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Lugar, Biden, Warner, Levin, Roundtable

Fox News Sunday

CHRIS WALLACE, HOST: I'm Chris Wallace. New reports that the Pentagon is drafting a timetable for the Iraqi government to take over -- next, on "Fox News Sunday."

Raging sectarian violence threatens Iraq. A nuclear North Korea alarms the world. What should the U.S. do? We've brought together the four most powerful senators on foreign policy and military affairs: Republicans John Warner and Richard Lugar and Democrats Joe Biden and Carl Levin, the chairmen and top Democrats on the Senate Foreign Relations and Armed Services Committees, all in a "Fox News Sunday" exclusive.

Also, as we head down the stretch of the 2006 campaign, where does the fight for control of Congress stand? We'll ask our Sunday regulars: Brit Hume, Mara Liasson, Bill Kristol and Juan Williams.

And our power player of the week makes billions and gives it away.

All right now on "Fox News Sunday."

And good morning again from Fox News in Washington. Let's start with a quick check of the latest headlines.

The New York Times reports the Bush administration is preparing a timetable for the Iraqi government to end sectarian violence and take over security. The blueprint would be presented to the Iraqis by the end of the year. But one U.S. official said the account is not accurate. Another said the Pentagon is working with Iraq to set benchmarks for progress.

A top State Department official says the U.S. showed arrogance and stupidity in Iraq. Alberto Fernandes in the Bureau of Near- Eastern Affairs spoke to Al-Jazeera television. A State Department spokesman says Fernandes was misquoted.

And according to news reports, North Korean leader Kim Jong Il told the Chinese he isn't planning another nuclear test. But Kim says what his country does next depends on U.S. policy toward North Korea.

Well, with a new sense of urgency in Iraq and a nuclear showdown with North Korea, we've assembled the four most powerful members of the U.S. Senate on national security: from the Foreign Relations Committee, Republican Chairman Richard Lugar and ranking Democrat Joe Biden, and from the Armed Services Committee, Republican Chairman John Warner and ranking Democrat Carl Levin, who's nursing his wounds in Detroit after game one of the World Series.

(LAUGHTER)

In any case, Senator Warner, have we now reached a tipping point in Iraq where President Bush's open-ended commitment to creating a unified, stable, democratic Iraq has to be reconsidered?

SEN. JOHN WARNER (R), VIRGINIA: I think the administration is constantly revising and looking forward. This article in the New York Times and in other periodicals -- Post, so on -- it does indicate clearly the forward thinking of the administration, working with the government of Prime Minister Maliki.

I stress, we've given sovereignty to that country. You said starting up the government or whatever. That government is up and functioning. Our job is to keep it moving forward.

But the key to this thing is impressing upon that government that they've got to come to grips with what is causing this increase in violence and killing, both Iraqis and our own armed forces, which incidentally -- I just got back -- are doing a brilliant job, our troops.

It is Maliki, you've got to come to grips with the private militias and get them out of business so that you're moving forward as the government unified and not the government of Sadr or Hakim or the Kurds. It is one government, united, bringing about peace and stability for that country.

WALLACE: I want to get back to that in a moment, but let's do a whip- around of your three colleagues.

Senator Biden, are we at a tipping point? Are we at a crossroads? Is it time to change policy?

SEN. JOSEPH BIDEN (D), DELAWARE: It was time to do it two years ago. What the president is calling for, at least what appears to be the case, of consideration of benchmarks, the United States Congress voted on about a year and a half ago. And my good friend, the chairman of the committee, took a Democratic proposal and made it even better, which basically called for the same thing.

The truth of the matter is there's a need for radical change in policy. There's a need for a political solution in Iraq and a bipartisan solution here at home. Without those two things happening, there is no possibility, in my view, we succeed in Iraq.

WALLACE: Senator Lugar?

SEN. RICHARD LUGAR (R), NEBRASKA: I think it's important to stress another dimension, and that is there's 40 to 60 percent unemployment in Iraq. The oil production is going down; there's corruption there.

In essence, even if you had a military solution or stability, it's not really clear how people pay for their government, physically how it continues on.

And therefore, as a part of the planning, we're going to have to rethink the reconstruction of the country in a way we haven't. We've sort of zeroed out in appropriations this reconstruction group at the State Department, even though the Defense Department is willing to give us some money. That's a critical element of this, because the stability of this is going to come about when people are employed, Iraqis are employed, reconstructing their country. Quite apart from the division of the oil money, if there isn't very much oil money, that becomes academic. And I just stress that as a part of this planning.

WALLACE: Senator Levin?

SEN. CARL LEVIN (D), MICHIGAN: Well, the administration has refused to consider changing course for the last couple years, although it's been obvious that the violence in Iraq has been increasing consistently. The killings have been increasing, and yet when we call for change of course, as we have for the last two years, to put pressure on the Iraqis to work out their political differences -- since our leaders in Iraq tell us there is no military solution, there's only a political solution in Iraq, and the leaders in Iraq have got to work out those differences or else the killings will continue and the violence will continue.

Every time that we Democrats and a few Republicans call for a change of course, instead of the president's bumpersticker, "stay the course, stay the course, stay the course," we've been labeled as cut- and-runners.

And I don't know if this administration is finally listening to what the reality is and recognizing the reality, but I hope so. And we shouldn't wait til the end of the year to come up with milestones. We ought to be doing that now. We should have done it long ago.

And we shouldn't wait until after our elections are over to tell the Iraqis that we are going to have to tell -- we're going to have to set a time when we're going to begin to leave Iraq. Because without that pressure of our troops leaving Iraq a few months down the road, the Iraqis are not going to do what only they can do, which is to work out those political differences.

WALLACE: One of the things that strikes me, in listening to all four of you, is you talk less about the military situation and more about the political situation.

I want to ask you about that, Senator Warner, because there were a couple of developments this week that I'm sure all of you felt were pretty troubling. One was that Prime Minister Maliki said that he wants to delay taking on and disarming the Shiite militias until the end of the year or some time next year.

We also had this kind of remarkable event where the U.S. arrested one of Muqtada al-Sadr's, the radical Shiite cleric, top aides for supposedly being involved in death squads, and then Maliki put pressure on the U.S. to release him because he didn't want to confront one of the main supporters of his regime, namely Muqtada al-Sadr.

Question: Do you still have confidence that Prime Minister Maliki is strong enough, tough enough, willing to do what needs to be done to bring this country together?

WARNER: I think we have no other course but to give him our confidence and our support. I thought Rumsfeld spoke very toughly yesterday, or the day before. He said, "Better that you get this done now than later." I mean, it was tough talk. The president has been very forthright and tough on Maliki.

You've got one other fact that you should know about. Maliki went to see Sadr and Grand Ayatollah Sistani just 48 hours before there was this Shia-upon-Shia fight down in Amarah. Now, that's clearly showing that his conversations with those two people were not fruitful. You have got to hold him to it. Maliki has to give more authority to the Iraqi army.

Our professional, I met with him yesterday at the Pentagon, have a degree in confidence in that army if they had more authority, more leeway to make decisions. And it is their job, not the U.S. coalition forces, to subdue and get rid of these private militias.

WALLACE: Senator Biden, do you still have confidence in Prime Minister Maliki?

BIDEN: I remember I was on your show when I came back after meeting with him in July and told you then I had no confidence in him. I have no confidence in his ability and possibly his willingness to deal with taking on that Shia coalition.

When I was down in Basra over the 4th of July, British general telling us, "It's not about an insurgency in the Shia region. It's not about a civil war. It's about a group of militia competing for control of that region."

And without a political solution, Chris, without giving the Sunnis a piece of the oil action, without following up with what they've already done under their constitution, call for a federal system -- they've already voted for a system to allow federalism -- without us making that work, helping them make that work, I don't know how he can do much of anything. I don't even think his inclination is to do much of anything.

WALLACE: But let me ask you a question. I mean, we'll get into the partition idea, which I know is one of your big proposals, in a moment. If he's not the right guy, and he was the one who was elected by the various elements in the National Assembly, what do we do?

BIDEN: Well, what we do -- remember when the president made that secret trip over and they met with him, and I remember I was on a sister show of yours, and they showed me a picture of the president whispering in Maliki's ear, and they said, "What do you think of this?"

I said, "It depends on what he's whispering in his ear. If he's whispering in her ear, 'We support you,' we're in trouble. If the president's whispering in Maliki's ear, 'Look, Jack, let's get something straight here. I'm serious, I'm not joking, you've got to deal with the militia, and you've got to give the Sunnis a piece of the action in terms of the oil revenue, so there's a political solution here. Absent that, you're in trouble.'"

So we are now seemingly beginning to say that to him -- a little late, but he's the only horse in town and they elected him.

WALLACE: Senator Lugar, do you have confidence -- do you still have confidence in Prime Minister Maliki?

LUGAR: Well, I think he's probably the best horse to ride on in the situation. The predicament is such, as Maliki looks at it, is that the Kurds are in favor of democracy generally, but polling in Iraq indicates that they're very conflicted on democracy at all, with regard to the central part of the country and Sunni areas don't like democracy.

And, as a matter of fact, sort of across the board, people would like a "strong" leader -- strong in quotes -- which is not Maliki. Maliki comes to us, I'm told, a phone call with the president, wanting assurance that we're not going to displace him.

But the fact is we don't have anybody to displace -- we're talking about putting pressure on Maliki, but he doesn't have much clout. Now, we probably need to think through how we, the United States, can give this prime minister more clout. Because he can't...

WALLACE: How do we give him more clout?

LUGAR: Well, that's a very good question, but it's a political question once again. Physically, how does our ambassador, how does the president, how does the secretary of state, anybody, weigh in?

Because we keep saying, "Go to your Shiites and get them straightened out, or the Sunnis, or divide the oil," and Maliki is saying, "There isn't any group here that wants to talk about those things." Even the division of the country, they want to put 18 months along the trail. Those are not our timetables; those are Iraqi timetables.

So if there's going to be some intersection, it ought to be politically, to strengthen at least whoever is there. And Maliki, for the time being, is the guy.

WALLACE: Senator Levin, there are a variety of ideas out there about what conceivably could be done to change the situation, to make it better. We've assembled at least part of the menu, and let's put it up on the screen.

Partition of the country into three autonomous regions with a weak central government; a phased withdrawal starting right away; allowing the Iraqi military to stage a coup and install a different leader, a strong man; and sending in still more U.S. troops.

You know, like a Chinese restaurant, Senator Levin, what would you order from that menu?

LEVIN: Well, what I would do is what a number of us have been proposing for a long time, what 40 of us -- all the Democrats and one Republican -- in the Senate voted for it, which is to notify the Iraqi leaders that we're going to begin a phased withdrawal by the end of the year. That's not immediately. It's not precipitous. It's to tell them that they've got to take hold of their own nation.

And what the president told Maliki on the phone just a week ago -- it was not whispered to him. We were informed, the American public, what the president told Maliki a week ago, which is, "You have our full support." He pledged full support to Maliki.

That is the wrong way to go. That's not pressure on Maliki. That's an unconditional statement of support.

What we need to do is put pressure on the Iraqis to do what only they can do, which is to make the political compromises on power and on oil resources, so that they can become a nation.

If they don't want to do that, if they're going to have a civil war, we have to tell them, "You're going to do that without us." But we have got to begin to leave Iraq, not precipitously, not cut and run, but by the end of the year.

WALLACE: Senator Warner -- and we're about to run out of time in this segment, but let me ask you to respond to that. I mean, you talk about getting tough with Maliki and putting pressure on him. Would announcing we're going to begin -- not a timetable and we'll get them all out by July, but we're going to begin pulling troops out, would that send the right message?

WARNER: No, I think not. We should not set timetables. We should not indicate a fixed lock-in, because the situation is very dynamic. It's gotten worse. It's gotten fractured. You've got Shia on Shia now, Sunni on Sunni, Al Qaida moving into al-Anbar. This is a fragile situation.

We've got to remain confident that we can make this government work -- not victory this, that or the other thing -- make the government work, so it can exercise the levers of sovereignty.

One other pressure on Maliki came this week. I admire General Caldwell, who stood up before the world...

WALLACE: Chief spokesman for U.S. forces in Iraq.

WARNER: Correct. And he said, "It's disheartening that the Baghdad campaign, one in which we put 12,000 troops, one in which we expected the Iraqi armed forces to send four battalions -- they only sent two." Our military is being very frank and credible with the Iraqi government and Maliki. Get rid of those militias now, not tomorrow -- now.

WALLACE: Senators, we need to take a break here, but when we come back, North Korea and the bomb: Is diplomacy the answer? And what's really at stake in the November election.

We'll be back in a moment.

(COMMERCIAL BREAK)

WALLACE: And we're back now with Senators Lugar, Biden, Warner and Levin to talk about North Korea and other trouble spots.

Senator Levin, you and Senator Biden have called for the U.S. to have direct, one-on-one talks with Kim Jong Il and the regime in North Korea. But when you see what's happened this week where the Chinese sent a top diplomat to deliver a very strong message to the North Korean regime, isn't it just possible that the president's diplomatic approach is, in fact, working?

LEVIN: Well, we obviously want to work with the Chinese, and we want to try to do anything we can to get the Chinese and the Russians to put some pressure on North Korea obviously. But that is not inconsistent with our having direct talks with the North Koreans. As a matter of fact, the Chinese and the South Koreans are allies, and South Korea want us to have one-on-one, direct discussions with the North Koreans.

That can be part of a multilateral strategy. It's not inconsistent to say that we want to keep our group together and we want to coordinate with the South Koreans and the Russians and the Chinese to say that we also, since they want us to talk to the North Koreans and the North Koreans want to talk to us, to have discussions with the North Koreans.

There's no inconsistency. It's another false choice which the president has presented to the American people: We either have to go it alone with North Korea or we have to work with the other countries that have the same position we do.

Well, there's a third approach here, which is, as part of a coordinated strategy, that we talk with the North Koreans and obviously coordinate the message. And we don't have to give them anything, but one- on-one discussions would be fruitful here, and we ought to do it in conjunction and coordination with our friends and allies.

WALLACE: But, Senator Lugar, isn't that, in fact, what we already have? Hasn't the U.S. already agreed -- and, in fact, haven't we had bilateral talks on the side of the six-party talks?

And does it make sense -- in the end, can the U.S. really accomplish anything with North Korea? Or, in effect, do we have to make it a regional problem with the neighbors, like Japan and South Korea and China getting involved -- all countries that have a lot more leverage with Pyongyang than we do?

LUGAR: Well, it's very important we have all of the countries, but my gut feeling is, at the end of the day -- and I don't know which day, which week -- there will be an American presence talking to the great leader and his people and saying, in essence, in terms that they understand, "We are not going to overthrow you. We are not involved in regime change. You're going to stay."

Now, the problem is, how do we work then with the Chinese to continue to get you the fuel and the food? How do we work with the South Koreans so there's some trade, some outlet for you?

But, in essence, we're for real, and we want you to dismantle whatever you're doing at Pyongyang, and quite apart from anything in the nuclear highly enriched uranium and some verification of this, but that's the deal.

WALLACE: But you're suggesting, Senator Lugar, a stepped-up, bilateral conversation between the U.S. and North Korea?

LUGAR: I believe that is going to happen. I hope it happens sooner rather than later. But I think it is inevitable, if this is to be resolved diplomatically.

Otherwise we're going to face problems, as the Japanese have become more militant; the South Koreans go through all sorts of gyrations in their policy; the Russians stand aside, tweaking the lion's tail. This is going to be a mess.

It's useful to have everybody there, and the Chinese especially, because they really have a stake in it. Every day they're pouring Chinese resources in there to keep North Koreans from coming into China.

WALLACE: Senator Biden?

BIDEN: The chairman is exactly correct. He said that back in '03. I've said that back in '03.

Look, it's either you want regime change or conduct change. Let's get something straight here: You don't say to somebody, "By the way, put down the very thing that you can keep us out of your hair militarily, and, by the way, after you put it down, we're going to take you out." Just rationally, doesn't work very well.

And every single party we're working with, every one of them, from Japan to Korea to Russia, has encouraged us privately to talk directly with North Korea -- Carl Levin's point.

So, it seems to me, we step up to this.

And, by the way, it would be fine if the president had an alternative plan. How's he going to change the regime? Is he going to go to war? Does he have the capacity while he's locked down in Iraq, while we're worrying about Iran?

And keep in mind, Iran is watching very closely how we handle this.

WALLACE: I want to get to Iran in a second.

But, Senator Warner, do you join the Greek chorus here, that the president's policy is wrong on North Korea?

WARNER: I think the president has done a very commendable job on North Korea. I really do. Secretary Rice and our negotiators have handled it just correctly.

Let's remind ourselves, I served in the Korean War in the Marines -- no great footnote in history. But we have, in 1953, we reached an armistice, and we're still not able to negotiate a final settlement of that conflict.

It's in our interest to have a nuclear-free peninsula. It is in our interest not to provide a basis through North Korea's pushing ahead on nuclear weapons, to have Japan or South Korea think it.

The president was right: Negotiations must be left to the six- party talks. Conversations on the side take place, as all of us know, in diplomatic areas. That's fine, conversations. Negotiations, he's been right, leave it to the six. Because we do not want the other powers to point to us and say, "You didn't handle this right, USA. It's your fault; now you take care of the problem."

China has the leverage, as Senator Lugar said, with the energy and the food. South Korea has leverage because of their bilateral relationships. Those countries -- and I think China has been very responsible in coming forward and applying pressure.

Leave it as it is. The administration did a good job.

WALLACE: Let's turn to Iran.

And, Senator Biden, you brought that up because Secretary of State Rice said this week the fact that we got this united 15-0 vote out of the U.N. Security Council, the apparent willingness to enforce it -- we did see the Chinese get a little tougher than I think a lot of us expected with North Korea this week -- sends a message to Iran, "If you continue with your uranium program, you're going to have problems too."

On the other hand, when she met yesterday with the Russian foreign minister, he said, "I don't support sanctions."

Diplomacy, as we now have it, as the track that we're on, is that going to work or not work with Iran?

BIDEN: It can work if we increase on that track the willingness to directly talk, as well.

And, look, John Kennedy said a long time ago, we should never negotiate out of fear, but we should never fear to negotiate. The bottom line here is, if regime change is the operative element of this administration's policy, you are never going to get to the point where you end up with a diplomatic solution.

There may be no diplomatic solution, in the end. That's possible. We may have crossed the line, or they may have crossed the line.

But what's going to happen, I suggest to the chairmen, is while we fool around with this, you're going to see Japan go nuclear, and you're going to see China react to Japan going nuclear, and you're going to see a chain of events set in motion that are going to be significantly damaging to the next generation of Americans.

And so, it seems to me we should get off this wicket of suggesting that we won't talk. I mean, what are we afraid of in talking?

WALLACE: Let me bring in -- it's a good question. Let me bring in Senator Lugar.

Do you also support one-on-one, direct talks with Iran?

LUGAR: I think that would be useful, but I think even more useful right now would be, as a part of our negotiations with Iran, to bring together the members of the Security Council, Germany, the nations that surround Iraq, including Iran -- that is, bring in Iranians into a conversation about Iraq.

Now, regardless of whether we have timetables for withdrawal, whether our troops come back as opposed to intensively going into neighborhoods in Baghdad, there's got to be some perimeter defense here of Iraq, some physical integrity. That's important to Iran.

I would just change the subject a little bit. I would say, "Iranians, we have something to talk to you about that's very important to you existentially." And that may not get to the nuclear thing, but I think it does indirectly. After a while, you have at least some basis on which they have the integrity of their country.

WALLACE: Finally -- and we've only got a couple of minutes left -- I want to just talk briefly about politics. And I'd like to do it, if possible, in as nonpartisan a way as we can.

(LAUGHTER)

I know there's a lot of talk in the park -- I know Senator Warner's going, like, "Good luck to you."

But I know there's a lot of talk: Republicans saying the Democrats want to cut and run; Democrats saying Republicans want to mindlessly, you know, stay the course.

Senator Warner, what's at stake in this election? If Democrats gain control of one or both houses of Congress, what's going to change? And, if so, what's going to be wrong with it?

WARNER: Well, the dynamics will change markedly, because you have a whole framework of new personalities taking over the committees. I happen to have a lot of respect for Carl Levin, and I do for most of my colleagues and, indeed, this gentleman on my right. We've gone toe to toe many times.

So I'm not -- look, let's focus on the House. I think the reality is that the Senate...

WALLACE: But what would that mean for U.S. foreign policy?

WARNER: Beg your pardon?

WALLACE: What will change for U.S. foreign policy?

WARNER: Well, the nations of the world will have to become adjusted to the various chairmen. Let's put the Senate to one side. I'm confident we're going to hold that. The House is where the question mark is. And there you've got a framework of chairmen coming in, which gives us all a little pause to figure out just which direction is it going to go.

But that's America. The people have spoken. You've got to remember, in all of these things, the power is not in the presidency or in the Congress. It's in the people of the United States. If they speak, then we have to work within the framework that they've established with these new individuals.

WALLACE: And very briefly, Senator Biden, what's at stake, in terms of foreign policy?

BIDEN: Very briefly, if the Democrats regain control, you're going to see 12 to 14 Republicans freed up to go out and join, in a bipartisan way, to tell the president, "We are seriously off course." If the Democrats don't make gains, it will be a reaffirmation for this administration, stay the course. And I believe that would be disastrous.

WALLACE: And you think there are a dozen Republicans champing at the bit?

BIDEN: I know there are at least three that have approached me before we left.

WALLACE: I don't know -- they're both...

BIDEN: No, neither one of these two gentlemen.

(LAUGHTER)

WALLACE: Neither one of those.

Senators Lugar, Biden, Warner, Levin, we want to thank you all so much. I thought it was a very useful conversation. Appreciate you coming in today.

Coming up, our Sunday regulars weigh in on the upcoming congressional elections. Will the situation in Iraq cost Republicans control of Congress? Some answers when we come back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Some leaders have said we shouldn't spend another dime on Iraq. Others have said, get out now. Others said, get out in a couple months. That's why they are the party of cut-and-run.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

WILLIAM CLINTON, FORMER PRESIDENT OF THE UNITED STATES: You know, they've won two elections by their skin's teeth, by scaring people at the end and dividing them up again.

(END VIDEO CLIP)

WALLACE: Presidents Bush and Clinton trading shots over national security this week on the campaign trail.

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, when we talked about this election last spring, I think we all agreed that Iraq and the situation on the ground in Iraq was going to be the key issue as we approached November 7th. Not only have there been no U.S. troop withdrawals, which a lot of us anticipated there would be this fall, but we also had this announcement, which Senator Warner talked about, from General Caldwell this week that, in fact, the effort to secure Baghdad has fallen below expectations.

Question, Brit: Will Iraq sink the Republicans in November?

BRIT HUME, FOX NEWS WASHINGTON MANAGING EDITOR: Well, it certainly is doing as much damage as it probably could do. I mean, the situation there markedly has not improved in any recognizable way that people are seeing now. And so, if you were a Democrat last spring and you were looking ahead to the fall, just in purely political terms, and you saw Iraq in the posture it is now, you'd think this is the best thing that could possibly happen to your party.

Now, whether it will sink the Republicans, obviously we don't know yet. It looks -- they're certainly going to suffer losses and probably some serious losses. Now, whether it will tip control of both houses or even one house is obviously out there to be determined.

WALLACE: And, Mara, is Iraq the key issue?

MARA LIASSON, NPR: I think Iraq is at the top of the list of a number of issues that are hurting the Republicans. The Foley scandal didn't help. Don't forget about Katrina, which kind of went into the mix long ago and changed the public's view of the competence of this administration.

But, yes, when you ask people what is the issue that's most important to them, Iraq ranks very high. And most of the people who choose Iraq see it negatively and are leaning Democratic.

And the fact is that Iraq just looks like it's deteriorating. Every piece of news from there looks bad, and of course it's hurting the Republicans.

WALLACE: Bill, the Wall Street Journal came out with a poll this last week, and let's put up some of the results on the screen.

First, on Iraq, only 33 percent of voters now approve of the president's policy, while 63 percent disapprove.

The poll found only 16 percent of voters now approve of the job Congress is doing. That ties the lowest rating for Congress in the 17 years the Wall Street Journal has done the poll.

And on the generic ballot question, 52 percent of voters now want Democrats to gain control of Congress. That's a 15-point margin, up from nine points just two weeks ago. And that is the biggest margin ever on the generic question for either party in the Wall Street Journal poll.

So how much trouble are Republicans in, heading into this November elections?

BILL KRISTOL, WEEKLY STANDARD: Deep trouble. I think on March 5th on "Fox News Sunday," 7 1/2 months ago, I looked, the generic ballot was around minus-10, minus-12 for Republicans. And I said, "If that holds up, and it could, Republicans will lose the House."

And Juan Williams ridiculed me: I didn't know anything about gerrymandering, the Republicans have constructed this firewall, they had all this money, this brilliant get-out-the-vote operation...

WALLACE: He gets tired of your Bush bashing all the time.

(LAUGHTER)

KRISTOL: He does.

And, you know, I thought the generic ballot might close. It hasn't. It's, if anything, widened a little bit. And if that numbers holds -- and there's no reason to think it won't -- Republicans are in very bad shape.

WALLACE: And do you think that's Iraq, Foley? What do you primarily ascribe it to?

KRISTOL: I think it is, in large part, Iraq. Bush is a war president. We're at war. People have lost confidence in his conduct of the war. That number, the 33-63 number that you showed on the screen, is very important.

But some percentage of those 63 percent who now don't approve of the president's conduct of the war are criticizing him from a hawkish point of view. That's the irony, I think. There's not a dovish majority in the country. There is a majority that is skeptical that he has the right strategy in Iraq.

It may not be too late. If he got on TV tomorrow and said, "I met with these military guys at the White House, and I am changing course, and this way we're going to surge troops, going to make a change in personnel at the top," I still think it could actually help. People want to see some sign, though, that he is open to a serious change to win the war.

WALLACE: So that's the answer, more troops for Iraq?

JUAN WILLIAMS, NPR: No, no, no. That's Bill's answer.

(LAUGHTER)

KRISTOL: I'm very consistent on that, you've got to admit.

WILLIAMS: You're staying the course...

(LAUGHTER)

... I'll give you that much.

I mean, what's telling about that Wall Street Journal poll, it's so interesting, in September it looked like things were trending more toward the Republicans. That's why I said what I said earlier. I thought the president has the bully pulpit, he can change things.

But according to the Wall Street Journal polls now, 39 percent believe that Democrats can do a better job of dealing with Iraq. I mean, and that's a reversal. That's 5 percent down since early September for the Republicans.

So what you see is suddenly the Democrats look like the ones that the Americans trust to deal with Iraq, to say, you know, we can't stay the course, it's not working. The whole business about what they stand up we'll stand down, it looks like, you know, basically now it's like we're just, you know, hanging on, you know, and hanging around and looking dumb, as the sectarian violence continues and our young people are getting slaughtered.

WALLACE: Brit, again, we'll talk about policy in the next segment, but in this segment, is that what the American people basically see, we look dumb in Iraq?

HUME: Well, some of them clearly see that.

Look, this -- war has always threatened the popularity of presidents, even winning campaigns. The Mexican-American war, I saw a document recently, it was fascinating. In history it's remembered as a walkover by American forces over a weaker enemy, and a war of conquest even. That's a war the United States won decisively. But it dragged on. And it utterly corroded the popularity of President Polk and became a very unpopular campaign.

It's very hard to wage lengthy, indecisive wars in democratic countries. People get tired of them. They get tired of hearing about the casualties, the death and the bloodshed.

In this situation, the situation appears to be deteriorating. And it is having the inevitable effect, and it's severe.

WALLACE: Let's switch, if we can, to the Senate. Two weeks ago we looked at eight Senate races, and four of those which were considered toss- ups then are now considered to be actually leaning Democrat. That's Montana, Ohio, Pennsylvania and Rhode Island. And those are all four Republican states which -- leaning, but those would all be four pick-ups for the Democrats if they go that way.

Mara, let's take a look at the four races that RealClearPolitics.com continues to say are toss-ups. They do a kind of clearinghouse of multiple polls.

Missouri: Democrat Claire McCaskill now has one-point lead over Republican Senator Jim Talent.

New Jersey, a Democratic seat: Democratic Senator Bob Menendez up narrowly, four points, over Republican challenger Tom Kean, Jr.

Tennessee, where Democrat Harold Ford is up by less than one point over Republican Bob Corker: That's basically a dead heat.

And Virginia, where Republican incumbent George Allen is now up almost five points over Democrat Jim Webb.

A few weeks ago, Mara, a Democratic takeover of the Senate looked like a big long-shot. It's not quite so improbable today.

LIASSON: No. I think it's still a hurdle, though.

The Republican firewall has now shifted. They were going to draw the line at Ohio, Missouri and Tennessee. Now they're going to draw the line at Missouri, Tennessee and Virginia, which is an extraordinary statement, that Virginia is a race where the Republicans now have to work hard to keep.

Now, I think that Allen still does have a lead and the Republicans feel more and more confident about that. But this is an amazing landscape that has really shifted against the Republicans. I think the theory of this firewall is that if the Republicans can pour tens of millions of dollars into states that are pretty reliable red states, like a Tennessee or Missouri or Virginia, that they can hold the line there.

But you've got a very able candidate in Tennessee, Harold Ford, who's really given the Republican candidate a run for his money. Missouri, same thing there. I think in Virginia it's a little bit different. Webb looks great on paper but hasn't yet really been able to get into the lead in any...

WALLACE: We've got about 30 seconds left, and, Bill Kristol, I want you to finish up on this. The Republicans keep talking about, "Well, the landscape isn't good, but we've got an advantage on money, we've got a big organizational advantage on get-out-the-vote."

Is that enough to save them?

KRISTOL: We'll see. I mean, if current levels hold, probably. The Democrats would need to win two of the three seats: Missouri, Tennessee, Virginia. They're all Republican states. Virginia and Missouri have Republican incumbents. I think if we just have a stable environment for the next two weeks, Republicans maintain control of the Senate.

The question is, does the bottom fall out? And it could in this kind of year.

WALLACE: All right. We have to take a break here, but coming up, after the election, will there be a big change in U.S. policy in Iraq? We'll tackle that when we come back.

(COMMERCIAL BREAK)

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(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

TONY SNOW, WHITE HOUSE PRESS SECRETARY: Yeah, that's a bunch of hooey. I mean, it seems to be a collection of actually old hooey brought into a piece of new hooey.

(END VIDEO CLIP)

(LAUGHTER)

WALLACE: That was White House Press Secretary Tony Snow this week dismissing a report that the White House is preparing for a course correction in Iraq.

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

Well, despite Tony Snow's hooey defense, there was growing chatter in Washington this week that, after the election, we're headed for a big change in policy in Iraq, whether it comes from the Democrats gaining control of one house of Congress, whether it comes from James Baker's Iraq study group, or just a growing realization within the Bush White House that things aren't going to work.

Juan, do you think we're headed for a big change?

WILLIAMS: I think we have to.

I mean, first of all, it's unfortunate that it has to come in the midst of this election that it drives it, but there was a Fox News poll this week: 73 percent of Americans want a course change in Iraq. So, stay the course, as a message, isn't working.

But, worst of all, it's not working on the ground. I mean, look at the results. Look at what's going on just in this past week. The bloodshed is just increasing. This is chaos over there. So to say "Stay the course" is like saying, "Yes, we're going to go deeper into these dark woods where we're being threatened and we're being decimated." It just doesn't make sense.

So there has to be a course change. The question is, where does it come? At what point does the president feel comfortable in saying to the American people, you know, "Here is a reasonable change. That doesn't mean that I am going back on what I said before." I think it becomes difficult for the president, but I think he's got to stand up and be a man.

WALLACE: Brit, I mean, we're not talking about the sort of tactical flexibility, which the White House says it always espouses. Are we headed for a big course change in Iraq?

HUME: No. The people who are talking about that fall very clearly into the category of nondeciders. We've just heard, in the last couple days, from the decider himself who gets to make policy. And that's one thing a president can do, and he doesn't have to clear with it Senator Levin, and that is to set the policy in Iraq. And in this instance, he said he isn't going to change. I think he's unlikely to change.

Now, there are people who say, you look at a poll like that one with the 73 percent number who want a change in course in Iraq. That doesn't necessarily mean what you suggested, which is a major change in strategy. It may mean a major adjustment in tactics in pursuit of the same policy.

So a better way to look at it is, do we expect a change in policy on Iraq? I would say no.

LIASSON: Yes, look, with 73 percent...

WALLACE: Well, let me add one more thing to that. Let's say that the Democrats gain control of one house of Congress, let alone two houses of Congress. How much can they do to force the president's hand?

LIASSON: Well, I don't think that they can -- well, they can cut off funding. That is what Congress can do. That would be pretty hard with just one house of Congress.

But, look, when 73 percent say they want a change in course, what they're saying is, "We want this to work." In other words, we don't want to see bad news coming out of Iraq over and over again.

The White House's premise all along was if people saw success in Iraq and they felt that we had a plan for victory, they'd stick with the plan. Well, they don't see that, because it's a mess and it's not working.

And if the goal is a stable, not-anti-American, non-terrorist- harboring country, you have to ask the question, what is going to get us there? Giving up on that goal and saying, "We don't care what happens to Iraq, let's just get out because it's a hopeless mess," that would be a true change in strategy.

But the question for people who support a timetable -- and I think after this election, we're going to get this debate. The timetable assumes that if you just tell the Iraqi leadership, "If you don't get your act together, guys, we're going to leave," that that will force them to somehow come together, stop slaughtering each other, Shiites and Sunnis, form a stable government, and get rid of the Shiite militias that are so embedded into the security forces." I really wonder if that's even possible.

WALLACE: Bill, let me ask you a question that I asked the four senators. From all your contacts with the White House, do you think the president still has confidence in Nouri al-Maliki?

KRISTOL: I don't know. I mean, clearly Secretary Rumsfeld doesn't. He basically attacked the Iraqi government on Friday and said they've got to get their act together, it's up to them. The president called Maliki this week to reassert confidence.

I don't know. Maybe he doesn't have much confidence in Maliki. Maybe he doesn't have much confidence if Rumsfeld anymore.

There will be a change, of course. There will not be -- Rumsfeld will leave after the election. I believe Rumsfeld will not be...

WALLACE: You thought he was going to leave after the last election.

KRISTOL: Well, he should have left after the last election, and we might actually be winning the war in Iraq now. But I think he will leave after this election.

And I think there will be a -- obviously the president's not going to change fundamental goals. I really do believe that he's committed to staying and to victory. But I think there will be a real debate about a serious change in course.

What I'm worried about...

(CROSSTALK)

WALLACE: ... define what victory means.

KRISTOL: Right. I mean, Jim Baker's going to report with this Iraq study group, and he's going to come down for (inaudible) Iran.

I mean, I'm worried that the change of course will go in the wrong direction. I think the conservative position -- I do not think a lot of conservatives around the country, a lot of hawks, will support more of the same for the next two years, or even more of the same with minor tactical variations. I think the conservative view will become, in effect, win or get out. And I think there will be support for a real serious effort to win, resurging of troops and a change -- a willingness to really fight to win. I'm worried that Rumsfeld's not for that, Baker's not for that...

WILLIAMS: But you're thinking neo-con...

LIASSON: Who are we fighting? The Sunnis and Shiites seem to want to slaughter each other. The Sunnis don't want to be in the minority. The Shiites don't want to give them a share in the pie. Who are we fighting, in which case?

KRISTOL: Well, if that becomes the dominant analysis, I think there will not be support in the country for staying for four (ph) years.

WILLIAMS: But there's not support now, Bill. So that -- I understand that you're saying among policy-makers, let's go take full control. I mean, we could go bomb them and take control, but that would not do it.

So then you come down to real ideas, and real ideas are things like partitioning the country, or you establish...

HUME: How are going to impose that?

WILLIAMS: Well...

KRISTOL: That would require more troops. I'm not even against it, necessarily, as an outcome. But just be clear about this: A decent partition of the country, which did not involve millions of people being killed, would require sending more troops in in the short term, because you would need to establish order, you would need to separate people, you would need to provide security for the Kurds, you would need to make sure the Shia aren't slaughtering the Sunni, et cetera.

Every realistic outcome, including partition, including us getting out of there, in my view, requires establishing security. If we do not establish security now, the outcome is going to be grim.

WILLIAMS: But established security could also mean that we have bases outside, and say, as long as they don't have terrorists in there, (inaudible) harboring terrorists, it's none of our business. If they want to fight among themselves, let them fight.

And then the other possibility that's been bandied around town is go in and have a coup, just get Maliki out of there...

KRISTOL: Who?

HUME: Who?

LIASSON: Who?

WILLIAMS: And why shouldn't that be part of... WALLACE: The idea is that you would basically look the other way and the Iraqi army would depose Maliki and put in a strong man.

HUME: The striking thing about this whole discussion is what a collection of bad ideas all of these alternatives seem to be.

WALLACE: Well, they're certainly unattractive alternatives.

HUME: They're all very unattractive. Which puts you in the position where the president now sits.

The current approach seems not to be working. Now, it may be because the terrorists have masked (ph) everything for a huge bloody push and the fomenting of the most sectarian violence they can in an effort to drive us out, and they think the election will be the lever for doing that. And it might prove to be, in some long-term way.

Or, and it could be that this will subside some after the election. It's something, no doubt, the administration hopes for.

But the whole idea...

WILLIAMS: But you're going to leave it, then, for the next president? Are you going to say, forget the fact there are no weapons of mass destruction, mobile weapons labs turned out to be nothing? You're just going to forget all that, Brit?

HUME: The question is, Juan, forgetting it really means pulling out, going away and leaving that situation to become the mass slaughterhouse that it would inevitably be, not to mention the extraordinary hotbed and homestead it would be for terrorists.

WALLACE: We're going to have to leave it there. Thank you all, panel. See you next week. To be continued.

For more visit the FOX News Sunday web page.

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