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O'Hanlon, Pollack, Rice Interviews

Fox News Sunday

CHRIS WALLACE, HOST: I'm Chris Wallace. A big victory for the president on Capitol Hill, next on "Fox News Sunday."

A world of trouble -- from Iraq to Iran and Saudi Arabia to Pakistan, we'll examine global hot spots with America's top diplomat, Secretary of State Condoleezza Rice, live, only on "Fox News Sunday."

The troop surge in Iraq gets support from two long-term critics. We'll talk with Michael O'Hanlon and Kenneth Pollack of the Brookings Institution, who say Iraq is a war we just might win.

Plus, finger pointing over the Twin Cities bridge disaster. Should Democrats be blaming the president and the Iraq war? We'll ask our Sunday panel, Bill Kristol, Nina Easton, Charles Krauthammer and Juan Williams.

And our Power Player of the Week says clothes can make or break politicians, 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. Late last night the House agreed with the Senate and passed a bill that gives the Bush administration the ability to eavesdrop on terror suspects without a warrant. The president won over the opposition of Democratic leaders.

In Iraq, U.S. forces killed the Al Qaida leader who masterminded a recent attack on a Shiite shrine in Samarra. He was also a suspect in the bombing of the mosque's golden dome last year that led to a sharp spike in sectarian violence.

And in case your morning paper missed it, Barry Bonds tied Hank Aaron's major league home run record last night when he hit number 755 in San Diego.

Well, joining us now from the presidential retreat at Camp David is Secretary of State Condoleezza Rice.

And, Secretary Rice, welcome back to "Fox News Sunday."

CONDOLEEZZA RICE, SECRETARY OF STATE: Good morning. Good to be with you.

WALLACE: All of Washington is waiting for the progress report that comes in mid-September from General Petraeus and Ambassador Crocker.

From what you've seen so far, how is the surge going and does it justify keeping more troops in Iraq into 2008? RICE: Well, the president will get this report and then we will be able to chart a coherent way forward, but I think that there are many very good elements here.

Clearly, the security situation with American forces working closely with Iraqi forces has improved some.

Clearly, the situation in Anbar, which just a little while ago was considered the epicenter of Al Qaida's activities, has really turned, and there we're working with locals.

Clearly, too, we have a lot of work to do on the political side. But, Chris, I would not underestimate the importance of the continuing work of the leaders of these very powerful parties in Iraq working through the presidency council, with the prime minister, to try to forge a compromise on some of these very essential elements.

So I think there are some very good elements. There are clearly some -- there's a lot more work to do, but we will see what General Petraeus and Ambassador Crocker report.

But obviously, the president is looking to chart a way that is coherent, a way that stabilizes Iraq, and a way that exercises our obligations to the region to leave the region more stable with a stable Iraq at its center.

WALLACE: Secretary Rice, you talk about the good elements. Let's look at some hard figures. Here they are. The number of U.S. military deaths in July was 77. That's the lowest monthly total this year.

On the other hand, the number of Iraqi civilian deaths was 1,652. That's up by a third from last month.

Given that, can you say that sectarian violence is declining?

RICE: Well, you are having -- there are two kinds of violence to talk about here.

One is the kind of sectarian violence we were seeing after the bombing of the Golden Mosque in February of '06, and that was large- scale sectarian death squads going into communities and lining up the men and shooting them, sending the women into exile, the bodies showing up in Baghdad every morning.

I think that that has diminished both by the actions of the Iraqis and by the fact that we've gotten really good work between Iraq and the United States to deal with some of these death squads and their networks.

On the other hand, there's no doubt that Al Qaida-inspired and other insurgents can get off the big suicide car bomb that unfortunately results in large-scale civilian casualties. That may continue.

But I think some of the underlying sectarian elements of the violence they're beginning to get a handle on, although there's obviously a lot more work to do.

WALLACE: Secretary Rice, let's turn to the political side of this where you indicated there hasn't been as much progress.

When President Bush announced the troop surge in January, he said he wanted to give the Iraqi politicians some breathing space to pass laws of national reconciliation.

You said much the same thing about Prime Minister Maliki right here six months before that. Let's take a look.

(BEGIN VIDEO CLIP)

RICE: I think we need to give him a little breathing space and a little chance here, and I think you're going to see very good things from this government. When they get it right, and they will get it right, everybody will forget how long it took them.

(END VIDEO CLIP)

WALLACE: Madam Secretary, it's now been 15 months since Maliki took over. It's been 7 months since the surge began.

I know, as you just mentioned, there has been some progress in the provinces where some of the Sunni sheiks have turned against Al Qaida.

But I want to ask you specifically about Baghdad. How do you explain the total failure over 15 months of the central government -- the failure to pass any of these key laws of national reconciliation?

RICE: Well, Chris, these key laws go right to the heart of what kind of Iraq it's going to be, and it's hard. They could have passed these laws by majority votes.

There's no doubt that they have enough votes in coalition to pass a national oil law, that they could pass de-Baathification laws. They could do that.

But they're trying to do this by consensus. They're trying to do it in a way that brings all Iraqis together regardless of what sectarian or what confessional group they come from. And that's very, very hard.

But it's not inconsequential that these very powerful party leaders are represented in this presidency council, that they're using the structure of the presidency council plus the prime minister to try and forge a compromise on some of these issues.

It's not inconsequential that money is really now starting to flow from the center into the provinces which will help the reconciliation that is happening from the localities upward and from the national government downward. They do need to make more progress.

WALLACE: May I interrupt, Madam Secretary? RICE: Well, let me just say, Chris, they need to make more progress, but we shouldn't forget that they are, in fact, taking on some of these very, very difficult challenges at the leadership level.

WALLACE: So I want to make sure I'm -- because I've not heard this before. You're saying that the Iraqi parliament could pass the de- Baathification law, the oil revenue law, and they've chosen not to do that because they want to get more of a consensus?

RICE: No, Chris, I said that I think that if they just took a majority vote, they could probably get through a national oil reconciliation law, but it would not have the support of all of the groups that are trying to do this.

And so they're trying to do a national oil reconciliation law that really brings all of the parties together. They don't want a 51- 49 on constitutional reform.

They want to try and bring this about in a way that brings all of the important groups together, and I think that that makes a lot of sense.

WALLACE: If they're so busy in trying to build a consensus, how do you defend the fact that the Iraqi parliament is taking the month of August off because it's too hot, while at the same time U.S. soldiers in full battle gear continue to patrol the streets of Baghdad?

RICE: Well, the leadership is not on recess. And the presidency council and the prime minister are still working.

This is a parliamentary system, Chris. And underneath the council of representatives, there are important party interests that are working to try to forge consensus so that when it goes to the council of representatives it has an opportunity to pass.

It's difficult work. It's difficult work to define how you're going to divide the resources of the country, the national oil resources of the country. It's difficult work to decide how you're going to deal with the past of the Baath party. It's difficult work to decide how you're going to reform the constitution.

We've been very clear that we don't think that they have achieved enough and that they need to work harder. We've been very clear that there is urgency to this. And the president, when he speaks to these leaders, when I speak to them, when all of us speak to them, we tell them that.

But we shouldn't simply dismiss the efforts that they're making to try to bring about a national consensus on these very important issues, and we shouldn't dismiss the work that they're doing to bring budget resources to the localities so that when Iraq emerges, it emerges as a place that has the support of all of its people.

And again, Chris, on what is happening in Anbar, we're not just talking about a few local sheiks coming over to the side of the coalition. We're talking about what used to be called the Sunni Triangle, this place in which Al Qaida was strongest.

We're talking about these people deciding that they're going to take back their streets from Al Qaida, they're going to take back their streets from terrorism, and they're going to do it in cooperation with the United States.

That is a major development, not a minor one.

WALLACE: I want to move on to another subject. Senator Barack Obama has been highly critical of your and the president's foreign policy recently. Let's take a look.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA, D-ILL.: If we have actionable intelligence about high-value terrorist targets and President Musharraf will not act, we will.

(END VIDEO CLIP)

WALLACE: Secretary Rice, the Pakistani foreign ministry says that President Bush called President Musharraf this week to try to distance himself from what he called unsavory comments made in the spirit of electioneering. Have the comments of Senator Obama been unhelpful in terms of our relationship with Pakistan?

RICE: The United States and the president are very committed to working with the Pakistanis on these difficult terrorism issues.

Now, let's remember that this government, Pakistan in 2001, was hardly a government that fought terrorism. In fact, it had very close relations with the Taliban. There are indications that there were -- also, there was a sort of blind eye to Al Qaida.

Now this is a government that's on the right side in the war on terror.

WALLACE: So what's the problem with what Senator Obama said?

RICE: Well, Chris, the idea -- first of all, what Senator Obama said, Senator Obama said. What the president said to President Musharraf is that we have to work harder, obviously, to deal with these Al Qaida terrorists, some of whom, yes, are active in the northwest frontier areas of Pakistan.

But let's be very clear. If anyone thinks that the Pakistani government, which is under constant threat from Al Qaida -- Musharraf himself, who has been targeted for assassination by Al Qaida -- would not want to do everything possible to get high-value targets, I think you have to think again.

This is a government that has an enormous amount at stake. It is a focus of and a target of extremism.

If you look at what happened in the Red Mosque, if you look now at the very more active posture of the Pakistani military in these frontier regions -- frontier regions, by the way, that have not been governed at all by the central government for many, many decades -- I think you see a government of Musharraf that knows the threat of terrorism to them.

WALLACE: But I guess the question I'm asking you, Secretary Rice, is why did the president feel it necessary -- you say Senator Obama said what Senator Obama said.

Why would it sufficiently rise to the level where President Bush would feel he had to call President Musharraf to clear this up?

RICE: The president talks with President Musharraf fairly frequently. And I can tell you that the president isn't going to go around disavowing comments that are made during an election campaign. It's not the president's responsibility to do that.

What the president is going to do with President Musharraf is to continue to affirm our partnership. He's going to continue to affirm our support for active Pakistani activities in this region.

And he's going to continue to press the importance of going after these terrorists, because American security is at stake, Pakistani security is at stake, and when he has these conversations, he finds in President Musharraf a man who knows firsthand the dangers of Al Qaida to himself personally and to Pakistan as a whole. And so we have a very good partner there.

And I just want to repeat, if there are high-value targets, the United States and Pakistan both are going to have a very strong interest in doing whatever it takes to make sure that those high-value targets are captured or killed.

WALLACE: The president has just announced a $20 billion arms sale of sophisticated weapons to Saudi Arabia and other Gulf states, but according to the New York Times, U.S. officials feel the Saudis have worked against the Iraqi government, are currently funding Sunni insurgent groups, and that the majority of suicide bombers in Iraq are actually Saudi.

Secretary Rice, given what our own U.N. Ambassador calls the destabilizing policies on the part of Saudi Arabia, why would we be selling them more sophisticated weapons?

RICE: Well, let's remember that the United States has had interest and security cooperation in this region for decades. There's nothing new in this. And certainly, we want our allies and strategic partners in the region to be well defended.

It would make no sense to leave Saudi Arabia or the other Gulf states undefended, incapable of defending themselves, or turning to others who might be less reliable in providing for their defense at a time when the security challenges in that region are increasing.

Now, as to political cooperation with Saudi Arabia, we have -- I've just been in Saudi Arabia talking with the Saudis and with the Gulf states, Egypt and Jordan, about all of our obligations to an Iraq that is unified.

I think these are states that understand that an Iraq that is unified is in their interest. Indeed, it's in their vital interest.

And I also would note that the Saudi government announced that it's going to put an embassy in Baghdad, something that we have hoped they would do for quite some time.

They're working to forgive the debt of Iraq, and they're working with these local tribes, some of whom have relatives across the Saudi border, to try and reinforce the need for Sunnis to be fully integrated in and fully active in the policies of Iraq.

And so I simply think that we have good cooperation. We want all of the states, all of the neighbors, to do more. But it makes no sense to leave our longtime strategic allies undefended in a region in which Iranian and other challenges are growing.

WALLACE: Secretary Rice, we have about a minute left -- actually, less. I want to talk to you finally about Congress, which late last night passed a temporary fix of the Foreign Intelligence Surveillance Act.

How important is that, the fix that they passed, for our national security? And how do you respond to civil libertarians who say what this fix is actually going to do is make it easier for the government to spy on Americans?

RICE: Well, first of all, I think that the Congress did a very good thing, and we appreciate the cooperation of the Congress in doing this.

We're going to be safer because it is important that the United States use all legal means to know what the terrorists are doing and what they're planning.

The long pole in the tent against terrorism is not to let something happen and then prosecute it. It's to have good intelligence about what is about to happen and prevent it, because if you don't prevent it, thousands of innocent people die.

This will allow the program to do what we need to do. We need to know what is going on between people who are talking to terrorists who may be located in the United States and terrorists who are located outside the United States.

You don't want an artificial barrier between the territory of the United States and the territory outside of the United States. And most importantly, you want to be able to protect civil liberties, and this will protect civil liberties of Americans, but it will also make certain that we can surveil, can monitor, and can act on activities that may be plotting against the United States.

So technologically, these days, to have an artificial separation, given the way that telecommunications space is really a unified space across the world, would make no sense, so this is a very good step forward. It will make us safer.

And we very much are pleased that the Congress and the executive branch have been able to come together around this.

WALLACE: Secretary Rice, we're going to have to leave it there. We want to thank you so much for sharing part of your Sunday with us.

RICE: Thank you. Good to be with you, Chris.

WALLACE: Up next, the troop surge in Iraq. What did two critics see on the front lines that convinced them the war might be won, and how have their liberal friends reacted? Some answers after this break.

(COMMERCIAL BREAK)

WALLACE: This week there was an op-ed column called "A War We Just Might Win" that said the U.S. troop surge is creating significant changes on the ground in Iraq.

What made it noteworthy was who wrote it, two critics of the way the Bush administration has conducted the war, Kenneth Pollack and Michael O'Hanlon from the generally liberal think tank The Brookings Institution.

And, gentlemen, welcome to "Fox News Sunday." You're just back from eight days traveling all over Iraq.

Ken, why don't you start? What did you see over there that led you to believe that this troop surge might actually work?

KENNETH POLLACK, BROOKINGS INSTITUTION: Well, you see in a few places in Iraq some very dramatic changes. The one that everyone knows about is Anbar province, where the Sunni sheiks have flipped on Al Qaida in Iraq and the other Salafi groups and are now working with U.S. forces.

But there are also some important things that we saw in other places. Mosul, Iraq's third-largest city, which at one point in time required tens of thousands of troops just to keep the place from flying part, was now mostly being handled by Iraqi security forces with only a small American presence up there.

And elsewhere, in Baghdad, in the southern belts, in the northern belts, we also saw progress, important progress, on the security front, and even some progress with local economic and political developments.

WALLACE: Michael, what can you add to that, particularly this question that I asked Secretary Rice about, which is sectarian violence, this argument that this is trying to provide some kind of a circuit breaker in terms of the sectarian civil war?

MICHAEL O'HANLON, BROOKINGS INSTITUTION: The way I would summarize it, Chris, we have suppressed the sectarian violence. We don't have a solution yet. That has to come, to some extent, from the politicians in Baghdad, also from the ground up.

That part is suppressed by a lot of American forces, a lot of concrete barriers and a lot of checkpoints. We don't yet have the end-game on that.

We are seeing, however, much more progress against the Al Qaida in Iraq, the other Salafist groups, some of the extreme Shia militias, and that part is going much better because Iraqis -- along with the surge, Iraqis are getting sick of the violence from other Iraqis against them, and they're getting tired of these extremist movements.

That does not solve the sectarian problem. That's going to have to be phase two of this. But the first phase is looking fairly good, on the military battleground, at least.

WALLACE: Which brings us to the bottom line of your article, and let's put it up, "The surge cannot go on forever, but there is enough good happening on the battlefields of Iraq today that Congress should plan on sustaining the effort at least into 2008."

Ken, you've got to know there are a lot of people in this town who don't want to hear that.

POLLACK: We've heard that very loudly from those people over the course of the last week. But you know, the fact of the matter is that Mike and I are most interested in what's in the best interest of the country, and we're going to call things exactly as we see them.

And we felt that it was important to say that, you know, we saw some progress over there. We went to Iraq specifically to ask the question, "Is there any reason to believe that the surge is having an impact?"

We started this very late in the day. I don't think there's any question it was the right strategy. But we only started it long after civil war had descended to some very violent levels in Iraq.

And the question we wanted to ask is, "Is there any reason to think that this was having an impact on the situation?" And we found evidence that it was.

WALLACE: Michael, one area about which you're not optimistic is the Iraqi central government and the moves toward national reconciliation.

Here's what you wrote, "Iraqi politicians of all stripes continue to dawdle and maneuver for position against one another when major steps toward reconciliation or at least accommodation are needed."

Michael, do you see any signs that the Maliki -- Prime Minister Maliki and the parliament are getting their act together? And absent serious moves toward national reconciliation, does the surge make sense?

O'HANLON: I think it makes sense for a while to see if the momentum can spread from the battlefield to the political theater. Ken's the greater expert on Iraqi politics than I, but my overall impression is if you don't get even some top-level, top-down movement coming up fairly soon, this thing can't work. Politics trumps the battleground in the end.

And I think, therefore, this is an interim report from us on the surge, and it's basically saying nothing more dramatic than give it six more months or so, maybe nine more months.

If things don't start to progress in that time, I personally would be a lot less optimistic and/or in favor of trying to prod the Iraqis to dump Prime Minister Maliki. That's me, not Ken.

WALLACE: Well, let me ask you, Ken, do you see any signs that Maliki and the parliament are getting their act together?

POLLACK: Basically none. The political side was absolutely dead in the water, exactly as Mike is suggesting.

You know, one thing to keep in mind is that as General Petraeus has repeatedly pointed out, the idea is that with security and local- level economic and political development, you create some space. There's an expectation that the politics is going to lag. It's going to take longer.

But this level of political stalemate is absolutely unacceptable. And I agree with Mike entirely that we can't give this much more time.

And I think that the U.S. -- the administration needs to be pushing much harder and maybe even thinking about, if the surge continues to work in terms of providing security, can we move to a different government, one that actually would be able to strike these hard bargains.

WALLACE: When you say a different government, meaning ousting Maliki and putting another man in?

POLLACK: I wouldn't necessarily suggest that the United States try to oust anyone. Our experience of ousting foreign leaders has been a very bad one.

But I think what we could do is go to the Iraqis and say, "Look, you're planning to have national elections in 2009. This government is deadlocked. It can't do it. You need to move those national level elections up and get a new parliament, hopefully one that actually can produce real results."

WALLACE: You -- and you referred to this -- have taken fire from some of your friends on the left, especially from some of the left- wing blogs, and let's put some of that up.

One of the blogs wrote, "For sheer deceit and propaganda, it is difficult to remember something quite this audacious and transparently false."

Another said your article "uses cherry-picked data to give the false impression that there is real progress being made militarily."

Michael, how much heat are you taking from the anti-war left? And is there an unwillingness on that side to even accept, even listen to new facts?

O'HANLON: Well, I've had a hard time with some of the bloggers and their take. I think left-leaning politicians have been fair. A lot of them haven't liked what we've said, but they've read it and they've tried to digest it.

But the bloggers, of course, to some extent, have a business of trying to make comments somewhat more extreme. But I respect the bottom-line judgment. You can look at the facts that Ken and I tried to report, and I think they are facts.

There is military progress. We're confident of that. And that's why we wrote the piece. But you can look at those facts and still conclude, "This thing's gone on long enough. If the Iraqi politicians aren't cooperating now, why would they ever? Let's pull the plug." I can respect that argument, even though it's not mine.

What I can't quite agree with is people saying, "Your facts are wrong." We spent a lot of time looking at the facts. I'm pretty confident the facts are right.

WALLACE: Now, am I right that both of you are supporting Senator Clinton's campaign for president? Is that correct?

O'HANLON: It's correct in my case.

POLLACK: I think that we...

WALLACE: You don't have to announce right now if you don't want to, Ken. But go ahead.

POLLACK: I was just going to say, we both work at the Brookings Institution. It's a non-partisan organization. We make our calls based on what we see.

WALLACE: Is it true that you bumped into Senator Clinton this week, Michael?

O'HANLON: Oh, nothing arranged, and nothing substantive.

WALLACE: Did she have any reaction to the article?

O'HANLON: I think she is admirable in her willingness to take in a lot of different viewpoints, and that's probably as much as I can say.

WALLACE: Let me ask you about that, Ken, because I talked with Democratic Senator Feingold last week before your article appeared, but I asked him why was he ignoring some signs that were out there that the surge was working. Here's what he had to say.

(BEGIN VIDEO CLIP) SEN. RUSS FEINGOLD, D-WIS.: I do not buy the notion that this 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."

(END VIDEO CLIP)

WALLACE: Ken, what do you make of that?

POLLACK: I think Senator Feingold is a highly intelligent and honorable man. And I think that that is a perfectly reasonable position for someone to take.

Mike and I have a different perspective based on what we saw, based on our work on Iraq for many years.

Unfortunately, this is the problem with Iraq, is that it is an extremely difficult situation, and different people can read the facts and different people can read the information that they're getting in different ways.

WALLACE: Michael, we have to wrap up here. Assuming that we keep the troop surge -- you're calling for it to continue another six to nine months -- what are the chances for success in Iraq? And what would success mean?

O'HANLON: Success means less violence and a place that doesn't fall apart. That's my standard. That's good enough, as far as I'm concerned.

I, in fact, am sympathetic to the idea of a soft partition of Iraq. I think that would be good enough -- a Bosnia model. It's going to be hard to convince the Iraqis to do that, as Ken constantly reminds me when I raise this idea.

But I think that would be perfectly viable as an outcome as well. We just need a place that doesn't fall apart or export terrorism or weapons of mass destruction.

WALLACE: And I hate to say this. We've got about 30 seconds left.

Ken, conversely, if the Congressional Democrats succeed in starting to pull most of our troops out by next spring, what do you see happening to Iraq then?

POLLACK: I am not in favor of precipitous withdrawal from Iraq. I think that could be very dangerous. I think it would lead to all- out civil war in Iraq.

And unfortunately, I think that that could have very profound repercussions not just for Iraq, but for the entire region.

WALLACE: Gentlemen, I want to thank you both for coming in and sharing your thoughts with us.

O'HANLON: Thank you.

WALLACE: Coming up, we'll talk with Bill Kristol, who's also just back from Iraq, and we'll ask the rest of our Sunday panel about what the Democratic frontrunners had to say at a convention of the anti-war left yesterday -- all that after this quick break.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

ADM. MICHAEL MULLEN, JOINT CHIEFS OF STAFF CHAIRMAN: I believe the surge is giving our operational commanders the forces they needed to execute more effective tactics and improve security.

(END VIDEO CLIP)

WALLACE: That was the newly confirmed chairman of the Joint Chiefs, Admiral Michael Mullen, telling a Senate panel things aren't great in Iraq but they are getting better.

And it's panel time now for Fox News contributors Bill Kristol of The Weekly Standard, Nina Easton of Fortune Magazine, columnist Charles Krauthammer and Juan Williams from National Public Radio.

Well, Bill, let's start with you. You're just back from a trip to Iraq. What struck you about the situation on the ground there?

BILL KRISTOL, WEEKLY STANDARD: What struck me was the high morale of the American soldiers who now feel they're executing a coherent strategy that General Petraeus has put in place and is being executed from the top down.

And the degree to which he has succeeded in persuading brigade commanders, battalion commanders, captains, lieutenants, that we have to fight a serious counterinsurgency which is both military and political and diplomatic -- the degree to which young American soldiers are doing diplomacy in the neighborhoods, doing economic development, is extremely impressive and really heartening.

WALLACE: And what's your sense -- I assume you traveled all over the country. What's your sense of how the surge is working? Is it really making a difference on the ground?

KRISTOL: Oh, sure. I mean, we went to Ramadi, which was the -- is the capital of Anbar province, the heart of the -- dominated by Al Qaida, controlled by Al Qaida.

One thing that struck me there, incidentally, Chris, is 2006 was a disastrous year, and for the president and Rumsfeld and Casey to have allowed it to degenerate as much as they did then -- it almost excuses the voters putting Democrats in charge of the Congress in November. I really felt, coming back, that, you know, I -- it was such a bad performance in '06. But Petraeus has turned it around.

We walked around Ramadi without body armor. Colonel Chaunton (ph), who's the brigade commander there, knows the people, the local leaders. We went to the -- we're rebuilding the mayor's office there, and they were having meetings with community leaders. That's awfully impressive. It really is making a difference on the ground.

We walked around Haifa Street in Baghdad. There we were armored, and that still remains a difficult area in central Baghdad.

But there, too, the degree -- the decline of sectarian violence, the ability of the U.S. troops and the Iraqis -- we were accompanied by Iraqi army troops in most of these cases, and often more Iraqi army troops than U.S. troops. It was encouraging.

WALLACE: On the political front, let me ask you the question I asked our two guests just now. What's the sense about the state of the Iraqi government?

And when you talk both to American officials and also to top or influential Iraqis, do they feel that Maliki is capable of taking charge?

KRISTOL: They're not sure. The Iraqi government is dysfunctional and has not -- not very impressive.

On the other hand, at the local and provincial level, a lot of reconciliation is happening, some reconstruction from the ground up.

And the question is even with a mediocre and somewhat incompetent Iraqi government, if there's sort of benign neglect toward the localities - - and we are building up the Iraqi army. We're building up even the Iraqi police, who have been a huge problem.

We could have a lot of progress on the ground and achieve a decent outcome without a terribly competent Iraqi central government.

WALLACE: Did you get any preview of what General Petraeus is likely to say when he comes back and gives his all-important progress report in September?

KRISTOL: He was pretty discreet when we had dinner with him the last night. I asked him for a copy of the report. For some reason he didn't think that was as amusing as I did.

Look, I think he would not be doing this if he did not think he had a shot at success. And so far -- we got a long briefing on the plan. I mean, it is very impressive.

They have a coherent strategy which they're pursuing methodically. And people here don't really understand that. We're not just driving around and a bomb goes off and we respond.

Here's an instance of this. They are not clearing certain areas. They are not removing Al Qaida from certain areas as fast as they could in a way because they want to make sure they can come in behind and hold those areas. That's been the great disaster the first three years -- you know, clear, but then no hold.

They're methodically pursuing the strategy. Petraeus thinks it's on course and on schedule. I believe he'll come back and say, "Give me another four or five months to play out this strategy and then we'll see where we are."

WALLACE: All right.

Let me bring the rest of you in.

And, Juan, assuming that General Petraeus reports some progress next month and says he needs to keep the surge going into 2008, what effect do you think that will have? How much influence will it have on the debate on Capitol Hill?

JUAN WILLIAMS, NPR: It should have very little influence at this point, because the track record is so overwhelming over the last five years.

You know, it doesn't sound like Bill got any dog-and-pony show. It sounds like you were looking around and got an honest look at the improvements that have been made in terms of the military side. He acknowledges the problems that existed just last year in '06.

But the fact is if you look at what Mike Mullen, who's going to be the chair of the Joint Chiefs, said on Capitol Hill this week, he said no amount of troops for no amount of time -- not five months more, not 10 months more, not 10 years more -- is going to be sufficient unless you have a functioning political structure in Iraq.

And we don't have that. By the benchmarks that were set, what you've seen here is Maliki has failed. They are on vacation, despite what Secretary Rice had to say. They're on vacation while the war goes on.

WALLACE: Charles?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: Look, Americans are not anti-war. Americans are anti-losing wars. And when the prospect is that the war is lost, losing, and nothing is changing, Americans want to leave. That's entirely understandable.

The war is turning around. Whether this is the decisive turn, no one knows. But the fact is that there are honest people like the guests that you had earlier, like Bill and like Petraeus, who are saying something is happening on the ground.

It's something that I think can have an effect on public opinion. Americans don't want to see a catastrophe in Iraq, and they have an understanding of what would happen as a result. So I think this will have an effect on public opinion.

I agree -- everybody agrees -- the real issue here is the Maliki government. In the end, it's going to have to perform, but in the end is not today. You can have changes on the ground, what they call ground-up reconciliation, in the provinces. If that's having an effect, I think Americans will give it some time to succeed.

WALLACE: Well, let's talk about public opinion, or at least a very small section of it, Nina.

The frontrunners for the Democratic nomination all spoke yesterday at something called the Yearly Kos Convention of the left- wing blogosphere, and here's some of what they had to say.

(BEGIN VIDEO CLIP)

OBAMA: We botched the job when we went in. We now have chaos and have helped to unleash civil war in that area.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

FORMER U.S. SENATOR JOHN EDWARDS: It's a very simple formula: Less allies, more terrorists. America is not safer.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

SEN. HILLARY RODHAM CLINTON, D-N.Y.: I don't believe that it is at root as much anti-American as it is anti-Bush.

(END VIDEO CLIP)

WALLACE: Nina, it doesn't sound like to me that whatever General Petraeus says is going to change the minds of not only those people in the left-wing blogosphere, but also of the leading Democratic frontrunners.

NINA EASTON, FORTUNE MAGAZINE: Well, I think they're going to be in somewhat of a political pickle. I mean, everybody is looking for this report to say, "Are we winning? Are we losing?"

The fact is, as everybody's making clear right now, it's not going to be clear-cut. It's going to show military progress, but it's not going to show political progress.

And I think the Democrats -- it's actually going to put the Democrats in a bind, because are you going to say, "We're going to pull the rug out from under what's clearly military progress because we don't see political progress?" And it's going to push them into a corner.

There were a couple of interesting moments, little-noticed moments, this week. One was the House Democratic whip, James Clyburn, saying, "Look, if Petraeus comes out with a report that says there's progress, that's trouble for us. That's trouble for Democrats trying to come up with votes to pass a timetable for withdrawal of troops." The other little- noticed fact was that Representative Ellison, the only Muslim and a very liberal Democrat in the House, also got back from Iraq, and he also was impressed with a lot of the things that you're talking about, the alliances with the sheiks on the ground, the grassroots efforts in partnering.

So you're seeing some voices out of that side seeing the military progress. But again, you're not seeing political progress.

WALLACE: Juan, do you think that Democrats are going to waver if there are these continuing reports and if Petraeus comes back and says, "Give me more time?"

WILLIAMS: Well, if you're just looking at the military side, you're saying -- well, of late, obviously, the military thing has been -- we've shifted our goals and interests over time.

But if you're saying specifically about the surge -- I'm going to take Bill Kristol at his word. It seems like we're making some progress with the surge. Right, OK.

But that's not the whole game. The whole game is our national strategic interest. The goal was to create a stable, functioning democracy in the Middle East. Do we have that? No.

Are we close to that? Can we say that if we put our young people at risk for another year we're going to accomplish that? No.

So it's all about how you frame the conversation, how you frame the argument. If it's limited simply to a matter of military progress, you can say, "Oh, yeah, we are making some military progress. Look at Anbar." You look at the whole Middle East. Are we creating more terrorists? Are we safer here in the United States? Answer: No.

KRISTOL: I just want to say at 1st Cav headquarters in central Baghdad, Colonel Roberts gave me this little pin, which is the 1st Cav symbol, and one of the soldiers standing there said, "Wear it on 'Fox News Sunday'," so I wanted -- and the soldiers and Marines send their best to all of you -- a lot of Fox News viewers in Iraq, and I hope we're helping keep their morale up.

That was really striking, how high their morale was. Anyway, I did my job. I wore the pin.

WALLACE: And if they're watching, God bless you and thank you for defending America.

We need to take a quick break here, but when we come back, playing politics with the bridge collapse in Minnesota -- more from our panel after the break.

(COMMERCIAL BREAK)

WALLACE: On this day in 1981, President Reagan began firing more than 11,000 striking air traffic controllers for refusing to return to work. They were replaced by supervisors and military controllers.

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

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

PRESIDENT GEORGE W. BUSH: On behalf of the citizens of America, I bring prayers from the American people to those who've suffered loss of life.

(END VIDEO CLIP)

WALLACE: That was President Bush on Saturday after touring the site of that collapsed bridge in Minnesota.

And we're back now with the panel. Well, even before the president got to Minnesota, some Democrats were already linking him and the war in Iraq to the bridge collapse. Take a look.

Minnesota Senator Amy Klobuchar said, "I believe the priorities in our country have been out of whack the last few years. You know, we've spent, what, almost $500 billion in Iraq."

And Massachusetts Congressman Barney Frank answered a question about where we're going to get the money to repair our roads and bridges this way, "We're going to get it from taxation, and one way we can do that, frankly, in my judgment, is end the war in Iraq."

Charles, fair criticism, reasonable solution?

KRAUTHAMMER: I find it astonishing and really unseemly. Look, the issue here is not lack of money.

The senator of Minnesota might have noted that her state is spending $1 billion dollars on a baseball stadium at a time when its bridges obviously are in trouble. The money is there. It's a question of who chooses priorities.

And secondly, it's not even a money issue. It's an engineering issue. The bridge had been inspected. And the bridge had been shown to be deficient, if you like, but there are 70,000 others in America in that category, which means it needs repairs.

But it was estimated it would not need replacement until 2020. The problem is our lack of engineering expertise. It's extremely hard to know if you have a bridge on the edge. These things happen. And to blame it on the Iraq war is the rawest opportunism. EASTON: It is a money issue. I mean, and you know -- but it's also the Democrats -- you know, this question of -- when they raise this as a partisan issue. This is a partisan issue because it goes to both parties.

The transportation bill, the pork-laden transportation bill, in 2005 with the bridge to nowhere -- engineers at the time said that it was $100 billion underfunded for maintaining projects.

Congress has been very good at passing pet projects, but not very good at taking care of the projects that are already out there.

Then let's turn the page to the Democrats -- who, by the way, are conducting something like 300 investigations of the White House on other things and haven't managed to get an appropriations -- transportation appropriations bill to the president.

You know, and, by the way, I looked at the committee hearings -- the House Transportation Committee hearings. This hasn't been a priority of theirs either. So for them to stand up and blame -- point the finger at the Democrats -- this is why Americans are so frustrated with Congress right now.

WALLACE: Bill, some remarkable figures came out this week. Seventy- five thousand of our bridges -- that's 13 percent -- are structurally deficient. The national infrastructure is clearly beginning to crumble or has been crumbling for decades.

What do we do about it? And when the memories of this latest tragedy in Minnesota fade, do you think we'll actually end up do anything about it?

KRISTOL: I think we're doing quite a lot about it. I mean, I live in Virginia, and we're spending an awful lot of money in northern Virginia on highway improvements and, I hope, bridge improvements, since I drive across one every day into D.C.

You know, most of this money is state money, not federal money, incidentally. That's the tradition in the United States, and it should probably remain that way.

And you know, I don't think this symbolizes any great failure of our infrastructure. You know, once every 25 years, some bridge falls down unexpectedly due to engineering problems, and it is unfortunate, obviously. But the idea that the whole country is crumbling is not, I think, credible.

WALLACE: Do you take such a benign view of this, Juan?

WILLIAMS: Well, I appreciate the optimism. But I think that if you live in New York and you see, you know, the steam pipes exploding and people think, "Oh, my gosh, that's terrorism," or you see the bridges in Minnesota falling down, or you live in a number of the big cities where there's questions about the quality of the drinking water, you start to say, "What's going on in America, you know, our first world greatest democracy, richest country in the world? Why do we have this failing structure?"

Now, I think your point is well taken that, "Wait a second, you know, it's held up pretty well." But it's now a 50-year-old highway system, for example, and you've got to put some money into maintaining what is a real wonder.

And if you don't, then you have tragedies like this, and I don't want to bet that it's not going to be me or you driving over some bridge that then, you know, gets crushed. So I think there is -- you have to put more money in it.

Now, to come to where we started, which is the war in Iraq, is there any question that we've spent a great deal of money on that war? And when you have the hurricane down in the Gulf Coast, people say, "Wait a second, we don't even have forces, we don't even have National Guard to go in there," much less money that should have been spent, attention that should have been focused on maintaining the United States rather than rebuilding - - what did you say, the mayor's office in Anbar or someplace we were rebuilding?

WALLACE: All right. Wait, wait. I want to move to one last thing before we run out of time here.

Congress finally got out of town, or is getting out of town, I guess, today for the August recess, but not before this extraordinary scene on the House floor Thursday night when Republicans accused Democrats of stealing a victory. Let's listen.

(VIDEO CLIP IS PLAYED)

WALLACE: The Republicans were supposedly shouting, "Shame." Anyway, here's a look at what Democrats say are their big accomplishments so far: Raising the minimum wage, passing some of the 9/11 Commission security proposals, progress toward extending children's health care coverage, and ethics reform.

Bill, overall, how do you rate Congress' performance so far?

KRISTOL: Not very good, and I think that's how the voters rate it. The Democratic Congress' numbers -- they came in with some high hopes -- have plummeted. Now I guess they're below President Bush's.

They're trying to stop the war in Iraq irresponsibly. They've failed. They will continue to fail. They haven't passed any major domestic legislation.

WALLACE: Nina?

EASTON: And that scene that happened in the middle of the night -- fortunately for Congress, not too many people saw it.

But I think that that's really set the tone for most of these first six months, even though the Democrats came in saying they were going to change the tone.

KRAUTHAMMER: What's failing here is not just that Democrats reversed a vote in the House after it had taken place -- pretty unprecedented -- but the substance of the issue over which they reversed the vote.

It was the Republicans' attempt to stop the money in the farm bill ending up as tax subsidies to illegal aliens for housing and employment.

And the Democrats wanted to oppose that and pulled a parliamentary maneuver to do it. It's telling what issue they had chosen to make this remarkable stand.

WALLACE: Juan, do you have better grades for the Democratic Congress?

WILLIAMS: Well, I think that they've dealt with a lot of -- you know, the Republicans have stood in the way.

I mean, when you look at immigration reform, which is something I think the nation needed, you have to say, "That's a big failure of this Congress." And I wouldn't put that on the Democrats' plate. I would put that on the fact that some right-wingers in the Republican party took over that conversation.

With regard to no major domestic accomplishments, I think minimum wage counts. I think child health is very important. And the president threatens right now to veto it, so we look forward to that conversation.

But I don't see that you can say this is a do-nothing Congress.

WALLACE: All right. Got to go. Thank you, panel. See you next Sunday.

For more visit the FOX News Sunday web page.

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