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John Kerry, Newt Gingrich, Roundtable

Fox News Sunday

CHRIS WALLACE, HOST: I'm Chris Wallace. President Bush keeps up the pressure on North Korea, next on "Fox News Sunday."

It was the joke that almost derailed the Democrats' march to their majority...


SEN. JOHN KERRY (D), MASSACHUSETTS: ... make an effort to be smart, you can do well. If you don't, you get stuck in Iraq.


WALLACE: ... and led his party to ask him to sit out the rest of the campaign. Today, for the first time since the botched joke controversy, an exclusive interview with Senator John Kerry. We'll ask him why he didn't apologize right away and whether he's still a viable candidate for 2008.

Reigniting the Republican revolution: What will it take for the GOP to take back control of Congress? We'll talk with the architect of the sweeping Republican victory of 1994, former House Speaker Newt Gingrich.

Plus, why is this woman laughing? The Democrats' new leader in the House suffers her first defeat. We'll hear from our Sunday regulars: Brit Hume, Mara Liasson, Bill Kristol and Juan Williams.

And our power player of the week, cooking at the White House for 10,000.

All right now on "Fox News Sunday."

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

Wrapping up his visit to Vietnam, President Bush pressed the issue of ending North Korea's nuclear program, especially in a meeting with the president of China. A statement from Asian and Pacific nations calls for North Korea to return to talks and stop developing nuclear weapons.

The president travels next to Indonesia, and even before he arrives, thousands of protesters marched the streets of Jakarta, some calling Mr. Bush a war criminal.

And in Iraq, at least 22 people are dead after a suicide bombing in the southern city of Hillah. According to police, a man drove his minivan into a crowd, promising work, then blew up the truck. While the last few weeks have been a time of triumph for most Democrats, it's been a time of trial for Senator John Kerry, who disappeared from the campaign trail in the post-election victory lap after making a joke that went bad. Today, Senator Kerry is sitting down for his first interview since the controversy.

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

KERRY: Glad to be with you. Thank you for having me.

WALLACE: Speaking to a former hockey player, have you been in the penalty box the last few weeks? Did Democratic leaders say to you that you were becoming a distraction in the final week before the election and that you should sit down?

KERRY: You know, I would differ a little with the characterization you gave. Look, first of all, obviously, it was a bad joke, and I apologized for it. And we moved on, and we should move on.

You know, we had an historic election, absolutely historic. The American people spoke. And I worked very, very hard for those two years to help us elect a Democratic majority.

It was clear to me that if people wanted to make that joke a distraction, I didn't want it to be. I wanted to win -- results. You know, campaigns are about winning and losing. We won.

Now we move on. You just had the news a moment ago, people are dead in Iraq. We have a terrible, unbelievable morass over there that's going to require enormous leadership. We Democrats are excited about what we've won, which is an opportunity to govern and help lead the country in the right direction. That's what I'm looking at.

WALLACE: Well, I must say -- and we told you before you came on that we were going to talk some about the joke. I agree there's things to talk about after, but there are questions people have, and I'm going to ask you about them, sir.

Didn't two senators, didn't Democratic leader Harry Reid and also the Democratic campaign chair, Chuck Schumer, didn't they call you up after the joke and say to you, "This has become a distraction; sit down; get off the campaign trail"?

KERRY: Chris, let me again say to you -- I mean, let's be serious about this. This was a bad joke. And I own it. And I apologized for it.

But the full measure of the Republican attack machine knew exactly what I had said, and they set out to make it a distraction.

I had a discussion with a number of leaders, including my colleague Ted Kennedy and others, in order to make a judgment about what was best to accomplish the goal that I had been working for.

And since you had some very close races, I thought it was important. I made the decision. It was my decision to make certain that I didn't distract.

And the results are what speak for themselves. In fact, the Republicans made a terrible mistake, because they shifted the topic back to Iraq. The polls showed that we went up. They didn't want to talk about Iraq, and within two days, they tried to shift back to taxes.

This is over. This was a misstatement. All of us make them in life. You wish you could have it back, but you can't.

But what really is the measure is, what are you fighting for? This election was a moment of history where the people of our country said, "We're tired of a corrupt Congress. We're tired of a Congress that's dysfunctional. We're tired of seeing the main issues that affect our lives not be attended to."

And we Democrats -- and I'm proud that I contributed to that. You know, last summer people didn't want to talk about Iraq. I brought that to the floor of the United States Senate, and I helped force that discussion with Russ Feingold, Ted Kennedy and others.

So I believe I offered leadership. And leadership is the real test. Do you lead? I believe I've laid out an agenda on energy independence. I think I've laid out an agenda on health care, an agenda on how we get out of Iraq, how we rebuild America's moral authority. And that's what I'm going to continue to do.

And I've offered -- you know, I called Condoleezza Rice, and I said, "Look, let's find a way to work together, because the country needs us to move on." They don't want to talk about a joke that's old news.

WALLACE: But, Senator, in fairness...

KERRY: Only you do.

WALLACE: No, it's not just me. I've got to tell you, there are a lot of people who want to, because they think that it raises questions. Both Republicans and Democrats have said it raises questions about your political judgment.

I want to put up on the screen what it is that your office, your staff said was the joke that you meant to say.

Please put it up on the screen, if you will.

That you said, "Do you know where you end up if you don't study, if you aren't smart, if you're intellectually lazy? You end up getting us stuck in a war in Iraq. Just ask President Bush."

Question: Do you think that -- that was the real joke; that's not the botched joke. Do you think that that's funny, to call the president of the United States dumb and lazy?

KERRY: I think they didn't do their homework, and I think Americans know they didn't do their homework. It was not a good joke. It was not well-stated. I own it; I apologized for it. And it's time to move on.

Let's look at this question of homework. Let's look at the question of the troops. Who really was insulted?

I'm a veteran. I have fought all my life to help take care of veterans and to honor what service means. Just this past week, in the United States Senate, I added $18 million in order to help for mental health problems that a lot of veterans are having because they come back with post- traumatic stress syndrome, and there are waiting lines, and we're not taking care of them.

You want to know what the insult to the troops is? The insult to the troops is sending them to war for false reasons. The insult to the troops is sending them to war without the equipment that they need, without the armor, without the armed Humvees. The insult was having the secretary of defense who, for month after month after month, refused to listen to the Congress and listen to his own advisers. The insult is having troops who have a strategy that has them mired without the diplomacy necessary to resolve what everyone has said cannot be resolved militarily.

Now, I'm going to continue to fight for that. That's what the American people voted for the other day, Chris. And, you know, this parlor game of who's up, who's down, today or tomorrow, if I listened to that stuff, I never would've won the nomination, I never would've gotten up in the morning. And I'm not going to be sidetracked by it now, and nor should you.

WALLACE: But, Senator, people are trying to take a measure, as they look ahead to 2008, of the various candidates, and are they...

KERRY: Well, then, you know what I say to them? Take a measure of the guy who mortgaged his house when I was at 30 points below and nobody said I could win. Take a measure of a guy who got up every morning and went to Iowa and said, "I know how to win this." Take a measure of a guy who was 10 points down and won three debates against a sitting president of the United States and put on a convention that had a great message to America about where we're going.

I believe I learned a lot of lessons in that race. And one of the lessons is, when the full attack machine of the Republican Party is leveled at you, fight back. I fought back, for my honor, my integrity and for the rectitude of what I said.

WALLACE: But, Senator...

KERRY: And now we go forward. That's behind us.

WALLACE: But, Senator, wait, wait. The point that a lot of Democrats, not Republicans, Democrats are making at this point is, they're saying you learned the wrong lesson from 2004, that the lesson you -- and you were on the show about a month ago...

KERRY: Right.

WALLACE: ... and you said, "I'm not going to get swiftboated again."

KERRY: Correct.

WALLACE: Some people say that's the wrong lesson; that the right lesson is to be politically agile, to be deft in handling whatever the situation is. Sometimes when it's fighting back and that's appropriate, fight back. When it's apologizing, that's appropriate.

I want to take you, if I may, sir, I want to take you back, because some people say what may have gotten you in as much as trouble as the joke is the way you responded to it. Both...

KERRY: But, Chris...

WALLACE: If I may, sir, both Republicans and Democrats were demanding an apology, but here is you at the news conference the next day. Let's take a look.


KERRY: Let me make it crystal-clear, as crystal-clear as I know how: I apologize to no one for my criticism of the president and of his broken policy.


WALLACE: Senator...

KERRY: Yes, but why didn't you play the part where I said, "It was a botched joke, and I never intended to insult anybody, especially not the troops"?

WALLACE: But why didn't...

KERRY: Because that was part of what I just said.

WALLACE: ... apologize. The question is...

KERRY: I apologized...

WALLACE: The question is, why not just stop the bleeding right away...

KERRY: Sure, Chris, I've apologized. And this is now clear to everybody, that it was a botched joke; I own it.

But I think the measure of an individual in public life and the measure of what I have done is much bigger than missing one word in a bad joke.

And, you know, that's a game everybody plays here in Washington. What people want to know is, what are we going to do about these major issues? America has lost its moral authority in the world. Does that matter, as we sit here today? Does that matter to people who play this parlor game in Washington? I've been leading the effort to try to restore how we have a foreign policy that makes us stronger. We need to have the ability to be able to talk directly to North Korea. We need to deal with Iran and Syria. I promise you the Baker Commission will come out and say that we should be doing things that some of us have been saying we should be doing for three years. That's leadership.

Energy independence: The United States of America could have jobs, better health, better environment, better security if we move toward real energy independence.

What the American people voted for the other day is to stop having an oil industry that writes an oil bill, a drug industry that writes the drug bill, a bank industry and credit card industry that writes a bankruptcy bill, and takes away from the American people their right to be in the people's house. The people's house once again belongs to the people.

Now, I think what's important for us to talk about is, how do we build a bipartisanship that lifts our government and seizes this moment of optimism and hope that's been expressed by the American people?

WALLACE: Well, Senator...

KERRY: That's what's important.

WALLACE: ... we keep talking past each other. I'm going to...

KERRY: Well, no, that's only because you want to focus on the picayune, not on the real issues that face the country.

WALLACE: I don't think this is picayune, sir. I mean, one of the points is that, on November 1st, when you finally issued your apology, you didn't even come out and say it yourself. You issued a statement. You issued a written piece of paper.


WALLACE: If I may, sir, just finish.

KERRY: Sure.

WALLACE: That same day, November 1st, a woman named Danna Swain Palmer sent you and every other senator a letter. Her son, Cory, left the computer engineering program at West Virginia University -- here he is up on the screen -- to join the Marines, sign up for the Marines. And this May, he and three of his comrades were killed by a roadside bomb in Iraq.

And here's what she wrote to you, Senator: "These men, along with their peers, are superior in intellect. How dare you dishonor them by your careless words."

Mrs. Palmer, Senator, has yet to hear -- this was three weeks ago -- has yet to hear from your office. Here is your opportunity, on camera, in front of the country. What do you say to her and everyone else about those comments you made?

KERRY: I'm sorry. I apologize. Profusely, profoundly. And I have said that on any number of occasions, and I can't make it more clear.

But at the same time, Chris, let's be honest about this. I mean, let's be honest about it. The White House knew that I didn't set out to or intend to insult anybody. And people who read the full context of my remarks knew that I didn't set out to do it. And what those troops heard they heard because the White House attack machine took those comments and took them into what they want.

And what I learned in '04 is, if people are going to try to make you something that you're not, if people are going to try to manufacture who you are, you have to fight back for that.

Now, I am deeply sorry for that woman, for her. And I have asked my staff to find anybody that I can contact -- I've contacted people in the military, because I feel this so profoundly.

Even the joke itself wouldn't make sense for the simple reason that we do have a volunteer army and you have to be smart to get into it. So, even that runs counter to what they did.

Now, I've apologized, and we have to move on to the real issues that face this country. And those are the issues of, how are we going to govern? How are we going to lift this place up? People didn't vote -- you know, nothing that I said affected this race. We won all our races. That's what I wanted to do.

And I think I showed political acumen, in fact, to understand that. My instinct would've been, if I'd been on the ballot, to go out. My name wasn't on the ballot. So I went out and fought and did what I thought was right in order to help elect a majority.

You know, winning -- you know, Newt Gingrich is coming on. You know, campaigns are about winning and losing. We won. We won a majority in the Congress. We won the right to go forward. That's what I've been working for.

And now I'm excited, as Americans are. They don't want to sit here and rehash the past. That's a Washington game, that's an inside- politics game.

WALLACE: How much damage...

KERRY: The real test is whether or not we're going to do what they've elected us to do. Are they going to accept responsibility? Are we going to do health care for all Americans? Are we going to reform the ethics of the United States Congress so we can open it up and be accountable and transparent?

WALLACE: Senator, how much damage has this done to your possibly seeking the presidency in 2008?

KERRY: The voters will decide that in the future. I believe the voters want to see leadership. And I'm proud of the leadership that I've offered. As I said, I was the first person to run for president who actually advertised publicly about energy independence and dealt with climate change in a real way.

We are the only nation in the world that is the denier of the facts and science of climate change. That has to change. I've been leading on that. Leading on health care -- I have a health-care plan that I laid out that I think is still one that would make our businesses more competitive, one that would help our country to reduce the cost of doing business and provide health care that's affordable to all Americans. And I know that we can fight a more effective war on terror and make our country more secure.

That's the crux of...

WALLACE: I want to ask you about the war on terror in a second, but I just want to make clear on 2008: You have not given up the thought of running for president in 2008?

KERRY: Not in the least. I'm looking at it in the same way. The people that I have talked to across the country are -- my team is confident and strong. I don't know what I'll do.

WALLACE: Are you thinking of setting up -- because that seems to be the thing to do now -- are you thinking of setting up an exploratory committee?

KERRY: You know what we need to do right now? And I've said this all along. My decision would be somewhere around the turn of the year, beginning of the year. Right now our focus, all of us, ought to be to respect what happened on Election Day.

The American people want us to make the Congress function in their interests. The American people are waiting for us to lift up an enormous challenge.

And what's interesting to me is, you know, my colleagues in the Senate and the House are not going to do unto others as they've done unto us. We're not going to be seeking retribution. We're all reaching out to our ranking members as future chairmen. We're going to try to work across the aisle. We're going to try to build the consensus necessary.

And I'm prepared -- as I say, I called Condoleezza Rice. Nothing is more important than resolving Iraq, Afghanistan, North Korea. And I will do everything in my power there.

WALLACE: Let me ask you about Iraq, if I can. We've got about a minute left.

General John Abizaid, the commander of all U.S. forces in the Middle East, spoke to the Senate Armed Services Committee this week. He said to start pulling troops out of Iraq now would only increase the sectarian violence and weaken the government.

One, how do you respond? And, two, do you still have confidence in the generals in charge of the war in Iraq? KERRY: I have confidence in the generals. I think they've been put in a very, very difficult position.

What I don't have confidence in is the policy. And General Abizaid is giving us a diagnosis that is based on the current policy. But that policy has to change, and it can change.

I believe that if you pursue -- I know that if you pursue legitimate diplomacy, the way Henry Kissinger did when he made multiple trips, night after night, day after day, twisting arms, working; if you make the effort that Jim Baker did to build a legitimate coalition, I'm confident we can do what's necessary to get the neighborhood -- and I include in that Iran and Syria -- to take greater stakes in what they realize they have a stake in.

And, frankly, it's very incumbent on us Democrats -- and this is why I called Condoleezza Rice. We have a significant role to play, because we have credibility, because we need to represent a united government. This is in America's interest. This is not Democrat or Republican.

And, frankly, that's how you protect and honor the troops. You give the troops the civilian leadership and the policy that backs them up. We owe them that, and that's what I'm going to work on.

WALLACE: Senator Kerry, we're going to have to leave it there.

KERRY: Thank you.

WALLACE: I want to thank you so much for coming in today...

KERRY: Proud to be here.

WALLACE: ... and dealing with all of this. Please come back, sir.

KERRY: I will.

WALLACE: Up next, the Republicans pick a team to try to lead them back to the promise land. We'll ask former House Speaker Newt Gingrich what the GOP needs to do. Back in a moment.


WALLACE: In 12 years, the Republicans went from seizing control of both houses of Congress to once again watching from the sidelines, leaving many GOP leaders wondering where they went wrong. For answers, we turn to former House Speaker Newt Gingrich.

And welcome back to "Fox News Sunday."


WALLACE: So what do congressional Republicans need to do between now and 2008?

GINGRICH: Well, I think they have to recognize that the country sent them a message. I mean, the first thing Republicans have to do is realize they lost the election. I actually agree with John Kerry about this. Elections matter. The country sent a signal that, on performance, they were unhappy; that there were some scandals that made them even more unhappy; that the conservatives felt the Republicans were not controlling spending the way they wanted to.

And I think that there's got to be some fairly serious soul- searching, not just on Capitol Hill, but in the White House, as Republicans try to understand, you know, where do we go wrong and starting with the State of the Union and the budget and the things that will come up in January, how does the Republican Party get back on message in what had been a growing center-right majority over a 20- year period, starting with Ronald Reagan in 1980.

WALLACE: You call for bipartisanship, but you say that there are two very different choices: that there's one bipartisanship where you try to work with the congressional leaders, with Nancy Pelosi and Harry Reid. The other way is what you call conservative bipartisanship, which is to try to peel off some of those conservative so-called 54 Blue Dog Democrats, in effect the way that Ronald Reagan did it in the early '80s.

GINGRICH: Yes, I was a sophomore, a very back-bench, junior congressman when President Reagan reached out and, for example, on his tax cuts, we got 49 Democrats who bolted from Tip O'Neill and the liberals and gave the Republicans a majority on the House floor.

Now, the Republicans in the Senate, of course, are right at the edge of a majority, with 49 votes. The Republicans in the House will be over 200, so they're stronger than they ever were under Ronald Reagan.

When you look at the number of Democrats who won in places like North Carolina, Indiana, Arizona, campaigning as centrist or Blue Dog or conservative, depending on where they were, Democrats, there's the potential that, with the right policies and right choices, that you could consistently have floor control for the conservatives in a bipartisan coalition even though you have a very liberal Democrat speaker.

WALLACE: You wrote an open memo this week in which you said the following, and let's put it up: "Are House Republicans electing a leadership team to be an effective minority or a leadership team to regain the majority?"

Well, on Friday, they chose to keep John Boehner and Roy Blunt as their leaders, both men with strong ties to lobbyists and special interests. And I don't have to tell you, some of your fellow conservatives weren't happy about that. Dick Viguerie said that "we've decided to reward failure." Jeff Flake, congressman from Arizona, said, "We're still in denial."

Does that same team of Boehner and Blunt, do they send the message of change that you say voters want to hear?

GINGRICH: Look, let me start with John Boehner. John Boehner was part of the original reform gang of seven that worked with me when I was the minority whip. John Boehner organized the Contract with America event on the Capitol steps. He was a very visionary leader of the House Republican Conference when I was speaker. And Boehner has only been the majority leader for the last seven or eight months and was not part of how we got in trouble.

Now, he's going to have to decide -- and I know John pretty well, and I think he desperately wants to be speaker and not minority leader. He's got to decide, is he going to focus on regaining control of the House, or is he going to focus on being the White House's floor leader? They are very different jobs. And my hope is that Boehner is going to decide that he wants to be the leader who helps the party get back into majority status.

WALLACE: Well, it's interesting you say that, because you seem to indicate that working for House interests is different from working for the White House.

I mean, there's a thing that's run through a number of statements you've said recently: Do you think the White House and President Bush have gone off-track?

GINGRICH: Look, I think every White House is its own world. I mean, President Eisenhower, President Nixon, President Reagan in his last two years. You know, it is inevitable.

The president gets up, and he has a legacy concern. What do I do in the next two years? I hope he'll decide that that legacy is in a bipartisan coalition that helps also, by the way, elect a Republican president in '08. The House Republicans have a different institutional challenge. How do they reach out in very closely contested districts, recruit the candidates, build the record, create the excitement and the energy to regain a majority?

They're not automatically identical. They can be identical. And I think if they work together and they're serious about it, they can make it identical. But they shouldn't start out every morning assuming that they're the same interests.

WALLACE: I want to press the point about the White House, because you blistered President Bush recently for getting rid of Defense Secretary Don Rumsfeld on the day after the election...


WALLACE: ... rather than making this announcement a couple of weeks before. You say if he had done that, that the Republicans would still control the Senate and they might have a lot more seats in the House.

How do you explain the president's actions?

GINGRICH: I don't. I mean, I look at three things we've heard in the last week: dismissing Rumsfeld; General Abizaid saying we needed to change tactics in Iraq; and reports that the Baker-Hamilton Commission has been talking with Syria. And I look at a level of flexibility, which apparently was going on before the election, which is the opposite of what the American people were being told.

And I believe a large part of this election was an effort to send a signal that said you can't just stay the course in Iraq. You have to have flexibility. You have to find a way to get to a solution.

So I look at that, and I don't understand why, in mid-October, the president didn't publicly say, you know, "We're going to go through changes. I hear you. We're going to do things differently."

And I think, had he done that -- and I've talked to a lot of candidates, including several defeated incumbents, who absolutely believe that, had that been the case by October 15, that you would still have a Republican Senate and you might well have a Republican House.

WALLACE: We asked presidential counselor Dan Bartlett about your criticism last week. He said if the president had made this announcement about Rumsfeld two weeks before the election, it would've looked, one, desperate and, two, political.

GINGRICH: Well, first of all, it's inherently political. I mean, deciding whether to keep the secretary of defense is always inherently political.

But in an election campaign, why wouldn't -- this goes back to my point about how White Houses think. Why wouldn't a White House, two weeks before an election in which the largest single issue is Iraq, try to answer the country -- not be political in some narrow, cheap, consultant sense, but answer the country, say to the country, "You're right; I hear you"?

And I think it's a huge mistake for White Houses to think that somehow they can ignore the American people. And they usually get punished by the American people deciding to send a stronger and stronger signal until, finally, they get the message.

WALLACE: What do you think of Nancy Pelosi? And as a former speaker, how serious is her having this early defeat?

GINGRICH: Well, she's going to be the first woman speaker in American history. She is going to be a very left-wing San Francisco- values speaker. And she should be; she represents San Francisco, and that's honestly her background.

She has to learn to manage the House. I made a number of mistakes when I was speaker. She will make a number of mistakes when she's speaker.

But Republicans, instead of chortling about, you know, the fact that she backed Murtha rather than Hoyer, Republicans need to start by saying, you know, if she has these weaknesses, how come she's going to be speaker? She won.

She and Rahm Emanuel put together a very intelligent campaign. People like Steny Hoyer went out and raised a lot of money. The Democrats took control of the House for the first time in 12 years.

She did make a mistake with Murtha. I think, frankly, backing Jack Murtha and then losing, I think if she appoints Alcee Hastings to be the head of intelligence, that will be a further mistake in the direction of making her far too left-wing and far too insensitive.

But I would say no one should render judgment on her until she's had six months to learn this new job.

WALLACE: Finally -- we have a couple of minutes left -- let's look ahead to the 2008 presidential race, because once an election's over, we've got to look at the next election.

GINGRICH: That's right. It never ends.


WALLACE: With George Allen and Rick Santorum now apparently out, is there a vacuum on the right for a candidate appealing to true conservatives?

GINGRICH: Well, there's probably a vacuum, but you have to be fair. Governor Mitt Romney is working very hard to fill that vacuum, and may well succeed. Senator McCain would like to find a way to fill that vacuum and is working very hard at it.

WALLACE: Why do conservatives have doubts about John McCain? And are they legitimate? GINGRICH: Well, I mean, look, I have a fundamental difference with Senator McCain on amnesty for illegal immigrants; on the tax policy, where he was very much against tax cuts; on the question of McCain-Feingold, which I think is the first censorship...

WALLACE: Campaign finance reform.

GINGRICH: ... which I think is the first censorship bill since the Alien and Sedition Acts in the 1790s and I think is a profoundly bad bill and is part of why these last elections were so unendingly negative.

So there are serious principle discussions, but Senator McCain is a relatively solid conservative. He's a very honest, hard-working man. He has a very patriotic record, both in the military and in the Congress. I served with him in the House.

And you'd have to say, you know, either he or Giuliani is the frontrunner right now. And then McCain, in organizational terms, is the frontrunner. So he's a serious man.

I do think on the movement right, in the areas that produced Ronald Reagan and produced Barry Goldwater, there's a yearning for a clearer voice of conservatism. And I think that Mitt Romney has an opportunity to fill that.

WALLACE: You say Mitt Romney. McCain started an exploratory committee this week. Thirty seconds: Are you going to do the same?

GINGRICH: No. We have a program called American Solutions we're working on. And in September of next year, I'll be glad to come back and talk with you about running for president, but not until...

WALLACE: Not until that late?

GINGRICH: Not until September.

WALLACE: Why so late?

GINGRICH: I think it's important for us to focus on solving very big, very real problems. We have lots of time for personal ambition. And I think an awful lot of this early energy is wasted, and we ought to be focusing on, you know, how are you going to compete with China and India, how are you going to solve the problem in Iraq? I mean, real issues that need real solutions.

WALLACE: Mr. Speaker, thank you. Thanks for joining us today. Appreciate it.

GINGRICH: You bet.

WALLACE: Coming up, we'll talk with our Sunday regulars about the choice of leaders for the new Congress. Nancy Pelosi suffers an early setback. And Republicans go for continuity over change. Stay tuned.



NANCY PELOSI (D-CA), SPEAKER-ELECT: As we say in church, let there be peace on Earth, and let it begin with us. Let the healing begin.


WALLACE: That was speaker of the House-to-be Nancy Pelosi, trying to put the best face on a stinging defeat as Democrats rejected her choice for majority leader.

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.

So, Nancy Pelosi tried to get rid of her number two, Steny Hoyer, because of longtime personal and professional differences, political differences. But her choice, anti-war advocate John Murtha, in the immortal words of George W. Bush, got a thumpin'.

Brit, what does this tell us about Pelosi and what does it tell us about her strength in the new Congress?

BRIT HUME, FOX NEWS WASHINGTON MANAGING EDITOR: Well, it's a little early to tell from this, but it looks on the surface like kind of an unforced error. At first it was thought that she had sort of such a relationship with Jack Murtha that she was going to personally back him, but that would be all there was to it. It would just be an expression of a view and that she would recognize that Hoyer was going to win and she wasn't going to go all out.

Well, it's not true that she went all out, but an awful lot of work was done in her direction to try to swing this for Murtha, and it failed utterly. He was beaten, what, 149-86 or something like that, was Murtha. That's a major defeat.

The other thing about it is that she has expressed a view on the war which is identical to Murtha's. And basically, she wants to get out and she doesn't seem to care particularly about what the consequences are in Iraq and the aftermath. I'm not sure that's a position that a lot of Americans would support, but I think that's where she is. And if that's the case, of course, we're likely to see more such actions on her part that will put her perhaps even at odds with her own majority.

MARA LIASSON, NPR: Yes, look, I think the decision that Nancy Pelosi made left a lot of people scratching their heads and kind of baffled. And I think the outcome is also unclear. Now, if she knew all along that Murtha wasn't going to win, but did it to show loyalty to someone who had been loyal to her? And to also send a signal to the liberal base of the party that they were hurt in this election, but that now she and Steny Hoyer will work just as well as they've worked together, regardless of personal feelings about each other, as they've worked together for the last number of years?

Or does it signal something that the Republicans were saying. Look, 149 of her caucus is willing to buck her and we're going to try to peel them off on other issues. I don't know if that can actually happen, but I do think that the big next test for her -- and it's almost more important than the majority leader race -- is who she's going to put in as the intelligence committee chairman. Whether she's going to put -- she seems to have all but decided Jane Harman will not get it again, but I think that's a very big test for her.

WALLACE: And the reason that's a big test, Bill, is because if she takes Alcee Hastings, who would the senior person, I guess, if Jane Harman isn't, this is a fellow who was removed as a federal judge on corruption charges. He was acquitted of them in a criminal court, but the U.S. Senate saw fit in its wisdom to remove him from office. The idea of making him house intelligence chair is questionable, no?

BILL KRISTOL, WEEKLY STANDARD: I think -- and the U.S. House voted to impeach him when the Senate convicted him. I think Nancy Pelosi...


KRISTOL: So there's redemption in American politics. I mean, it will be a good talking point for Republicans and I think it will not be an effective committee for the next two years. I don't suppose it will make a fundamental difference.

You know, what's striking about Pelosi's endorsement of Murtha is she believes that the duty of the Democratic Congress is to get us out of Iraq. I think that's an honest belief of hers, and of Jack Murtha's. I don't think that's political. And everyone -- the conventional wisdom in Washington right now is but of course they'll never cut off funds. That would be politically suicidal, and that's not going to happen.

I don't believe that. Four months from now, if things continue to slide downhill, if the president hasn't adjusted course, if hawks like Senator McCain haven't been satisfied that there's been an increase in troops or that we have a real strategy for victory, I think Nancy Pelosi and the Democratic House will move at some point to enforce timetables and to enforce a funds cutoff.

And frankly, if things don't get better four or six months from now -- that was the window that Abizaid gave, remember, in his testimony? He said he had -- we think we have four to six months to prevent it from really sliding over to the edge to really just sectarian civil war. And if things aren't better four or six months from now, I think we could be looking at a Democratic House and some Republicans who are willing to just pull the plug on Iraq.

JUAN WILLIAMS, NPR: I don't know about pull the plug, but I think you're looking at an American nation that is totally discontent with the way things have been going in Iraq, and I think that's why she felt comfortable in making clear her support for Murtha as the hero, the anti- war hero, the guy who would, you know, put his credentials as a Vietnam veteran...


WALLACE: ... that that was completely rejected.

WILLIAMS: It wasn't completely rejected.

WALLACE: It was rejected by the majority of the House...


WALLACE: ... of the Democratic caucus.

WILLIAMS: No, there was a decision made, Chris, a decision made that the leadership team that had Pelosi and Hoyer is a better team and that Hoyer is clearly a better inside player in terms of...

HUME: That wasn't what Pelosi wanted, though, was it?

WILLIAMS: No, but I'm telling you, I think Pelosi may have been wise. I think the media may have misplayed this, Brit. I think, in fact, it may be that she is sending a statement to the -- to her base that the Democrats understand the war was a defining issue of the midterm elections, that this Democratic party's not going to run away from the war, not going to try to play moderate and somehow play ball with the White House in a way that will allow the war just to continue ad infinitum.

And that what you've got here is Steny Hoyer, who is much more moderate, much more of the blue dog type Democrat. He gets in. But now what's he going to have to do? He's going to have to kiss up to Pelosi. She's not going to kiss down to him.

WALLACE: All right, before we end this discussion, I want to turn to the Republicans if we can. Because they also made an interesting choice. There were two young conservative -- and there you see them up on the screen, House members Mike Pence and John Shadegg -- who wanted to jump the line and take over the leadership. In fact, Republicans decided to stand, as we mentioned, with Newt Gingrich, with the current team of John Boehner and Roy Blunt. Brit, what do you make of that?

HUME: Well, Boehner is an old face going back, as you heard Newt Gingrich describe, to that era. But he's associated with the reform element in the Republican caucus in the House. He's just really taken over as majority leader. So -- or was majority leader. He'll be minority leader, of course, in the next House. So it's not as if he was necessarily someone who could be identified as part of the problem.

Roy Blunt, of course, goes back to the DeLay era and is a technician and a vote counter and a good one from all accounts. It's very like the Republicans not to throw over their next in line people. They don't -- they tend not to do that. Democrats are more inclined to do that. And in this case, Republicans decided not to. And I suppose it's -- in Boehner's defense, you could say he hasn't been around very long. The guy deserves a chance.

LIASSON: Yes, I think that the Republicans decided that you need real tactical skills to be in the minority. The same thing happened in the Senate when they returned Trent Lott to a position in the leadership that was...

WALLACE: Talk about political resurrection, huh?

LIASSON: Talk about redemption. That was really something. But Trent Lott is very able. And I think that the Republicans on the Hill decided that they want people who know how to use the rules, in the case of the Senate, the rules of the Senate, who know how to use whatever small clout the minority party has in the House, to their advantage and to set themselves up for 2008 rather than making some kind of a symbolic gesture or showing a fresh face. Because, let's face it, the minority is some of the less visible faces on Capitol Hill.

KRISTOL: I'm afraid Republicans in Washington are in a state of denial. This was the worst Republican election since 1974. The worst showing across the board for the Republican party since 1974, since the beginning of the Republican realignment. To send the same leadership team back, for the White House to say so far no big changes except throwing Rumsfeld out the day after, I'm worried that they think this is just a tactical defeat, a short-term problem. And I think they need to be more radical in thinking about changes in personnel and changes of policy.

WILLIAMS: I wonder if it's not a -- it's bad news for the White House, I tell you that. I think that not only to have the established leadership in the House reaffirmed, as opposed to going towards new, more conservative people, but then also to see that Trent Lott comes back. Trent Lott has a grudge, I mean like a personal grudge, not only against Bill Frist, but against President Bush, given the way he was treated before.

WALLACE: Oh, it's going to be interesting.

All right, we have to take a break here. But when we return, the top U.S. commander in the Middle East delivers a message that not every senator wants to hear. That's next.



SEN. HILLARY CLINTON (D), NEW YORK: Hope is not a strategy.

GEN. JOHN ABIZAID, U.S. CENTRAL COMMAND: With regard to hope not being a method, Senator, I agree with you. And I would also say that despair is not a method. And when I come to Washington, I feel despair.


WALLACE: Senator Hillary Clinton and General John Abizaid sparring this week about the way forward in Iraq. And we're back now with Brit, Mara, Bill and Juan.

Well, General Abizaid, it was very interesting, took fire from both the right and the left when he appeared before the Senate Armed Services Committee. He rejected calls from Democrats to start pulling troops out, but he also rejected calls, especially from Senator John McCain, to send in more troops.

Brit, how long can he continue to sell the steady as she goes idea?

HUME: Well, it's not going to hold up much longer if the situation doesn't improve. And if it deteriorates further, there will be a cry to do something different, anything different, because, you know, continuing to do the same thing over and over again and expecting the same result is said to be a definition of insanity.

However, it's very interesting to listen to Abizaid on this. Rumsfeld is not gone yet, but he's on his way. If Abizaid had a different view of how this war ought to be fought, one would think we might have gotten an inkling of it.

The truth of the matter is that the way that is being waged in Iraq, it's Abizaid and Casey's war. This is the way they think it ought to be done, and they're worried about two things at all times when it comes to troop levels. They're worried about whether the force is big enough to do the American end of the job. And they're also worried about it being so big that it furthers the sense of occupation and heightens the problems that grow from that, as well as making it easier for the Iraqis to do less.

The policy is the Iraqification of the war. That is what is being sought here, and that's why the steady as you go approach may work if indeed the Iraqis can step up. That's the big question. The Iraqi military and police.

LIASSON: Look, I think that that whole notion that if only we would draw down a little bit and really make the Iraqis understand that we're not going to be around there forever, all of a sudden they'd suddenly be up to the task and do all the things they wanted them to do, make some kind of national reconciliation political deal, get rid of the sectarian militias that have completely insinuated themselves into the security forces, everything would be fine.

What if that's just not the case? In other words, what if they have no willingness or ability to do those things? And I think that's potentially what we're facing. But the other question that was raised this week is, if the number of troops now are clearly not succeeding, the two choices are either, as many Democrats have concluded, cut your losses and get out, it will never work, or as John McCain is suggesting, put in more troops. The generals are all saying there are no more troops to be put in.

WALLACE: Yes, let's talk about that, Bill, because you have been nothing if not consistent for a long period of time in saying send in more troops. General Abizaid was asked about that repeatedly by John McCain and Lindsey Graham. He said two things. One, if we sends in more troops, it sends the wrong signal to the Maliki government that they don't have to get Iraq together. And the other thing he said is, we could send in 20,000 more troops for a brief time, but as it's currently configured, the military can't sustain that.

KRISTOL: Well, on the first point, this has been Abizaid and Casey and Rumsfeld's consistent theory, that Iraqification comes ahead of victory, is the way I would put it. Or the only way to win, to be fair to put it, is Iraqification. I think that's been now -- that's false. We're failing at Iraqification because there's no confidence that we'll be there to help the Iraqis who are with us. So I think that theory was not crazy. It's been discredited. It's time for more troops.

Are there more troops? There are. It would be a strain on the army. You could do 20,000 in the short-term. You could do up to 50,000 over six to eight months. It would require a lot of strain and a lot of extending deployments and taking people out of Okinawa and other places and bringing them into Iraq and stressing our commitments elsewhere. And we need to rebuild the military at the same time.

But, look, Abizaid's job -- he's not chief of staff of the army. He is a combatant commander. He is commander of CentCom. Casey is the field commander. Their responsibility is to win the war. And in my view, they have talked themselves into this notion that their responsibility is to Iraqify the war instead of to win the war.

We can afford to win this war. If we choose not to -- and I think Abizaid said something very important when he said I come back to Washington and I feel despair. That's a big problem. I think Bush has two or three months. If by the state of the union -- I agree with Brit on this -- if by the state of the union, things aren't getting better on the ground or there's not a really plausible change of tactics here at home, I am very worried that political support will crumble; not among Democrats, but among Republicans.

WILLIAMS: But I think political support is gone. I think that's why increasing the size of the force is really not an option politically. I don't think there's support for it. And I think that, on the contrary, there's concern about the sense of the U.S. being an occupying force. And that's why the Baker commission I don't think is even looking at that as an option. What they're talking about is stability, maybe containing Iraq so that you don't have the insurgents there festering and growing in number.

And maybe you also have a possibility of redeploying on a more gradual rate and pulling in people like the European allies, Syria, Iran. Maybe even extending it in terms of bringing back negotiations over the Arabs and the Israelis and saying, you know what, this is a regional issue.

KRISTOL: Oh, my God.

WILLIAMS: I don't think, though, that there's any realistic and -- you know, you and Brit agree on this. The Iraqification hasn't worked, isn't working.

HUME: Well, here's the problem of arguing against Iraqification as a strategy. At some point, in order for this whole enterprise to be a success, the Iraqis have to take charge. We're not going to appoint a viceroy and have a permanent occupation of the country and have it defended and policed by the American military in perpetuity. At some point, the Iraqis have to step up and take over.

The sense, obviously, is that if you don't make them do it now and it's really urgent, it's not going to be easier to make them do it later, and an insurgency can revive. So that this policy of trying to help and protect where needed while building them up may be the only policy that makes sense.


WILLIAMS: ... a democracy.

HUME: Juan...

WILLIAMS: Remember, we went in there, we were going to promote democracy.

HUME: I'm making the point that -- no, exactly the opposite point.

WILLIAMS: What's the point?

HUME: Listen to me. Which is that a democratic Iraq has to be able to defend itself. It cannot be a successful, people-driven democracy while it's depending on an external force to protect it. And this is what -- this is what the whole idea is, is to get Iraq into a position where it can police itself, defend itself and have confidence in its own...

WILLIAMS: I think our interests as Americans is to simply say, listen, you may not be able to defend yourself, but we'll defend you to the extent that we don't want terrorists using you as a training ground and we'll stop that. That's the American interest. What you want to do in terms of sectarian violence, democracy, that's up to you.

WALLACE: Well, we'll have to get Brit's response next Sunday. Thank you, panel. We'll all continue the discussion in a week.

For more visit the FOX News Sunday web page.

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