fire over this question of family reunification. But in fact, the bill doesn't -- it still allows minors and spouses of immigrants to come in, so it keeps that pool of people, and it sets up a separate pool of people who come in because of -- they have the work skills. I think that on the left there's more of a sense that you have to compromise among Democrats to get something through, that there is a path to citizenship or to legalization and citizenship.

Just going back to your point, I think if -- they could get a bill passed, but there is nothing that can be done, I think, if you have any kind of path to citizenship...

WALLACE: Got to leave it there.

EASTON: ... that will satisfy the anti-amnesty...

WALLACE: Say goodbye, Nina.

EASTON: Goodbye.

WALLACE: Thank you all. Thank you, panel. See you next week.

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