STEPHANOPOULOS: And we begin with the cornerstones of President Obama's national security Cabinet, the secretary of state, Hillary Clinton; secretary of defense, Robert Gates.

Welcome to you both.

This is the first time you're here together on "This Week." Thanks for doing it.

(LAUGHTER)

CLINTON: The first time we've been called cornerstones.

(LAUGHTER)

STEPHANOPOULOS: Secretary Gates, let me begin with you, because there has been so much focus since the president's speech on this call to begin an exit strategy in July 2011. I want to show you what Senator McCain said earlier this week.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN, R-ARIZ.: When conditions on the ground have decisively begun to change for the better, that is when our troops should start to return home with honor, not one minute longer, not one minute sooner, and certainly not on some arbitrary date in July 2011.

(END VIDEO CLIP)

STEPHANOPOULOS: Just two months ago, you seemed to agree with that sentiment. You called the notion of timelines and exit strategies a strategic mistake. What changed?

GATES: Well, first of all, I don't consider this an exit strategy. And I try to avoid using that term. I think this is a transition.

STEPHANOPOULOS: Why not?

GATES: This is a transition that's going to take place. And it's not an arbitrary date. It will be two years since the Marines went into southern Helmand, and that two years that our military leaders believe would give us time to know that our strategy is working.

They believe that in that time General McChrystal will have the opportunity to demonstrate decisively in certain areas of Afghanistan that the approach we're taking is working. Obviously, the transition will begin in the less contested areas of the country.

But it will be the same kind of gradual conditions-based transition, province by province, district by district, that we saw in Iraq.

STEPHANOPOULOS: We've heard that phrase a lot...

GATES: But it begins -- but it begins in July 2011.

STEPHANOPOULOS: Well, I understand that. But you about this conditions-based decision-making. And I guess that's fairly vague term. So if the strategy is working, do the troops stay? If it's not working, do they leave? How -- how is the decision-making process going to go?

GATES: Well, from my standpoint, the decision, in terms of when a district or a cluster of districts or a province is ready to be turned over to the Afghan security forces is a judgment that will be made by our commanders on the ground, not here in Washington.

And -- and we will do the same thing we did in Iraq, when we transitioned to Afghan security responsibility, we will withdraw first into tactical overwatch, and then a strategic overwatch; if you will, the cavalry over the hill, in case they run into trouble.

STEPHANOPOULOS: And this certainly increases the leverage on President Karzai and his government, Secretary Clinton, which brings up questions similar to questions that were raised by a lot of Democrats during -- after the Iraq surge, including President Obama when he was a senator.

He asked Secretary Rice, basically, what happens if the Maliki government doesn't live up to its promises.

(BEGIN VIDEO CLIP)

OBAMA: Are there any circumstances that you can articulate in which we would say to the Maliki government that enough is enough, and we are no longer committing our troops?

(END VIDEO CLIP)

STEPHANOPOULOS: A lot of people asking the same exact question today about President Karzai: At what point do we say enough is enough, we're no longer going to commit troops?

CLINTON: Well, George, I understand the desire to ask these questions which are all thrown into the future. They're obviously matters of concern about how we have a good partner as we move forward in Afghanistan.

But I think you have to look at what President Karzai said in his inaugural speech, where he said that Afghan security forces would begin to take responsibility for important parts of the country within three years, and that they would be responsible for everything within five years.

And from our perspective, we think we have a strategy that is a good, integrated approach. It's civilian and military. It's been extremely thoroughly analyzed. But we have to begin to implement it with the kind of commitment that we all feel toward it.

I can't predict everything that's going to happen with President Karzai. I came away from my meeting with him around the inauguration heartened by a lot of what he was saying. But, you know, the proof is in the pudding. We're going to have to wait to see how it unfolds. STEPHANOPOULOS: But if you're really going to have maximum leverage, doesn't he have to know that, if he doesn't live up to the commitment, we're going to go?

CLINTON: Well, I think he knows that we have a commitment to trying to protect our national security. That's why we're there. We do want to assist the people of Afghanistan and to try to improve the capacity of the Afghan government.

But I think it's important to stress that this decision was based on what we believe is best for the United States. And we have to have a realistic view of who we're working with in Afghanistan, and it's not only President Karzai. It's ministers of various agencies that, some of which are doing quite well and producing good results. It's provincial and local leaders.

So it's a much more complicated set of players than just one person.

STEPHANOPOULOS: There's also the question of Pakistan, the neighbor, and whether they're living up to their commitments. You got in a little hot water in Pakistan when you suggested that they hadn't been doing enough in the past to go after the Taliban.

And, Secretary Gates, let me turn a question about this to you. It's connected to a report that Senator Kerry, the chairman of the Senate Foreign Relations Committee released this week about Osama bin Laden. He suggested that the failure to block his exit from Tora Bora has made the situation there much worse.

In this report, he actually wrote that "The decisions that opened the door for his escape to Pakistan allowed bin Laden to emerge as a potent symbolic figure who continues to attract a steady flow of money and inspire fanatics worldwide."

The Pakistani prime minister, sort of, shrugged off any concerns about that this week, about whether or not he'd gone -- done enough to go after Osama bin Laden. He said he doesn't believe Osama is in Pakistan. Is he right? And do you think the Pakistanis have done enough to get him?

GATES: Well, we don't know for a fact where Osama bin Laden is. If we did, we'd go get him.

(LAUGHTER)

But...

STEPHANOPOULOS: When was the last time we had any good intelligence on where he was?

GATES: I think it's been years.

STEPHANOPOULOS: Years?

GATES: I think so. STEPHANOPOULOS: So these reports that came out just this week about a detainee saying he might have seen him in Afghanistan earlier this year?

GATES: No, that's...

STEPHANOPOULOS: We can't confirm that.

GATES: No.

STEPHANOPOULOS: So do you believe that one of the reasons we haven't had good enough intelligence is because the Pakistani government has not been cooperating enough?

GATES: No. I think it's because, if, as we suspect, he is in North Waziristan, it is an area that the Pakistani government has not had a presence in, in quite some time.

The truth of the matter is that we have been very impressed by the Pakistani army -- Pakistani army's willingness to go into places like Swat in South Waziristan. If one had asked any of us a year or more ago if the Pakistani army would be doing that, we would have said, "No chance."

And so they are bringing pressure to bear on the Taliban in Pakistan, and particularly those that are attacking the Pakistani government. But frankly, any pressure on the Taliban, whether it's in Pakistan or in Afghanistan, is helpful to us because Al Qaida is working with both of them.

STEPHANOPOULOS: You mentioned the actions the Pakistani government has taken. Is Baluchistan next? Is that where they have to go next to take out the Taliban?

GATES: Well, I think that the Pakistani government -- we sometimes tend to forget that Pakistan, like Afghanistan, is a sovereign country. And Pakistani -- the Pakistani army will go where the Pakistani army thinks the threat is. And if they think that threat's in Baluchistan, that's where they'll go. If they think it's in North Waziristan, they may go up there. Or they may just winter in where they are right now.

But these are calls that the Pakistanis make. We are sharing information with them. We have had a steadily developing, better relationship between our militaries.

And we -- we will help them in any way we possibly can, but that's their call.

STEPHANOPOULOS: Back to Afghanistan, Secretary Clinton, some have suggested that one of your envoys, the president's envoy, Richard Holbrooke, should begin negotiations with those elements of the Taliban who are willing to talk to him.

Do you agree with that? CLINTON: Well, George, we have said -- and the president made it clear in his speech at West Point -- that, you know, there are two different approaches here.

One is what could be called reintegration. And that is really looking at the lower-level members of the Taliban, who are there through intimidation and coercion, or, frankly, because it's a better living than they can make any way -- anywhere else.

We think there's a real opportunity for a number of those to be persuaded to leave the battlefield.

Now, the problem, of course, once they leave -- and we have a lot of evidence of this -- they'll get killed if they're not protected. And that's one of the reasons why we're trying to get these secure zones.

STEPHANOPOULOS: In other words, they don't believe we'll stay?

CLINTON: Well, and also, just, we need to secure the population. It's one of General McChrystal's principal objectives.

Then the upper levels of the Taliban -- you know, look, they have to renounce Al Qaida, renounce violence. They have to be willing to abide by the constitution of Afghanistan and live peacefully.

We have no firm information whether any of those leaders would be at all interested in following that kind of a path. In fact, I'm highly skeptical that any of them would.

So, we're going to be consulting with our Afghan partners. It's going to be a multiply-run operation to see who might come off of the battlefield and who might possibly give up their allegiance to the Taliban and their connection with the...

(CROSSTALK)

STEPHANOPOULOS: But high-level negotiations are possible?

CLINTON: We don't know yet. And again, I think that -- we asked Mullah Omar to give up bin Laden before we went into Afghanistan after 9/11; he wouldn't do it. I don't know why we think he would have changed by now.

GATES: I would just add, I think that the likelihood of the leadership of the Taliban, or seniors leaders, being willing to accept the conditions Secretary Clinton just talked about depends, in the first instance, on reversing their momentum right now, and putting them in a position where they suddenly begin to realize that they're likely to lose.

STEPHANOPOULOS: How is this offensive in Helmand province going?

GATES: It's actually going very well. And the Marines have already had -- I think one of the reasons that our military leaders are pretty confident is that they have already begun to see changes where -- where the Marines are present in southern Helmand.

STEPHANOPOULOS: Let me talk about the question of costs, which has been raised by our next guest, Senator Russ Feingold . As you know, he's against the escalation announced by the president.

But he's also (inaudible) and wrote a letter to the president where he raises -- where he says, "We request that you not send any additional troops to Afghanistan until Congress has enacted appropriations to pay for the cost of such an increase and that you propose reductions in spending to pay for the costs of any military operations in Afghanistan" -- a concern shared by many of the American people.

Secretary Clinton, shouldn't this war, if we're going to fight it, be paid for?

CLINTON: Well, the president has said that the costs are going to be accounted for, that the Office of Management and Budget, the Defense Department, the State Department, you know, are going to be working to make sure that we give the best projections of costs we can.

I think that we're going to have to address our deficit situation across the board. There's no doubt about that, and I certainly support that.

But I think we have to look at the entire budget, and we have to be very clear about, you know, what the costs are, as Secretary Gates has said a couple of times in our testimony together. We are drawing down from Iraq. There will be savings, over the next two to three years, coming from there. And the addition of these troops is going to put a burden on us, no doubt about it.

It is manageable, but we have to look at all of our fiscal situation and begin to address this.

STEPHANOPOULOS: There's also the question of the cost-benefit analysis. And a lot of people look at our own U.S. government intelligence estimates, saying there are fewer than 100 active Al Qaida in Afghanistan and say, why is that worth putting $30 billion more this year into Afghanistan?

GATES: It is because, in that border area, Afghan-Pakistani border, that is the epicenter of extremist jihad. And Al Qaida has close relationships with the Taliban in Afghanistan, and they have very close relationships with the Taliban in Pakistan.

The Taliban in Pakistan have been attacking Pakistani civilians, Pakistani government officials, military officials, trying to destabilize the government of Pakistan.

Any -- any success by the Taliban in either Afghanistan or Pakistan benefits Al Qaida. And any safe haven on either side of the border creates opportunities for them to recruit, get new funds and do operational planning. And what's more, the Taliban revival in the safe havens in western Pakistan is a lesson to Al Qaida that they can come back, if they are provided the kind of safe haven that the Taliban were.

This is the place where the jihadists defeated the Soviet Union, one superpower. And they believe -- their narrative is that it helped create the collapse of the Soviet Union. If they -- they believe that, if they can defeat us in Afghanistan, that they then have the opportunity to defeat a second superpower.

STEPHANOPOULOS: But if you look at that...

GATES: And it creates huge opportunities for them in that area, as well as around the world.

STEPHANOPOULOS: You were the deputy director of the CIA back in 1985, when Gorbachev made the decision to expand. Eighteen months later, he was pulling out.

What's to prevent that from happening again?

GATES: Well, what he did was agree with his generals to make one last push.

But the parallel just doesn't work. The reality is, the Soviet Union invaded Afghanistan. They -- they killed a million Afghans. They made 5 million refugees out of Afghanis.

They were isolated in the world in terms of what they were doing there.

We are part of an alliance of 42 countries with us, in addition to us, that are contributing troops. We have a U.N. mandate. We have a mandate from NATO.

So you have broad international support for what's going on in Afghanistan. And the situation is just completely different than was the case with the Soviet Union.

STEPHANOPOULOS: We're just about out of time.

Secretary Clinton, I want to ask you about the case of Amanda Knox, the American college student who was convicted of murder in Italy, just on Friday.

Senator Cantwell of Washington has expressed a lot of concerns about this conviction. She said she wants to talk to you about it. Here's what she said.

"I have serious questions about the Italian justice system and whether anti-Americanism tainted this trial. The prosecution did not present enough evidence for an impartial jury to conclude beyond a reasonable doubt that Ms. Knox was guilty. Italian jurors were not sequestered and were allowed to view highly negative news coverage about Ms. Knox." She goes on to lay out several of the concerns she had with the trial. She did say, as I said, she's going to be in contact with you so you can express the concerns to the Italian government.

Do you share her concerns about this trial?

CLINTON: George, I honestly haven't had time to even examine that. I've been immersed in what we're doing in Afghanistan.

Of course, I'll meet with Senator Cantwell, or anyone who has a concern, but I can't offer any opinion about that at this time.

STEPHANOPOULOS: So you have not expressed any concerns to the Italian government?

CLINTON: I have not, no.

STEPHANOPOULOS: Secretary Clinton, Secretary Gates, thank you both very much.

(END VIDEOTAPE)

STEPHANOPOULOS: Secretaries Clinton and Gates late yesterday. Now I'm joined in the studio by Senator Russ Feingold of Wisconsin. Welcome.

FEINGOLD: Good morning, George.

STEPHANOPOULOS: You heard Secretary Gates there. Even though you've called the president's decision an expensive gamble, he says the United States must escalate because this is the epicenter of extremist jihad, and that's why our vital national security interests are at stake.

FEINGOLD: Well, Pakistan, in the border region near Afghanistan, is perhaps the epicenter, although Al Qaida is operating all over the world, in Yemen, in Somalia, in northern Africa, affiliates in Southeast Asia. Why would we build up 100,000 or more troops in parts of Afghanistan included that are not even near the border? You know, this buildup is in Helmand Province. That's not next door to Waziristan. So I'm wondering, what exactly is this strategy, given the fact that we have seen that there is a minimal presence of Al Qaida in Afghanistan, but a significant presence in Pakistan? It just defies common sense that a huge boots on the ground presence in a place where these people are not is the right strategy. It doesn't make any sense to me.

STEPHANOPOULOS: But isn't the point they're making that if we don't defeat the Taliban in Afghanistan, that will strengthen the Taliban as well in Pakistan, and that will put us at risk, because Pakistan of course has nuclear weapons?

FEINGOLD: Well, it's just the opposite. You know, I asked the chairman of the Joint Chiefs of Staff, Admiral Mullen, and Mr. Holbrooke, our envoy over there, a while ago, you know, is there a risk that if we build up troops in Afghanistan, that will push more extremists into Pakistan? They couldn't deny it, and this week, Prime Minister Gilani of Pakistan specifically said that his concern about the buildup is that it will drive more extremists into Pakistan, so I think it's just the opposite, that this boots-on-the-ground approach alienates the Afghan population and specifically encourages the Taliban to further coalesce with Al Qaida, which is the complete opposite of our national security interest.

STEPHANOPOULOS: So (inaudible) pull out, pull out of Afghanistan now? FEINGOLD: We should have a rational policy to, over a timetable of the next several years, to withdraw in a rational way. I'm afraid that the president's idea, which is to just set a date where we may start withdrawing troops, gives nobody anything they want. It doesn't give the Afghan people a belief that we're actually leaving. It doesn't give the American people any confidence that we have a plan to finally end this.

But I think the best thing we could do would be a real timetable, flexible timetable, that says, look, we're going to continue this for a reasonable period, but it is not the top priority in going after Al Qaida. It is certainly not the top priority for the people of the United States, given our economic problems. So from either an international nor a national level, does it make sense to put so many resources into a place that doesn't even involve our basic national security needs.

STEPHANOPOULOS: So if the real problem is Pakistan, what more should we be doing there right now?

FEINGOLD: Well, I think we should be figuring out a way to do what many have suggested -- and even the secretary of defense suggested in this interview with you -- which is, there is a way to go after these extremists -- particularly the Al Qaida operatives anywhere -- by cooperating with the Afghan government, by cooperating with the Pakistani government. This is what we have done in the past in Somalia and other places to get Al Qaida operatives. But the idea of huge troops on the ground doesn't seem to advance that interest whatsoever.

I guess the way I'd look at it is this, George: You know, if -- if -- if we never invaded Afghanistan and we knew what was going on there now, we looked at it, we saw the problems with the government, we saw the -- the fact that there are so many people who are -- who are having a problem with -- with our presence there, if they saw that -- that, in fact, Al Qaida was based in Pakistan and other places, if they saw the enormous economic problems in our own country, who would advise that we invade Afghanistan at this point? Nobody would.

So the question should be, if we wouldn't do it on those facts, why would we continue it now?

STEPHANOPOULOS: Except that's where the attack on the World Trade Center and the Pentagon were launched from.

FEINGOLD: That's right. And that's the only argument. But, you know, we chased these guys over into Pakistan. So why would we continue something that we wouldn't even initiate today? It doesn't relate directly to our fight against Al Qaida in any way like it did in 2001.

STEPHANOPOULOS: Is there any way you can stop this?

FEINGOLD: Well, that's difficult. And what's going to happen here is that it's probably going to be difficult to stop it now. We'll do whatever we can. We're already working with members of both parties in both houses to question whether this funding should be approved. We're going to fight any attempts to use sort of accounting gimmicks to allow it to be funded. If there's an attempt to have an emergency supplemental, I think that's something we're going to oppose, not only on the grounds of it being an unwise policy, but also being fiscally irresponsible.

But in the end, George, what's going to happen is, if we continue this policy and build up these troops, there's going to be more and more members of Congress who aren't comfortable with it, and it's not just going to be Democrats.

STEPHANOPOULOS: So you grant that the funds are there right now, but if they come back in the spring for $30 billion or $40 billion, that's where you'll make your move and try to block it?

FEINGOLD: I don't grant that the funds are there now. We are operating at huge deficits in this country, and the idea of continuing to spend for this war goes -- flies right in the face of the American people's priority to bring spending down.

STEPHANOPOULOS: Let me ask you a question also on health care. Senators in session this weekend, President Obama coming up this afternoon, and you've been reportedly part of a small group that is trying to work on a new compromise on this public health insurance option. It's based on the -- the plan that members of Congress have, the federal employee health benefits plan. Are you making progress? Do you believe a compromise can be struck? And what will it be?

FEINGOLD: Well, there are a number of great ideas on the table. We've gone from general conversations over the last few days to some very specific conversations that are not limited to the idea you suggested.

For me and for many others in this country, there has to be a public element to this. There has to be an approach that either creates a new public option or an expansion of current public programs. There can't just be a purely private approach. We have to have some competition for the insurance industry.

But the talks are exciting. They're getting closer. And I am cautiously optimistic that we're going to be able to pull everybody together and...

(CROSSTALK)

STEPHANOPOULOS: And get all 60 Senate Democrats together?

FEINGOLD: That's -- that's what we need to do.

STEPHANOPOULOS: And -- but is it -- is it based on this idea that you're going to expand the federal health employees...

(CROSSTALK)

FEINGOLD: That is only one idea that's on the table. It will not be one idea. It will be a package of ideas that reflects the different views of people in the room, the needs of the American people. So it is by no means limited to something like that, and that is not even definitely going to be it.

STEPHANOPOULOS: Reach agreement today?

FEINGOLD: I hope so. We'll willing to work as long as we have to, to try to do it.

STEPHANOPOULOS: Senator Feingold, thanks very much.

FEINGOLD: Thanks, George.