Sen. McConnell, Sen. Dodd, Newt Gingrich, Roundtable

CHRIS WALLACE, HOST: I'm Chris Wallace. A key U.S. ally says no to military action against Iran, next on "Fox News Sunday".

Iran working on the bomb. Iraq still waiting for a government. And here at home, immigration reform stalled. We'll examine these hot-button issues with two key senators, Republican Mitch McConnell and Democrat Chris Dodd.

Congressional Republicans in power, but for how long? Does the GOP need a new strategy for victory in November? We'll find out from former speaker of the House and possible presidential candidate Newt Gingrich.

Plus, what's behind all these retired generals going after Defense Secretary Rumsfeld? We'll ask our Sunday regulars, Brit Hume, Mara Liasson, Bill Kristol and Juan Williams. And our Power Player of the Week has got everyone's attention this weekend, all right now on "Fox News Sunday".

Good morning again and happy Easter from Fox News in Washington. Let's start with a quick check of the latest headlines. Prime Minister Tony Blair has reportedly told President Bush Britain would not be part of any military action against nuclear sites in Iran. However, sources say England expects to support possible diplomatic sanctions.

Reports out of Iraq say a deal is near to replace Ibrahim Al- Jaafari as the nominee for prime minister. Efforts to form a new government there have been deadlocked for months.

And at the Vatican, Pope Benedict led Easter Sunday mass for tens of thousands of worshipers. The pontiff's first Easter service came on his 79th birthday.

There are some tough issues facing Washington this holiday weekend. To discuss them, we're joined by Mitch McConnell, the number two Republican in the Senate, and senior Democrat Chris Dodd. On this Easter, each joins us from his home state.

And, Senators, welcome back to "Fox News Sunday".

SEN. MITCH MCCONNELL (R), KENTUCKY: Good morning.

SEN. CHRISTOPHER DODD (D), CONNECTICUT: Thank you, Chris.

WALLACE: Let's start with what I think we'd all agree was the unusual development this week of six retired generals calling for the resignation of Donald Rumsfeld.

Senator McConnell, what do you make of their criticism and does it change your opinion of whether Secretary Rumsfeld should stay on?

MCCONNELL: Well, it is reminiscent of the problems that Abraham Lincoln had with generals during the Civil War. As you know, his opponent for re-election ended up being a disgruntled general. And of course, Harry Truman had his problems with MacArthur.

At least these are retired generals. They're certainly free to say what they'd like to say. And clearly, they've got something to get off their chests. I think many of them didn't like Rumsfeld personally.

But look, this is a free country. I think they're entitled to say whatever they choose to say. But it does remind us that civilian control of the military in this country is important, and at the end of the day the civilian leaders are the ones who make the decision.

With regard to Rumsfeld, I think he's been a spectacular secretary of defense, one of the best in American history. And I certainly do not think he ought to resign.

WALLACE: Senator Dodd, there are two main points to the criticism from the generals -- first of all, that Rumsfeld has mismanaged the war in Iraq, and secondly, that he doesn't listen to his generals.

Do you buy either of those arguments and does this shape at all or shake your confidence in Rumsfeld staying on as secretary of defense?

DODD: Yes, it does. This is not an insignificant event. Generals are not in the habit, even as retirees, to go around being critical of the civilian leadership. This is a very, very important event.

You have four former major generals, a lieutenant general, a general here. These are very significant commanders. They led troops in Iraq, Afghanistan. They've led major infantry divisions. This is very, very important. And I think you ought to pay attention here.

These are generals who are not only speaking for themselves but I suspect are speaking for a lot of senior military people who are in uniform today and under Article 88, of course, of the military code would be not permitted to make public comments about the president or the secretary of defense.

We ought to pay a lot of attention. David Brooks this morning, a conservative columnist, put it right in the end. I think Mr. Rumsfeld, Secretary Rumsfeld, with all due respect, is a past tense man. And the president would be very wise, in my view, asking him to step aside.

We need a new direction in Iraq. We're not doing well in Iran, in my view, at this particular juncture. North Korea has quadrupled its nuclear arsenal over the last several years. There's a real concern here that we're looking at some incompetency in addition to the arrogance issues that have been raised.

Things have not gone well. Condoleezza Rice talked about 1,000 tactical mistakes the other day in Iraq -- not exactly a ringing endorsement from the secretary of state for the secretary of defense. This ought not to be personal.

Remember, the war is being set -- and the tone of it is being set out of the White House, but clearly I think Secretary Rumsfeld needs to move on

WALLACE: Senator McConnell?

MCCONNELL: Of course, he should not move on. What I think we've lost track of here is what going on offense after 9/11 was all about. The important thing to remember is that we haven't been attacked again here at home since September of 2001.

Why do you think that is? It's not an accident of history. It's because we've been on offense out in Afghanistan and Iraq. We've wiped out a lot of the people who would do us harm. There are still, obviously, plenty of them left in Baghdad. But I'd rather be fighting them over there and in Afghanistan than in Washington or New York.

The war on terror has been an extremely successful undertaking with regard to Iraq and getting a government up and running. Hopefully, this elected democratic government will shortly choose its leadership, and in the very near future I think we'll be able to draw down troops.

But you know, I think Iraqis are more optimistic about their future right now than we are about ours. Some of the surveys have been quite interesting about how optimistic they are about the changes that are coming about in their country.

WALLACE: Let me turn to the situation in Iraq.

Senator Dodd, it has been, as I'm sure you know, more than four months now since the Iraqis went in, millions of voters, to elect a national assembly. They still don't have a government there. Secretary of State Rice went two weeks ago to try to pressure the Iraqi politicians. That didn't seem to work.

There's a report today that the Shiite alliance is close to replacing Ibrahim Al-Jaafari as the nominee for prime minister. Good idea?

DODD: Well, I think it's moving in the right direction, but let me just say here those elections on December 15th -- no new government formed. Here we are in the middle of April. Patience is running out.

If you can't form a coalition government, if the Iraqis are unwilling, the leadership of the Shia, Sunnis and Kurds, are unwilling to form a government, then this isn't going to work. And that's what the generals are saying. That's what others are saying as well here. This is falling apart. Anyone who's paid any attention to this knows that.

With all due respect to my friend from Kentucky here, this is falling apart. It's a mess. Most people know it. And frankly, if they can't get a government formed here with new leadership that represents the future of Iraq, then I think we ought to be drawing down troops immediately, pulling back and telling the Iraqi people until they decide they're going to manage their future, we can't guarantee it for them.

We have given them an option. We've given them an opening here. But they seem to be unwilling to take advantage of it, and people are tired of it at home.

WALLACE: Senator McConnell, two aspects of what Senator Dodd said that I'd like you to pick up on. One, the question of how tough we should get with the Iraqis to get their act together and form a government, and do you think it would be a good idea for Jaafari to step aside so you can get a compromise candidate in there?

MCCONNELL: Look, what I think I hear my good friend Chris saying, and a lot of his democratic colleagues, is that we ought to cut and run. The American people don't think that. They think we ought to stay and finish the job.

I certainly agree with Chris that it's taken entirely too long to form this new government. It looks like they are finally about to achieve that new government. That is extremely important, because we don't want to leave a mess behind.

And I think leaving prematurely is a guarantee that Iraq will become again what it used to be, which was a haven for terrorism and a threat to the area and to us.

WALLACE: Let me move on, if I can. We could be debating Iraq all day. But let's move on, because there are so many trouble spots right now, to Iran.

I was looking at our research. We found statements from both of you from early 2005 in which you both backed the diplomatic track. It is 15 months later, and diplomacy doesn't seem to have worked. We had the new development this week of President Ahmadinejad announcing that they have joined the nuclear club by enriching uranium.

Senator Dodd, let me start with you. Is it time to leave the U.N. Security Council, given the fact that the Chinese and the Russians are dragging their feet, and to get a coalition of the willing to impose tough economic sanctions on Iran?

DODD: Well, I certainly don't disagree with the sanctions option. But I would disagree with your characterization, Chris, that we've sort of exhausted the diplomatic option. We basically outsourced the diplomatic option, if you will. We're on the sidelines here. We've been leaving it up to the Europeans and others.

I happen to believe that you need direct talks. Former Secretary Armitage made the point the other day -- others have as well here -- had we had political leadership in this country in the '50s, '60s, '70s and '80s that had been unwilling to talk to the Soviet Union, had Richard Nixon been unwilling to go to China, think what the world might have looked like had we not engaged these people.

It doesn't mean you agree with them. It doesn't mean you support them. It doesn't mean you have formal diplomatic relations. But there's an option. The Iranians have been asking...

WALLACE: But wait, Senator Dodd, if I may just for a moment, I mean, what I've been hearing from Democrats for years is let's be more multilateral, let's not go it alone. I mean, given the fact that we don't have much of a weapon since we've sanctioned out Iraq -- Iran, rather, didn't it make sense to go along with the Europeans?

DODD: Well, again, we've been basically a non-participant. The Iranians have been very interested for us to be very directly involved, with the Europeans or not. The point is we almost have no contact at all. They are asking us to sit down and talk about Iraq with them because they're concerned about that. That's an opening.

Former Ambassador Richard Haas and the Bush administration has strongly suggested that there is a formulation whereby we may be able to walk Iran back from its nuclear arsenal and simultaneously offer them some things.

I don't think we've been muscular enough, if you will, on the diplomatic front. I don't disagree that we ought to leave the military option on the table, but I don't think we've been working hard enough on the diplomacy side of this.

WALLACE: Senator McConnell, is it our fault that the diplomacy hasn't worked so far?

MCCONNELL: Well, your question to Chris was right on the mark. When the president went into Iraq, they accused him of being too unilateral. And now he's applying a multilateral approach in Iran and they say he ought to be unilateral in Iran.

Nobody thinks -- nobody seriously thinks there is a unilateral solution to the Iranian nuclear crisis. It has to be done on a multilateral basis.

What would be helpful, obviously, is if -- the Russians and the Chinese, even though they agree with us that a nuclear-armed Iran is unacceptable, are at least so far unwilling to act through the U.N. Security Council in a way that could guarantee multilateral sanctions that actually bite and could get the job done.

We've got to continue to pressure the Russians and the Chinese to come on board, along with the British, the French and the Germans, who already agree with us that this is a situation that cries out for U.N. Security Council action and for multilateral sanctions that actually mean something.

WALLACE: Senator McConnell, immigration. The Senate comes back from recess a week from tomorrow. Will the Senate Republican leadership immediately reintroduce that compromise immigration bill that fell apart at the end of last week?

MCCONNELL: Well, I think the Washington Post, which rarely supports Republican initiatives, had it right when they said that Senator Reid insisted on a procedure that guaranteed the bill couldn't go forward.

I think Senator Reid needs to agree to a reasonable number of amendments, 15 or 20 amendments, which is fewer than we normally have on a bill of this magnitude. Once we get an agreement on amendments that will be voted on, I think we ought to bring up the bill.

I think we ought to pass a comprehensive bill with a heavy emphasis on border security but, yes, a guest worker program as well. And just as soon as Senator Reid is willing to give up on what he apparently thinks is a great election year issue and give us a chance, along with his colleague Senator Kennedy, who seems to want to work with us to get a bill, I think we can get one.

WALLACE: But, Senator McConnell, you're saying that the Democrats have to move first before the Republicans will reintroduce the bill?

MCCONNELL: Well, we have to have an agreement to get to the end of a bill. It's easy to bring a bill up in the Senate. What is hard to do is to finish it.

The Washington Post has looked at the situation. They agree that the Republicans have not been unreasonable in asking for a reasonable number of amendments.

Just as soon as Senator Reid agrees to that -- and by the way, Senator Kennedy, who's been the leader among Democrats on this issue, also thinks that our request is not unreasonable -- we can get a comprehensive bill out of the senate.

WALLACE: Senator Dodd, do Democrats want a bill or a political issue for November?

DODD: Well, listening to my friend Mitch, I almost thought we were running the Senate for a minute there. The Republicans control the House, the Senate and the White House. Senator Reid has written to Senator Frist saying after the supplemental vote when we get back next week, the first item of business ought to be the immigration bill, bring it back up.

There were almost 400 amendments filed, the bulk of them, overwhelming majority, by the Republican side. That's death by filibuster and, of course, the majority leader prohibited on two occasions for votes on the compromise bill, the bill being offered by Senator Martinez, Hagel along with Senator Kennedy and Senator McCain. Two times those votes were not allowed.

Clearly, the fault here, despite what the Washington Post may have said, was the Republican leadership. They control the place. They set the agenda. They pulled the bill down because they were unhappy about the compromise. Now, hopefully we can get back to this. It's a major issue. It deserves to be considered. I think we can put a good bill together. You're still going to have to resolve the differences with the House.

And I agree with my friend Mitch here, of course, having a strong border security issue is absolutely critical to any immigration bill. But my hope is we can get back to that very quickly.

WALLACE: Senator Dodd, we're running out of time, but I do want to ask you one last question. In doing research for this interview, I was surprised to see that you're now talking about possibly running for president in 2008.

First of all, how seriously are you considering this? And secondly, do you seriously think that either you or any other Democrat can beat Hillary Clinton for the nomination?

DODD: Well, first of all, I'm speaking to you here. I was in New Haven this week, not in New Hampshire, and around Danbury rather than in Dubuque, so that ought to tell you something, first of all. I'm focusing on Connecticut.

We're a long way away from the nomination process. And certainly, Senator Clinton, if she decides to run, will be a very strong candidate along with many others of my colleagues and others who are considering it at this juncture. But at this point here, I haven't made up my mind about that at all.

WALLACE: We're going to have to leave it there, and I'm glad to see the two of you on this Easter morning agreeing on so many issues. Senator Dodd, Senator McConnell, thank you both for joining us again.

MCCONNELL: Glad to be with you.

DODD: Thank you. You bet.

WALLACE: Up next, former House Speaker Newt Gingrich on whether Republicans are in danger of losing control of Congress as they face the November elections. We'll be right back.

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WALLACE: Many Republicans here in Washington are worried about whether the party will keep control of the House and Senate this November. How much trouble is the GOP in? We turn to the former speaker of the house and possible presidential contender Newt Gingrich.

Mr. Speaker, happy Easter, and welcome back.

NEWT GINGRICH, FORMER HOUSE SPEAKER: Happy Easter. Glad to be here.

WALLACE: I want to start by showing you the latest Washington Post poll that is out recently. Take a look here. Fifty-five percent of voters now say that they plan to vote for the Democratic House candidate in November, while 40 percent back the Republican. That's plus 15 for the Democrats.

By way of comparison, back in 1994 when you led the Republican revolution that picked up 52 seats, Republicans led by only 41 percent to 36, or plus five, one month before the elections.

Mr. Speaker, are Republicans in serious danger of losing the House this November?

GINGRICH: I think they're in very serious danger of having a very bad election this fall. And I think that you have to respect -- when you get poll after poll telling you basically the same thing, you have to respect the right of the American people to say they want change.

And the question for the Republicans in the next 90 days is are they going to become the party of real change, and are they going to learn some lessons and get their act together, or are they going to try to go into the fall campaign focusing one district at a time, hoping that somehow incumbency will survive public anger.

I think it's very dangerous to stay on defense when you get these kinds of numbers, and I would hope they would take a real message to the American people, which is not about general direction. It's about performance, and it's about specific components of what they're doing.

And this is true for the White House and it's true for the House and Senate. And I think, frankly, the debacle two weeks ago on immigration is one more piece of this. The McCain-Kennedy bill and the compromise that followed is so far from the average American that it further widened the gap and raised the danger of Republicans staying home. WALLACE: Well, let me ask you about that, because you keep talking about the Republicans, 90 days, get their act together. In fact, it seems to be exactly the opposite.

In the case of immigration, you had the House pass an enforcement-only bill which a lot of people reject. On the other hand, you had the Senate and Senate Republicans backing a bill that you call amnesty, in effect. So are you...

GINGRICH: Well, that's because it is amnesty.

WALLACE: All right.

GINGRICH: I mean, let's be clear what the bill is.

WALLACE: Well, OK.

GINGRICH: It's amnesty.

WALLACE: If that's true, then both sides have got it wrong.

GINGRICH: I think that's right. I mean, look. I'm not here to be for the House or the White House or the Senate. I'm here to say as a Republican leader that the country tells us what they really want. I mean, the country is very clear about big issues.

The country absolutely wants a voter I.D. card. Eighty-five percent support says in a time we have 11 million illegals, you ought to know it's an American who's voting.

The country absolutely wants control of the border. I would be perfectly happy for the Senate Republicans to bring up a border control bill and have Hillary and Schumer try to stop it.

The country absolutely wants us to insist that becoming an American citizen requires you pass a test in history, in English. These are all 80 percent, 85 percent, 90 percent issues.

Now, I think that we do have to ultimately have a temporary workers program, which I'm very strongly for, and there's a way to design it, as the Krieble Foundation indicated, where you can get 75 percent or 80 percent of the country to agree.

Have a background check. Have a biometric requirement. Have a card that is run by somebody other than the U.S. government, because nobody trusts the government to do this in a competent way right now. I mean, we've had a terrible cycle -- look at Katrina -- of the government not performing.

I would also hope the president would get very angry about the level of non-performance in the federal government and send up a series of bills demanding real change in the federal government.

WALLACE: Let me ask you about another aspect in which some people would say that there's been Republican failure. Earlier this month, House Republicans couldn't agree on a budget bill to crack down on spending.

I want to show you a tough editorial in the Wall Street Journal this week that said -- and let's put it up on the screen -- a Category 5 political storm is building in GOP precincts around the country, and it is going to blow Republicans right out of the majority in November if they don't soon give their supporters some reason to reelect them.

Mr. Speaker, are Speaker Hastert and Majority Leader Boehner the right people to turn things around?

GINGRICH: I think they certainly have that potential. And they're the people who are going to have to turn things around because they're in charge. The fact is we're the party of taxpayers who pay for the pork. We are not the party that applauds the pork.

And I think sometimes incumbents forget that we're sent here to reform Washington. We're not sent here to be coopted by Washington. And I think this is a very real identity challenge for the Republican Party.

WALLACE: But I mean, that's a nice speech to make. But in fact, if you look at issue after issue, whether it's spending where the appropriations chairman, Jerry Lewis, opposed this bill that cut down on spending, or Boehner and Hastert, who seem to have backed off dramatic lobbying reform, I mean, truth to tell, haven't Republicans grown all too comfortable with power in Washington?

GINGRICH: Well, I said a couple minutes ago I believe for the Republicans to succeed in '06 and '08, we need real change, because I agree with you, what you just said.

Now, my hope is that looking at these numbers, going back home, listening to their constituents, that Republicans are going to come back to Washington determined to make a real difference and determined to change.

My hope is that the president, who's also looking at these numbers, is going to realize that the country is sending a signal. It's not a signal that they want liberal Democrats. The country does not want a contract with Vermont and San Francisco. The country does not want to go dramatically to the left.

But the country does want a much higher level of reform and tougher sense of performance.

WALLACE: So what do you do? I mean, first of all, you're talking about sort of a personality transplant in 90 days. There's no indication whatsoever that the people that are leading the House are interested in a Republican revolution.

GINGRICH: I'm not talking about a personality transplant. I'm talking about a group of 230-some elected officials getting together in a room, which we used to do all the time, and having a real argument, talking through a real strategy. I'm talking about the senators on the Republican side getting together. And I am saying that if the president would aggressively look at the failures of performance of the bureaucracy and lead the Congress toward changing the bureaucracy, that the country could, in fact, get very excited again about the opportunity to make government work.

And today, if you look at the response after Katrina -- and it's going to be really bad by September when we go back and have a one- year review and we realize how much of New Orleans is not fixed as of this coming September.

All I'm saying is, as a leader of the party, as somebody who's been down this road many times -- I first ran in '74 the middle of Watergate. I got beat. I mean, I'm just telling you, you know, I've been down these roads. And I ran in '82 when we lost 29 seats. So I prefer to run in a year where we have a win behind us.

Nothing in the polling you've shown me and nothing -- any pollster I've talked to says we have a win behind us. That suggests to me we had better think through tacking the sailboat, not just sailing into the storm blindly.

WALLACE: You made a stir this week with a speech in South Dakota in which while, on the one hand, you continued to support the basic -- or you certainly didn't call for cut and run, after I read the full speech and not some of the news reports about it. You did say that the U.S. has made major mistakes in Iraq.

Do you agree with any of the criticism from those six retired generals that Secretary Rumsfeld went in with too few troops, went in without a plan, hasn't been listening to the generals?

GINGRICH: Look. First of all, Don Rumsfeld listens to generals. He doesn't obey them. We have civilian control. The president is in charge as commander in chief. The secretary of defense works for the president. The generals advise. The generals don't control.

But to say that Tommy Franks is not a general, to say that John Abrams is not a general, or Abizaid is not a general, to say that the people in charge of the Afghan campaign weren't military officers -- that's an absurdity.

The fact is the old Army would have had six divisions in Afghanistan. The president and the secretary rejected that plan and insisted on a special forces air power system that worked. The old Army would have used 600,000 men.

And by the way, you can make a case, and I think it's a fair case, that Bremer's decision to disband the Iraqi regular army in June of 2003 -- and I said this in 2003; this is not hindsight -- that that was a mistake, given the size of the force that the secretary and General Franks created.

The secretary and General Franks created exactly the right size force to liberate Iraq, create an Iraqi interim government by June or July and pull back. It was the wrong force -- and Shinseki would have been right and Colin Powell would have been right -- if our goal was to occupy Iraq.

Bremer was confused. He behaved as though he had a 600,000-man force when, in fact, he had...

WALLACE: Rumsfeld agreed.

GINGRICH: Listen, I agree. I think that's the one major mistake you can say the secretary's made. Remember, the generals who are complaining now are symptomatic of the fact that in August of 2001, before 9/11, there was a cover of a major magazine that said Rumsfeld would be the first to go because the old Army was already objecting in August of 2001 to the kind of changes that are underway in the Pentagon.

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

GINGRICH: Thank you.

WALLACE: And we look forward to having you back again.

GINGRICH: Have a happy Easter.

WALLACE: Thank you. Same to you, sir.

Coming up, our panel of Sunday regulars on the retired military brass who are taking aim at Defense Secretary Rumsfeld. I promise, you won't want to miss this.

(BEGIN VIDEO CLIP)

MAJ. GEN. JOHN BATISTE (RET.), U.S. ARMY: We also served under a secretary of defense who didn't understand leadership, who was abusive, who was arrogant.

(END VIDEO CLIP)

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(BEGIN VIDEO CLIP)

DONALD RUMSFELD, SECRETARY OF DEFENSE: Out of thousands and thousands of admirals and generals, if every time two or three people disagreed we changed the secretary of defense of the United States, it would be like a merry-go-round.

(END VIDEO CLIP)

WALLACE: That was Defense Secretary Rumsfeld and one of the six retired generals who have called for his resignation.

And it's time now for our Sunday regulars, 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, I have to say that ever since the generals started going after Donald Rumsfeld, I have been looking forward to this discussion. So let's have at it.

Brit, what do you make of the criticism and the critics?

BRIT HUME, FOX NEWS WASHINGTON MANAGING EDITOR: Well, the only problem I have with the criticism is that there doesn't seem to be anything new about it. Rumsfeld is not being attacked, as far as I can tell, for the recent conduct of the war in Iraq, the recent policies put in place, for what Generals Casey and Abizaid are doing over there now.

This all seems to be about the decisions that were made when we -- before we went in about the size of force and all that. Now, that is a debate that we have had in this country. In fact, I think it's fair to say that we had it, really, almost in the 2004 election. It was there to be argued.

Abu Ghraib prison came and went. Rumsfeld offered to resign over that. His resignation was not accepted. His resignation is not going to be accepted. So while I suppose it's interesting that these generals -- and there are a great many other generals, I'm sure, who do not like Donald Rumsfeld and didn't like him before this war because of the changes he sought to bring about in the Pentagon.

Now, I'm not attributing ill motives to these people. It just seems to me that they're making a new call for resignation based on an old argument.

MARA LIASSON, NPR: Yes, but it is a fact that now there is this call, and it has been building slowly. It's not like they all came out all at once. I mean, it was kind of one after another. And there have been some people, including our colleagues here, who have been suggesting that he step down for quite some time.

But I do think that it is a political fact of life now that adds to the difficulties of this administration. I don't think this would be happening at a time when the administration was wildly popular.

It also hurts the credibility of any decisions that are going to be made about the military in the near future, whether it's a possible strike on Iran, drawing down troops in Iraq. All those things are now going to be questioned.

WALLACE: Bill, do you agree? Are you satisfied by Mr. Hume that it's just a bunch of new fuss over old arguments?

BILL KRISTOL, WEEKLY STANDARD: Well, it was an old argument. I think I was for removing Rumsfeld before removing Rumsfeld was cool. And you know, I thought the president should have accepted his resignation in 2004 or should have made a change when Powell left in the interregnum after the president was reelected. The president chose otherwise. And we have had Secretary Rumsfeld for the last year-plus.

The question for me is going forward, who is the best person to lead the Defense Department in the ongoing war in Iraq, in dealing with Iran, in the global war on terror. I don't think Rumsfeld is the best person. Others disagree. The president appears to disagree. We'll see what happens.

Look, the president had to put out that statement this week. I do think that Rumsfeld is right in a sense. You can't have a few retired generals pop up suddenly, and the president looks like oh, my God, I can't support the secretary of defense.

The question is, three weeks from now or three months from now, whether they don't have a private conversation and Rumsfeld decides -- he is a patriot -- that Rumsfeld decides that really, for the next two years, the best thing for the country is to have a new secretary of defense.

WALLACE: Is that just wishful thinking or do you really think that's going to happen?

KRISTOL: It's partly wishful thinking. But look. He's a serious guy, Rumsfeld. And he really has to ask himself what can I accomplish now at the Defense Department. He's done his transformation thing. It hasn't worked out terribly well, but fine. He's trying to change the military. He'll make one last round of appointments of senior generals this summer. I guess he might want to stay for that.

But at that point, he can't honestly believe that he's the best person to unite the country on moving forward in Iraq and on doing what we have to do with Iran. I don't think he really can believe that. I don't think the president can believe that. And I think at that point he might step down.

JUAN WILLIAMS, NPR: Well, you know, in a way I think what we've been going through in Washington -- and this is part of it -- is nothing new, as Brit said. But it has to do -- there's a new book coming out. Anthony Zinni, who's a long-time critic of Rumsfeld, has come forward and made his statement.

Now you have this kind of gathering storm of antagonism toward Donald Rumsfeld. But of course, the key vote comes from the president, and the president seems stalwart in his defense of Rumsfeld, calling him Don in the statement that he put out. The Pentagon has put out this statement for all the retired generals who want to defend him, so they're engaged in their own offensive now to support Donald Rumsfeld.

But I think that what it comes down to is people having a sense that the war effort, the justification for the war, the way the war has been led has just been problematic. And people are not going back and arguing about weapons of mass destruction, who knew what when, with the Washington Post story this week saying that the president was talking about these mobile weapons labs after defense people had told him they weren't being used for weapons of mass destruction.

And I think the whole notion of...

HUME: No defense people ever said that to him. There's not a speck of evidence to that effect, Juan.

WILLIAMS: Well, there is. There is...

HUME: No, there's not.

WILLIAMS: There's evidence that this special group...

WALLACE: Well, wait. Wait, guys. With all due respect, we're off the subject of Rumsfeld.

WILLIAMS: OK. Let me go back to Rumsfeld for just a second and say that people are now questioning whether or not we should have put more people on the ground -- I think that's the heart of this argument -- and really done a job of wiping out Saddam Hussein in some effective way and anticipated that the insurgency would last this long. People are just frustrated with that.

WALLACE: I want to ask Brit a question about this.

Let's take your point, which is that a lot of this is stuff that's been talked about and talked about...

HUME: This is not the news. This is the olds.

WALLACE: Right, so let me ask you about the news, or at least the possible news that Bill has raised. Is Don Rumsfeld the right guy to be leading the war, leading -- and is he the best secretary of defense for the war effort going down the line?

HUME: Well, I think you have to ask yourself the question then what is it that you need to be to be the best person. Bill suggests that you have to be the person who's capable of uniting the country.

You're not going to unite this country on this conflict. No one is going to be able to do that, not Rumsfeld, not anybody else. The question is, in the midst of this conflict, in which there's transformation -- Bill suggested he's done his transformation thing. My eye. That is underway and continuing.

The resistance to it is alive and well inside the Pentagon and outside among retired generals who think it all ought to be done a different way.

So who is tough enough to take the hits and keep this going and carry out a policy that the president clearly supports? My sense about it is that given the level of support he's got and given Rumsfeld's evident toughness, that he may very well be the guy.

LIASSON: Yes. I mean, first of all, the decision will be made by Rumsfeld himself and the president. I think those are the only two people involved in this. I can imagine a time -- not now; I agree with bill, not now, not even three weeks from now, but at some moment where there's a benchmark met, like a new government in Iraq, or some kind of a success where Rumsfeld might himself decide that, you know, this is a more politic time to step down.

But one of the things that this debate by the retired generals has raised is all of those assurances that the president and the secretary of defense made that the decisions about troop levels, the decisions about certain things that were done in Iraq were all done by commanders in the field and not by the civilian leaders -- I think this...

HUME: Who said they were not and which generals say now that were involved in the process of making that war plan and carrying it out -- which of those generals has now come forward and said he wouldn't listen to me? Has any? Has Tommy Franks said that?

Have any of the other generals associated -- he's retired. He's out there. If his war plan were overruled, he could say so now. Is he? No. He's saying quite the opposite.

KRISTOL: Look, we're supposed to have a civilian in control of the military. Rumsfeld was entitled to insist on a change in the original war plan he inherited which, at 380,000 troops...

LIASSON: Which he didn't like, yes. KRISTOL: ... which he didn't like. He and Franks whittled it down to 150,000 troops and then he refused to send the 1st Division, I think contrary to Franks' request. But look. He is the secretary of defense. He made those decisions with the president's, obviously, approval and support, and he was entitled to.

And we shouldn't second-guess every detail of the way these decisions -- these are tough judgment calls. You have to step back and say on that, has he been successful in running the war in Iraq. That is his greatest single Responsibility. And I would say no, that he has consistently been wrong and stubbornly wrong on what was needed.

He's a patriotic man. He did his best. He was just wrong. And I don't agree that the transformation agenda is going anywhere in the next couple of years, and I do think you could unite the country more behind what has to be done in Iraq.

There's still bipartisan support for staying the course there and winning, and there will be bipartisan support, I think, for dealing seriously with Iran. And it would be helpful to have a new secretary of defense and to take a fresh look at what's happening in Iraq and to rally support for what we have to do in Iran.

LIASSON: Yes. My only point was that it's disingenuous for him to say that the decisions on troop levels and all those things were made by commanders in the field. Of course they're made by him, and rightly so. And that's how things should work.

WILLIAMS: One last point on this, which is just -- you know, my concern is what happens going forward, especially inside the Pentagon, inside the military. I think this has been -- I mean, the argument that comes from some that you can't have military people bickering with the secretary of defense seems to me rational, especially people who are in the line of order, you know, in the hierarchy.

The retired guys should have the right to say something. But my sense is that these guys are speaking for people who are still inside the military line of command and who are dissatisfied with Rumsfeld, who feel that he is arrogant and difficult to work with, difficult to respond to.

If that's the case going forward, there's going to be a real problem in our military. The long knives are going to be out, one general after another, who's in Rumsfeld's camp, who's not. That's a problem.

HUME: Let's ask this question, Chris. We've had most recently two Rumsfeld critics, Ralph Peters and David Ignatius, come back from Iraq and they reached the same conclusion, although from a different starting point, which is what's going on over -- they got it right now. Abizaid and Casey have put in place the right plans and policies and people to do the job now going forward.

Let's listen and see if these generals are critical of what's happening now. If they're still angry and upset about what happened three years ago or more, then I think we can dismiss that. If they have something intelligent and useful to say about what we're doing now, then I think we ought to take that very seriously. I don't sense that they do. They seem not to.

WALLACE: We do have to take a break here. Just to point out how completely convoluted this is, Ignatius, who, you're quite right, came back and said things are going pretty well in Iraq -- he's a columnist for the Washington Post -- this week called for Rumsfeld to step down, so...

HUME: He doesn't like Rumsfeld and never has, which is why what he said about what was happening over there was so striking.

WALLACE: All right. We have to take a break here. But coming up, Iran stages a nuclear show for the world. How far along is their program? How immediate is their threat? Some answers from our panel after this.

(COMMERCIAL BREAK)

WALLACE: On this day in 1972, Apollo 16 departs for space. It was the fifth mission to land on the moon. Astronauts used the lunar rover vehicle to collect more than 200 pounds of rocks.

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

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

KARL ROVE, WHITE HOUSE DEPUTY CHIEF OF STAFF: But this guy had a sense that he was -- you know, that he was mystically empowered and as a result transfixed the audience. Now, that is not a rational human being to deal with.

(END VIDEO CLIP)

WALLACE: That was White House Deputy Chief of Staff Karl Rove talking about how Iran's president, Ahmadinejad, felt he had a halo around his head as he spoke at the United Nations a few months ago.

And we're back with Brit, Mara, Bill and Juan. Well, Iran's president held quite a show this week to announce that they are joining the nuclear club.

I know, Brit, you like to call it the uranium Olympics.

HUME: I owe that to Corbett Reiner (ph) on the Special Report's staff, who said it looks like the uranium Olympics.

WALLACE: Well, it's a good line. Here you can see part of the uranium Olympics, the opening ceremony. And if that wasn't alarming enough, the president said again that Iran faces annihilation. Let's look at this quote. "The Zionist regime is a rotten, dried tree that will be eliminated by one storm," with the possible implication that that could be a nuclear storm.

Juan, how worried should we be by what happened in Iran this week?

WILLIAMS: Well, only in limited sense. I mean, obviously, the fact that they are staging what looked like a high school play with that phony backdrop on the stage -- that has a lot to do with generating support for what is a troubled regime that has trouble at home and is trying to secure itself and to make themselves out to be, you know, standing against the great United States, against Israel, all the rest.

But according to the experts, there's no way that they're going to have the potential to actually use nuclear weapons for many years to come. So in the short term, I don't think there's a great deal of need to worry.

It's the long term -- it's the idea that this guy is going on talking about wiping Israel off the earth, wiping the United States out. And the contrary thing is what about the allies here. You know, this morning the British say they're not necessarily going to join on board. The Russians...

WALLACE: Well, for military action.

WILLIAMS: Right. There's a lot of just concern about the U.S. taking military action and that it could spawn additional terrorist attacks because it could sort of, you know, create a coherent -- it could bring together all of the factions who are interested in perpetrating terrorism, even at a time when we're trying to get Al Qaida under control.

WALLACE: Brit, before we get to the question of what the allies are going to do and what U.S. policy should be, are you as sanguine as brother Williams is here about the fact that there's not a threat?

HUME: I think Juan's got it about right on that. I mean, I think that the one thing that came out of this was a discussion of experts that, you know -- these people have come up with 164 centrifuges, and it would turn out that they would need tens of thousands of them, which means that they are some way off from being able to have a serious weapons program. It means that there's time.

It means one other thing as well, that while the administration may let the discussion of military options flower in a few quarters, although they're not really saying -- officials are not saying it themselves, it does have the effect of focusing the world's attention and the world's diplomats.

One of the things that we've learned in recent years in dealing with the Middle East and much of the rest of the world as well is that often the only way to get the U.N. or the Europeans or anybody who you want to work with you going is when they start being afraid not of the real threat from the outlaw governments but afraid of what the United States will do.

And I think that that's probably a useful thing. But I think when the administration officials like Condoleezza Rice say that they are content now to let diplomacy run its course, I think that's true, and I think that's what's happening.

WALLACE: Mara, are you content to let diplomacy run its course?

LIASSON: Well, look. I think that Iran having a nuclear weapon is a big problem. I think that whether it's one year or 10 years away, they're moving toward that goal. And so far, I don't think the administration has come up with a way to stop them.

I mean, there's been a lot of talk about trying to get this to the Security Council and impose sanctions. China and Russia don't want that to happen. And there's no guarantee that sanctions would derail this nuclear program. At least that was the first hope of maybe uniting the international community on this issue, but it certainly wasn't a guarantee that they were going to stop. And the military option -- we hear reporting to two completely different ends. One, Seymour Hersh in The New Yorker saying that we're on the verge of some kind of military strike, and then the other reporting is that we're nowhere near that, and the administration has no interest in doing that at this time.

So it looks to me like Iran is moving forward with its nuclear ambitions and so far the West has not figured out a way to stop that.

WALLACE: Bill, the word out of the State Department by the end of the week was we're going back to the U.N. Security Council. Sean McCormack, the spokesman, talked about asset freezes and travel bans on Iranian diplomats. I mean, is that tough enough, quickly enough?

KRISTOL: No. And I disagree strongly with the complacency on all sides of me here about the Iranian nuclear program. To say that this was like a high school play and to laugh about it -- Nuremberg was like a high school play.

This is the unquestioned leader of that country with the support -- he spoke, and Khamenei spoke as well. And they are going for nuclear weapons, and they're committed to destroying Israel, and they are committed to doing damage to us.

And the president's doctrine is you cannot let these kinds of regimes have these kinds of weapons. And nothing is going to change. It's not going to be easier to take them out five years from now.

We do not know how close they are to nuclear weapons or to at least having an internal process that will put them on the path to nuclear weapons. And it's getting harder. There's a story today...

HUME: So, Bill, what to do? What to do, Bill? What to do?

KRISTOL: What to do is to be serious about destabilizing the regime and to be serious about preparing for a military strike.

HUME: Why do you not believe that that's so?

KRISTOL: We're doing nothing -- because we're busy reassuring everyone: God forbid, we're not thinking about a military strike, we're on a diplomatic path now.

We should be serious about -- I believe there's no serious preparations in the Defense Department right now for a military strike, which we need to be serious about...

HUME: Well, I think you're wrong.

KRISTOL: ... and I don't think we're doing anything covertly in a real way. And we're not challenging Iran...

WILLIAMS: Let me ask you a question.

KRISTOL: ... politically. WILLIAMS: What if it's simply the rantings of an impotent and ineffective government, a man who is a religious fanatic, Ahmadinejad, and you are going to therefore take the risk of destabilizing the entire region and possibly kicking off World War III? I think I would urge caution, Bill

KRISTOL: The entire region is unstable. And it is partly unstable because Iran is seeking nuclear weapons -- Iran, a state that has unquestioned terror ties. It wasn't just Ahmadinejad on that platform. Khamenei was on that platform. Rafsanjani is for the nuclear program.

They know what they're doing. This is not one guy just talking. Who's giving the orders to expand the uranium conversion site in Isfahan, which is reported today, or reinforce the Natanz underground uranium enrichment site?

WILLIAMS: Do you think you might be making...

KRISTOL: Is that just one guy?

WILLIAMS: Do you think you might be making a monster, a giant, out of people, a government that really doesn't have the power to do much here, except to stick a finger in our eye and to curse the Israelis, and therefore to excite us and possibly get us to do something that we're not fully understanding of all the repercussions, at a time when we're already engaged in Iraq?

KRISTOL: It needs to be thought through, and people need to be serious about thinking it through. We have a long piece in The Weekly Standard this week by Reuel Gerecht really going through the pros and cons. You can't just say military action, one shot deal. There would be real follow-on consequences which we have to be ready for.

But to say that this isn't serious or that we think -- or we can be confident that we have years to deal with this -- we don't. And to be more precise, George Bush cannot leave office with this regime in Iran on a path to acquiring nuclear weapons.

WALLACE: So, Bill...

KRISTOL: It totally undercuts the entire achievement and thrust of his foreign policy.

WALLACE: We've got about 15 seconds, 20 seconds left. Are you saying that you'd basically give up on the idea of economic sanctions and diplomacy?

KRISTOL: I would accelerate and make much more urgent the push for economic sanctions and not let this go on for two or three years.

WALLACE: We're going to have to leave it there. Thank you, panel. That's it for today. See you next week.