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Mark Levin, John Warner, Arlen Specter, Peter King, Roundtable

Fox News Sunday

CHRIS WALLACE, HOST: I'm Chris Wallace. Iraq's prime minister offers insurgents a major new amnesty plan, next on "Fox News Sunday".

The war in Iraq comes to Congress. What does the debate mean to soldiers in the field and politicians at home? We'll ask the leaders of the Senate Armed Services Committee, Republican John Warner and Democrat Carl Levin.

Another secret White House program to fight the war on terror is revealed. And Republicans take the immigration debate to the people. We'll talk both issues with two key players, Senator Arlen Specter and Congressman Pete King.

Plus, the arrest of alleged homegrown terrorists. And did the New York Times compromise national security by disclosing a program to track terror plots? We'll hear from our Sunday regulars, Brit Hume, Mara Liasson, Bill Kristol and Juan Williams.

And our Power Player of the Week, the most important presidential adviser you never heard of, all right now on "Fox News Sunday".

And good morning again from Fox News in Washington. Let's get right to the news out of Iraq. Prime Minister Nouri al-Maliki outlined today a 24-point national reconciliation plan.

Here are the key points: An unspecified timetable for Iraqi forces to take over all security, but no details on the withdrawal of coalition forces; a general amnesty to insurgents who have not been involved in terror attacks; and a new outreach to Sunni rebels.

Also, General George Casey, the top commander in Iraq, has drafted a plan to cut the U.S. military presence there over the next three years. According to the New York Times, the Casey proposal would begin in September when two combat brigades, about 7,000 troops, would leave Iraq. The Pentagon refused to confirm the report.

And joining us now to discuss the day's breaking news are the two leaders of the Senate Armed Services Committee, Republican John Warner and Democrat Carl Levin.

Senators, welcome back to "Fox News Sunday".

SEN. CARL LEVIN (D), MICHIGAN: Good to be with you, Chris.

WALLACE: As we said, the new Iraqi prime minister offered a general amnesty plan today that excludes any acts of terror but leaves unclear what happens to those who have attacked American troops. Senator Warner, should the president -- should the Congress make it clear to the Iraqis that there can be no amnesty for anyone who has killed Americans?

SEN. JOHN WARNER (R), VIRGINIA: First, Chris, this is a very positive step forward by the Maliki government. And mind you, he has drafted a plan -- it's to be disseminated to all 24 provinces -- to get the grassroots response in an effort to have a healing effect and put behind us the differences in Iraq and bring to the forefront a consensus, and hopefully the council, which is their congress, will work on it.

Now, to your question, I want to say up front last week we had a vigorous debate in the Senate. My good friend right here -- and we've been together 28 years on this committee -- we differed strongly. He wanted to lay down -- although a sense of the Senate -- something in the nature of what we felt was a timetable. We were defeating that.

Now, far better that we turned that back and allowed the Iraqis this morning to show their exercise of sovereignty and to bring up this question than to have them react to what the Congress may have said last week.

WALLACE: But, Senator Warner, I want to press my specific question, which is on the question of amnesty for anyone who has attacked U.S. troops, should the U.S. -- should the president and the Congress say that's a non-starter?

WARNER: There's an interesting thing here that both the United States and the Iraqi government have said we're going to do steps in consultation with one another.

We will, our government, be in consultation -- not dictating, but in consultation -- on the points, all 24 points, as well as the one questioning how you treat those who fought in various ways against the forces that we had when they came in and today fighting the insurgency.

So I think at this point, it wasn't clearly defined, and it will be, and we will have, I'm sure, in consultation, a voice in how that's defined.

WALLACE: Should we just have a voice, Senator Levin, or should we make it clear amnesty for people who killed Americans is a non- starter?

LEVIN: Absolutely, we should. We had a vote in the Senate and most Democrats and, I think, a few Republicans joined in trying to task the Senate a recommendation to the president.

For heaven's sake, we liberated that country. We got rid of a horrific dictator. We've paid a tremendous price. More than 2,500 Americans have given up their lives. The idea that they should even consider talking about amnesty for people who have killed people who liberated their country is unconscionable.

Now, apparently, the White House decided they didn't want us to do that, and so most of the Republicans squelched our effort, and we lost it. But it was worth the effort because there should not be amnesty for people who kill the liberating forces.

WALLACE: I have to say, Senator Warner, I'm a little surprised at your reluctance to go along with Senator Levin on that.

WARNER: My reluctance is to recognize their sovereignty and it is a consultative process. I'm personally strongly against any amnesty, but I do not wish the Congress last week to speak specifically to it nor I speak specifically this morning, other than to say personally that's my view.

I want the Iraqi people to take this decision unto themselves and make it correctly. And I hope it comes out, as you say, no amnesty for anyone who committed an act of violence, of war crimes.

WALLACE: All right.

LEVIN: That's all our effort did, Chris, was a recommendation to the president. It was an expression of our opinion, there should not be amnesty. Of course, they're sovereign. They're going to make their own minds up.

But we have a right to express our opinion, and that's what we tried to do last week, and that's what was squelched by the White House.

WALLACE: All right. Senator Levin, there's also a report today that General Casey, the top U.S. commander of all foreign forces in Iraq, has laid out a plan to the Pentagon under which 7,000 U.S. troops would be pulled out by September and an additional at least 30,000 by the end of 2007.

Now, you've been asking for a timetable. You put out a resolution this week that called for getting some troops out by the beginning of the year and a timetable for further withdrawals. Are you willing to take yes for an answer?

LEVIN: Of course. Frankly, it's one of the worst-kept secrets in this town that there is going to be reductions in our forces, redeployments in our forces, before the election. I mean, it's obvious what's going on here.

When we offered a resolution not with a fixed timetable for the final departure of American troops, most Democrats voted against that. That was the Kerry resolution.

We didn't think there should be a fixed timetable for the ending, but we did, almost all the Democrats, including all of the Democratic Senators who are considering running for president, then coalesced around the so- called Levin-Reed resolution which simply urged the president -- urged the president -- to begin the phased redeployment of American forces from Iraq by the end of this year.

The White House didn't want to do that, and so it was rubber- stamped by the Republican-dominated Senate. They just went along because the White House said no. But let me tell you something, it will be the greatest shock in this town -- it would be like a tornado hitting this town, frankly -- if there's not a reduction in our forces prior to the election.

It will be time for that by the administration, and I don't have the slightest bit of doubt that that's what's going to happen.

WALLACE: Now, this is twice now you have linked this to the election, so let me ask you, do you think the decision to pull troops out is a military decision or a political decision?

LEVIN: It should be a military decision. General Casey at the Pentagon a few days ago said he believes there will be fairly substantial troop reductions this year. Of course, when we say military decisions, ultimately, it should be a civilian decision.

But it shouldn't be a political decision, but it is going to be with this administration. It's as clear as your face, which is mighty clear, that before this election, this November, there's going to be troop reductions in Iraq, and the president will then claim some kind of progress or victory.

WALLACE: Senator Warner, is the Pentagon -- is the White House playing politics with troop withdrawals?

WARNER: No, I don't think at all. And a matter of fact, if you'll see what Secretary Rumsfeld said, and the fact that the White House will not confirm this leak -- it is a leak. It's not an official pronouncement. It's a leak to the press.

WALLACE: You're the chairman of the Senate Armed Services Committee.

WARNER: That's correct.

WALLACE: Let me ask you a question. Is it true?

WARNER: I met with General Casey, and Rumsfeld, and Pete Pace, and two or three other senators. Carl was in the room. We were trying to manage a bill, so we were in and out of the room.

But I specifically asked a question about the troop withdrawal schedule. He said we're going to adhere to -- the ground conditions will dictate it; together with the military professional opinion, we'll make a recommendation to the president.

Did he draw up a plan? Well, of course the department's drawn up plans at all times, but I think it would be wrong now to say that this is the plan that we're going to operate under, because I come back again, Chris -- there's only one point I want to make.

We have struggled and made tremendous sacrifice to give this nation its sovereignty. They are now beginning to exercise this sovereignty with a young government. Give them a chance to move out. We will consult with them. I'm confident our government will not let them make mistakes that would reflect adversely on troop withdrawals or amnesty or otherwise.

But give them the chance to move out in this release by Maliki. Specifically, we will look at levels of troop withdrawals. They want to get their own assessment of how fast their forces can come up before we have any timetable as to firm, fixed troop withdrawals.

WALLACE: All right. Gentlemen, I want to move on to another issue involving Iraq. The military this week charged 12 servicemen with the murder of Iraqis in two separate incidents, and it was also revealed today that they've charged two other soldiers in another incident.

And as we all know, they're still investigating Haditha and the death of 24 Iraqi civilians there. Here's what Democratic Congressman John Murtha, one of the leading critics of the war, had to say about Haditha. Take a look.


MURTHA: Our troops overreacted because of the pressure on them and they killed innocent civilians in cold blood. We can't operate -- we can't sustain this operation.


WALLACE: Senator Levin, first of all, is Murtha right about Haditha or is he involved in a rush to judgment about an investigation that hasn't even been completed yet? And secondly, are these isolated incidents, or is Murtha right when he says that they say something about the overall mission going wrong?

LEVIN: Well, the evidence is really very compelling that we've seen that there was at Haditha killing of innocent people. I mean, it's overwhelming evidence. Should we reach a final judgment on that? We should not.

These people should be given their rights in court, will be given their rights in court. But the evidence, I've got to say, is kind of overwhelming as to what happened when you look at the reports that came out of Haditha.

WALLACE: And what about the idea that this says something about the overall mission?

LEVIN: I think that we've, frankly, been there so long that we're going to see quite a few of these incidents. They're intolerable. We train our people not to kill innocent folks. But will there be a few of these? I'm afraid there will be. There are in other wars. There will be in this war and are, I'm afraid, in this war.

But is it a pattern? No. I think 99 percent of our troops are fighting professionally. They've been trained well. I hope it's not a pattern, but there will be a few.

WALLACE: Senator Warner? WARNER: You know, we must always remember that now we've passed the 2,500 mark dead, 18,000 to 20,000 wounded. These men and women have gone -- you know, basically, a million men and women of the armed forces, together with associated civilians, have gone over, performed their duties professionally and come back home.

Now, these are incidents that, to the credit of the military, are being fully investigated, Haditha being investigated by an Army general. He will be issuing a report. I think he has sent it to the top levels now. It will eventually come to the Congress for examination.

Our committee, Senator Levin and I, will be very prompt in providing oversight as to how the Army went about the procedures and the findings. But when you say the evidence is overwhelming -- we must wait until all the evidence is in before we describe it as overwhelming or otherwise conclusive.

LEVIN: There's also evidence of a cover-up here, too, by the way. It's not just evidence of wrongdoing at the events on the ground, but it was a very long period of time before the Army acknowledged that...

WALLACE: Well, I must say, the L.A. Times, which supposedly got access to the Bargewell report, says that there was no knowing cover- up, that there were people who failed to ask questions.

WARNER: We should not comment until that's before the Congress.

WALLACE: All right. We've got a little over a minute left, and I'd like to get one last issue, and that is North Korea and reports that they are preparing to test a long-range missile.

Senator Warner, what's the latest information you have on whether they are going to launch that missile? And have U.S. missile defenses been put on alert to strike it if it approaches U.S. territory?

WARNER: I talked with the Security Council last night and again this morning and the White House. And frankly, we don't know exactly what the status is, whether it's been fully refueled or what the problem is. The weather is closing in now, which would not make it an optimal time to try and test it.

But it's the wrong thing for them to do, and that message has been sent by our administration. Russia has joined us, China, other countries in that area, Japan.

WALLACE: Have U.S. missile defenses been put on alert?

WARNER: You can anticipate that such missile defenses that we have now in place -- and it's been a struggle through the Congress to get the money to put these defenses in -- they will be utilized to the extent they can.

There's some limited operational capability to our research and otherwise development program on missile defenses, and you can assume that if it is necessary that it will be utilized.

WALLACE: We're going to have to leave it there. Senator Warner, Senator Levin, we want to thank you both so much for coming in today.

Up next, the split within the Republican Party over immigration, and a secret White House plan to fight terrorists is revealed. We'll discuss both with two key players right after this.

WALLACE: With the news this week about another secret White House program in the war on terror and a new fight among Republicans over immigration reform, we want to talk with two key players on both issues. Arlen Specter, chairman of the Senate Judiciary Committee, is in Philadelphia, and Pete King, chairman of the House Homeland Security Committee, is in our New York studio.

Gentlemen, welcome back to "Fox News Sunday".

KING: Good morning, Chris.

SPECTER: Nice to be with you, thank you.

WALLACE: Let's start with the revelation this week that the Bush administration has for years been tracking the financial transactions of terrorist organizations.

Senator Specter, you have been very critical of the NSA warrantless wiretap program, saying that without judicial review it is a, quote, "blotch on America". Do you have the same concerns about this program?

SPECTER: The tracing of the bank records is different. Since the program broke on Friday, my staff and I have been doing some research, and it appears preliminarily that the same kind of a privacy interest, Chris, does not attach to bank records which does to conversations.

I believe that there needs to be judicial oversight on wiretapping, where you hear conversations, where there is an expectation of privacy, and that is different from the bank records.

And we're getting close with the discussions with the White House, I think, to having the wiretapping issue submitted to the Foreign Intelligence Surveillance Court.

Now, respect to the bank records, I think we need to know more. We just have a newspaper report and, frankly, that's not sufficient for congress to discharge its congressional responsibility for constitutional oversight.

We're having the attorney general in in a couple of weeks, and we'll have a chance to get into this program and have some oversight, which I think will be effective. WALLACE: I don't want to get too much into the weeds, and I want to bring Congressman King into this, but you did say something there that I thought was -- several things I thought were interesting. One was that you indicate that the White House may be willing to submit the NSA warrantless wiretap program to the FISA court?

SPECTER: Well, we're having a lot of conversations about that. After the vice president and I exchanged some letters, he said he was serious about discussions. We've had discussions. And I've talked to ranking officials in the White House, and we're close.

I'm not making any predictions until you have it all nailed down, but I think there is an inclination to have it submitted to the Foreign Intelligence Surveillance Court, and that would be a big step forward for protection of constitutional rights and civil liberties.

WALLACE: And secondly, Senator Specter, you talk about the fact that you want to exercise congressional oversight. Briefly, does that mean that you want Senate Judiciary Committee hearings on this financial tracking, or the so-called Swift program?

SPECTER: Well, I'm not prepared to move to hearings yet. First, I want to have the attorney general on the record to find out what we can from him. That's a very high-level hearing. We need to know the specifics.

It's not enough, Chris, as I know you understand, to read about it in the newspapers. We need to know what the program is, how far it is. When the report is made about administrative subpoenas, that is a form of a legal process.

But to make a really proper evaluation, we need to know more, even though there is not the same privacy interest in bank records.

WALLACE: Congressman King, let me bring you in on this as well. From what you know, do you have any problems with the Swift program, this tracking of financial records? And what about the argument that even if it was an emergency after 9/11, that five years after the fact, this has become a permanent program, and that you should get approval from the courts and Congress?

KING: Chris, I think the administration acted entirely appropriately. The 1976 U.S. Supreme Court case gives them, to me, the absolute right to do this. They're in full compliance with all statutes.

To me, the real question here is the conduct of the New York Times. By disclosing this in time of war, they have compromised America's antiterrorist policies. This is a very effective policy. They have compromised it. This is the second time the New York Times has done this.

And to me, nobody elected the New York Times to do anything. And the New York Times is putting its own arrogant, elitist, left-wing agenda before the interests of the American people. And I'm calling on the attorney general to begin a criminal investigation and prosecution of the New York Times, its reporters, the editors that worked on this, and the publisher. We're in time of war, Chris, and what they've done here is absolutely disgraceful. I believe they violated the Espionage Act, the Comint (ph) Act.

This is absolutely disgraceful. The time has come for the American people to realize and the New York Times to realize we're at war and they can't be just on their own deciding what to declassify, what to release.

If Congress wants to work on this privately, that's one thing. But for them to, on their own -- for them to decide -- for the editor of the New York Times to say that he decides it's in the national interest -- no one elected them to anything.

You know, remember, this is the newspaper that brought us Jason Blair. Going back a few years ago, they're the ones who gave Fidel Castro his job in Cuba. They have no right to do this at all. The First Amendment is not absolute, certainly, when it comes to something like this, which to me is a clear violation of statutory law.

WALLACE: Senator Specter, there's a lot to react to there. First of all, do you think the Times was wrong to publish this story as well as the NSA warrantless wiretap story, and does it rise to the level that they should be prosecuted?

SPECTER: Well, we have seen the newspapers in this country act as effective watchdogs. You have Jefferson who laid out the parameter, saying if he had to choose a government without newspapers or newspapers without government, he would choose newspapers without government.

You have the Pentagon Papers case where the administration took the New York Times and The Washington Post to court. And the Supreme Court of the United States said there could be no prior restraint.

I don't think that the newspapers can have a totally free hand. But I think in the first instance, it is their judgment. The editor of the New York Times was quoted as saying that they had considered the government's request not to publish and had made their decision that it was in the public interest.

I'd be prepared to criticize the New York Times if I felt it warranted after knowing a lot more about the facts, but on the basis of the newspaper article, I think it's premature to call for a prosecution of the New York Times, just like I think it's premature to say that the administration is entirely correct.

I think you start with the proposition that there is not the privacy interest in bank records that there is in a telephone conversation. And let's find out more before we try to make a judgment here.

WALLACE: All right. Gentlemen, let's turn to another big issue that we originally thought that we were going to be talking to you mostly about, and that, of course, is immigration reform and the decision this week by Republican leaders in the House not to go immediately to a conference to try to work out a deal with the Senate, but rather to hold hearings all over the country this summer, in large part, it's been said, to point out the flaws in the Senate bill.

Congressman King, isn't this a calculated decision by House Republican leaders that for the political purposes of the November election, it's better to have no bill at all than a bill that includes comprehensive reform?

KING: Chris, we want a bill, but we want a good bill. And for instance, I have strong problems with the legalization -- we call it amnesty provisions -- in the Senate bill. This would reward bad behavior.

I support immigration. I support immigration reform. But I will not do it if it's going to involve giving legalization to those who violated the law. That is rewarding people who jumped the line. If you're rewarding people who broke the law -- and when you analyze the Senate bill, that's what it comes down to.

But I think it's important that we do have this debate and have a -- I know Senator Specter has scheduled hearings. I think it's a very good idea. Have Senate hearings, have House hearings, take this to the American people. Let them see what is on the table, and then hopefully we can have a bill before election.

But right now I, myself -- and I believe I can speak for most House Republicans -- have very serious philosophical and real objections to any type of legalization which is rewarding those who jumped the line, rewarding those who broke the law. It sends the very wrong message. We have to secure our borders first.

WALLACE: But, Congressman King, isn't there a political component to this as well? You are quoted in the Washington Post today as saying our polling shows that it's definitely to our advantage to oppose the Bush plan.

KING: Well, that was in answer to a question about whether or not I thought we were hurting ourselves by doing this. I'm saying if we are going to look at the polls, the polling is on our side.

But in spite of that, we still want to have the hearings to get the full range of opinions. And you know, we can always adjust. If the Senate can make their case, that's fine. I don't think they can.

But I was saying that in answer to the question do I believe that this is going to hurt us politically, I don't think it's going to hurt us politically. I think good politics is good government, and the American people have made it clear they want border security first, not legalization or amnesty.

WALLACE: Well, let me ask about policy and politics, Senator Specter, because the House leaders keep calling what you guys passed in the Senate the Kennedy bill. Is what you passed the Kennedy bill? Did you somehow get snookered by the senior senator from Massachusetts?

And do you have any doubts in your mind that basically the House has decided they'd rather have no bill than comprehensive reform?

SPECTER: Well, as to whether I got snookered by Senator Kennedy, I think the record's pretty plain. I was on your network when we had the confirmation hearings about Supreme Court Justice Alito, and we had a pretty good size clash, and I think it was pretty apparent who came out on top. I wasn't snookered by him at all.

The Senate bill came out of the Judiciary Committee, which I chair. And we need to deal with the issue of guest workers, which the House bill does not. And I scheduled hearings after the House did to point out the advantages of the Senate bill.

We have an economy which needs to have guest workers. And then you have 11 million undocumented immigrants who are a real threat, some on security, some in criminal conduct. And what the Senate bill does is to divide them.

We want to find the ones who are law-abiding citizens, who have jobs, who are paying their taxes, who have learned English, who ought to stay in this country. Whether it's guest workers or citizens, let's figure it out. And we're analyzing the people who ought not to be in this country.

But we ought not to have an 11 million fugitive clash in this country, an underclass. That's not in keeping with what American means. We are a country of immigrants. But let's segregate out those who don't belong here and send them back.

And those who are making a good contribution, do hold a job, are paying taxes, don't have criminal records, let's figure out a way to deal with them humanely.

WALLACE: Congressman King, we've got about 30 seconds left. You know, President Bush spoke to the nation. He has made comprehensive immigration reform perhaps his top legislative priority for the rest of this year. Do you as a loyal Republican have any problems with stiffing the president again?

KING: We're not stiffing the president. What we're doing here is trying to come up with a very good immigration bill, one which will do what the American people want. That's secure the borders and not give legalization or amnesty, and also, take away the incentive for illegal immigrants to come here by really cracking down on the employers who hire them.

They are the ones -- they and the alien smuggling gangs are the ones who have created this problem. We have to secure the borders first.

WALLACE: Congressman King, Senator Specter, we're going to have to leave it there. We want to thank you both for sharing your Sunday with us.

KING: Thank you, Chris. Thank you.

SPECTER: Nice to be with you. Thank you, Chris. Thank you.

KING: Thank you, Chris.

WALLACE: Coming up, our Sunday regulars on the developments this week in the war on terror. Stay tuned.



JOHN SNOW, TREASURY SECRETARY: This is a program that works. This is a program that makes Americans and the world safer.


WALLACE: That's Treasury Secretary Snow defending another secret program revealed by the New York Times to track the movement of terrorist money around the world.

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

Well, I've got to say, it feels like we've been here before. Last December, the New York Times revealed the NSA warrantless wiretap program to the world, and then this week the Times reported that since 9/11 the government has also had a secret program to track terrorist finances.

Brit, what do you think of the program and what do you think of the Times' decision to reveal it?

BRIT HUME, FOX NEWS WASHINGTON MANAGING EDITOR: I would say about the program that it's probably less important in some ways than the wiretapping or the phone intercept program. But I have to say that the case for revealing it seems even worse, even weaker.

The editor of the New York Times said something to the effect it's a matter of public interest. Well, that can apply to almost anything. Juan and I were talking about this earlier. That applies to ball scores. And you know, I mean, women with their breasts exposed are a matter of public interest to some people.

What kind of an argument is that for the revelation of a classified program? Look, we live in a country that has made a decision that there's going to be enough freedom so that editors get to make these decisions.

One would certainly hope that the editor of the New York Times would have something more interesting and more compelling to say about why they chose to reveal this program and make its existence, therefore, known to the enemy than what he said.

And you know, you listen for reaction to it. Senator Specter, who gets worked up over almost anything -- he doesn't seem particularly bothered by it. He's going to look into it. Some of the members of -- you know, some of the more...

WALLACE: Congressman King took it seriously.

HUME: Well, he did. And I don't agree with him that the New York Times should be prosecuted, because I don't think that's possible. You know, the New York Times over the long years of its presence there has built up, justifiably, a great deal of credit with the American people, and the paper carries great weight.

It is now, in my judgment, rapidly spending that credit. There's enough of it that will last a long time, but eventually it won't be there anymore. And at the rate it's going, it doesn't deserve to be.

MARA LIASSON, NPR: Look, as long as the New York Times is the one that keeps on breaking these stories, it's going to come under attack from people who don't think these programs should be made public.

However, I think the issue is something different than just whether the New York Times was right or wrong. I mean, there are many programs like this that Congress in some broad way gave the administration authority to conduct against terrorism.

The question is as they go on and on for years, and become more permanent than just temporary, shouldn't there be some kind of system of oversight where it's not just a secret program, where enough members of Congress understand what it is and what's going on.

And then maybe you don't have these articles that are disclosing it to the public because it's become regularized and members of Congress aren't surprised when they read about it, or at least the right members of Congress aren't surprised about it when they read about it in the paper.

And I think that's what Senator Specter's talking about now. He wants to hear what the program is from the attorney general. And maybe in the end, Congress won't be exercised about it.

WALLACE: Bill, the Bush White House apparently launched a full court press to try to get the New York Times not to report this story, including pleas from the director of national intelligence, John Negroponte; from the two chairmen, Republican and Democrat, of the 9/11 Commission.

I want you to take a look -- and let's put it up on the screen. When the Times turned them down, here's what Executive Editor Bill Keller said. This is now referring to what Brit mentioned. "We remain convinced that the administration's extraordinary access to this vast repository of international financial data, however carefully targeted use of it may be, is a matter of public interest."

Now, we should point out that Vice President Cheney late this week, after the Times put this story on its front page, wasn't persuaded. Take a look.


RICHARD B. CHENEY, VICE PRESIDENT OF THE UNITED STATES: Some of the news media take it upon themselves to disclose vital national security programs, thereby making it more difficult for us to prevent future attacks against the American people. That offends me.


WALLACE: Bill, your latest issue of The Weekly Standard raises this question: Should the New York Times be prosecuted? Should it?

BILL KRISTOL, WEEKLY STANDARD: I think the attorney general has an absolute obligation to consider prosecution here. This is not a Bush -- I love the way Bill Keller calls it the Bush administration program. This is a program of the United States government.

There's no charge that it's unconstitutional, illegal. There aren't whistle blowers coming forward saying data's being misused. This seems to have been a total sort of vanilla secret program in an ongoing war on terror.

This is not the Pentagon Papers, a historical document that was classified where you're probably not going to prosecute people because it's not revealing ongoing operations in a war that has stopped people from killing Americans.

Absolutely, I think the justice department has an obligation to consider prosecution, and I think Congress can weigh in here, too, because the New York Times' rhetorical defense is well, we're exposing the Bush administration.

Well, Congress should consider whether -- if Congress approves of this program, which I believe it does, it might want to pass a sense of the Senate, sense of the House resolution this week saying you know what, we approve of this kind of legislation, and we do not think the executive editor of the New York Times has the unilateral ability to decide what is and isn't in the national security interests of the United States.

I would like to find a single responsible Democrat from the Clinton administration who thinks this should have been exposed. As you say, they consulted Lee Hamilton, the Democratic co-chair of the 9/11 Commission. He counseled against revealing this.

This isn't a partisan thing of the Bush administration. This is a U.S. government secret program in a time of war, willfully exposed for no good reason by the New York Times.

JUAN WILLIAMS, NPR: Well, the question is how long does a time of war last for. This is a program that was put in place right after 9/11, never has really has come before the Congress for any kind of long-term authorization saying this is an effective plan.

I do think that the plan has lots of merit. I think it works effectively. I think there have been specifics cited where you have had terrorist cells exposed as a result of this plan. So I don't understand even though the New York Times revelation undercuts it.

What we're doing is essentially taking away this Swift international banking program as a mechanism for terrorists shifting money around.

HUME: And now they know it. That's the problem. Now they know it.

WILLIAMS: So then they won't use it. So we've taken it away, Brit. They don't have...

HUME: The objective is not to take it away from them and allow them to make their transactions through some secret channel. The objective is to find out what channels they are using, who's got the money and where it's coming from.

WILLIAMS: Correct.

HUME: You don't want to drive this stuff further underground because it undermines your ability to track it and to stop it.

WILLIAMS: They cannot make financial transactions in this underground -- this is not a matter of shifting money from, you know, Buffalo to Brooklyn. This is a matter of international finance, and there are only so many ways to do it. The idea that we take it away I think is just terrific. I think it's an effective program. But the larger point...

HUME: So the New York Times has actually helped...

WILLIAMS: ... is accountability. The larger point...

HUME: So the revelation actually helps national security, is that what you're arguing?

WILLIAMS: I'm saying it's a good program. I think it's a program that deserves some oversight. The larger point is one of accountability for the Bush administration. This goes back to the previous Times story about warrantless wiretapping. It extends across the broad spectrum of programs put in place to deal with terrorism after 9/11.

Should the Congress have oversight or should the Bush administration have the right to simply do whatever they want to stop the terrorists and take credit that there's been no subsequent attacks?

My feeling is Congress in a democracy has a role to play and we should not be ceding all authority to the Bush administration on the grounds that, as the Republican-led Senate says, see no evil -- or what Hillary Clinton said this week, see no evil, hear no evil, speak no evil to the Bush administration.

LIASSON: But this is a program that had some oversight. As a matter of fact, Booz-Allen -- I mean, why should Booz-Allen, which is a private consulting company, know more about this program than the ranking...

WALLACE: This was the outside auditing firm that was sitting there looking to see...

LIASSON: That Swift asked for, actually.

WALLACE: Right, but that was looking to see whether, in fact, there was a specific terrorist connection to any requests.

LIASSON: Right. Right, because they wanted to make sure the requests were appropriate. Great. But doesn't Congress have a role to play, at least the appropriate members of Congress, to make sure that this is done - - Booz-Allen aren't elected representatives. Well, apparently, there is some question about who was...

HUME: Mara, how can you...

KRISTOL: Bill Keller, the editor of the New York Times, is not a member of Congress. He is not a judge. There is not a single judge or member of Congress, the two other branches of our democratically elected government, who has complained about this program.

HUME: Yes, there is. One or a couple of the adolescent members, I think Ed Markey or somebody piped up about it, which is a wonderful example of nobody serious.

KRISTOL: But I mean, this is the New York Times taking it upon itself to reveal a classified program.

WILLIAMS: But you're an editor. Don't you have a right in this country to report stories? And if you wanted -- didn't you challenge Clinton on Bosnia? I think you have some...

KRISTOL: We supported Clinton on Bosnia.

WILLIAMS: OK, but you have the right...

KRISTOL: I do not have a right to damage U.S. national security willfully when there's no evidence this -- yes, damage U.S. national security.

WILLIAMS: How would it damage national security, Bill?

KRISTOL: Because this has broken up plots that now they may be able to go around the international banking system...

WILLIAMS: They can't go around the international banking system.

KRISTOL: They couldn't get money from one place to another without wiring it through banks. That's beyond terrorists' ability.

WILLIAMS: If we take away a major network, we're doing good work. That's what the United States government has done. WALLACE: All right. We have to take a break here. And I just want to point out, Congressman Markey, the preceding comments were solely those of Brit Hume. Coming up, Iraq's prime minister announces a plan to reconcile with insurgents. What does it mean for the United States? Some answers after this.


WALLACE: On this day in 1950, the Korean War began. With strong U.S. backing, the south fought the north for control of the peninsula. More than 54,000 Americans were killed in the three-year conflict.

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


WALLACE: And we're back now with Brit, Mara, Bill and Juan. Well, very interesting developments this morning out of Iraq. First of all, new Prime Minister Maliki has announced this general reconciliation plan in which he explicitly talks about amnesty for all of those who have committed terrorist acts.

But there seems to be some confusion, something left unclear about the question of whether this includes attacks against Americans. And in fact, in the draft of the plan, it specifically talked only about the shedding of Iraqi blood.

Brit, what do you make of this and the possible distinction which we've heard about over time about this question of whether or not killing or attacking Americans should be...

HUME: This is not a serious policy issue. This is a political issue, and it's mostly a political issue within the United States. And in my judgment it's not worth much, and here's why.

Many of the people who are clamoring now saying oh, we can't have any amnesty for anybody who tried to kill Americans are the same people who criticized, just to cite an example, the decommissioning of the Iraqi military after the original conflict.

And they said that they should have been kept in business, thereby urging the United States ally itself with an army which only days before had been trying to kill Americans.

When you're trying to bring a country that has been at war with itself, to some extent, even when Saddam was there, back together, you have to have some kind of a general reconciliation program. This is a very big deal.

And I know that at the Pentagon this is very strongly supported and believed in. Their confidence in Maliki is quite high. They believe he's a doer and a decider, and they believe this is an indispensable element in trying to end this insurgency.

And the political noise that's made and the pieties about no one who shot at Americans I think are a side issue, Chris, and should be considered as such.

LIASSON: Well, as a practical matter, the sovereign Iraqi government is going to decide who it gives amnesty to and who it doesn't, and it's going to make the decision as to who killed who, whether someone killed an Iraqi or an American, and what they're going to do with them.

And I think that it's completely out of the United States' hands how this thing is implemented. We're not going to be telling the Iraqi government who to give amnesty to or not. They're going to decide.

There has to be some kind of reconciliation. There has to be some way to end the insurgency and to bring a lot of those opposition figures into the political process, as they did with Muqtada al-Sadr. I mean, this is going to go forward regardless of what politicians in the United States say.

WALLACE: Bill, maybe I'm getting sidetracked on a silly political issue, but you know, it seems to me if you say everybody gets amnesty, that's one thing. But if you start to make a distinction between people who killed Iraqis and people who killed Americans, am I alone in thinking that's kind of a difficult case to make?

KRISTOL: No. I mean, as a practical matter, people who kill Americans should get killed, and that should be our policy as long as we're fighting there. Obviously, at some point...

WALLACE: We're going to be fighting there for some time.

KRISTOL: We are. And I think we would have a real problem, therefore, with helping a government that was -- if it were, was explicitly and knowingly sort of pardoning people who were involved in the murder of Americans or in terrorist attacks on Americans.

This is the 10th anniversary of the Khobar Towers attack, incidentally, in Saudi Arabia. Exactly 10 years ago, 19 American Air Force men killed. They have not been brought to justice. It's very bad to start establishing the precedent that Americans get killed by terrorists and there's no retribution.

WILLIAMS: Well, there's no question about that. You know, but the thing is I think I agree with Brit that it's a matter of politics now. Who's going to make a distinction, did this guy really kill an American, did he kill Iraqis, was he involved in the planning that led to the death of Americans? It's hard to parse.

So essentially, what you have to do is say it's in the best interests of the United States' effort there to have some reconciliation on the ground so that we can move forward. And that seems to me the best you can hope for.

And then in combination with General Casey's declaration that he intends now to start bringing some troops home, it seems to me what you've got is a buildup towards November, towards the elections, and so it becomes a matter, then, of the right wing of this country, the people who I think are the ones who are jumping out of the box on this, who are saying oh, you can't have anybody who was involved with terrorism granted amnesty -- I think that becomes a political issue for your side of the fence, because I think people are having an emotional response rather than thinking how we can have -- you know, hate to say it, but -- an exit strategy, how we can have an exit strategy.

LIASSON: Well, actually, the Democrats -- it was Democrats who kind of have been making the biggest fuss about this.

HUME: Yes, as we saw. I mean, Senator Levin's really a serious military policy issues...


HUME: ... to get to the right of the Republicans on some things.

LIASSON: Sure. I think that any time the Democrats see an opening -- and the Republicans would do the same thing. And if it became a real policy of the Iraqi government -- and we don't know yet because, remember, first there was an aide who was about to be -- a former aide saying that nobody who killed Americans would -- they would be given amnesty. Then that was corrected. No, no, they didn't mean it.

It's not clear what they mean. But I think that if there is an actual policy of giving amnesty to people, terrorists who killed Americans, you will see members of both parties raising a lot of fuss about it.

WALLACE: Brit, let me bring in -- and Juan made reference to it -- the fact that there's a story in the New York Times today that General George Casey has laid out a plan for taking troops out, 7,000 by September, roughly 30,000 by the end of 2007.

What do you make of that? And what do you make of Senator Levin's comment that gee, what a surprise, they're doing it just before the election?

HUME: Well, there's not much new here. There have been draw- down plans of various kinds in the works. I'm sure there -- and I was told that high levels at the Pentagon this week -- that there's an anticipated draw- down over time, and it's going to be a jagged line, because there are going to be times when they'll send more troops back in.

This has been what has been expected forever. This is utterly consistent with everything that the president, secretary of defense and others have been saying about this: As the Iraqis stand up, we draw down, we stand down. So there's not much new here. It's events- driven.

I don't think it's politics driven. I think if it were politics driven, they'd be announcing it publicly, and guaranteeing it, and locking it in and trying to get the public to think that well, we're winning now, we're going to bring the troops home. And if the conditions don't warrant it, it isn't going to happen.

KRISTOL: What depresses me about this is, as Brit says, there's not much new here. Rumsfeld and obviously Casey have been looking for opportunities to draw troops down.

The killing of Zarqawi was a chance, I thought, to go on the offensive and to correct a policy which has led to increasing insecurity in the capital of Iraq, in Baghdad. That's according to our ambassador.

So if we continue to try to draw down, I'm afraid there will be increasing insecurity, there won't be a stable government there, there won't be a stable Iraqi army, and we're going to be in deep trouble.

KRISTOL: And the politics of this, I think, are not the actual number of U.S. troops. People aren't going to say oh, by the end of 2007 we're going to be at 100,000 instead of 137,000. What matters is what the situation looks like in Iraq, does it look like we're succeeding, does it look like it's getting safer. I don't think the difference between 138,000 and 100,000 is that...


WILLIAMS: No, and what you'll see is that they'll make an announcement, a hard announcement, closer to the election.

WALLACE: What's interesting is the degree to which events on the ground have overtaken all the debate up in that building behind me. Thank you, panel. That's it for today. See you next week.

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