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Interview with Admiral Michael Mullen

Interview with Admiral Michael Mullen

Fox News Sunday - March 1, 2009

WALLACE: I'm Chris Wallace and this is "Fox News Sunday."

The president sets a time line for pulling U.S. troops out of Iraq.

(BEGIN VIDEO CLIP)

PRESIDENT BARACK OBAMA: Let me say this as plainly as I can. By August 31st, 2010, our combat mission in Iraq will end.

(END VIDEO CLIP)

WALLACE: How will the Pentagon manage the end game there as well as the growing commitment in Afghanistan? We'll find out from the nation's top military officer, Admiral Mike Mullen, chairman of the Joint Chiefs of Staff.

Then, President Obama offers a budget brimming with big spending and higher taxes for some. Where will the GOP make its stand? We'll ask Jon Kyl , the number two Republican in the Senate, and Paul Ryan, the top Republican on the House Budget Committee.

And after this week's events, we'll ask our Sunday regulars whether Barack Obama is on course to be the most transformational president since Ronald Reagan, all right now on "Fox News Sunday."

And hello again from Fox News in Washington. President Obama made good on a campaign promise Friday laying out how he intends for the U.S. war in Iraq to end. Here now to explain exactly how that will work is the nation's top military officer, Admiral Mike Mullen, chairman of the Joint Chiefs.

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

MULLEN: Thank you. Good morning.

WALLACE: Let's start with President Obama's announcement Friday that the U.S. combat mission in Iraq will end in August of 2010 and that he will pull roughly two-thirds of our troops out.

You and I discussed that scenario when you were last on the show.

MULLEN: Right.

WALLACE: Let's take a look.

(BEGIN VIDEO CLIP) WALLACE: If I were to say to you let's set a time line of getting all of our combat troops out within two years, what do you think would be the consequences of setting that kind of a time line?

MULLEN: I think the consequences could be very dangerous in that regard. I'm convinced at this point in time that coming -- making reductions based on conditions on the ground are very important.

(END VIDEO CLIP)

WALLACE: Admiral, why was a time line dangerous in July but not now?

MULLEN: Well, conditions have changed fairly dramatically since last July. In particular, the military situation as a result the surge has gotten a lot better. Iraq security forces have improved. And those kinds of things -- all those trends are in the right direction.

Additionally, we have a timetable since that time. In fact, the status of forces agreement requires us to be out of Iraq by the end of 2011.

And most importantly, at this point in time, is we have a new mission, and it's important for us to recognize that mission and carry it out safely over the period of time that we've been given, which is to get to a new mission of no more combat forces in Iraq at the end of August in 2010.

WALLACE: Back in July, when we talked, and you made it clear that any decision should be based on conditions on the ground -- now, you are, between now and August of 2010, going to be continuing to monitor conditions with General Odierno, our commander on the ground.

Has the president assured you that if conditions change and you so advise him, he is prepared to slow down or stop this withdrawal?

MULLEN: What -- and I'll use this process as an example. The president listened to General Odierno, General Petraeus, all the chiefs, throughout this process, which was -- which was very thorough and very deliberate. And I have a great deal of confidence in that process.

And as we look down the road and execute this plan over the next 18 months, I am sure that I'll be able to address any issues that come up with respect to change in conditions.

However, I mean, I'm -- I'm optimistic that conditions continue to improve. We just had a good set of elections in Iraq, well supported by the Iraqi security forces -- and that as those conditions continue to improve, we'll be able to execute this mission.

WALLACE: Now, you said you're confident you'll be able to address if conditions change. Has the president assured you that he'll listen and that he is prepared to alter the timetable depending on conditions?

MULLEN: The president has listened extensively in the time up to making this decision. And if past is prologue, I certainly expect that he would do so in the future.

WALLACE: One of the things I noticed in the president's speech at Camp Lejeune on Friday is that he didn't talk -- and in fact, he almost never talks -- about our winning in Iraq. He never talks about victory in Iraq. Why not?

MULLEN: I think he focused very specifically on the success that has occurred, and a great deal of that success has been generated as a result of the military success that we've enjoyed there.

And I'm -- I'm a little bit reluctant to talk specifically about winning and losing. We've turned it around over the last two years, and in great part that's because of our incredible young men and women who served us so well.

And they've created the conditions that look to the possibility that the Iraqi people and the Iraqi government can have a better future. There's still...

WALLACE: But are you prepared to say we're winning in Iraq right now?

MULLEN: I'm prepared to say that we have achieved a great deal of success, and we literally turned it around from what was headed to be exactly the opposite two years ago.

WALLACE: And does it bother you that the president isn't willing to make those same declarations?

MULLEN: Not at all.

WALLACE: Why not?

MULLEN: Because I think it's very difficult in these kinds of wars to pick a term that's that specific. This isn't going to be crossing the goal line or a situation like that.

It -- clearly, the conditions are much more positive than they were two years ago, and the conditions are set for the Iraqi government, the Iraqi people, to take over their own country and be responsible for it and have a very, very positive outcome.

WALLACE: Let me ask you a related question to this, and we'll move on. Does it bother you that the president isn't willing to say the surge has worked?

MULLEN: The president was very clear that with the military effort over the last couple of years that conditions have improved dramatically from the security perspective, and then he's laid out what he thinks the challenges that are out there that still exist from a diplomatic standpoint, political standpoint and an economic development standpoint. WALLACE: The White House says that one way it's going to be able to cut the budget deficit is by saving hundreds of billions of dollars by dialing back in Iraq. Did you ever project that we would be spending $183 billion on into 2019?

MULLEN: I haven't looked out that far in terms of the specific projections. Certainly, we review routinely the costs as best we are able to project it in the budgets over the -- over the next several years, and we've done that.

And actually, you know, there will be considerable costs, certainly in the near term, even as we draw down. It's not just the costs of being there, but it will be the costs of coming home, in addition to the increasing costs of the war in Afghanistan, and taking...

WALLACE: Well, I'm going to -- I'm going to get to that in a moment, but the question I'm asking is -- and you're saying as chairman of the Joint Chiefs, you did not have a projection -- excuse me -- of spending $183 billion in Iraq up through the next decade.

MULLEN: No.

WALLACE: So when the Obama budget says that it's going to save hundreds of billions of dollars because it's not going to be spending $183 billion in 2019, that's a gimmick.

MULLEN: Well, I'm -- I'm not sure it's a gimmick. Looking out to 2019 so far, there are certainly uncertainties associated with that. I have a very clear understanding in the near term of what we think it's going to cost us for these two wars, and in the long term I think...

WALLACE: But you didn't have that number, is what I'm saying.

MULLEN: No, I didn't have that number.

WALLACE: OK. Meanwhile, the White House is budgeting the cost of the wars in Iraq and Afghanistan at $50 billion a year starting in 2011.

Given the fact that you're anticipating a serious escalation in Afghanistan, isn't that number unrealistically low?

MULLEN: I think the projections that have been made have been based on our best estimates thus far, and that conditions certainly could change one way or the other, and that over time we'll certainly adjust those estimates.

The budget projections that are out right -- out there right now are more contingency-based. They're certainly not an exact science, certainly, the further you get out to the right in terms of our budget.

So I think they're an approximation, and I'm confident that over -- that over time they'll become as accurate as needed to -- to carry out the mission, and I think that's really an important part of this as well.

WALLACE: The president has announced that he's sending another 17,000 troops to Afghanistan. Two questions. Is that it, or do you expect you're going to have to send more troops beyond the 17,000 the president has announced?

And have we -- is the mission in Iraq -- or in Afghanistan, rather, still to create and help prop up a democracy, a centralized democracy, or have we scaled back the mission to simply trying to prevent Al Qaida and the Taliban from establishing safe havens?

MULLEN: The president has directed a strategic review which has been ongoing for a while and will be completed here in the next couple of weeks.

The 17,000 troops he recently approved, 12,000 of which had been ordered, are part of the upwards of 30,000 troops that General McKiernan has asked for. Those troops will be focused principally on providing security for the Afghan people.

And then the overall objectives of what our strategy will be in the future will be part of this review, and I certainly wait for it to finish to see what the outcome will be and what the president's decisions will be.

WALLACE: Meanwhile, we have continued drone attacks against Taliban targets in the tribal region inside Pakistan. In fact, there's a report that there was another drone attack just today. And there seems to have been a steady drumbeat of these.

Has our policy of taking the fight to the Taliban and Al Qaida inside Pakistan escalated since Mr. Obama became president?

MULLEN: Well, I'm not going to talk a lot about our operations specifically. There is a continuing concern with the existence of the safe haven in the FATA in Pakistan, and that has to be addressed, has been addressed, and needs to continue to be addressed.

We've brought pressure on both sides of the border, Pakistani military as well as coalition forces and Afghan forces, and we did towards the end of 2008, and that will continue to happen, and we need to continue to bring that pressure on both sides and continue to coordinate that -- those operations.

WALLACE: Has there been any change in policy in the sense that it is a more aggressive policy, an escalation, in terms of our going after -- without getting into detail, going after those targets inside Pakistan?

MULLEN: I think there's clear recognition that that threat, where Al Qaida leadership lives, is -- is every bit as dangerous as it has been, and that it needs to be continued -- we need to continue to address it and address it as rapidly as possible.

WALLACE: Is there any difference between the policy under President Obama and President Bush? MULLEN: I've got guidance right now from President Obama, and we're carrying out that guidance very specifically.

WALLACE: The North Koreans are talking about launching a missile soon with a communications satellite, and the commander of American forces in the Pacific says the U.S. is prepared to shoot down that missile.

Why isn't North Korea entitled to a non-military space program?

MULLEN: Well, I've certainly read reports of what the North Koreans might be doing. I also am aware of the -- the potential that -- you know, down the road, that that could offer based on what they've done historically.

But we've made no decisions. The president's made no decisions. I've made no recommendations with respect to anything the North Koreans might do.

I would hope that the North Koreans would not be provocative in their actions. And in fact, we're keeping a very, very close eye on what they're doing.

WALLACE: And would firing a missile with a communications satellite be provocative?

MULLEN: Well, again, I'm not going to go into hypotheticals. The North Koreans have -- have claimed -- essentially asserted that they intend to put a satellite in orbit.

And again, we're just watching it very carefully, and I wouldn't presume that -- ahead of anything to happen of what we might do.

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WALLACE: Iran also launched a satellite recently. During the campaign, Barack Obama , then Senator Obama, expressed serious doubts about missile defense.

Have you been given any instructions to either slow down or stop the U.S. antimissile system, the plans to install one in Eastern Europe, or is it still full speed ahead?

MULLEN: I haven't been given any instructions one way or the other at this point.

WALLACE: So is -- given the orders you had under President Bush, does that mean it's full speed ahead?

MULLEN: Well, again, there are an awful lot of reviews that are ongoing under President Obama, and there's an awful lot on the -- on all of our plates. So that's a review that will, I think, take place. And over time, that's much more a policy area than it is mine, per se. But again, I haven't been given any...

WALLACE: So you're saying -- you're saying that the question of U.S. antimissile defense is under review.

MULLEN: Clearly, over time, it will be. And then I think decisions will be made. The policy decisions will be made, and we'll follow them accordingly.

WALLACE: Finally, let's talk a little bit about the new president. During the campaign, Barack Obama made a lot of statements, including about Iraq, that he has since modified.

How would you describe the way he is dealing with and listening to the Pentagon brass and commanders on the ground?

MULLEN: Actually, I think you captured it. He's been very consistent to listen to us. He has come to the Pentagon, and we had a great two-hour session with him in which we had a terrific exchange across a host of issues.

He clearly has sought my advice. I feel very comfortable that as a senior military officer and adviser to the president that he is giving me the time and the opportunity to advise him accordingly.

WALLACE: Having said that, a lot of people have noticed that both the president and top advisers very seldom talk about the war on terror. Why is that?

From your conversations with him, does he see our fight against Islamic radicals differently than President Bush did?

MULLEN: It's very clear in my engagement with him that he is very focused on the terrorist extremist threat, and my guidance is to continue to pursue that in every possible way.

WALLACE: Does -- do you have any explanation as to why he doesn't talk about the war on terror?

MULLEN: No, I don't. I mean, I don't. I just told you what he's told me to do is focus very specifically on this threat, led by Al Qaida, but certainly it's a top priority to focus on the terrorism and terrorists and the extremists that are out there who would -- who would do us harm.

WALLACE: Last question. As the nation's top military man, do you believe you are still leading a war against terrorism?

MULLEN: There is -- there are an awful lot of elements of terrorists and terrorism which threaten us, and we continue to very clearly pursue them, and we will until they're no longer a threat.

WALLACE: Admiral Mullen, I want to thank you so much for coming in today. It's always a pleasure, sir.

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

WALLACE: Up next, President Obama sends a whopping big budget to Congress. We'll ask two key Republicans what they like and don't like right after this break.

(COMMERCIAL BREAK)

WALLACE: Depending on your point of view, President Obama's new budget is a statement of our national values or a socialist experiment, which shows just how fierce the debate on Capitol Hill will be.

Joining us to discuss the plan are two Republican leaders, the number two Republican in the Senate, Jon Kyl , is in Phoenix, and Congressman Paul Ryan, the top Republican on the House Budget Committee, joins us here in Washington.

Gentlemen, before we get into the details, I'd like to get an overview from both of you.

Senator Kyl, how big a change in direction does the Obama budget represent in the relationship between government and the American people?

KYL: Chris, I was going to quote this a little later, but since you asked the question that way, let me just quote from the Wall Street Journal on Friday, which certainly captures my sentiment. They said the budget represents a historical shift in the ideological direction of U.S. economic policy.

And then in their editorial, they say President Obama is attempting to expand the role of government to such a dominant position that its power can never be rolled back.

I think it's terrifying in the policy implications as well as mind-boggling in the numbers.

WALLACE: Congressman Ryan, fair to say that the Obama budget is radical in the same sense that Ronald Reagan's was radical, FDR's was radical, Lyndon Johnson's was radical?

RYAN: It's a breathtaking budget. This is probably the biggest rewrite or transformation of our federal budget since the New Deal. And that's not necessarily surprising. I mean, the president said he was going to bring us sweeping change, transformation.

What surprises me most about this budget, though, is that they would bring this out in the middle of a recession. This budget takes the size of our government in this year to the largest level it has been since World War II.

It's got a $1.4 trillion tax increase in it, in the middle of a recession. It doubles the debt in eight years. It never balances the budget. In fact, it proposes for the next 10 years that our deficits are the highest we've ever had on record.

WALLACE: But, gentlemen -- and let me take the flip side of that argument, Congressman Ryan -- we're in a crisis. We just learned on Friday that the GDP in the fourth quarter contracted by 6.2 percent, the worst number since 1982.

And while President Obama offers, whether you like them or not, sweeping proposals, what we hear from Republicans is the same old talk about spending restraint and tax cuts.

Don't -- what are your new ideas? What are the ways in which -- we're in an unprecedented situation. What are your new ideas for getting us out of it?

RYAN: We will be bringing an alternative. And it's not just enough for us to criticize. We're going to be bringing a full alternative budget to the floor in April to show how we would do things differently.

But the first thing you don't do is raise taxes in a recession. And if you think these tax increases...

WALLACE: But wait But let me just hit you on the taxes issue, because the White House says...

RYAN: So we would -- we would cut taxes.

WALLACE: ... the White House says...

RYAN: If you're asking me...

WALLACE: ... that the -- that the taxes are going to be raised only in 2011. So it wouldn't happen during the next two years.

RYAN: Let me get this straight. So the small business, the entrepreneur that's thinking about expanding, about whether to hire or fire people -- they have these huge tax increases coming in about a year and a half's time. That's not going to affect their decision- making?

The assets that go into our pension funds, our 401(k)s -- huge tax increases on those in about a year and a half time? You don't think that's going to affect people's wealth, people's retirement funds?

And this cap and tax idea, this carbon cap and tax idea -- we're going to bring this huge tax increase on the energy and manufacturing sector of America in just a couple of years. You don't think that's going to affect the economy today? That affects planning. That affects small businesses. You know, more than half of the people who pay these higher taxes are the small businesses of America, which produce 70 percent of our jobs.

So doing this now, saying in a couple of years this huge slew of spending and tax increases are coming -- that doesn't affect the economy then. It also affects the economy now.

WALLACE: Senator Kyl, let me bring you into this discussion. President Obama discussed the issue of taxes in his speech to Congress this week. Let's watch what he had to say.

(BEGIN VIDEO CLIP)

OBAMA: If your family earns less than $250,000 a year, a quarter million dollars a year, you will not see your taxes increase a single dime -- I repeat, not one single dime.

(APPLAUSE)

(END VIDEO CLIP)

WALLACE: Senator Kyl, at a time when income inequality has grown dramatically over the course of the last 10 years, what's wrong with increasing taxes on just the top 2 percent of wage earners?

KYL: Three points. First of all, he's not correct when he says you won't see your taxes go up. As Paul Ryan just pointed out, this new energy tax hits everybody.

Unless you never buy any gasoline, or you never use any electricity in your home, or you never buy anything that was made with this energy -- which is, of course, absurd -- it'll hit every single person.

And in fact, it's regressive because a higher percentage of the income of lower-income families is spent on these things than with the higher income people.

Secondly, the tax on the upper income -- it has a direct and dramatic impact on job creation. As Paul pointed out, about two- thirds of the businesses report small business income, and small businesses create 80 percent of the jobs in the country. So you're directly punishing job creation with this kind of -- of huge tax policy.

And finally, in your question, you're basically assuming, Chris, the Obama philosophy of income redistribution as the basis for tax policy. It should not be. Tax policy should be to provide what the government needs without harming the economy and American families.

Today the people he's talking about, the 250,000 and above, pay 60 percent of the income taxes in the United States -- 60 percent. So how much more do you want this top 2 percent to pay?

There's a point at which when you continue to tax them, they no longer produce the jobs that they're producing in this country. So it's bad policy.

WALLACE: But let's talk about this, Congressman Ryan, from a practical political view, because what the Obama administration would say is, "Yes, we are going to have this carbon tax or this cap and trade," which one can argue is a tax, "and that is going to get passed on, but on the other hand we're going to take that money and we're going to use it for our middle-class tax cuts."

So again, the point is why shouldn't the middle class support a system under which the top wage earners or the top taxpayers are going to pay more, but they're going to get a tax cut?

RYAN: A couple of things. Under this bill, small businesses will pay a higher tax rate than the largest corporations in America pay.

Number two, this tax cut for middle-class families amounts to about 14 to 20 bucks a week. You're going to see energy prices, energy costs, go up by far more than that, so middle-class people are going to get hit with this as well.

If people don't think that this is only going to tax rich people, I've got some old lottery tickets I'd like to sell them. This tax is going to hit every consumer in the economy.

But more to the point, the engine of economic growth in America is small businesses. It's entrepreneurs. It's the people who start from new ideas and start businesses. This raises their taxes.

So it's not just Brett Favre and Bill Gates. It is those mom- and-pop small businesses that start with 10 employees and maybe grow into 110 employees. Those are the people that are going to get hit with these kinds of taxes. And that is what is struggling in this economy right now.

WALLACE: All right. Let's turn to the -- to the huge increase in spending, which is another part of the Obama budget.

Congressman Ryan, the president calls it -- and everybody uses their phrases -- a long-term investment in the economy. Will you at least grant him that we have been talking for years about reforming health care?

RYAN: That's right.

WALLACE: We've been talking for years, for 30 years, about -- let's do something to build up alternative energy so we're not dependent on foreign oil. At least he's prepared to do it.

RYAN: Yeah. I think the way that they're preparing it, though, is to have the federal government more or less micro manage these two sectors of our economy, energy and health care. That's 25 percent of our economy right there.

We spend more than 2.5 times per person on health care than any other country, yet we have all these 47 million who are uninsured. Throwing more money at the problem has not been the answer.

We can have universal access to affordable health insurance in America without having the government run it. So we're going to be offering alternatives on how you can achieve this without spending a trillion or so dollars, as this budget proposes to do.

The concern that I have with this budget in the macro sense is it's almost as if we're relocating the headquarters of the American economy from Main Street, from New York, from Chicago, from Silicon Valley, to Washington, D.C. and putting Washington, D.C. in the driver's seat of the American economy.

That is not what we've done in this country. That's what they do in Europe, and it doesn't work very well.

WALLACE: Part of your party's problem, Senator Kyl, and I think you'd agree with this, is that the GOP has lost credibility on the issue of spending restraint.

For instance, Congress is in the process of passing a $410 billion spending bill to basically pay for the government over the course of the next year, with almost 9,000 earmarks in it, but 40 percent of those earmarks are Republican earmarks.

And we're putting up on the screen, Senator, your earmarks, a long list of them, according to the Taxpayers for Common Sense, totaling $118 million.

Question -- I think it's a fair one -- who are you to lecture the Democrats on spending?

KYL: Well, first of all, I don't see on the screen what you're talking about. I can defend everything that I have recommended in the budget, and I would suggest that they're not earmarks under the definition, because we have a specific definition.

Let me make another point. I don't think you can contend anymore -- you could have in the election three years ago -- that Republicans should be slapped on the hand for spending, because we were in charge of the Congress.

We haven't been in charge of the Congress now for the last two- plus years, and what you talk about in this omnibus appropriation bill is the result of the Democrats deciding to only fund the government for the first half of the year, waiting for President Obama to come in and therefore fund the second half that starts next March -- or this current March, with the second half of the budget.

That's where this omnibus appropriation bill comes in that adds 8 percent more spending on top of the over trillion dollars of spending in the so-called stimulus bill.

Every House member and all but three Republicans in the Senate who are Republicans opposed that. So I don't think you can put that spending on Republicans. And one more point I'd like to make. This isn't just an abstract proposition. This budget adds more debt to our country's future than all of the debt from 1789 when George Washington was president right up through Franklin Roosevelt and -- and Lyndon Johnson and George W. Bush .

In other words, in just the 10 years of this budget, we will have more than doubled the debt of the United States of America from its 220-year history.

WALLACE: Senator Kyl, Senator Kyl, we're running out of time, and I don't mean to interrupt, but I do want to get to a couple of other questions.

Can Republicans block the Obama budget, especially given the fact that there's no filibuster in the Senate on a number of budget reconciliation votes?

KYL: Well, that's a good question. This is why the American people need to understand what's in this budget and hopefully act before it's too late.

Because of the control that would be exerted over health care, and energy, and education, and our financial institutions -- all of these things are critical for the American people to bring pressure to bear on the Congress.

And if they're able to do that, then I think there is a chance for us to be able to stop at least the most egregious parts of this budget, but it will take the involvement of the American people to understand it and then to let their representatives know what they think.

WALLACE: But you're saying the 41 Republicans can't stop it?

KYL: No, I hope that we can. But that means that all of us will have to be together on this, and there are only 41 of us. So we have to be absolutely united on this, and we will be, if the American people convey to all of us their desire that we get a handle on this budget and that they care about the future of our country enough that we should stop the most egregious parts of it.

WALLACE: And let me -- and let me bring in Congressman Ryan on the last 30 seconds.

In the House, there's nothing you can do to stop it, is there?

RYAN: No. No. Look, your earlier question -- the House Republicans -- House Republicans were amateur big spenders, and we have a mixed record, and we've got to clean that up.

We've got the professionals in charge now. We had a fiscal responsibility summit on Monday and then we passed 9,000 earmarks on Wednesday. You can't stop this in the House. It is a complete majority rule. It's going to be very difficult to stop this in the Senate. Only if a few Senate Republicans -- I mean, Senate Democrats turn -- turn their votes and vote with the Republicans can this thing be stopped, in my opinion.

WALLACE: You don't think that the 41 Republicans in the Senate...

RYAN: It's going to be tough. I think you're going to have to get a few southern Democrats, probably, conservative Democrats, to say, "We're against this incredible expansion of government, this massive tax increase in a recession." And if you can get a few Democrats to turn, then I think you can slow this thing down. If not, I don't -- I'm not sure you can.

WALLACE: Congressman Ryan, Senator Kyl, I want to thank you both so much for joining us today. It should be quite a debate.

Coming up, our Sunday regulars discuss what we learned about Barack Obama this week. Does he aim to be the most transformational president since Ronald Reagan? Back in a moment.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: I know these steps won't sit well with the special interests and lobbyists who are invested in the old ways of doing business, and I know they're gearing up for a fight as we speak. My message to them is this: So am I.

(END VIDEO CLIP)

WALLACE: That was President Obama during his regular Saturday address preparing for the oncoming fight over his proposed budget.

And it's time now for our Sunday regulars -- Brit Hume, Fox News senior political analyst, and contributors Mara Liasson of National Public Radio, Bill Kristol of The Weekly Standard, and Juan Williams, also from National Public Radio.

Well, I think it's fair to say that this would have been a remarkable week for any president -- first of all, the speech at the joint session of Congress, then the unveiling of this extraordinary budget, and then on Friday, as if he didn't -- hadn't done enough, a time line for getting U.S. troops, combat troops at least, out of Iraq.

Brit, let's start with the budget. In a macro sense, what did we learn about this president?

HUME: Well, we learned that he is proposing to completely overhaul our set of priorities as a nation and to have the government play in a range of areas a much bigger role than it has in recent times.

We also learned that he is prepared to spend staggering sums of money to do this on top of those already laid out for the -- in his stimulus package and in other areas.

There will be, Chris, as a result of this -- and the budget basically recognizes this -- a debt overhang which I think is going to be a drag on this economy for a long time.

On top of that, you have to look at the policies he's enacting that have -- regard to taxation and regulation and the -- and the energy proposals. These are antigrowth, ultimately, despite what they say. And there's only one way to cope with debt of this size, and that is -- and it's only happened -- we've had it happen a couple of times in the last 30 years, and that is with a booming -- I mean a thunderously booming -- economy.

It strikes me -- which -- you know, Clinton had that for a while, and we actually went to surplus. Bush had it in the midterm of his -- mid-years of his presidency, and there was progress against the deficit, major progress, despite the wars.

We're not going to have that kind of growth under Barack Obama with these policies. So this is, in a sense, a budget at war with itself. I don't see how it could possibly work, and I'm not sure it can pass.

WALLACE: Mara, what did you learn this week?

LIASSON: Well, first of all, I think it can pass. Don't forget, the budget passes Congress under different rules. There's no filibustering the budget. You only need a basic majority.

I think this president meant what he said. During his campaign, he talked approvingly about Ronald Reagan and how transformative he was. He got in a little bit of trouble with the Clintons when he did that. And I think this is a Reaganesque budget in the sense of its transformative potential.

He wants to end -- I guess the era of big -- the era of the era of big government being over is over. I mean, we are now going to have the government play a large role -- when Rahm Emanuel said he doesn't want a crisis to go to waste, they weren't kidding.

He's going to use this economic crisis to solve problems using the government as a major actor in health care, energy and education.

I think that he is going to run into some problems not just from the special interests, as he said in his radio address, but also from Democrats who are very queasy about getting rid of the charitable deductions, getting rid of agriculture subsidies. I mean, he's going to have to get their approval.

Congress is going to change this budget. I also think the other thing we learned in this budget is how hard it is to find the money to pay for all the things he wants to do.

He had to use rosy scenarios on economic growth to make it work, to make the deficit reduction work. He also is looking to do all of this by only taxing the top 2 percent of income in America. And I just don't think over time that he's going to find enough money from them.

WALLACE: Bill, before we get into the details, I want to talk about this -- and I was surprised to hear both Congressman Ryan and Senator Kyl being so pessimistic about their ability to stop this.

We're in the depths of perhaps the greatest economic crisis since the Depression, so people are scared. We have had, I think it's fair to say, some discrediting of the way the markets work with what's happened on Wall Street, so people are angry.

What are the chances that President Obama can use this situation, a national mood of anger and fear, to get this budget through?

KRISTOL: You know, I was struck exactly by the same thing, Jon Kyl and Paul Ryan's final responses to you, which I thought were pretty fatalistic -- you know, well, if the American people rise up, maybe we have a chance to stop some of this.

They're political leaders of the party that's in opposition and that should be in opposition to this massive expansion of government control, and spending, and debt, and taxes.

And it seems to me, if I were an elected official of that party, I would say, "We're going to do everything we can to stop it. This is the moment. We're going to rally the American people. We're going to rally Democrats and make it politically very difficult for them to support this."

The Republicans need to fight a little more aggressively now. And I think Obama has given them an opportunity. Until Tuesday of this week, Obama was Franklin Roosevelt -- horrible recession, maybe a depression. He was going to help get us out of it -- pretty hard to fight some of the extraordinary spending.

After his speech Tuesday night and the budget Thursday, he became Lyndon Johnson -- a huge, big government program which has nothing to do with the current recession.

His energy proposals, cap and trade -- his health care proposals -- they have nothing to do with getting us out of any recession. Those are huge changes in the relationship between government and the private sector in this country.

That is a good fight for Republicans to have, and they need to insist on having that fight and not let him steam-roll this stuff through under the guise that it's all somehow part of reacting to this emergency.

WALLACE: Do you think the president can get this through or some form of this basic budget?

WILLIAMS: Yeah, I do. It's going to take a lot of effort, but here's the thing. You know, contrary to what we're hearing on the panel this morning, it was something like two-thirds of Americans who listened to the president's speech on Tuesday night -- said they felt good about the speech. They liked it. Eighty-five percent said they felt more optimistic about our country.

WALLACE: But they didn't have these numbers in that speech.

WILLIAMS: No.

WALLACE: The budget was a lot more radical than that speech. WILLIAMS: Well, hold on. Hold on. Eighty-five percent who listened Tuesday night as he's talking about setting priorities, talking about health care, education, green jobs and the like, said, "You know what? This makes me feel more optimistic that we can deal with this recession and we're going to move forward as a country."

Then you come to the budget issue. And here, you know, it's titled an era -- end of the era -- start of the era of responsibility. And he talks about how, in fact, the middle class was having its opportunities foreclosed, and wealth was being transferred to the wealthy over the last eight years.

And I think for most Americans, 95 percent of whom are going to see a tax cut, they think this is good news. This is good news that somebody is actually looking out for the middle class for the first time in a long time.

HUME: And I think it's risky, though, Juan, to measure the likely success of a presidency by a speech made when he's still in his honeymoon phase -- extraordinarily charming speaker.

That doesn't translate, necessarily, into his policies once in place, if they do get into place, to being effective and popular. I don't think the risks to Barack Obama stem from whether he will somehow become unable to give an affecting speech. He will always be able to do that.

The question really is whether the results, and they're all that count at the end, will be what he...

WILLIAMS: Well...

HUME: ...(inaudible)

WILLIAMS: ... Let me just say, you've got -- I don't even think the speech is the point. The point is the ideas, and the point is the sense that we can take some action.

Where is the Republican Party that would stand up and say, "Here are alternative ideas for getting us out of this recession."

HUME: Well, in fact, Juan...

WILLIAMS: "Here are alternative budget proposals."

HUME: In fact -- in fact, Juan...

WILLIAMS: I don't see any of this.

(CROSSTALK)

HUME: There was a Republican alternative to the stimulus package.

WILLIAMS: What's that? More tax cuts for the rich? KRISTOL: Can I just say something? You said what are the Republican ideas for getting us out of this recession. What does cap and trade, this massive big government regulatory scheme in Washington, have to do with getting us out of the recession? Nothing.

WILLIAMS: That has to do...

KRISTOL: What does it have to do...

WILLIAMS: Wait, wait, wait. Let me answer your question.

KRISTOL: Please. Please.

WILLIAMS: The answer to the question is we have to build infrastructure. We have to make investments in America, and we have to look to the future. It's the same thing with education. It's the same thing with health care.

If you don't attend to these problems, they then become a drag on the economy.

KRISTOL: And the "you" that has to attend to these problems is -- Washington, D.C. has to manage the entire energy sector of the economy, which means managing a huge amount -- and the entire health care sector of the economy.

WILLIAMS: The reason that Washington is so involved in the economy at this point is -- why? Because we're in a terrible recession and we see the failure of Wall Street. We see right now major corporations failing all around us.

And there's a need for government at this point to intercede on behalf of the American people who are losing jobs at an alarming rate.

HUME: Ask yourself this question. Why is the price of gold at this moment so high? Now, some people say, "Well, you know, gold goes up. It's a flight to quality. And people are afraid." Well, that usually results in a flight to cash.

The price of gold is up because people fear one thing, people who have money to spend and are looking out -- or to invest and looking to the future, and that is that they fear a wave of inflation, perhaps a hyperinflation.

So the people who are voting with their money are not voting in favor of these policies.

WALLACE: All right. We have to take a break here, but there's obviously a lot more to discuss about that. We haven't even talked about the tax plan that the president has. We'll get to that.

We'll also take a look at foreign policy, where Mr. Obama took a decidedly more cautious approach. And we'll discuss all of that in a moment.

(COMMERCIAL BREAK)

WALLACE: On this day in 2003, suspected 9/11 mastermind Khalid Sheikh Mohammed was captured in Pakistan. In 2006, he was sent to the prison at Guantanamo Bay.

Stay tuned for more from our panel.

(COMMERCIAL BREAK)

WALLACE: And we're back now, continuing our discussion about the Obama budget with Brit, Mara, Bill and Juan.

So let's talk about the tax side of the Obama budget. And let's put something up on the screen. This is quite remarkable.

When you add up all the tax increases the president is proposing, it comes to an extra $1 trillion over the next 10 years. But in his budget message, the president is making no apologies for this massive redistribution of wealth.

He says there is something wrong when we allow the playing field to be tilted so far in the favor of so few.

Brit, I have a feeling that makes your teeth hurt.

HUME: Well, it's just so dishonest, because the top, what, 2 percent of taxpayers in this country pay something on the order of 40 percent of the taxes already. The top 5 percent pay 60 percent of the taxes already, income taxes. And the top 50 percent pay all but, you know -- they pay like 95 percent of the taxes.

So most of the people in this country -- most of the people -- pay almost either no income taxes at all or almost none. That's like half the -- half the income brackets. So the idea that the playing field is somehow tilted in favor of the few is bosh.

And the idea that you're going to be able to squeeze out of the rich, who will move their money around and invest in such a way to avoid it as much as they can, this much money in tax receipts is crazy.

There is only one way to get a big gusher of tax receipts out of the wealthy and everybody else, and that is with an extraordinarily booming economy. And normally, what happens is you get that when tax rates, which he proposes to allow to increase here, go down, not up. WILLIAMS: Let me give you an alternative point of view. An alternative point of view is that 40 percent that you're talking about -- those people earn about half of all the money that's earned in America.

They're blessed to be in this country and to have the opportunities. And why shouldn't they be responsible...

WALLACE: But, Juan...

WILLIAMS: ... and pay...

WALLACE: Juan, Juan...

WILLIAMS: ... their fair share of taxes?

WALLACE: Juan, let me -- Juan, let me -- Juan, let me ask you a question, because this is the part of that budget message that bothered me. He said there's something wrong when we allow -- the government is allowing and deciding whether or not people keep their money or not?

WILLIAMS: No. Wait a second. There were tax breaks put in place under Republican administrations -- tax breaks. Tax breaks...

WALLACE: It's their money.

WILLIAMS: Oh, it's every -- it's all our money. But we have a country...

HUME: Woah, woah, woah, woah, woah.

WILLIAMS: We have a country -- don't we have a United States of America that we all want? Don't we want airports and air safety? Don't we want...

HUME: Juan...

WILLIAMS: ... police in the streets?

HUME: Juan, we agree with that. But remember this. The share of income taxes paid by the higher income people over the years has not gotten smaller under Republicans. It's gotten larger. And why do you -- why do you suppose...

WILLIAMS: Why is that, Brit? Because they're earning more money.

HUME: Well, I know that, Juan, but -- but the fact of the matter is that's what you want, isn't it? Don't you want -- I mean, I often feel that people like Democrats and liberals would rather have everybody equally poor rather than unequally rich.

LIASSON: You know, there's two parts to this. One is the economic part, whether he's actually going to get enough money from these tax hikes to do all the things he wants to do with them. I'm skeptical about that.

The second part is the political part. Can he sell this at a time of economic crisis, where there is a lot of populist anger, and where, as he said, 95 percent of Americans are getting tax breaks? I think he has a better chance politically of selling this than, for instance, Bill Clinton did when he raised taxes and got roundly punished for it.

WALLACE: But, Mara, do you think that the president is going to be able to sell the idea that the people who are the biggest contributors to charities are going to get a lowered deduction on their taxes? Instead of -- if they're being taxed at 35 percent, they're only going to get 28 percent.

LIASSON: And that -- and that is where...

WALLACE: And what does it do to the housing industry if you -- the home mortgage deduction is also reduced?

LIASSON: That is -- those are two specific things where the president is going to run into a buzz saw in Congress from Democrats. Those deductions are sacred to a lot of people, and I think there's going to be a problem.

It's not going to -- I -- what I'm worried about is it's going to be like the stimulus plan -- great goals, great priorities, but by the time it goes through the meat grinder of Congress, it comes out looking pretty ugly and doesn't accomplish the principles that he wanted.

WALLACE: All right. I want to turn to the other big subject.

And I'm sorry that you're not going to get to weigh in on taxes...

KRISTOL: All right. OK.

WALLACE: But you probably don't really have an opinion on that anyway, Bill.

As if all of that weren't enough, the president announced his time line for pulling combat troops out by August of 2010. With all the caveats that are built in, and the fact that he's going to keep 50,000, is it a reasonable plan?

KRISTOL: I think it's reasonable. I'd prefer to have them not -- there's no need to specify a deadline. I much prefer to keep flexibility. But I think this was something that General Odierno agreed to, and I trust him, and I think that's reasonable.

I'm more uncomfortable with the absolute deadline of all troops out at the end of 2011, which I think will be hard for him to change and is imprudent. There's no reason we shouldn't...

LIASSON: That's the agreement with the Iraqi government.

WALLACE: That's President Bush's...

KRISTOL: That is in the status of forces agreement. It's always been anticipated that that could be -- that was -- that's a short-term agreement.

WALLACE: But that was an agreement that President Bush agreed to.

KRISTOL: A short-term agreement. But he is now committing the U.S. unilaterally to wanting to get out of Iraq even if an Iraqi government requests that we keep some troops in.

I'm pretty -- I think that's foolish. I think it lessens the chances that people in Iraq decide we're there to stay and that we're going to be a long-term ally.

So it could have been worse on the foreign policy side. It is worse on the domestic policy side than the foreign policy side, so maybe we need to be grateful for small things.

On the other hand, on the budget, this wonderful huge gusher of government spending that he's embracing on tax increases -- defense spending goes down as a percentage of GDP to 3 percent by 2016.

So Obama's vision of the world is wonderfully safe world, we can take defense spending down to mid 1990s Clinton levels -- 9/11, Islamic jihadism, Iran going nuclear, Pakistan unstable -- no problem. Three percent of GDP does it.

That, I think, tells a lot about Obama's vision -- Huge domestic spending, no defense spending.

WILLIAMS: Don't you think it's time for some spending here at home, especially after this very unpopular war? He's pulling out.

And let me just say, you know, the reaction from the right, from John McCain and others, has been to support what the president announced this week. They see it as reasonable and coming out of consultation with the general. I don't see that's unreasonable.

Now, let me tell you, the left has not been happy with this. Leaving 50,000 on the ground for training and potential combat? That's another view of this, Bill, and you're going to have, therefore, Americans engaged in an extended effort with Iraq to somehow coach along this Democratic process when they haven't done it themselves. They haven't divided the oil revenue.

We've given them how many years to do this? And you want us just on the ground forever and ever, amen?

KRISTOL: You know, I want -- we won that war and we've paid great sacrifices to do so, but I do not want to fritter it away because of a stupid campaign promise about a 16-month withdrawal and then an arbitrary deadline.

I think Obama is probably responsible, but... LIASSON: You know...

WALLACE: Let -- Mara? Yes.

LIASSON: ... he -- this is not arbitrary. I think that every bit of body language you're getting from all the generals is saying that Obama has reassured them he is practical, he is flexible, he's willing to number -- willing to leave the number of troops on the ground that's going to be willing to keep Iraq -- exactly the same goals that President Bush laid out -- stable, not a safe haven for terrorists, with an accountable responsible government.

And I think that if they come and tell him we need more than 50,000, they need to do certain things, that is what will happen.

HUME: Chris, there's been some criticism from the right that he didn't use the words victory, that he spoke to the troops as if they were victims instead of victorious warriors, and so on down the line.

But if you read the speech, what he describes in Iraq is victory.

LIASSON: Yeah.

HUME: And if you look at what he's doing, this is -- George Bush would not have given this speech this way, but the -- but the policies that he's put in place and the actions he's taking are completely consistent with what, it seems to me, President Bush intended.

In other words, Barack Obama , without ever saying so, because politically he couldn't, has ratified the Bush policy in Iraq.

WALLACE: You don't agree -- in 15 seconds.

KRISTOL: I hope he has, but he's foolish in giving an -- giving a deadline for this -- for the 18 months, and giving the absolute "we're out in 2011."

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

Time now for some mail about our interview with the four governors last week.

Tom Harmon from Greenville, South Carolina writes, "The governor of Michigan is incorrect that no country has refused to help their auto companies. One of those who refused is Sweden, who abruptly told Saab to take a hike. They've now filed for bankruptcy."

And Carla Wynn (ph) from Silver Spring, Maryland was unhappy about governors looking beyond the state house. "It is so sad Governors Pawlenty and Sanford are already running for president while their states are in dire need of assistance. It is really grandstanding when you say you will not accept some of the stimulus money but you have the safety or your legislature overriding that decision."

Be sure to let us know your thoughts by e-mailing us at fns@foxnews.com.

When we come back, something new for "Fox News Sunday."

(COMMERCIAL BREAK)

WALLACE: Have you ever wondered what happens with one of our spirited panel discussions after the show ends? We hope the answer is yes. Well, now you can find out.

Be sure to check out foxnews.com/fns to see an exclusive panel plus, as our Sunday group keeps arguing in our new Web feature.

But that's it for today. Have a great week and we'll see you next Fox News Sunday.

For more visit the FOX News Sunday web page.

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