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Newt Gingrich, Russ Feingold, Roundtable

Fox News Sunday

CHRIS WALLACE, HOST: I'm Chris Wallace. A key ally in the Iraq war meets with President Bush, next on "Fox News Sunday."

Democrats and the attorney general: Are calls for a special prosecutor to investigate Alberto Gonzales a search for the truth or just political theater? We'll ask one of the senators behind the move, Russ Feingold.

Then a possible 2008 contender slams the process we use to elect the president. We'll talk with the always controversial former speaker of the House, Newt Gingrich.

Plus, the two frontrunners for the Democratic nomination take off the gloves. Who came out ahead? We'll poll our Sunday panel: Brit Hume, Mara Liasson, Fred Barnes and Juan Williams.

And our Power Player of the Week has a date today in baseball's hall of fame, 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. Britain's new prime minister Gordon Brown arrives in the U.S. later today to meet with President Bush.

According to reports out of London, a key issue for the two leaders is whether British forces will pull out of Iraq sooner than planned.

In Baghdad, security forces are on heightened alert because Iraq's national soccer team is playing in the Asian Cup finals. Following Wednesday's victory in the semifinals, at least 50 celebrating fans were killed by suicide bombers.

And a New York Times story today may clear up the apparent conflict between Attorney General Gonzales and FBI Director Mueller over a 2004 policy dispute.

The Times indicates Gonzales was right. The fight was over computer searches through electronic databases, not the interception of phone calls and e-mails.

Well, the always provocative Newt Gingrich was back at it again this week, eviscerating the presidential campaign process as well as the solutions being offered so far by Republican candidates.

Joining us now to discuss his comments, the former speaker of the House.

And welcome back to "Fox News Sunday."

NEWT GINGRICH, FORMER HOUSE SPEAKER: It's good to be with you.

WALLACE: Pulling your punches as usual, you called the current campaign process pathetic and compared the candidates lined up in the debates to so many trained seals waiting for fish to be thrown at them. Is the process that demeaning?

GINGRICH: I think the process -- first of all, the actual quotes are all -- and the actual audios -- at Newt.org for anybody who wants to listen to it.

And I believe that the process is fundamentally broken. When you have 10 people or 11 people or 12 people standing in a row patiently waiting for 30 seconds to be allowed to finally answer questions chosen by a personality other than the candidate, I think that you have demeaned seeking the president of the United States to a level that is an absurdity.

I mean, we are faced with enormous problems. In 1860 Abraham Lincoln gave a two-hour speech at Cooper Union. In 1858 Lincoln and Douglas debated seven times for three hours each.

We're faced with problems I think that are fully as great as those that faced Lincoln and Douglas in the 1850s, and yet we have reduced our political dialogue to a point where literally potential would-be leaders of the most powerful government in the world stand meekly in line waiting for somebody to pick a question, and the question can be anything.

I mean, it's entirely up to the television personality to pick what to ask. I think it's a fundamentally flawed system.

WALLACE: You also had some harsh comments for the Republican field, saying that so far they have failed to describe in historic terms how they would change Washington.

GINGRICH: I think the great dilemma of America today -- and if we don't solve it, it will become a tragedy -- is that the Republicans don't recognize the scale of the performance failure of government as a system, and the Democrats are living in a fantasy land in terms of their policy proposals.

And so you have two parties, each of them disqualifying itself in different ways. Republicans are closer to reality in terms of what we ought to do for policy, but they don't understand that the system is broken, doesn't work.

The Democrats are offering a series of policies that have no hope of working in the real world, but they at least sound better than the performance failure.

I think this is truly one of the most important political processes in American history and that we have to come to grips with how much trouble we're in and how deep the problems are.

WALLACE: All right. So people are going to say, "All right, Newt Gingrich, you come up with some ideas." You're putting together what you call the American Solutions Conference where you're going to come up with big ideas. It's going to be in late September.

Give us an example. What is the kind of bold, transformational change that you're talking about that would really shake up Washington?

GINGRICH: Well, let's start with education. The Detroit public school system currently graduates 22 percent of its entering freshmen on time and fails to serve 78 percent of the young people in Detroit.

And if you're an African-American male, you have a 73 percent unemployment in your 20s if you drop out of school and a 60 percent chance of going to jail.

Now, faced with a catastrophic collapse of that scale, we should basically fundamentally replace the Detroit school system with a series of experiments to see if they'll work.

I would include paying kids in very poor neighborhoods the equivalent of working at McDonald's if they took math and science and got a B or better.

I would include the KIPP system, which is a private school system that graduates -- 85 percent of its students in the inner city go to college.

Instead, because of the unions -- and let's be clear. This is entirely about the unions. It's about union dues. Because of the unions, in San Diego, I was briefed yesterday, there's a school that has great scores that is a charter school that's going to be closed because the teachers aren't unionized.

And you look at Detroit, which is a disaster. Just one quick thing. Detroit in 1950 had 1,800,000 people and the highest per capita income in the United States. Today, Detroit is at the 62nd per capita income with 950,000 people.

WALLACE: And is that the kind of thing that you as president would want to get involved in and run, or is it the kind of thing, I mean, that you would leave -- most people would say you'd leave that to the city of Detroit and the state of Michigan.

GINGRICH: Well, first of all, I think that the reason we created American Solutions -- and we're having workshops nationwide online in late September -- is because there are 513,000 elected offices in the United States.

And the reason that I've chosen to focus on creating a nationwide movement is precisely your question. I think we ought to challenge the Detroit school board. We ought to challenge the Detroit city council. We ought to challenge the Michigan legislature. We ought to challenge the governor of Michigan.

But by the way, while you're doing that, if you don't challenge the union and the education bureaucracy, and you don't challenge the UAW, you are not going to save Michigan.

Michigan has lost more jobs than any state in the United States except the impact of Katrina on Louisiana. And nobody stops and says, "What is the systemic reason for this collapse?"

I do think a president has an obligation to say to the country, "You can't compete with China and India if your education system is failing," and that has to be solved locally.

And frankly, I think the federal Department of Education is not a useful asset in trying to solve that.

WALLACE: Not surprisingly, your comments this week drew some pushback. You compared yourself to French General de Gaulle being asked in the '50s to join the pygmies, and here's what someone on the American Spectator blog wrote.

Take a look. "Newt is brilliant. Unfortunately, Newt knows he is brilliant. As a result, he has little control over his ego."

Mr. Speaker, how do you plead?

GINGRICH: Well, look. I was a child living in France in 1958. My dad was serving in the U.S. Army. We lived in Orleans. And I experienced what happened in France.

I watched the French Fourth Republic die, literally killed by the paratroopers after the Algerian war. I watched President de Gaulle, who had been the savior of France after World War II, who had retired to get out of politics because he thought it was a hopeless mess, brought back to create the Fifth Republic, which just elected a new president, the longest serving French system since the monarchy.

And my reference was as a teacher. I mean, I find it fascinating in the city that if you actually studied something and you actually know about something, you must be egocentric because you're actually talking about facts as opposed to what my consultant advised me that the focus group said last night that I should memorize.

I was relaying the systemic failure of the American system, Democrat and Republican, systemic in Sacramento, systemic in Detroit, systemic in Albany, systemic in Washington, D.C., and the fact that neither political party is producing the kind of campaign and the kind of candidates not just for president but across the system.

We are not coming to grips with how big our problems are.

WALLACE: Of course, people wonder whether you're going to get into the race or whether you're going to stay on the sidelines.

There was a report the other day, and this is the level of political reporting these days, that the Gingriches had dinner a couple of weeks ago with Fred and Jeri Thompson at the Thompsons' house and that you discussed policy.

So I don't care so much about the menu. Are you going to endorse Senator Thompson for president?

GINGRICH: Chris, I love this business, and I know why you enjoy every Sunday morning. We've now gone from the systemic crisis of the French Fourth Republic to did we have dinner.

Calista has given me permission to tell you that yes, we had a very nice dinner with Jeri and Fred and with Bob Livingston. It was a delightful discussion. They've been good friends for many years.

And I think that Fred will be a very formidable candidate. And I start with -- American Solutions is offering all of its polling data and all of its ideas to every candidate in both parties. We literally delivered our last poll to every candidate in both parties.

Fred Thompson will be a serious candidate. I think the Republicans have three major choices in Mitt Romney and Rudy Giuliani and Fred Thompson. I think any of the three will be...

WALLACE: And not John McCain.

GINGRICH: I think Senator McCain has taken positions so deeply at odds with his party's base that I don't see how he can get the nomination.

But I think that either Mayor Giuliani or Governor Romney or Senator Thompson would be a very formidable opponent for what I expect will be a Clinton-Obama ticket, and I think that there's a possibility that will work.

After we're done with our workshops at American Solutions in September, if there is a vacuum and if there's a real need for somebody to be prepared to debate Senator Clinton, then I would consider running. I think we'll know that in October.

But these three are serious people. They're working very hard. And if they can fill the vacuum, I don't feel any great need to run.

WALLACE: We're going to talk to Senator Russ Feingold in a moment. This week he joined other democratic senators in calling for a special prosecutor to investigate whether Attorney General Gonzales has lied to Congress.

In April, you said here on this program that the country would be better served with a new attorney general. How damaging is it, in the middle of a war on terror, to have an attorney general, the chief law enforcement officer of the nation, who has so little credibility?

GINGRICH: I think it's very damaging, and it's not a question -- I don't agree with Senator Feingold and the Democrats' 293rd request for more investigation. I think they've gone sort of almost irrational in their desire to investigate everything in the executive branch.

But we badly need an attorney general who is above any question. We need somebody -- you know, President Ford solved this by bringing in the dean of a law school, bringing in somebody who was a Republican but a widely accepted senior person who had never been in politics.

Both the president and the country are better served if the attorney general is seen as a figure of probity and a figure of integrity and a figure of competence.

And sadly, the current attorney general is not seen as any of those things. And I think that it's a liability for the president. But more importantly, it's a liability for the United States of America.

And we've got to get beyond whether it helps the Democrats or helps Republicans and set a standard of does it help America.

WALLACE: Finally, and we have about a minute left, on Iraq, Senator Feingold is already calling and already voting to start pulling troops out starting in 120 days, with most forces out by next April.

Why do you think that some Democrats want to start pulling out troops even before General Petraeus gets a chance to issue his progress report in September?

GINGRICH: The left wing of the Democratic Party is deeply opposed to American victory and deeply committed to American defeat.

In 1975, when there were no Americans left in Vietnam, the left wing of the Democratic Party killed the government of South Vietnam, cut off all of its funding, cut off all of its ammunition, and sent a signal to the world that the United States had abandoned its allies.

What I would say to any Democrat who wants America to leave is quite simple. Millions of Iraqis have sided with the United States. They are known in their neighborhoods. They are known in their cities. If we abandon them, they are going to be massacred.

How can you, in good conscience, walk away from these decent people and leave them behind to a fate which we've seen, for example, in Afghanistan, where the Taliban recently was machine-gunning girls as they walked to school because the Taliban is determined to stop women from getting educated?

We are faced with evil opponents. Those opponents need to be defeated. And if General Petraeus and Ambassador Crocker come back in September and say, "We actually can win this thing," I want to understand the rationale that says, "No, we don't want to let America win. Let's legislate defeat for the United States."

WALLACE: All right. That's a good question. We'll be asking Senator Feingold on the other side of the commercial.

Speaker Gingrich, thank you for coming in...

GINGRICH: Good to be here.

WALLACE: ... and continued success with your book, "Pearl Harbor." GINGRICH: Thank you.

WALLACE: Up next, we'll hear from Senator Russ Feingold about his call for a special prosecutor to investigate the attorney general, about censuring the president and about getting out of Iraq. Stay tuned.

WALLACE: Joining us now, Senator Russ Feingold, who's in his home state of Wisconsin.

And, Senator, we want to give you a chance to respond to Speaker Gingrich. You don't want to wait till General Petraeus issues his progress report in September to start pulling U.S. forces out.

But the fact is that so far this summer, the number of American troops killed this month of July is down. Shiite death squad activity is down sharply. And in Anbar province, some of the Sunni sheiks have broken with Al Qaida.

Are you, in fact, ignoring some signs of success, some signs that the surge is working?

SEN. RUSS FEINGOLD (D), WISCONSIN: And I'm happy to acknowledge any signs of success, but the truth is since this surge began, we've had some of the highest numbers of American deaths and some of the greatest tragedies in Iraq of the entire period.

I do not buy the notion that the surge is working. I do not buy the notion that somehow Petraeus is going to be able to tell us that things are moving in the right direction. And in fact, he'll come back in September and he's going to say, "Let's wait till the end of the year."

So this is an endless game that continues this tragedy, and I think it's just the opposite of what Speaker Gingrich said. The truth is this is draining America's strength. It is costing us $12 billion a month.

We're losing over 100 people almost every single month, and it is hurting us in the fight against those that attacked us on 9/11. So this disaster has to end.

And a number of Republicans, of course, now have voted saying, "We can't just wait till September. We've got to get this done."

WALLACE: So I want to make sure I've got this clear, Senator. If General Petraeus comes in September, issues his progress report and indicates, obviously, not that we have a Jeffersonian democracy, but that things are better on the ground in Iraq, are you willing to change your position, or is your mind already made up? FEINGOLD: Well, I'll listen to whatever he says. But he's not going to be the only person I consult with. We've heard from the White House and generals before about how there's no civil war, about the insurgency is in its last throes, and time and again it proved not to be true.

So I'll give all the respect to General Petraeus' remarks that are due, but every indication I get -- and I'm on the Intelligence Committee and the Foreign Relations Committee, so I get a lot of information on this -- suggests tat it is virtually impossible that he's going to be able to give the kind of rosy scenario that you've concocted here.

WALLACE: Senator, let's turn, if we can, to Attorney General Gonzales, who seemed to get into a new controversy this week when he and the director of the FBI seemed to contradict each other about a dispute within the administration back in 2004, a fight so fierce that Gonzales ended up going to the hospital bed of then-Attorney General Ashcroft. Let's take a look.

(BEGIN VIDEO CLIP)

GONZALES: The reason for the visit to the hospital, Senator, was about other intelligence activities. It was not about the terrorist surveillance program that the president asked the American people.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

FBI DIRECTOR ROBERT MUELLER: The discussion was on a national -- an NSA program that has been much discussed, yes.

(END VIDEO CLIP)

WALLACE: Senator, according to this morning's New York Times, Gonzales may actually have been right. The dispute may have been over -- and this gets very technical -- the computer searches of databases, not the interception of phone calls.

But in any point, it's a fairly technical issue we're discussing here. Does this really rise to the level of appointing a special prosecutor to investigate the attorney general for perjury?

FEINGOLD: You bet it does. This is technical, and it is classified, but there's really nothing more important than not having the attorney general of the United States tell false statements to Congress about these programs and about what's going on.

Now, the truth is that the attorney general, in my view, has at least lied to Congress and may have committed perjury, and I think we need to have somebody who's able to look at both the classified and non-classified material in a way that he can actually determine whether or not criminal charges have to be pursued.

We can't do that through the press. We can't do that through the New York Times. We can't do that through Fox News.

The only way it can be done fairly is through the request that four of us have made, which is that a special counsel be appointed through the Bush administration, through the attorney general's office, and that they look at it and determine whether something has happened here that I think has happened, which is I think perhaps a crime has been committed by the attorney general on this matter.

WALLACE: You think it would be a crime if it turns out that they were arguing about whether the dispute was about computer data mining or interception of phone calls? Do you think that's worth a perjury investigation?

FEINGOLD: Well, this is a very significant area of our national security, all of this area, the part that's been publicly discussed and the part that has not been.

And if the attorney general has committed perjury or has made false statements to Congress or has obstructed justice, certainly there should be a special counsel to determine if charges should be brought.

Why wouldn't you do that on such an important matter?

WALLACE: Well, you talk about national security. While you're calling for a special prosecutor, the director of national intelligence wants Congress to do something that he says is vital to protect our safety.

He wants changes in the Foreign Intelligence Surveillance Act, or FISA, as it's called, which at this point he says hinder the ability of the United States to intercept communications between one foreign terrorist in a foreign country and another foreign terrorist in another country.

In fact, would you push to fix that law before Congress leaves for its August recess?

FEINGOLD: See, what you just described is exactly the kind of thing we should be doing. Communications between two foreign sources is something that all of us have publicly said we can agree should be changed.

But that's not what they're pushing for, Chris. What they're doing is trying to change immunity laws. They're trying to take items that go through the normal courts and put them into secret courts. They're trying to basically gut the FISA law as part of this process.

So it's the old game they play. They did it on the Patriot Act. They did it on military commissions where they threw all kinds of inappropriate things. They bring up something that everybody agrees on, and then they throw the kitchen sink in and try to jam it through at the last minute.

This is an outrageous attack on the privacy of the American people. Why shouldn't they propose something that we can agree on? We could get that through in one day.

WALLACE: Well, I grant you that the FISA reform the administration is calling for is a lot broader than just this one issue, but why can't Congress, in this next week or in one day, as you said, pass this one simple measure which would allow the U.S....

FEINGOLD: Chris, if that's the...

WALLACE: Let me just finish, Senator, asking the question -- that would allow the U.S. to intercept communications between a foreign terrorist in one country and another foreign terrorist in another foreign country?

FEINGOLD: Well, as long as it's two foreign countries, we have a deal. That's fine. I agree with that.

And that's not what they're proposing, though, Chris. They're trying to do things that go well beyond that, that involve domestic situations, and this is the scam they play every time.

A perfectly reasonable thing which you just stated begins it, and then they throw the kitchen sink in. That is not what they're proposing. If they want to do foreign to foreign, we can do it tomorrow.

WALLACE: Meanwhile, this week a House committee held two White House aides in contempt, and a Senate committee issued a subpoena for Karl Rove to testify, all in the investigation of the firing of U.S. attorneys.

Senator, so far, Congress has been investigating this issue all year. You've heard from 14 witnesses. You've received 8,500 pages of documents.

Can you point to a single smoking gun, any hard evidence, that the White House has done anything illegal?

FEINGOLD: I think clearly with regard to the NSA surveillance program that we've been talking about...

WALLACE: No, no, I'm talking about the U.S. attorneys, sir.

FEINGOLD: Well, I believe they probably have. I can't give you anything definitive on that, but I do believe there's been terrible misconduct and misleading approaches here.

And look. My view is that our first priority is getting us out of Iraq. We have had successes in terms of raising the minimum wage. We are going to pass a major lobbying and ethics bill. We've passed an energy bill. We've got the pay-go rule back in place. This is what we spent six months on.

But now we have started some accountability. This was a week of accountability -- a censure resolution proposal that I made, the call for the special counsel, the issuing of contempt orders. This administration is trying to prevent us from learning the facts about these situations that you've asked me about. Until we can learn the facts, how do we know whether they have committed anything illegal?

That's something that we as members of Congress have an obligation to find out, not just a question of whether we should do it or shouldn't do it. We need to ask these questions or we're not doing our job.

WALLACE: But you know, I think the question is, is this really going anywhere? Is this substantive oversight or is this political theater?

I mean, the point is on the U.S. attorneys which we're talking about, six-month, seven-month investigation, 8,500 pages of documents, 14 witnesses, and you say yourself as a member of Senate Judiciary you haven't found any hard evidence that the White House has broken the law.

FEINGOLD: Well, I happen to think they probably did break the law here, but I don't think the investigation is over, and...

WALLACE: But do you have any evidence of that?

FEINGOLD: ... until we -- well, that's why we're asking for people like Karl Rove and others to come down and testify so we can actually examine the evidence.

We haven't had access to the evidence. How are you supposed to examine it when you can't look at it?

WALLACE: Finally, while all this is going on, as you pointed out, you plan to introduce legislation or resolutions this week to censure the president, two resolutions.

When you tried this last year, only three Democrats signed on to your motions or to your resolutions. Wouldn't the American people rather see Congress do something about lower drug prices, about energy policy, about student loans, all part of the Democratic agenda, that you haven't passed so far rather than engage in this political theater?

FEINGOLD: Well, Chris, that's just not true. We have passed a major energy bill in the Senate. We have passed major legislation on student loans and higher education. The fact is we have done those...

WALLACE: But forgive me, Senator, but none of it has gotten through Congress.

FEINGOLD: Well, the fact is the minimum wage increase got through Congress, and I think by the end of this week you'll see a major lobbying and ethics reform bill passed that's going to be one of the most important bills in 30 years in this area that actually gets at some of these abuses from the Abramoff scandal. So it's a myth that nothing's been accomplished. But it is time to address the matter of the illegal and other conduct of this administration.

This administration, honestly, has been one of the worst in American history. It has abused the American public with regard to the Iraq invasion in terms of misleading us as we got in and misleading us as we stayed there.

They have attacked the rule of law on everything from illegal wiretapping programs, to the writ of habeas corpus, to torture policies, to abuses under the Patriot Act. It has been a shameful record.

And there needs to be some historic recognition that these things are wrong. If the Congress does nothing, what will our children and grandchildren say when they look at the historical record of an administration that has abused the American people?

WALLACE: Senator Feingold, we're going to have to leave it there. We want to thank you so much for talking with us today.

FEINGOLD: Thanks.

WALLACE: By the way, we invited White House officials and Republicans on the Senate Judiciary Committee to defend Attorney General Gonzales. We had no takers.

Coming up, the two Democratic frontrunners duke it out over foreign policy. Our Sunday panel weighs in on the contest between experience and change when we come right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA, D-ILL.: The motion that somehow not talking to countries is punishment to them, which has been the guiding diplomatic principle of this administration, is ridiculous.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

SEN. HILLARY RODHAM CLINTON, D-N.Y.: It is not that you promise the meeting at that high a level before you know what the intentions are. I don't want to be used for propaganda purposes.

(END VIDEO CLIP)

WALLACE: Those were the leading Democrats running for president finding some sharp differences this week on foreign policy.

And it's time for our power panel, Brit Hume, Washington managing editor of Fox News, and Fox News contributors Mara Liasson of National Public Radio, Fred Barnes of The Weekly Standard, and Juan Williams, also from National Public Radio.

Well, Senators Clinton and Obama engaged this week when they were asked at a debate whether in their first year of president they would meet with the leaders of hostile nations without preconditions. Obama said he would. Clinton said she wouldn't.

And, Brit, they've been arguing about it ever since.

BRIT HUME, FOX NEWS WASHINGTON MANAGING EDITOR: They have, and I think Obama's answer did show a certain lack of experience in these things. He answered it immediately in the affirmative and aggressively so. And she came back -- saw an opening and came back at him.

Now, there's been a lot of talk about this exchange which, as you noted, has been going on all week about this, as if this is really a real battle. I still think it's pretty tame stuff.

And if she were ultimately to decide that she wanted to have him on the ticket with her, or he were to ultimately decide that he wanted to do that, or both, I don't think any of this stuff that's happened so far rises to the level of something that would be a sword between them, that it could not be dealt with.

MARA LIASSON, NPR: It's not even a big sharp debate about foreign policy when you look beneath it. She has said many, many times exactly what he said, that the Bush administration is wrong because they don't talk to bad people.

And she said I would, quote, "right from the beginning engage with Iran and Syria," and Obama has also said that he wouldn't have these meetings -- you know, on day one, invite them over for coffee, of course he'd do some kind of preliminary work and find out what the conditions were.

But the way this was conducted is what was so interesting. This was the first direct in-person engagement. She didn't leave this to her surrogates. She decided to call him naive and irresponsible, or his approach naive and irresponsible, to an Iowa paper.

He responded, saying her approach was Bush-Cheney lite, which is about probably one of the worst things you can say to a Democrat. She responded, saying that he was getting away from the politics of hope.

I think what we learned this week is that she is quite agile and aggressive in debates. He can take a punch and give one back.

WALLACE: Let me ask you about this, Fred, because Obama, who clearly thinks that his appeal is the politics of change, seems to feel that he's tapped into something here, that where Clinton represents the established way of thinking about diplomacy, that he would change the rules.

Let's take a look at what he said on the campaign stump that Mara referred to.

(BEGIN VIDEO CLIP)

OBAMA: I don't want a continuation of Bush-Cheney. I don't want Bush-Cheney lite. I want a fundamental change. It's time to turn the page on how we do business.

(END VIDEO CLIP)

WALLACE: Fred, given the disaffection within the Democratic base about business as usual, is it possible that Obama is on to something here?

FRED BARNES, WEEKLY STANDARD: Look, he's not only on to something with the Democratic base, I think he's on to something with the American public.

Look, Hillary Clinton gave the right Washington answer. I agreed with it. I thought it showed cleverness and experience and so on. But that's not necessarily the best campaign answer.

The truth is the American public, even during all those years of Ronald Reagan -- remember in his first term when he didn't meet with any Soviet leaders, he said they kept dying on him, and they did, and he didn't meet -- until he met Gorbachev in the beginning of his second term, in the first year of his second term.

But the truth is the public -- the polls were showing in that whole first year that they thought he ought to be meeting with Soviet leaders. I mean, the public -- I think the public may be wrong about this, but that doesn't mean that Obama is in trouble. I think he's probably going to gain from this issue.

WALLACE: So, Juan, if it ends up being a debate between experience -- Clinton -- and change -- Obama -- who gets the better of that?

JUAN WILLIAMS, NPR: Depends what audience you're trying to reach, Chris. I mean, in this case, it's a primary...

WALLACE: Well, the audience that nominates a Democrat.

WILLIAMS: That's right. So in the short term, I think Obama cements the idea that he's a fresh face. In fact, he's tapping into the legacy of President Kennedy in the first inaugural in '61, saying you needn't fear to negotiate or negotiate out of fear, and all that.

But Mrs. Clinton is on to -- or Senator Clinton, as people keep reminding me to say, is on to something here when she expresses a need for experience, accentuates that she is the experienced candidate.

And I think that plays very well with swing voters going toward the general election, and it advances her prospects of being the candidate.

WALLACE: Mara, Clinton continues to lead Obama by double digits not only in national polls but also in most state polls.

On the other hand, as you saw in that little clip, Obama attracts bigger crowds. He's getting more money. How do you handicap the race at this point?

LIASSON: Look, there's no doubt that she's the frontrunner. I think the only question is is she the prohibitive frontrunner at this moment. And I don't know if you can say that.

He has brought thousand of people -- tens of thousands of people potentially into the process who weren't in before, have never voted before. They're not going to show up in those polls of likely Democratic primary voters because they haven't voted in a Democratic primary before.

So that is the great unanswered question about him. Can he translate all of that excitement, all of those new people who have donated to him and come to his rallies and get them actually out in a primary?

They're not showing up in the polls, maybe, right now. I think he has to find a way to challenge her and she has to find a way to actually widen that gap. That gap is not comfortable enough for her yet. She needs to be farther ahead if she's going to be the prohibitive frontrunner. WALLACE: Brit, Meanwhile, Fred Thompson is still -- and we've been saying this for a long time -- still not a candidate in the Republican race, but even still, he hit a small bump this week when a number of top aides left the campaign amid talk that -- and you can see her there in the pictures -- that the senator's wife Jeri Thompson is playing a big role, in fact perhaps too big a role, in managing the campaign.

What do you make of all that?

HUME: Well, I think it shows you some of the things already that a Thompson candidacy might bring with it. He's a very appealing guy. We've all known him forever. He's a very good communicator. From a Republican standpoint, his heart is in the right place on most issues.

But Fred Thompson has never been a guy known for organizational skills, and these campaigns are about the ability to organize, persuade and lead. He may be able to lead in some sense, but he has to prove it to us that he can organize and persuade.

And on the organizing part of that right now, this campaign, this nascent campaign, appears to be in something of a shambles. It's not a good sign.

WILLIAMS: You know, it's kind of interesting to me that he's taking so long to get in the race. I think there's so much excitement about him early on, especially the idea that he would fill the conservative void.

And I think the -- no insult here, but the Fred heads are, I think, kind of thinking something's wrong inside, something's rotten in Denmark.

LIASSON: You know, I disagree with that.

WILLIAMS: Now, Romney says he's the leader in this campaign because he's got the lead in New Hampshire and Iowa, and I think Giuliani -- this week Giuliani had great numbers come out and show that he's now the strongest and ahead.

LIASSON: This is July, Juan.

WILLIAMS: But where is Thompson?

LIASSON: Juan, this is July. I think we're all getting warped by this calendar.

In other words, when you are running second in the polls or sometimes second behind undecided, why would you rush to get in? In other words, he's getting in right after Labor Day or over the Labor Day weekend. That's plenty of time...

WILLIAMS: But don't you think if he had gotten in early and said, "I've raised a lot of money," that would have been -- would have given him momentum?

LIASSON: Well, he hasn't done that yet.

BARNES: There is an analogy with Ronald Reagan and, Chris, I want you to know I'm not warped by this campaign.

(LAUGHTER)

LIASSON: By the calendar, not the campaign.

WALLACE: He's warped by other things.

(LAUGHTER)

BARNES: Yes, but not this. Look, there's an analogy with Reagan because, of course, Nancy Reagan was very involved in her husband's campaign. She denied it frequently, but she was, and had -- remember, when he changed the staff in his 1980 campaign, she was a part of that.

Here's the problem, though. Reagan was a conviction politician with a great deal to say. And Fred Thompson -- so far, we haven't heard that he has an important message. He's going to have to come out with one. That's what people are expecting.

They're not expecting a beautifully organized campaign. They're expecting a candidate who has a lot to say that we haven't heard from the other candidates, necessarily. I think it's a high test for him to meet.

WALLACE: But, Brit, let's talk about this question of the delay, because there are reports that Thompson has not raised -- has fallen short of his $5 million fundraising goal. You see on the Fred heads' -- excuse me -- Web sites that people are beginning to complain, "Get in the race. Get in the race."

Has some of the air gone out of the Thompson balloon at this point?

HUME: I think so. Some of it has gone out. Now, you know, obviously, he'll get some kind of a boost and a tremendous amount of attention when he announces his campaign, as he's now expected to do right after Labor Day and on the eve of a big Republican debate in New Hampshire, which I think we're carrying.

So all that will be interesting, and he'll have a moment there, and he'll need to make the most of it, because he has generated by virtue of not being a candidate and sounding like a candidate at the same time a tremendous set of expectations about how good he's going to be and how able he will be to set himself apart from the rest of the field.

Well, we'll find out about that fairly quickly.

WALLACE: All right. And we have to take a break here, panel.

But coming up, the continuing debate over who's more serious about fighting the war on terror takes on a sharp new turn. Our panel tackles that in just a moment.

(COMMERCIAL BREAK)

WALLACE: On this day in 1958, President Eisenhower signed a bill creating the National Aeronautics and Space Administration. Eisenhower called it an historic step in launching the U.S. into the space race.

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

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

REP. PETER HOEKSTRA, R-MICH.: This is a wake-up call for Congress and for America. At a time of increased threat, we are handicapping ourselves in the fight against Al Qaida and radical jihadism.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

REP. ANNA G. ESHOO, D-CALIF.: We owe more to the American people than just trying to scare the hell out of them.

(END VIDEO CLIP)

WALLACE: That was Congressmen Pete Hoekstra and Anna Eshoo this week, demonstrating the divide between Republicans and Democrats when it comes to fighting the war on terror.

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

Well, as we talked about with Senator Feingold, there's a new issue on Capitol Hill about rewriting the Foreign Intelligence Surveillance Act.

And the administration in the person of Mike McConnell, the director of national intelligence, said at this point we have great difficulties intercepting a conversation between a foreign terrorist in one foreign country and another foreign terrorist in another foreign country because of the fact that it might go in a fiber-optic cable through this country.

Democrats, including Feingold, say this is a power grab, that, in fact, it's like the Patriot Act. They want to have a wholesale rewriting of our civil liberties. Brit.

HUME: Well, first of all, the question that Senator Feingold didn't answer was the one you put to him.

And that is if they don't like the kitchen sink, as they call it, that the administration is offering along with this proposal to fix this particular problem, then all they need to do is just pass the simple fix.

And there's been no good answer as to why that hasn't happened. Now, my guess is it will.

But the answer from Anna Eshoo in that hearing was instructive as well -- in other words, not, "Oh, my God, we really do need to fix this." No. She was lamenting the fact that she thought the administration was trying to scare the American people, which is -- make no mistake about it.

This is what a lot of Democrats and those who support them think. They think the war on terror is some kind of a political scam which the administration is using to try to undermine civil liberties and expand the power of the executive branch of the government.

They do not treat it particularly seriously.

WALLACE: Juan?

WILLIAMS: This is unbelievable to me. Wait a minute. When you say it's likely to be passed, why doesn't the administration therefore, then, suggest, "Let's just fix exactly this issue, let's not put that addition?"

And let me just say one other thing.

HUME: Excuse me, Juan. That is what McConnell is proposing.

WILLIAMS: No, McConnell and the administration have a great deal more to say, Brit, and they're interested in advancing the idea that you don't have to go before the FISA court in order to get the warrant, that you can do things and get retroactive approval.

But here's the larger point about being scared. Who is it, you know, Republicans or Democrats that didn't properly arm this force to go out and fight this war, that didn't put enough boots on the ground in order to get the job done early?

Who is it that confused the mission? And then you say, "Oh, no, it's somehow Democrats who are running scared." To the contrary, Democrats this week put in place, you know, money to protect the homeland and make it tougher for terrorists to crack our defenses here at home.

I don't see how you can say it's anything but scare-mongering and puppeting propaganda to say, "Oh, no, it's the Democrats, those bad guys."

BARNES: Well, they are in charge, you know, now. They are in charge. I mean, they can do whatever -- they can write whatever bill they want. They don't have to listen to Mike McConnell or President Bush on this question of wireless surveillance, this FISA thing.

And when you look at the more recent record, it may be true -- although I didn't realize you were one back when the war started who was calling for more troops. I thought you were against the war. Now you say there were more troops.

But look. Here's what Democrats want. One, they've sat on this request by the administration for six months while they were spending a lot of time holding all-night Senate sessions and going after Gonzales and all this stuff.

They want to ban a lot of this wireless surveillance. I mean, certainly Senator Feingold does, because he's called it unconstitutional and using it impeachable and so on.

They want to shut down Guantanamo. They want to give all those terrorists the rights that a guy arrested for drunken driving in the United States would have, including habeas corpus.

You know, 30 of them from Guantanamo have been released, gone back into terrorism, been arrested or killed again.

And they want to soften all the interrogation techniques, particularly the ones that have worked so well.

WILLIAMS: Let me respond.

BARNES: Now, I think that's a record that shows that...

WALLACE: Let me bring Mara into this.

BARNES: ... they're tough on this.

WALLACE: You know this is going to end up being one of the key arguments in the 2008 campaign. Once again, the Republicans are going to say, "We understand and we're serious about fighting the war on terror. The Democrats are not."

And the question, I suppose, is are the Republicans so discredited because of all the problems in Iraq, will they be able to make the argument as effectively as they did against Democrats, for instance, in 2004?

LIASSON: Well, it might be harder. A lot depends on if we have another terrorist incident between now and then.

But I think on this narrow question of making it possible to wiretap calls between two foreign terrorists residing in two foreign countries, I think that is going to get solved pretty quickly.

You have a lot of noises coming out of the Democrats saying, "On this matter, we see no problem." As a matter of fact, the chairman of the House Committee...

HUME: Well, that isn't what Feingold said. He sounded like he has all kind of problems with it.

LIASSON: He said all kinds of problems with the other stuff that they wanted in addition.

(CROSSTALK)

HUME: No, but he asked him why he wouldn't make -- asked him the perfectly good question, why he wouldn't go ahead and make the simple fix. And then he started talking about what else the administration wanted.

LIASSON: On the House side, the chairman of the Intelligence Committee has said first of all he sees no reason why you need a warrant at all for this particular instance, and if there are problems, he would be happy to address them.

WALLACE: But I'd like to go back to the bigger issue, which is...

LIASSON: Yes, I think that Republicans...

WALLACE: ... the war on terror has definitely been a very strong...

LIASSON: ... will have a harder time, there's no doubt about it.

WALLACE: Pardon?

LIASSON: Republicans will have a harder time if things look the same way as they do today to make that argument.

BARNES: Yes, but the reason is not Iraq. The reason is the fading of the memory of 9/11. It's as simple as that. And I think that frees Democrats like Anna Eshoo to say that there's -- to act like there's not much of a threat. And to the extent there's a threat, it's a talking point of the Bush administration.

WILLIAMS: No, no, no, no. You're confused. You're confused.

BARNES: Well, that's what she was talking about.

WILLIAMS: First of all...

BARNES: In truth, the memory of 9/11 has faded significantly. WILLIAMS: Nobody's faded. Why are they voting to make it harder for terrorists to attack the United States? It's because people are so aware - - and Republicans didn't take action in the five years that they were in control of the Congress, Fred.

And when you talk about the war and say you weren't supporting -- people support the idea that we were going after the real Al Qaida that attacked us on 9/11, specifically in Afghanistan.

It's not that anybody -- I wasn't opposed to going to war. In fact, people said, "We need to take response, to retaliate as an American people and protect ourselves."

And now you guys want to say, "Oh, everybody who is not with us is not patriotic and a chicken and running from --" Now, come on, Fred.

BARNES: Juan, you know what? I was twitting you.

WILLIAMS: You did.

BARNES: I wasn't calling you unpatriotic. I know you well, Juan. You're not unpatriotic.

WILLIAMS: All right.

WALLACE: Brit, do you think the war on terror plays as a key issue in this campaign? Does it help the Republicans as much as...

HUME: I think in the end it will help the Republicans, though, as Mara suggests, probably not as much as it once did.

I do think that this sense you get from the Democrats of reluctance, hesitancy, skepticism, even cynical view of the war on terror is something that people will have in the backs of their minds in the voting booth, and it will probably end up helping the Republicans, particularly if, say, Rudy Giuliani were the nominee and seemed to be strong on that issue.

WALLACE: Even against Senator Clinton?

HUME: Well, no -- yeah, I think so, because I -- I mean, I think she's -- this is what she's worried about. This is why she jumps on something like the Obama remark to try to avoid that problem.

This is the issue that has kept the Democrats out of the White House in election cycle after election cycle even when they were doing well down ballot.

This broad issue of who would protect you best is always the one that has helped the Republicans and it has accounted for a series of Republican presidencies that might not otherwise have occurred.

WILLIAMS: And she's a woman. She's got to prove that she can be tough, and Obama's got to prove as a minority that he's willing to be tough. LIASSON: And it's not just toughness. I think you should expect to hear a lot of speeches on terrorism and how to fight it from the Democrats. We haven't heard enough of that yet.

WALLACE: But it's going to be hard to do, isn't it, Fred, given the fact they've been pushed so far by their left-wing base during this primary that they're all kind of tumbling over each other in terms of, you know, who's got the strongest and quickest policy to get out of Iraq?

BARNES: You know, I think they can get away with that right now. The war is unpopular. Next year it will matter what they're saying then, and I think Hillary will be a lot tougher than she sounds now, and so will Obama or whoever wins the nomination. And I think it will be one of them.

WALLACE: Thank you, panel. See you next week.

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