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Edward Kennedy, Frederick Smith, P.X. Kelley, Roundtable

Fox News Sunday

CHRIS WALLACE, HOST: I'm Chris Wallace. A mass kidnapping in Baghdad, next on "Fox News Sunday."

One of the most powerful Democratic voices in Congress makes his first appearance ever on "Fox News Sunday." Senator Edward Kennedy talks about the war in Iraq, health care and the next presidential campaign in an exclusive interview.

A new call to end our dependence on foreign oil as a threat to national and economic security. We'll discuss the controversial plan with Frederick Smith, chairman of FedEx, and P.X. Kelley, former commandant of the Marines.

Also, how will the health of this politician affect the narrow balance of power in the Senate? We'll find out from our Sunday regulars: Brit Hume, Mara Liasson, Bill Kristol and Juan Williams.

Plus, our power player of the week finds a way to honor veterans in the Christmas season.

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.

In Baghdad today, another mass kidnapping. Masked gunmen stormed the offices of an aid group affiliated with the International Red Cross and took as many as 30 people. The kidnappers were dressed as Iraqi soldiers.

Also in Iraq, British Prime Minister Blair showed up for a surprise visit today to show his support for national reconciliation. As part of that effort, the government announced Saturday all former members of Saddam's army are welcome to return.

And in New York City last night, another wild NBA brawl. All 10 players on the floor at the end of Denver's easy win over the New York Knicks were ejected for fighting.

Well, joining us now for the first time ever, Senator Edward Kennedy.

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

SEN. EDWARD KENNEDY (D), MASSACHUSETTS: Good morning. Glad to be here.

WALLACE: Let's start with Iraq. President Bush is reportedly considering an option to surge another 50,000 troops into Iraq, and says he wants nothing less than victory. If that's what it takes to stabilize the country and protect us from terrorism, isn't it worth it?

KENNEDY: Well, first of all, no, it's not. And I don't believe that that would stabilize the country, nor do I think it'll bring victory. We have heard in the Armed Services Committee, General Casey, General Chiarelli and General Abizaid, who believe that adding additional troops would enhance and increase what they call the footprint and enhance the kinds of antagonisms against the United States forces at the present time.

What is absolutely necessary is a political resolution and determination by the Iraqi government.

But let me just back up very, very quickly. Since the Hamilton report has been issued, 40 Americans have been killed. Our military has been in Iraq longer than in World War II, World War I, longer than the Vietnam War. They have done everything that they possibly could. They've done it courageously and bravely. And we need a policy that's going to be worthy of their valor.

And we have a president that is on a listening tour about the future of Iraq. We have a president that won't be rushed. Where has this president been?

This country is in chaos. There are now 100,000 refugees that are leaving Iraq every month. Jordan has sealed its borders. Lebanon has sealed its borders. They're rushing into the Middle East. We have 700,000 refugees that have come into Jordan. It's like 30 million people have entered the United States over the last two to three months.

WALLACE: But, Senator, let me follow up on that. Last March you said the following, and let's put it up on the screen: "The administration has been dangerously incompetent, and its Iraq policy is not worthy of the sacrifice of our men and women in uniform."

If you truly believe that, don't you and your fellow Democrats have an obligation, now that you are going to be in control of Congress, to try to stop this president from fighting the war?

KENNEDY: Well, first of all, I was opposed to the war. It was the best vote that I ever had in the United States Senate. And in January of 2005, I laid out a pathway toward what I think would have been reconciliation and success in Iraq, two years ago, that called for the reduction of troops, the redeployment of troops, talked about the Iraqis moving ahead in terms of the reconciliation and talked about the regional kinds of diplomacy. That was two years ago.

Now, one thing about the Democrats is we will support our troops, but we also can support our troops so they are not in harm's way. And I think that's a very important...

WALLACE: Well, what do you mean?

KENNEDY: Well, wait and see. That offers all kinds of options. Our commitment is to the troops, so they're not getting caught in a cross-fire and a civil war, which they are. What are their rules of engagement between the Shia and the Sunni today? You can't tell us, and neither can we hear that in the Armed Services Committee. We are involved in that civil war.

And we are not going to pull the line, in terms of the troops. But we are also leaving open options to protect those troops in whatever way that that would come up...

WALLACE: But the question I'm specifically asking -- you were in the Senate during Vietnam...

KENNEDY: That's right.

WALLACE: ... when the Congress...

KENNEDY: This is a different situation than Vietnam.

WALLACE: But the Congress took steps then, Senator...

KENNEDY: That's right.

WALLACE: ... to scale down our involvement.

KENNEDY: That's exactly right. But we are not at this point at this time, but we are at a point where we are going to put the safety and the security of the troops first. We're going to look out after the troops and take whatever steps are going to be necessary to keep those troops or to try and protect those troops.

WALLACE: Even if you have to...

KENNEDY: And we are going to...

WALLACE: Even if you have to go against the president's policies?

KENNEDY: Well, the president's policy, if they're going to enhance the number of the troops, there's going to be opposition to that, not only just by the members of the Armed Services Committee but within the Defense Department itself. I mean, we've heard what General Abizaid has said, General Casey has said. This isn't a question about individual members of the Congress or Senate.

But we have to understand that there is absolute chaos that is taking place there. This country is falling apart. The bottom is falling out of this thing. And we have to -- as the number-one issue is the protection of the American troops, and not let them be in a sinkhole. And that is our commitment.

Carl Levin has said he'll have the hearings, weekly hearings, on Iraq. This reminds me of those kinds of hearings that Senator Fulbright had on the Vietnam War.

This country will be tuned into this. And the manner of the stubbornness of the president of the United States will not be able to resist what I think is the movement in this country to ensure that we're going to protect our troops and recognize how limited our influence really is.

WALLACE: Do we have any moral obligation to the Iraqis who have risked their lives, counting on our word that we're going to be there? And do we have to ensure that we're going to be safe from the possibility of terrorist attacks coming from Iraq?

KENNEDY: We have an enormous moral obligation to those Iraqis who have worked with us. And we are failing them. We are failing them.

We have taken 202 Iraqis into the United States. There are tens of thousands of Iraqis that have worked with the military, who have worked with military contractors, have worked with the press, that are out there, that are being threatened every single day.

And they are being told at American embassies, in Jordan and in Lebanon, in the countries of the area, "You can't get into the United States of America." We took 100,000 after the Gulf War I, when we didn't have this kind of internal battle.

That is just one aspect of this administration's failed and flawed policy. We are absolutely failing people on the ground, and that's illustrative of as a wide range of different...

WALLACE: Senator, I am told that your leader, the new Senate majority leader, Harry Reid, has just said this morning that he would support a temporary surge of U.S. troops into Iraq.

KENNEDY: Well, I respect Harry Reid on it, but that's not where I am.

WALLACE: You think that would be a mistake.

KENNEDY: Well, I agree with the generals who have appeared before our Armed Services Committee and think an enhanced -- just as we saw the enhanced troops in Baghdad didn't quiet Baghdad down, the generals who have testified before the Armed Services Committee think that we would add to being a crutch for the Iraqi civilian government in not making the right judgments and decisions. I think that is a persuasive case and is one that I support.

WALLACE: Let's talk about domestic policy. According to the nonpartisan National Journal, you had the most liberal voting record in the Senate...

KENNEDY: Oh, wow.

WALLACE: ... in 2005. And you're still called -- I don't know if that's a compliment or not -- the liberal lion of the Senate.

During your 44 years in office, Bill Clinton has said that the era of big government is over. Some of your fellow Democrats have gone along with cuts in social programs.

Over these last 20 years or so, have you changed your view at all about the role of government? KENNEDY: Well, my view is that programs change but our values don't change. And that was really what was at the issue, wasn't it, at the last campaign. I was a candidate in the last campaign. What people were saying in Massachusetts and across the country, that they wanted a change, they wanted a change in Iraq policy, and they wanted a change in Washington, D.C.

They wanted a change from a government that is just looking after special interests to the public interests. And they wanted a government that is going to be concerned about the middle class and their needs.

I will never relinquish and I will never stop in trying to get a comprehensive health care that is going to cover all Americans, just like we have in the United States Congress and the United States Senate and the president of the United States. I will never give up on that.

And I will never give up in trying to ensure educational opportunity. That is what the Democrats inherently stand for. When you come and scratch right down to it, we stand for hope, we stand for opportunity, and we stand for progress. And that's measured in education and decent payment for different jobs.

Now, how are you going to do this? I sponsored eight different kinds of health-care bills in order to try to achieve that. So I'm wide open in trying to achieve and accomplish this.

WALLACE: But let me ask you about this, because some people would say that there need to be bigger changes than what you're talking about. Let me give you an example.

Back in 1995, you were one of only 12 senators to vote against welfare reform, which was subsequently signed by President Clinton. And you said the bill was -- and let's put it up on the screen...

KENNEDY: This is...

WALLACE: 1995.

KENNEDY: Six years ago, OK.

WALLACE: On welfare reform.

KENNEDY: Here we go.

WALLACE: You said that welfare reform was a legislative child abuse. "Let them eat cake." But now, Senator, 10 years later, the employment rate among unmarried women -- the employment rate -- has soared, and the child poverty rate has dropped.

Hasn't welfare reform worked?

KENNEDY: No, no. Your figures are wrong in terms of child poverty. Your figures are absolutely wrong.

WALLACE: Well, we got them from the liberal Brookings Institute, sir.

KENNEDY: You're wrong. We've had an increase in the last five years of the number of children that are living in poverty in the United States of America. It's increased by 1,700,000.

We have 36 million Americans that are going to bed hungry every night -- 36 million Americans who are going -- and 12 million of those are children. So...

WALLACE: So you don't think...

KENNEDY: No, I don't. Listen, I thought -- what we saw in that period of time is an expanding economy. What you need in welfare reform is, first of all, you need training programs. You need job opportunities, and you need a day-care. Those are the elements. And you need, basically, transportation for people on it. And you need the expanding economy.

We had the expanding economy, but we still -- children were left out. If you look at what's happening to children in this country, at this present time, you'll find out the number of children that are hungry and the increased number of children in poverty.

I'm right on the increased number of poverty children. I know this issue. I've been debating this issue all during the fall. And we have had that, and we've had the total number of people that have fallen back into poverty during this Bush administration. We have 5 million more people that have dropped back into poverty...

WALLACE: But, Senator, nobody thinks that we should go back to the dependency that we had in the past...

KENNEDY: I'm not talking about...

WALLACE: ... about welfare reform, where people spend their entire lives on the government dole.

KENNEDY: What we're talking about, that issue primarily was about how are you going to deal with children. And you had principal designers of it. I mean, Dean Elwood, who's the dean of the Kennedy School, resigned because they weren't dealing with children.

But let's go now. You talk about big government. Let's talk about big government in the student loan program. Let's talk about Sallie Mae's stock going from $3.50 to over $50 because they are the principal student loan guarantee. That is absolutely outrageous.

You talk about big government under the Republicans. That's the biggest giveaway of all. We can peel off $12 billion to $13 billion that middle-income families shouldn't be paying and put it right back into those students' pockets in the middle income.

So if you're saying -- that is big government to me, Chris. That's the big government to me.

What about the big government on the pharmaceutical where they paid -- listen to this. You go to an HMO, you're 18 percent healthier than you are if you're outside of an HMO. And this Republican administration gave a 9 percent inflater to the HMOs so they get paid 25 percent more than we do under the Medicare. That's $40 billion.

Come on. That is what we want to free this...

WALLACE: I want to continue this conversation, but...


WALLACE: ... I also wanted to talk about some presidential politics, and we're beginning to run out of time.

You caused quite a stir this week when you said that you won't wait indefinitely to see whether your Massachusetts colleague, John Kerry, decides to run for president, that you may decide to support someone else.

Is it just a matter of timing, or might you endorse someone else like Senator Hillary Clinton, Senator Barack Obama?

KENNEDY: Well, I've talked with John. John is going to make his mind up in these very next few weeks, and I have every intention of supporting him.

This process is moving very, very rapidly, as we've seen in the last, really, 48 hours or so, where Evan Bayh has gotten out. Looks like John Edwards is getting in. Barack Obama looks more like he's going to be a candidate. Hillary Clinton has accelerated her, sort of, timeframe.

So it is moving much more rapidly than it ever has before. And I think a candidate, if they're going to be able to stay the course on this, has to get in much more quickly. I think if they're not going to get in quickly, then it's going to be a difficult situation.

But John Kerry -- I think of what a difference John Kerry would be if he were president of the United States of America. We'd be a vastly different country. And I think John Kerry -- people underestimate him. They underestimated the last time. I think he's a strong candidate. And if...

WALLACE: Let me ask...

KENNEDY: ... if he makes a judgment and decision to get in, I intend to support him.

WALLACE: Briefly -- we have about a minute left -- for all of the excitement about Barack Obama, there's also talk about his inexperience. They said the same thing about your brother John back in 1960. Do you see any parallels?

KENNEDY: Well, first of all, my brothers are my heroes, and they're in a category by themselves. But Barack Obama is talented.

I think when you look at -- I went to an interesting conference that looked back on presidents, and the historians talked about not only their legislative achievements but also their character, their ability to inspire. Abraham Lincoln, one term in the Congress of the United States and certainly one of our greatest presidents. President Buchanan had been in the Congress 10 terms, had been in the Cabinet, and one of our worst presidents.

They all come back to the question, then, of character, their sense of vision that they have for the country, their sense of purpose, and their ability to inspire a nation.

It seems if we come back to a different, perhaps, judgment, in terms of all of the candidates, the Democrats will have the best candidate. And we have every intention to win. The fact is all of them, whether you take Obama, Hillary, Chris Dodd, John Kerry, they're all better than our Republican friends.

WALLACE: So you're going to vote Democratic this year?


Senator Kennedy, we...

KENNEDY: Good to talk to you. Thanks very much.

WALLACE: ... want to thank you for coming in.

KENNEDY: Good to be with you.

WALLACE: And now that you know where we are, please don't be a stranger, sir.

KENNEDY: All right. Nice to see you. Thank you.

WALLACE: Up next, the business and military leaders behind a dramatic new push to declare America's independence from foreign oil.

We'll be right back.


WALLACE: Energy independence is sort of like the weather. Everyone talks about it, but no one ever does anything about it. But now some of the country's top business and former military leaders have formed the Energy Security Leadership Council to do just that.

We're joined by the two co-chairs: from Memphis, Frederick Smith, chairman of FedEx, and here in studio, retired General P.X. Kelley, former commandant of the Marines.

Well, Mr. Smith, you compare the threat from our dependence on foreign oil to terrorists and weapons of mass destruction. Is it really that serious?

FREDERICK SMITH, CHAIRMAN, FEDEX: Well, Chris, we today are importing over 60 percent of our petroleum needs from abroad. Ninety percent of the world's proven oil reserves are owned by national oil companies, and many of those national oil companies are owned by countries who wish the United States ill.

Terrorists have repeatedly tried to attack the oil infrastructure. There's no question oil is being used as a strategic weapon. And we simply have to reduce the amount of imported petroleum that this country consumes.

WALLACE: General Kelley, you say that a 4 percent shortfall of daily oil supply could double the price of oil to more than $120 a barrel of oil within a few days were that to happen.

Is our economy, the world economy, in effect, sort of walking a tightrope here?

GEN. P.X. KELLEY (RET), U.S. MARINE CORPS: Well, you've got to understand, I think, Chris, exactly what the price of oil means. Oil is a fungible item, which means that a price any place is a price every place. So we don't control the price of oil.

But when you have that 4 percent shortfall -- and we did this with a very, very careful program that we had last year -- that we concluded that 4 percent would bring it up to something over $100.

WALLACE: And if you got $100-a-barrel oil, what would that do to the world economy, General Kelley?

KELLEY: The world economy, it wouldn't paralyze it, but let me say, there would be dire consequences.

But that's not where it would stop, we don't think, because the terrorists -- Chris, there have been 5,000 terrorist activities in 2005. Over 7,000 people were killed. Osama bin Laden said that the best way to bring us to our knees is to deny us the oil. If we continue on the road that we're on right now, we'll be in a catastrophic oil shortage in a very short period of time.

WALLACE: In this year's State of the Union speech, President Bush raised the issue. Let's watch.


PRESIDENT GEORGE W. BUSH: Here we have a serious problem. America is addicted to oil, which is often imported from unstable parts of the world.


WALLACE: But since then, not much has been done. Let's take a look at the record.

During the oil embargo in 1973, we got only 35 percent of our oil from foreign sources. By 1995, we were up to 45 percent. And so far this year, we are getting 61 percent of our oil from foreign sources.

Mr. Smith, why have both Republicans and Democrats, in the White House, on Capitol Hill, over the last quarter century, been unable to break what you call this cycle of failure?

SMITH: Well, I think we've been lulled into a sense of complacency in recent years. The country became much more energy- efficient from '75 through '95 because of vehicular efficiency standards that were put in place under the Ford administration. And after '95, that has plateaued.

I think it's been sticking our head in the sand. On the right, you've had people that say production only. On the left, you had conservation only. And what needs to happen is a grand compromise along the lines that we've suggested in the program.

WALLACE: All right. Let's get to that.

General Kelley, let's talk about your plan, which you say would cut imports of foreign oil in half by the year 2030 and which, it's clear to see, as we'll tick it off, would upset people on both sides of this issue.

First of all, you want to order a steady increase in the fuel efficiency of cars and light trucks. But several industry groups have already said that this will only increase the cost of doing business and be passed on to the consumer.

KELLEY: Well, what's amazing, I think, as you look at the market today, particularly on a motor market, I see more and more people who are buying Japanese nameplates on their cars. They seem to be able to do it.

And the question is, we're not asking the impossible. We're saying a 4 percent raise in efficiency over the years, with ramps. If we find the technology is not worthwhile, they can fall off.

The beauty of this plan, Chris, is we see it -- I'm not saying it's the only plan, but we think it's the best plan because we did it. But the beauty of the plan is that both sides of the aisle seem to have embraced it. The White House, we have briefed them on it. This may be the golden opportunity to bring this country together, because it's the most serious problem I see facing us in the future.

WALLACE: All right. I want to talk about the political reception in a moment. But, Mr. Smith, let me ask you about the other side of your plan, which is that you would like big incentives for alternative fuels, which the environmentalists would like. You also want more drilling on the Outer Continental Shelf as well as in ANWR, in the Alaska Wildlife Reserve, which the environmentalists just hate.

Talk about that, sir.

SMITH: Well, as General Kelley mentioned a moment ago, oil is a fungible commodity. Many people think it doesn't make any difference if we don't have that production from the Outer Continental Shelf or Alaska. And, in fact, it does, because every barrel of oil produced domestically displaces a barrel of oil that is imported that comes from unstable parts of the world.

I think the oil industry has shown -- and Katrina was a good example of this -- that they can safely drill in the Outer Continental Shelf and in Alaska. And that production would be extremely important in reducing our dependence on foreign, imported petroleum.

WALLACE: General Kelley, as you say that you have been meeting with people in the White House, you have been meeting with the new Democratic leadership up on Capitol Hill, what's the reaction been so far?

KELLEY: The reaction has been absolutely positive. In fact, they have asked us to stay engaged because they see it as a blueprint for success.

Never before, I don't think, have we ever brought together the kinds of people that we have, particularly in our council. And I want to comment on Fred. Without Fred, I don't think we'd be where we are today.

On the other hand, we have senior leadership, retired leadership from the military services, senior CEOs. And all of them support this plan. Everybody we have talked to on the Hill in the leadership positions support the plan.

We know it's going to go through hearings. We know it's going to be debated. We know it's going to be argued. On the other hand, we feel that we're going to persevere. And until such time as something like this is passed, we owe it to the country to do exactly this. WALLACE: But, Mr. Smith, as I've pointed out, that when you proposed your plan, the automotive industry already came out against increasing these fuel economy standards; some of the environmental lobbyists have already come out against increased drilling on the Outer Continental Shelf and ANWR.

What makes you think that these lobbyists, which have blocked action for decades now, are going to budge?

SMITH: Well, I think with the opposition that you just chronicled there, we've got it just about right. The country is going to have to have a grand political compromise. Neither the right nor the left is going to get everything that it wants.

But there has to be a national will to reduce this dependence on imported petroleum, which, again, is coming oftentimes from countries which wish the United States ill. And there's no question, at some point, oil will again be used as a strategic weapon against us if we don't reduce our dependence on foreign, imported petroleum.

WALLACE: All right. We're going to have to leave it there. Mr. Smith, General Kelley, we want to thank you both for coming in and discussing your plan with us. Thank you, both.

SMITH: Thank you, Chris.

WALLACE: Coming up, our Sunday regulars on what's likely to be the fierce debate of the new year: whether to send more troops into Iraq or start pulling them out. Stay tuned.



SEN. JOHN MCCAIN (R), ARIZONA: We all know that the Iraqi military is not capable of doing it by themselves now, period. So then it requires Americans to be able to do it with them.


WALLACE: That was Senator John McCain in Baghdad this week, continuing to push his position to send more U.S. troops into Iraq.

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

Well, there was a lot of talk this week that the president is now leaning towards what's called the surge option, sending up to 50,000 more troops into Iraq to try to stabilize the situation.

Brit, from your reporting, do you get a sense that's where the president perhaps is leaning and what do you think of the idea?

BRIT HUME, FOX NEWS WASHINGTON MANAGING EDITOR: Well, not so much from my reporting, but from the reporting of our White House correspondent Bret Baier, who started reporting this early in the week. Others have now apparently caught up with that, and it does appear that that's the direction in which the president wants to go.

And it's going to be tremendously controversial. You heard the resistance to it that you'll get from Senator Kennedy. And there are a lot of people who think, just as he does, it was intriguing to see Senator Kennedy in such rare form and agreeing with Abizaid and Casey about whether more troops are a good idea.

In an interview I did with Donald Rumsfeld on Thursday, he said, well, they better have a specific military mission or there's no point in sending them. Well, perhaps they will. In addition to that, Nouri al-Maliki, the man that President Bush says is the right man for Iraq, is opposed to the idea. So it's going to be tremendously controversial, and there are all kinds of pitfalls associated with it. But it is at least not standing pat. It is not continuing to do the same thing and hoping for a better result.

MARA LIASSON, NPR: Yes, and I think the president is under tremendous pressure to not stand pat. And if you're not going to withdraw troops and if you're not going to add tremendous numbers of troops -- of course, people think that that wouldn't be possible if you wanted to -- you've got to do something. And the surge seems to be the only option.

But I think that if he wants them, he can have them. I think the big question is how's he going to convince the Iraqis to accept them if they're dead set against it?

WALLACE: Bill...

LIASSON: The other question, of course, is how big a surge are you going to have? I mean, John McCain is talking about 35,000. Other numbers that we've heard are more in the range of 15 to 20. And then the question is where are they going to come from and how long can you sustain that increased troop level?

WALLACE: Bill, I want to ask you about one aspect of this that Brit kind of referred to. You are clearly on record supporting the surge option. We know where General Kristol stands. But throughout this war, the president has always that said he listens to his commanders on the ground. It came out again this week that General Abizaid, the top U.S. commander in the Middle East; General Casey, the top commander of U.S. forces in Iraq; have both expressed strong reservations about sending in more U.S. troops. How does the president now justify, if he's going to go this route, ignoring his commanders on the ground?

BILL KRISTOL, WEEKLY STANDARD: Well, the war isn't going so well. I mean, this is what's incoherent about Senator Kennedy's position. His position is, the war is a disaster. The war, under the supervision of Secretary Rumsfeld and General Abizaid and General Casey, has been going downhill. But we've got to listen and defer to General Abizaid and General Casey.

WALLACE: I think he'd say you should listen to General Kennedy, who thought you never should have never gotten into the war in the first place.

KRISTOL: Well, fair enough. But his current position, with 140,000 troops there, is that we should listen to the people -- follow the strategy -- continue to pursue a strategy which has not been winning. And that is not the president's view.

I think, with the departure of Secretary Rumsfeld, that the president decided a month ago I have to take charge of this war. He's ordered a thorough review of options, and it's a genuine review, I believe, led by Stephen Hadley in the White House, the national security adviser. They've looked at a whole bunch of options.

And I think the president believes that the option articulated especially by retired army vice chief of staff Jack Keane, who was in the meeting with the president last Monday, that we can surge troops, that it make an -- it will have an effect, it will stabilize Baghdad, it will give us a real chance to get the situation enough under control to allow the political process to begin again. I think the president's convinced that that's the way to go.

JUAN WILLIAMS, NPR: Well, the question is, you know, get the political process underway again to what end? You know, what is the strategy if you control Baghdad? I guess that's the heart and soul of this double down idea, is that it's not that you're doubling the 140,000 troops that we have on the ground, but it's really the 17,000 located right in Baghdad. So what would that do for you, and how much of a payoff would it have if the Prime Minister al-Maliki cannot stop the violence, if he's not willing to reorganize the political structure in the country? And so the question then comes down to should you have faith in him and is it worth the cost of American life and American treasure at this point?

I think the overall image I take away, though, from this week -- you know, all the talk about increasing jobs for those who are unemployed. I think it's 70 percent unemployed in Iraq right now, so it's trying to stop the flow of young men into the violence by giving them jobs. And now there's talking of doubling down. I just think that it looks like the president is looking for new brushes to paint himself into the same old corner. I don't see that he's changing his policy.

HUME: No, he isn't changing his policy. At least he's not changing his policy objective. His policy objective remains the same and it happens to have been adopted by the almost now completely forgotten Baker-Hamilton commission, which arrived at a great fanfare and seems -- and got so much criticism from all sides that it now seems to be an irrelevance.

There are important pitfalls that need to be noted here. One is that the impression of occupation and the sense of occupation is detested by the Iraqis, and if it is intensified, that runs a risk of intensifying the insurgency, even if you're trying by the presence of more troops to suppress it.

And the second question, of course, is what effect this has on the emergence of the Iraqi forces themselves? Do they now take even more of a backseat role in the most critical theater in the whole conflict and does that make bringing them along more difficult and retard that process further? These are some of the risks and some of the problems associated with a surge of American forces.

WALLACE: Bill, and I direct this at you, as the prime -- at least at this table -- prime sponsor of the idea of the surge. I mean, there's also another question: is it going to work? In effect, we already have surged troops into Baghdad. That's what Operation Together Forward was all about. We had 17,000 troops in there for the last period of months. It didn't do any good. What makes us think that another 10, 20, 30,000 will do good, that that will do the trick?

KRISTOL: Well, we added 7,000 troops for Operation Together Forward, and it wasn't enough. And some of us had been saying for a long time that there just wasn't enough troop force there to really establish security. No one can guarantee that it will work. But at war you don't get guarantees. The question is, is there enough of a chance that it's worth sending in the American troops to try to establish security.

The Iraqi -- current Iraqi army cannot do it. And you need to have security before you can ask Maliki to turn on the Shia sectarian militia. You need to have security before you can ask Iraqis to commit to this effort once again, and the security situation from going downhill. The president's got his entire military reviewing this option. They're not going to do it if it's rash or if it's impossible.

WALLACE: But we know a lot of members of the military are against this idea.

KRISTOL: They've been against it because they were -- from the beginning, had a view, that Brit articulated, that the occupation was a large part of the problem, that we had to turn over -- we had to have the Iraqis stand up as we stood down. The political process had to come, in a sense, before the military process. And they put providing security kind of third in their three objectives.

I think that was a mistake. And they tried it. It was a good- faith effort, it was a reasonable theory, that the occupation would be more of a problem than sending in more troops. But I think it has not worked. And if it's impossible, we have to get out. But no one I've talked to -- and I've talked, in the last 10 days -- kibbutzing a little bit on the development of the plan by...


KRISTOL: I've talked to a lot of military guys just back from Iraq. They do not think it is hopeless. And these are serious people. A recently retired colonel who worked with Joel Armstrong, who worked with McMaster when they did Tal Afar, the great success from a year ago.

These people do not believe that this is a hopeless endeavor. They think another five brigades in Iraq -- which in Baghdad, which is doable, two regimental combat teams in Anbar, could really put pressure on the insurgents.

We haven't tried to pressure them in two places at once, incidentally. And one of the -- I think the plan the president is going to adopt is going to go for Baghdad and for Anbar to really try to put pressure on the Sunni insurgency, suppress that, then turn to the Shia sectarian militias, is a reasonable plan.

WALLACE: And briefly, Juan, what do you think the political reaction up on Capitol Hill is going to be? I expected it would be like Ted Kennedy, that this is a mess. But, on the other hand, apparently on another show today, Senator Harry Reid, the Senate majority leader, supported the surge. So what do you think the general reaction from Democrats, who had viewed the November election as a kind of statement about getting out of Iraq?

WILLIAMS: Well, I think that, one, you have to separate the House and Nancy Pelosi and those folks from what Harry Reid is doing. But my sense is that you're going to get tremendous opposition. The people are willing, like Harry Reid, to say, listen, we're open to any alternative at this point. Let's see what's on the table. If you're talking about a surge, then lay out what is your plan, what is your strategy, why is it not going to be viewed as occupation? So that, essentially, gives the administration ropes to hang themselves if you see in three months they've put more people in and nothing has come of it.

LIASSON: Yes, Congress is not going to stop the president or try to stop the president from doing this. They -- the Democrats, at least believe, this is his war and he's going to take responsibility for it.

HUME: There's a political calculus here, and the president could use a little political running room. He doesn't have very much under the current circumstances. He isn't going to get any more if he stands pat. This effort, although it will be widely resisted by some in Congress and widely criticized, I think will probably go down reasonably well with a lot of Americans who are not in favor of our losing in Iraq or even leaving Iraq unless they believe that the situation is hopeless and can't be won. If this seems to hold out hope of success, it's likely to be supported.

WALLACE: All right. We need to take a break here. But coming up, we'll examine the medical and political drama being played out here in Washington over the health of Democrat Tim Johnson and the balance of power in the Senate.

We'll be right back.



SEN. DICK DURBIN (D), ILLINOIS: Tim Johnson is going to return to the Senate and the Democrats will still be in a 51-49 majority. I think that is the bottom line.


WALLACE: That was the Senate's number two Democrat, Dick Durbin, vowing that his colleague from South Dakota will recover fully from his sudden illness this week.

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

Well, everyone in this town was startled this week when 59-year- old Senator Tim Johnson of South Dakota had to undergo emergency surgery for bleeding in his brain. And we also realize that the Democrats' hard-won takeover of the Senate could suddenly slip away.

Mara, Senator Johnson seems to be recovering fine. We're all grateful for that. But there were some tense times on Capitol Hill this week. LIASSON: Oh, my goodness, of course there were. I mean, the Democrats' hold on the Senate is very tenuous. One-vote margin. You heard what Dick Durbin said. And I think that, at this point, as long Tim Johnson is alive, he's going to be a member of the United States Senate, period, stop. That's it.

And it looks like he actually is recovering to the point where he can function and -- I don't know how well. It sounds like he'll need a lot of therapy. But he's going to keep the Democrats' razor-thin majority.

WALLACE: You know, you talk about the fact that as long as he's breathing, he's going to be a senator.


WALLACE: Bill, one of the things that I have to say I learned this week is that senators are not inclined to give up their seats voluntarily no matter how sick they are.

And let's take a look at the record here. It's fascinating. Senator Carter Glass, who had heart trouble, was absent from the Senate for four full years in the 1940s. Clair Engle underwent repeated operations for brain cancer in the '60s. He cast an aye or yes, vote for the civil rights bill by pointing to his eye. And Karl Mundt, also a senator from South Dakota, was absent for more than three years after suffering a stroke in 1969.

Which raises the question, not about Tim Johnson, but just in general, Bill, should the country, should the states, leave it up to senators to decide whether they should hold on to their seats?

KRISTOL: Yes, I don't really see what the alternative is. And I would...

WALLACE: Well, I mean, for the president, we do have an amendment to the Constitution which creates incapacity or, in effect, announces that.

KRISTOL: True, but there's only one chief executive and there are 100 senators. So I guess I would stick with the status quo and simply wish Tim Johnson well. I think he'll -- hopefully, he'll come back and be fine.

WILLIAMS: I think there are lots of people who are looking at this whole issue of incapacity, and how it's determined by the old boys club and self-serving. But, I mean, a lot of this is being driven at this point by the fact that there is this razor-thin margin, Chris, as you said and, therefore, a lot of it's coming from Republicans operatives who are thinking about it although not stating it publicly because it's not very polite, given the man's condition.

My sense is that nothing's going to change, that you're going to have Tim Johnson there. And you heard this week that Senator Reid, the Democratic leader, spoke with Republicans and said basically we're going forward. And the Republicans said, fine, let's see what happens. That's all you can do.

HUME: Chris, there is -- there might be a minor political difference in this. Obviously, if the senator had died and a Republican governor of the state had appointed a Republican to fill the seat, it could flip control. Short of that, however, Senator Johnson being incapacitated for a time and unable to participate, unable to vote, deprives the president and the Republicans of one vote that they can sometimes get on big issues. He voted, for example, in favor of the Bush tax cuts, something not even John McCain did. He also voted to confirm Sam Alito. So among Democrats, he was somebody that they could sometimes get. His absence won't help them.

WALLACE: So you're suggesting this might be a loss for the Republicans, not the Democrats.

HUME: Not in a big way, but a small -- and perhaps on some issues -- notable way.

WALLACE: Let's take the time left, Mara, and talk presidential politics. Because two years, 23 months before the 2008 elections, there were interesting developments this week. First of all, Senator Evan Bayh of Indiana, considered one of the more moderate possible presidential candidates, surprised a lot of people by announcing that he is not going to run. And meanwhile, former senator and vice presidential candidate John Edwards is reportedly going to announce that he is running before the end of this year. So what's going on here?

LIASSON: Well, the first one was a surprise. The second one wasn't. I mean, Evan Bayh dropping out...

WALLACE: Well, maybe the timing was a little bit.

LIASSON: The timing was. Yes, that's right, the timing was, for Edwards. But Evan Bayh dropping out after Mark Warner also decided not to run really means there is no centrist, kind of former red state governor, in the race.

And it leaves Hillary Clinton in this improbable position of being the most moderate candidate so far. You've got John Edwards, who's going to run as a kind of labor-backed populist. Barack Obama, who is this phenomenon on the scene, he has as liberal a voting record as anybody. His difference with Mrs. Clinton is probably more style than substance. But it means that the field is shifting. And the frontrunner right now, Hillary Clinton, will probably get challenges from the left rather than the right.

KRISTOL: You know, Bill Clinton won a nomination in 1992 against a weak field. Mario Cuomo, the governor of New York, chose not to run. George Mitchell, the Senate majority leader, chose not to run. Al Gore and Dick Gephardt, who had run in '88, chose not to run. The heavyweights didn't run. Bill Clinton had a sketchy field against him and won the nomination, despite various missteps and flaws.

Hillary Clinton, it looks like to me, is now going to follow in Bill Clinton's footsteps. If she gets a race against John Edwards and Barack Obama, she's going to be the nominee. Gore is the only threat to her, then. She wants to be the centrist.

I think she's taking some risks in staying on the center, not going to left, which is intelligent. She can still beat the left-wing democratic candidates, I think. And then she's pretty well-positioned for the general election. So this is all good for Hillary Clinton. Barack Obama is not going to beat Hillary Clinton in a single democratic primary. I'll predict that right now.

WALLACE: Juan, before you get in, let me just put up, if we can, on the screen, the cover of this week's new "Newsweek," which gives you an indication of how crazy this whole thing has become. The race is on. Obama and Clinton, 23 months ahead of time. Juan?

WILLIAMS: Well, I worry for Barack Obama. I mean, he's a wonderful man and I think he's a breath of fresh air. But I think the long knives have come out for Barack Obama. We already see this about real estate deals in Chicago, and the fact of his middle name being Hussein and all this. You know, it's just so petty. But people are going after him.

Even his vote on the fence for immigration has angered some in the Hispanic community. You're starting to see people say, hey, this is the real Barack Obama. This is -- forget, you know, the pretty face. Let's talk about who he represents. And people come in and know him. People also have to get to know Hillary Clinton, I think, in greater detail, beyond being the wife of the former president.

LIASSON: You know, if you asked Barack Obama, he'd say great. He wants that kind of scrutiny right now. Hillary Clinton also voted for the fence.

WALLACE: We've got to go. Thank you, panel. See you next week.

For more visit the FOX News Sunday web page.

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