John Brennan & Senator Bond on "Fox News Sunday"

John Brennan & Senator Bond on "Fox News Sunday"

By Fox News Sunday - January 3, 2010

WALLACE: I'm Chris Wallace. The U.S. closes its embassy in Yemen -- that story next on "Fox News Sunday."

The Obama administration tries to plug the holes in the security system that allowed a would-be bomber on board a U.S. airliner. With Americans asking, "Are we safe," what can be done to prevent future attacks?

We'll get the latest from John Brennan, assistant to the president for homeland security and counterterrorism, and Kit Bond, top Republican on the Senate Intelligence Committee.

Plus, our Sunday panel looks ahead to the new year in politics, the economy, sports and entertainment, all right now on "Fox News Sunday."

Hello again and happy new year from Fox News in Washington. Citing ongoing threats, the U.S. government today has closed its embassy in Yemen.

Meanwhile, the president and top advisers are reviewing what Mr. Obama calls the systemic failures that allowed a would-be bomber on board that plane Christmas day.

We're joined now by the White House official leading that review, John Brennan, assistant to the president for homeland security and counterterrorism.

And, Mr. Brennan, welcome to "Fox News Sunday."

BRENNAN: Thank you very much, Chris.

WALLACE: As we said, the U.S. today closed our embassy in Yemen. Why?

BRENNAN: Well, there are indications that Al Qaida in the Arabian Peninsula is targeting our embassy and targeting our personnel, and we're not going to take any chances with the lives of our diplomats and others who are at that embassy.

So we made a decision overnight. I spoke with Ambassador Seche, our ambassador in Sana'a, last night and again this morning to make sure that we're doing everything possible to protect our diplomats there.

We're working very closely with the Yemenese. The Yemenese are providing support. But we're not going to take any chances.

WALLACE: Now, you say targeting the embassy. Do you mean you had indications, intelligence, that they might try to explode a bomb or attack the embassy?

BRENNAN: Al Qaida has been trying, in fact, to carry out such attacks over the past many months. We know that in November of 2008 they carried out such an attack against the embassy.

We're continuing to track this. We know that there are a number of Al Qaida operatives who are determined to carry out such attacks. We're not going to let that happen. And if we have to close the embassy to ensure that we have the optimal security, we will do that.

WALLACE: Are U.S. citizens in Yemen in danger?

BRENNAN: Well, the embassy has a warning system so that other U.S. citizens in country are notified when such activities take place. We are doing everything possible to make sure that all U.S. citizens, as well as westerners and the Yemenis themselves, are protected from the scourge of Al Qaida.

WALLACE: But to press my question, are U.S. citizens in that country at risk? Are they in danger?

BRENNAN: I think until the Yemeni government gets on top of the situation with Al Qaida, there is a risk of attacks. A number of tourists have been, in fact, kidnaped. A number of tourists have been killed. That is why we're working very closely with the Yemeni government.

We've worked with the Yemeni government closely since the first day of this administration. I've been out to Yemen twice, met with President Salih. I spoke with President Salih this week, emphasizing the importance of maintaining pressure on Al Qaida.

And the Yemenis have been very good. They've been very cooperative. And we're determined to continue to press this effort.

WALLACE: Let me widen this discussion in that sense. Not only as you point out, obviously, were you in Yemen earlier, but General Petraeus, the head of Central Command, was in Yemen yesterday.

The British overnight have announced that the U.S. and the British are going to be co-funding a new Yemeni antiterror counterterror police force.

Is it fair to say that we are opening up a second front in our war on terror outside the Afghanistan-Pakistan theater in Yemen?

BRENNAN: I wouldn't say we're opening up a second front. This is the continuation of an effort that we've had under way since, as I said, the beginning of this administration.

David Petraeus has been out to Yemen several times. I spoke with him yesterday after he met with President Salih. We're continuing to have a very close and ongoing dialogue with the Yemeni government. The cooperation is on the security, intelligence and military fronts.

We've had close consultations with the British. I spoke with the British last night also about the types of things that we can do together in support of the Yemeni government. So this is a determined and concerted effort.

We're not going to let Al Qaida continue to sort of make gains in Yemen, because we need to take whatever steps necessary to protect our citizens there as well as abroad.

WALLACE: Could that mean U.S. troops on ground in Yemen? BRENNAN: We're not talking about that at this point at all. The Yemeni government has demonstrated their willingness to take the fight to Al Qaida. We -- they're willing to accept our support. We're providing them everything that they've asked for.

And they've made some real progress. And over the past month, Al Qaida has taken a number of hits, and a number of Al Qaida leaders in Yemen are no longer with us because of this determined and aggressive action.

WALLACE: In President Obama's media address this weekend, he talked for the first time about the young Nigerian Abdulmutallab's links to known terrorists. Let's watch.


OBAMA: It appears that he joined an affiliate of Al Qaida, and that this group, Al Qaida in the Arabian Peninsula, trained him, equipped him with those explosives and directed him to attack that plane headed for America.


WALLACE: Mr. Brennan, what do we now know about Abdulmutallab's links to Al Qaida, what their role was in the Christmas day attempted terror attack?

And how seriously do you take claims from Abdulmutallab and from Al Qaida in Yemen that there are dozens more jihadis who are being trained to attack the west?

BRENNAN: Well, I think right now in Yemen we know that there are probably several hundred members of Al Qaida. And as we've been able to piece together the story about Mr. Abdulmutallab, it's clear that he was in Yemen for several months between August and November or so.

We know that he had reached out to Al Qaida. We know that he received training -- in fact, training at one of the camps that was hit during the month of December. He was clearly directed to carry out this attack at the direction of Al Qaida, the senior leadership there.

This is something that we're very concerned about. We're concerned that they may be, in fact, trying to get other operatives, non-Yemenis and others, to train inside of Yemen, to send to the west. And that's why we need to make sure that we maintain this pressure on Al Qaida within Yemen.

WALLACE: Now, you say you're very concerned that they're reaching out. Do we believe that, in fact, as Al Qaida -- as Abdulmutallab -- has claimed that there are dozen more jihadis who have already been trained to attack the west?

Do we have specific information about a credible threat of that?

BRENNAN: We have good intelligence that Al Qaida is training individuals in Yemen. We are pulling the threads on a number of these reports to make sure that we stay on top of it.

And over the past week in particular, we are doing everything possible to scour all the intelligence that is out there to see whether or not there's another Abdulmutallab out there.

WALLACE: And at this point, do we have credible information, specific information, that there is another Abdulmutallab out there?

BRENNAN: We know people have been trained inside of these camps. We've not been able to identify any individual who may be, in fact, getting on board a plane. But it's much more difficult to get on a plane today than it was on Christmas day.

WALLACE: Several Guantanamo detainees who were released, it should be pointed out, by the Bush administration reportedly ended up in important roles in Al Qaida in Yemen.

And yet the White House says that it has no plans to halt all transfers of detainees to Yemen, that it's going to decide those on a case-by-case basis.

First of all, is that true that we have not decided to halt all transfers of detainees to Yemen? And if it's true, why not? Why wouldn't we want to, at this point, given the instability there, decide not to send any Yemeni detainees back to the country?

BRENNAN: Well, first of all, we ought to put this in context. During the last administration, 532 detainees were transferred from Guantanamo. During this administration, we have transferred 42. Seven of those have gone back to Yemen. The first one went about six or eight weeks ago and six went in December.

We've had close dialogue with the Yemeni government about the expectations that we have as far as what they're supposed to do when these detainees go back.

Several of those detainees were put into Yemeni custody right away. We're continuing to talk with them. What we're trying to do is to do this in a very measured fashion.

Guantanamo facility must be closed. It has served as a propaganda tool for Al Qaida. We're determined to close it. We're not going to, though, do anything that is going to put American security at risk.

So working closely with the Yemeni government, right now we are looking at the other detainees in Guantanamo from Yemen, and we are going to take the right steps, but we're not going to do anything that put Americans at risk.

WALLACE: But you are going to consider on a case-by-case basis sending more Yemenis back to Yemen?

BRENNAN: Absolutely. We're going to be looking at this, working closely with the Yemeni government, and ensuring that these security measures are put in place as we address the security situation on the ground.

WALLACE: Perhaps the most controversial step that President Obama took after the Christmas day terror attack was to charge Abdulmutallab as a criminal defendant.

He was cooperating with authorities. He was giving information about his links to Al Qaida. But after he got a criminal lawyer, he reportedly stopped cooperating, stopped talking.

Why not treat him as an enemy combatant, put him in a secret prison, use the interrogation techniques that President Obama has specifically approved, and try to get more information out of him?

BRENNAN: Well, we have an array of tools that we will use, and we want to make sure we maintain flexibility as far as how we deal with these individuals.

Now, let's get the facts on the table. He was arrested on U.S. soil on a plane on -- in the Detroit airplane. He was, in fact, talking to people who were detaining him.

There were people who were arrested during the previous administration -- Richard Reid, the shoe bomber; Zacarias Moussaoui; Padilla; Iyman Faris; others -- all were charged and tried in criminal court and sentenced, some cases to life imprisonment.

Just because somebody is going to be put into the criminal legal process does not mean that they're -- we don't have other opportunities to get information from them.

WALLACE: But wait, wait. Let me ask you specifically. After Abdulmutallab got lawyered up, did he stop cooperating with authorities? Did he stop talking?

BRENNAN: I'm not going to address exactly what he did before or after he was -- talked with his lawyer. We got information. We continue to have opportunities to do that.

As you talk with the lawyers and you talk with the individuals, as they recognize what they're facing as far as the charges, conviction and possible sentence, there are opportunities to continue to talk about it.

FBI has some of the best interrogators and debriefers in the world, and so I'm confident that we're going to continue to be able to work this system and see whether or not...

WALLACE: But once he gets his Miranda rights, he doesn't have to speak at all.

BRENNAN: He doesn't have to, but he knows that there are certain things that are on the table, and if he wants to, in fact, engage with us in a productive manner, there are ways that he can do that.

WALLACE: But why not treat him -- you certainly had the right -- have -- had -- still have the right to treat him as an enemy combatant. Why not do that?

If he has more actionable intelligence about future attacks, and you say there's a real possibility of that, doesn't the president have a responsibility to do everything legal he can to get that information?

BRENNAN: And the president has that responsibility, and the Department of Justice makes these determinations about what's the best tool to use. And in this instance, we felt as though it was the best way to address Mr. Abdulmutallab's case.

We'll continue to look at each of the cases individually and proceed accordingly.

WALLACE: Just briefly, what's the downside of treating him as an enemy combatant?

BRENNAN: There's -- there are no downsides or upsides in particular cases. What we're trying to do is to make sure we apply the right tool in the right instance. In this case, we made a determination that he should be tried in U.S. criminal court.

WALLACE: You're leading the review, as we pointed out at the beginning, of what the president calls the human and systemic failures that led to Abdulmutallab being on that plane on Christmas day -- intelligence screening. From what you've learned so far, what was the failure?

BRENNAN: Well, we're still going through those reviews that have come in to the White House, and I think there are a combination of issues that we're looking at.

First of all, the president is very determined to make sure we identify what the problems were and take corrective actions immediately, whether or not they're individual cases or whether or not they're more systemic issues that we have to address.

I think it was a combination of things. We had information that came from Mr. Abdulmutallab's father. His name was put into what's called the TIDE record system.

We also had, though, intelligence, snippets of intelligence that came in, that didn't refer directly to Umar Farouk Abdulmutallab but had little bits and pieces of information that we now know, in hindsight, related to Mr. Abdulmutallab.

We need to, as a system, make sure we can put those pieces together so that we take every step possible to prevent these individuals from...

WALLACE: But if you...

BRENNAN: ... getting on planes.

WALLACE: ... can characterize it without getting into the details, was it that there was a smoking gun that was ignored? Was it that there were bits and pieces of information that -- and the puzzle wasn't put together?

Or was that it that there's continued division, rivalry, among the various intelligence agencies?

BRENNAN: Well, a couple things. One is that there was no smoking gun. There was no piece of intelligence that said, "This guy's a terrorist. He's going to get on a plane." No, not whatsoever.

It was the failure to integrate and piece together those bits and pieces of information. But it's much different than prior to 9/11. Before then, I think there was really a culture of keeping information to the individual agencies and departments.

In the review so far, there's no indication whatsoever that any agency or department was not trying to share information.

There were some lapses. There were some human errors. There were some failures of the system to allow that to happen at the speed of light. And that's what we're talking about, information that comes in to one agency or department that has to get somewhere else so that actions can be taken.

WALLACE: You talk about human error. The president insisted this week that people will be held responsible for their failures. Let's take a look.


OBAMA: It's also my job to ensure that our intelligence, law enforcement and homeland security systems and the people in them are working effectively and held accountable. I intend to fulfill that responsibility and insist on accountability at every level.


WALLACE: Let me pursue this question about accountability. Does the president have full confidence in Homeland Security Secretary Napolitano; in Director of Intelligence, National Intelligence, Blair; and CIA Director Panetta? Or is he reserving judgment on those three?

BRENNAN: Well, first of all, I think we're very fortunate to have people of the caliber of Secretary Napolitano, Denny Blair and others in this government. Accountability needs to be part of any type of review. And as the president said, it should be at all levels.

But specifically as far as Secretary Napolitano is concerned, I know she's taken some hits this week as far as her comments about that the system worked. I think she's clarified those comments, made it very clear that she was referring to how the system reacted after the incident.

But I've worked very closely with Janet Napolitano over the last 11 months, and I can tell you we're very fortunate to have somebody of her experience and caliber. She is an exceptionally dedicated individual, and I consider it a privilege to work next to her.

WALLACE: Well, you've given her a vote of confidence. How about Denny Blair and Leon Panetta?

BRENNAN: Denny Blair and Leon Panetta are also consummate professionals. And there are very complicated issues within the intelligence community, and they are working as hard as they can to make sure that the president has the benefit that the intelligence community can provide.

WALLACE: On another personnel matter, it came out this week that the president's nominee for TSA chief, head of transportation security, Erroll Southers, had to correct congressional testimony after he had given it about his involvement a couple of decades ago in going through criminal records on a personal matter.

Does the president still have full confidence in him and back his nomination?

BRENNAN: Absolutely. Erroll Southers has tremendous experience and is what we need right now at the Transportation Security Administration.

And it's unfortunate that there is one senator who has a hold on Mr. Southers. And I think these issues have been looked at repeatedly. Senators are comfortable with it. And again, it's unfortunate that there's just one hold.

WALLACE: I don't have to tell you -- we've got a little over a minute left -- politics has reared its head in the discussion this week about the response to the Christmas day attack. This week, Vice President Cheney had this to say about President Obama.

Here it is. "He seems to think if he closes Guantanamo and releases hardcore Al Qaida-trained terrorists still there, we won't be at war. He seems to think if he gets rid of the words "war on terror," we won't be at war. But we are at war, and when President Obama pretends we aren't, it makes us less safe."

Mr. Brennan, your response?

BRENNAN: It's disappointing to me that either the vice president and others have willfully mischaracterized President Obama's position and actions, or they're just ignorant of the facts. I think in either case, it doesn't speak well to sort of the reasons why they sort of went out and said these things.

I came back into government for the express purpose of making sure that we can make this country safer than it's ever been in the past. I have worked with the president over the last 12 months now. And he is as determined as anybody that I've worked with, neither Republican nor Democrat.

I worked for the previous five administrations, and this president is determined, and I think it is demonstrated in his language. He says that we're at war with Al Qaida. We're going to destroy Al Qaida the organization.

And we're going to demonstrate through our actions, whether it be in Afghanistan, Pakistan, Yemen and other places, that Al Qaida might be able to run but they're not going to be able to hide so.

WALLACE: And what do you think is the effect of the kind of political attacks we've seen in the last week?

BRENNAN: Well, I think it's made people lose sight of who the real enemy is here. Al Qaida has been responsible for the deaths of many, many Americans.

At this time right now, after this failed attempt, I think what we have to do is to think back after 9/11 when this country came together, when Democrat and Republican said, "We have to make sure that we are able to stop Al Qaida from carrying out its acts of terrorism and trying to murder innocent civilians."

And I would just hope that Republicans and Democrats and everybody else out there really takes stock of sort of where we are right now and -- for this country's national security.

WALLACE: But didn't, over the course of the last eight years, Democrats take a lot of potshots at the Bush-Cheney administration's national security policy?

BRENNAN: I just think that, you know, partisan politics should be put aside when something as important to national security as the threat of terrorism -- it's a serious threat. It continues to haunt us. And we have to make sure that we stay focused on Al Qaida.

And so that's what I'm going to do in this job. I don't care what Republicans or Democrats say out there. We need to continue to prosecute this war because Al Qaida the organization needs to be destroyed.

WALLACE: Mr. Brennan, thank you. Thanks for coming in...

BRENNAN: Thank you, Chris.

WALLACE: ... giving us the latest information.

BRENNAN: Thank you.

WALLACE: Please come back, sir.

BRENNAN: Thank you.

WALLACE: Up next, reaction to the attempted attack and advice about what President Obama needs to do now from the top Republican on the Senate Intelligence Committee. Back in a moment.


WALLACE: Joining us now to continue our coverage of the response to the attempted Christmas day massacre is Kit Bond, top Republican on the Senate Intelligence Committee.

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

BOND: Always a pleasure, Chris.

WALLACE: You just heard John Brennan. Your reaction to the decision to close the U.S. embassy in Yemen?

BOND: Concerns me that we're saying we're going to work closely with the Yemenese, but we're closing the embassy. We didn't close the embassy in Kabul or embassy in Baghdad.

Now, I have not been briefed on any of the latest intelligence, but it seems to me if we're going in there and going to work, there ought to be one place where we have a platform from which the Americans can work.

But again, I haven't seen all the classified information. I hope to do that the first of this coming week.

WALLACE: Can you add anything to what Mr. Brennan said about the strength of Al Qaida in Yemen and how serious the threat is of more terror attacks against the west coming from Yemen?

BOND: I think there's no question that we have been watching Yemen for some time. And this is where we see great dangers coming. And the fact is, as the president admitted, that the Al Qaida in the Arab Peninsula operating out of Yemen has trained these terrorists, some of them Gitmo graduates.

And if we don't stop the practice of releasing Gitmo detainees to Yemen or to other countries -- and some of them came through Yemen through Saudi Arabia -- we're asking for even more trouble. And I think there ought to be an immediate halt put to releases from Gitmo.

WALLACE: Well, let me ask you to pick up on that, because as you just heard Mr. Brennan say, even after the Christmas day attempted massacre that the Obama administration intends to continue transferring detainees from Gitmo to Yemen on a case-by-case basis. Your reaction? BOND: I am very disturbed by that. Everybody ought to admit that the Bush administration made a big mistake in transferring these detainees, these terrorists, back to other countries.

Saudi Arabia was supposed to have an excellent program of rehabilitation. Eleven of their rehabilitation graduates have been captured or killed on the battlefield.

And I have asked the director of national intelligence what's the -- what's the scorecard for 2009. We knew through 2008 there were 61 Gitmo guys that had gone back to terrorism. And it's classified. They won't release it. We need to know.

WALLACE: Even to you as the vice chairman of the Senate Intelligence Committee?

BOND: I hope that I could get it, but it should be declassified for the public. I understand there -- that it is -- it's a troubling report. I have not seen it. I hope to see it. But more importantly, I think the American people need to see it.

WALLACE: Is there anything -- I know you and a number of other senators of both parties feel strongly about this releasing detainees to Yemen or to other countries. Is there anything that Congress can do to stop it?

BOND: Well, we were trying to stop bringing Gitmo detainees to the United States, but in the last bill that was passed, the majority removed that constraint.

We have 40 members of our party in the Senate and a number of Democrats who want to work with us. I hope that we might be able to do that. But I think the Bush administration has been shown to have made a mistake. I hope the Obama administration will learn from that and not continue to commit the same mistake.

WALLACE: Well, let's talk about another -- I suspect you're going to say it's a mistake. Do you think it was a mistake to charge Abdulmutallab as a criminal defendant?

BOND: Clearly. As you said in your interview, as soon as they got a lawyer, he lawyered up. Now, they may be able to negotiate over a period of months or years some kind of deal in which he gives them some information.

But we have the ability -- or we had the ability in the previous administration to interrogate detainees following the laws and the Constitution, not torturing them, but getting information from them.

And this man, Abdulmutallab, probably has more insight into possible other recruits that Al Qaida would be sending into the United States. And they may be coming. And we need to know from him or from others what he knows and who they are.

We even brought in the pirate from Somalia and put him in the -- in the civilian courts. We should have treated him as an enemy combatant, because those pirates are feeding money to the Al Qaida in the Arab Peninsula. We need to treat them as enemy combatants and get information from them.

WALLACE: Well, let's talk about that, because you're suggesting, and Mr. Brennan certainly did, that there's a real possibility that there are more jihadis, jihadist terrorists, who are being trained right now in Yemen to come to this country.

How much harder is it going to be to get that information on a timely basis out of Abdulmutallab with him as a criminal suspect, criminal defendant, rather than an enemy combatant?

BOND: Any criminal lawyer has to tell him he has to be quiet, he has to shut up until months from now, maybe years from now, they come forth with a deal saying, "Well, if you'll tell us who your handlers were, who the other people were, we will limit you -- limit your charges."

We should have held him as an enemy combatant, tried him under the military commissions. The Supreme Court upheld that when we caught German saboteurs in the United States, tried them as enemy combatants.

WALLACE: That was, of course, during World War II.

BOND: In World War II. That was a Supreme Court case. Fourth Circuit upheld it in the -- Jose Padilla's case. We can question them and try them in a -- in a military commission approved by Congress as recently as 2009.

WALLACE: Your Senate Intelligence Committee has announced that you're going to hold hearings into the terrorist would-be attack as well as these alleged failures in our ability to prevent it starting on January 21st.

In announcing the hearings and the investigation, you said the following, and let's put it up, "Somebody screwed up big-time." Senator, any thoughts about who screwed up?

BOND: That's what we want to find out. It probably should have been plural. I have didn't think at the time of making it plural. There are probably a number of people who screwed up.

How was the information shared? Did the information get in? Do we have adequate means of -- do we have a system in the National Counterterrorism Center of making sure that the -- that all the information relative to a single suspect or a single activity can be collated? Can we get it out to the agency that needs it?

We may need more I.T., better information systems. But with all of the -- with all of the leads dangling out there, somebody screwed up on not reporting it. And clearly, the screening was a disaster. That's homeland security's area.

WALLACE: Right. Well, let's talk about that. The president has repeatedly said that he intends to hold government officials, top government officials at all levels, accountable.

You heard on this -- just a moment ago Mr. Brennan praising several top officials -- let's put them on the screen -- Secretary Napolitano...

BOND: Right.

WALLACE: ... intelligence chief Blair, CIA director Panetta. Question: Have you lost confidence in any of those?

BOND: Well, I work very closely with Leon Panetta and Admiral Blair. I think -- I think they're doing the best job they can.

The problem with the director of national intelligence, Denny Blair -- he has all of the responsibility and not enough authority. I voted against the bill because he does not have the ability to control all the elements of the I.C.

I don't -- I have not worked with Secretary Napolitano, but when she said that a terrorist act should be called a man-caused disaster, or when she said recently the system worked perfectly, I think it raised a lot of eyebrows. But that -- those statements -- misstatements are certainly not grounds to relieve her. I think we need to find out what really happened.

WALLACE: Finally, I want to talk with you, as I did with Mr. Brennan, about politics, because former vice president Cheney and a number of top Republicans have really gone after this administration for its response to -- after Christmas day and suggested that this is another example of Democrats being soft on terror.

But let's go through the record, if we can. It took President Bush six days to react to the shoe bomber Richard Reid. It was the Bush administration that set up this Terror Watch System. And several of the Guantanamo detainees, as you pointed out, who ended up in Yemen were released under President Bush.

Don't Republicans have plenty to answer for?

BOND: Well, I think that the Bush administration really needs to answer for releasing the detainees to Saudi Arabia and other places. And we've seen that's a mistake. And I know -- I'm sure they would admit that's a mistake.

But to continue to make the same mistake would be a tragedy. And I really think that failing to recognize that we are under attack -- the Al Qaida and its related activities and related allies have declares war on us. They're coming after us.

And this is not a case for a series of criminal trials. We tried that in the ‘90s after the first attack on the World Trade Center, embassy bombings, Cole attack. This is -- this is war, and it's time that we reacted to the war attacks that are coming at us.

WALLACE: Senator, thank you.

BOND: Thank you, Chris.

WALLACE: Thanks, as always, for coming in and bringing us up to speed.

BOND: Real pleasure. Thank you so much, sir.

WALLACE: Up next, the Sunday group looks at the policy and the politics of the Christmas day terror attack. Back in a moment.



OBAMA: ...our nation is at war against a far-reaching network of violence and hatred and that we will do whatever it takes to defeat them and defend our country, even as we uphold the values that have always distinguished America among nations.


WALLACE: President Obama in his Saturday media address leaving no doubt he still considers the U.S. to be a nation at war.

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

Well, I want to pick up on the president's remarks. He declared that this is a nation at war. He said it appears that this young Nigerian, Abdulmutallab, joined Al Qaida, that he was trained, equipped and directed by them to attack the U.S.

Given all of that, Brit, what do you make of the debate and what do you make of the decision to charge him as a criminal defendant and not as an enemy combatant?

HUME: I don't think it was a decision made with the idea in mind that this is the best way to get information out of him, and that tells you something about this administration's priorities.

The president spoke there about doing whatever it takes, and then he said consistent with our values. He is of the belief, and it permeated his campaign rhetoric and much of what he has done as president, that what we most need to do to deal with the situation in the world and the threat of terrorism is to have a better reputation as a country of being a kinder and gentler land consistent with our values.

This decision to try him in a criminal court rather than to pursue him as an enemy combatant reflects that opinion, that view, that judgment. I think the net effect of it is laxness, laxness across the board.

I think that it starts at the top with the president and his ideas. I think it permeates his administration and it permeates the approach that we've seen. We're seeing him now -- they're now saying, "Well, we're going to continue to consider sending Guantanamo Bay prisoners back to Yemen." Yemen.

I mean, if there's one thing that we know out of -- out of this is what a hotbed that place is. Why would you want to send anybody there? But there they are.


EASTON: Well, the bottom-line question of this and how you try this guy is about intelligence and what you can get out of him.

HUME: I don't think it is.

EASTON: And it's not -- well, it's a question...

HUME: No, they're -- no, it's about...

EASTON: ... it's a question of...

HUME: They're treating it as a law enforcement issue.

EASTON: They are, and -- but the question of whether you would do it in a different way is to get more intelligence and the prospect of getting more intelligence.

And to me, it's not just a question of getting intelligence. It's what you do with it. We've heard a lot about systemic failure, and I would argue that it's more of an altitudinal failure.

We saw -- we rearranged the system. We now have a Department of Homeland Security. We now have a Counterterrorism Center. We now have a director of central intelligence.

There was intelligence. It wasn't a smoking gun, as John Brennan said, and it's not always going to be a smoking gun. But there was some intelligence that came. It was a question of what you do with it.

This guy had a visa to enter the United States, a visa that was granted to him in 2008. The fundamental question is why wasn't that visa revoked. Britain revoked his visa or revoked his ability to come to Britain just based on his lying in a school application.

I think we need to lower the threshold of the people who can get visas to get into this country. But that means the world isn't going to like you. That doesn't...

HUME: You mean raise the threshold.

EASTON: Raise the threshold. That means the world isn't going to like you. You know, it fits, again, with the Obama vision. He wants the world to like us.

There was a lot of heat against the Bush administration when we started cracking down on visas and, you know, students couldn't get in. Business people couldn't get in. You'll take a lot of heat if you do that.

WALLACE: Bill, is that -- as Brit frames it, is that the issue, that it's a choice between getting tough or doing things, whether it's on decisions about Guantanamo, decisions about criminal defendants, that may appeal to the rest of the world and that -- and the Obama administration is coming down on one side of that?

KRISTOL: I'm not even sure it appeals to the rest of the world, of course. I don't think the rest of the world would be shocked if we treated him as an enemy combatant in -- consistently -- consistent with President Obama's rules of interrogation -- no enhanced interrogation techniques -- but still try to interrogate him.

Mr. Brennan said to you that we are very worried that there are other Abdulmutallabs out there. This Abdulmutallab was there for four months. He might know who the others are. He might know their names.

We let him lawyer up, and right now he's probably thinking, "Gee, maybe I could use that information to bargain with to get a reduced sentence." That's what Brennan seemed to indicate when he kept talking about how, "Well, we're going to work with his lawyers, and we have some incentives to offer him."

But this is operational intelligence in real time, and we are not treating it as a war. I mean, if this -- incidentally, when he said there's no smoking gun, this is the smoking -- he is the smoking gun. Right?

His father comes, gives the CIA station chief in Africa his name. He -- a month later, he goes to Yemen, says he's in Yemen. He's in Yemen. He's with this cleric whom we're monitoring in Yemen, trying to kill in Yemen, Awlaki, who's the same guy who's been in touch with Major Hasan.

He goes to an airport using his own name, no disguise, no alias, buys with cash a one-way ticket to the U.S.

HUME: No luggage.

KRISTOL: No luggage. That -- he is the smoking gun. And frankly, for Mr. Brennan to say, "Well, no smoking gun," that itself shows a kind of not-serious-about-the-war mentality.

And I would add one last thing. Closing the embassy in Yemen last night -- I mean, I don't -- you know, no one wants State Department officials to be put at risk and all that, but that is a sign of weakness.

Closing the embassy? We can't protect our own embassy in Yemen, a place we have Special Operations forces, a place we say we're working with the government on the front lines of the war on terror, and there's a terror threat and we close the embassy? That's a victory for Al Qaida. This last week has been a victory for Al Qaida in that region, I'm afraid. WILLIAMS: I disagree. I don't think that there was any smoking gun. I think what Mr. Brennan was talking about was a specific failure that you could backtrack and say, "Here is the moment when there was such derogatory information that would have led you inescapably to say we definitely want to crack down on this individual."

And by the standards that the U.S. has, you'd say, "Well, you know, the father went to the embassy. The father did complain. We had the knowledge." It wasn't sufficiently communicated, but is there some specific standard that was not held to? I don't think so.

And then with regard to what Brit was saying, I recall that Richard Reid was tried by the Bush administration in criminal court. He was allowed -- so I don't see that there's any change between a conservative Republican administration and a more liberal...

KRISTOL: That was one month -- that was in December of 2001. They didn't have the military commissions stood up then. Richard Reid didn't know anything. This guy was dealing...

WALLACE: But wait. We didn't know whether Richard Reid knew anything.


KRISTOL: And it may have been a mistake not to -- incidentally, to try him in criminal court...


KRISTOL: ... as it was with Moussaoui.

WILLIAMS: All right.

KRISTOL: If that's Obama...


KRISTOL: If that's the Obama administration's excuse, the Bush administration did it eight years ago...

WILLIAMS: It's not an excuse.

KRISTOL: ... eight years into the war on terror...

WILLIAMS: It's a standard.

KRISTOL: ... we're doing that...

WILLIAMS: I think it's an excellent American standard. And you talk about just wanting to make people like us. No, no, no. Look, I was wrong last week when I said on this program that I thought he was acting independently.

I think there are lots of people who thought, you know, it's not only U.S. intelligence, it was British intelligence, others around the world who didn't pick this up. OK, a mistake was made. It should have been communicated.

But to somehow suggest that that is now reason for us to act in a more draconian manner, and to give up on the idea we want to stop the spread of anti-American sentiment around the world, and it's just a matter of, you know, like, dressing up and being nice to people and greeting the guests, that's not right.

It's about trying to stop the spread of terrorism to these individuals like this -- like this guy, Abdulmutallab, and the guy at Fort Hood who picked this up over the Internet and think that they are being anti-American and attacking the monster. I think we are in our -- acting in our best interest and intelligently to say that we have standards.

WALLACE: Brit, we have 30 seconds left. Are you persuaded by Mr. Williams' argument?

HUME: That would be a no, but...


... but I might say, you know, we keep talking about this failed attack, this failed attempt. I mean, it surely didn't succeed on the scale on which it was intended, but look at the consequences.

It set in motion all kinds of security procedures which -- for several days which made absolutely no sense, by the way, at U.S. airports. Certainly, we would not be closing the embassy in Yemen in the absence of these events. Yemen is -- was -- a month ago was a hotbed. It's a hotbed today.

You know, if I were the Al Qaida people, I think Bill's right. They could look at this as a success. This was -- this was an attack that didn't succeed on the scale it was expected to but did succeed.

WALLACE: All right. We have to step aside for a moment.

But when we come back, our panel looks to the year ahead in politics, sports, entertainment and the economy, and they have a few surprises, right after this break.


WALLACE: On this day in 1961, President Eisenhower severed diplomatic relations with Cuba and closed the American embassy there. This marked the end of the U.S. policy of trying to negotiate with the new regime of Fidel Castro.

Stay tuned for more from our panel.


WALLACE: And we're back now with the panel and their fearless predictions for 2010, guided by the philosophy "often in error, never in doubt."

Our first category is politics and, Brit, why don't you get us started?

HUME: Well, I think terrorism returns as a major political issue this political season, and I think it confronts the administration with a somewhat difficult choice.

If it continues in this -- in this "let's make -- let's be nice, let's be true to our values and make the world like us better" approach, we're going to have more trouble. The other option, of course, is to act more like the Bush administration acted and take a more -- the more war-like approach, which I think is unpalatable as well.

So I think it's a difficult choice and there's no easy answer for the administration on that.

WALLACE: Nina, politics.

EASTON: I think the 2010 election is going to be a nail-biter and that the Democrats will succeed holding onto the House just barely but that we'll see the loss in the Senate of big liberal stalwarts like Chris Dodd and Barbara Boxer and Harry Reid .

And it's going to make this White House nervous enough that it's suddenly going to move to the center, as it campaigned, and that's actually not going to be good for Republicans in 2012.

WALLACE: And obviously, according to that prediction, the 60- vote Democratic super majority in the Senate gone?

EASTON: It's gone.

WALLACE: Mr. Kristol?

KRISTOL: That cheers me up already.


Here's even better news. I think the Iranian regime could fall this year. After 30 years in power, it's lost its support of the public, whatever support it had. It's lost its support of an awful lot of clerics who have decided that the doctrine of where the supreme leadership ruled -- undemocratically, dictatorially -- is not consistent with Shia Islam.

Montazeri, who died just a few weeks ago and whose death triggered the latest demonstrations, had turned against Khamenei and turns out to have a lot of support among younger clerics, so the combination of the loss of popular legitimacy and, I think, religious legitimacy could bring down the regime this year, which would be a very good thing.

WALLACE: And briefly, what would take over? What would replace them? And would they be more amenable to the west?

KRISTOL: It would be, I think, a democratic, actually, regime, and the army would presumably have to play a transitional role. And yes, they would be more -- less determined to be hostile to the west.


WILLIAMS: Boy, those are glad tidings. I hope you're right, Bill.

I think here on the domestic front you have health care reform passing, and then you have things like immigration reform and card check.

And I think the result is a rise in right-wing populist politics and then, more and more not necessarily people going to the Republican Party but talk of a third party getting serious in this country, people saying, "You know what? We want people who are really going to respond to the kind of populist urge to say the government's too big, too much taxes," and they're going to be looking for candidates. I think there's going to be a big change in politics in the country.

WALLACE: All right.

Let's move to entertainment and our entertainment editor, Brit Hume.


HUME: Well, I must say I'm not looking forward to another year of movies. I think the movies in recent years have been pretty bad, very few -- very few really good movies. The action remains on television.

There is good television drama to be seen, good crime drama to be seen. TV is where it is. Movies continue to be where it isn't.


EASTON: And "Mad Men," which we just saw, I'll say is just an exquisite show. That's a very well-written show. My prediction is that Jay Leno at 10 p.m. is a goner. This was NBC's attempt, experiment, to look for more cheap program and not scripted dramas. They moved him out of "The Today (sic) Show," put him in that 10 o'clock slot. The ratings have just tanked since then. So I think we're going to see the end of that show and the end of that experiment.

WALLACE: That's two votes for TV dramas.

Bill Kristol?

KRISTOL: Donald Westlake, the great comic crime novelist who died just a year ago, wins the Nobel prize posthumously for literature, as he should. No American has won in two decades. Westlake deserves it.

It won't happen. The Nobel Prize Committee does not have a sense of humor. They'll give -- they'll give -- they'll give the Nobel Prize for literature to another, you know, angst-ridden analyst of the depths of the modern soul.

WALLACE: Who nobody's ever heard of.

KRISTOL: But you -- but you can learn a lot more by reading Donald Westlake's 100 novels than most of those people who've won the Nobel Prize.


WILLIAMS: I like -- I like Kristol's projection. For a former professor, that's pretty nice.

KRISTOL: It's not going to happen.

WILLIAMS: Well, all right. Well, I'm going to say...

KRISTOL: That one.

WILLIAMS: ... though, on the issue of books, I think there's going to be a major shift that's going to be evident to anybody walking down the street in -- anywhere in the United States these days -- fewer and fewer bookstores, because Kindle, you know, Nook, the reader -- the e-readers actually outsold books during this last Christmas season.

And I think you're going to see more of this now take place in the country, that people who are readers are buying books from Amazon and then downloading them onto these electronic devices -- fewer people in the airports with books.

WALLACE: Did you get one?

WILLIAMS: No, I didn't -- actually, my wife gave me one, a Sony one, a long time ago and I've been really slow to put it to work.

WALLACE: OK. Sports, Brit?

HUME: Tiger Woods will recover as a golfer. Whether he can recover as a person I think is a very open question, and it's a tragic situation with him. I think he's lost his family. It's not clear to me that -- whether he'll be able to have a relationship with his children.

But the Tiger Woods that emerges once the news value dies out of this scandal -- the extent to which he can recover seems to me depends on his faith. He's said to be a Buddhist. I don't think that faith offers the kind of forgiveness and redemption that is offered by the Christian faith.

So my message to Tiger would be, "Tiger, turn your faith -- turn to the Christian faith and you can make a total recovery and be a great example to the world."


EASTON: Look for Congress to dive again into the professional sports drug-testing controversy. The NFL wants the Vikings to suspend two players who have tested positive not for steroids but for a drug that masks steroids.

And the House Energy and Commerce Committee, I predict, will vote to say that the NHL should preempt Minnesota's more lenient law and go ahead and suspend those players.


KRISTOL: Well, Brit's concerned about Tiger's soul, which is admirable. I just made a more straightforward sports prediction, which is that he'll come back and win the Masters, because, you know, he's still an awfully good golfer, despite the chaos and bad news about his personal life.


WILLIAMS: Brett Favre, I think, gets close to the Super Bowl this year but he doesn't quite get there. And as a result, there's lots of talk about whether he's coming back again for another year. And yes, he'll come back to the Vikings. The Redskins could use him, but no such deal. I think he's back to the Vikings.

And we'll see exactly -- he's the oldest player in the NFL, and -- but he is going to be even older. We'll see how it goes.

WALLACE: does he retire before he comes back?

WILLIAMS: What do you mean?

WALLACE: Does he -- he always retires every year.

WILLIAMS: No, he retires -- right, he retires, but then he comes -- and it's... WALLACE: Then he comes back.

WILLIAMS: ... always the drama. We wouldn't have TV programming without him.

WALLACE: The economy, Brit?

HUME: Well, I think it's -- the question is can we have a full- blown recovery of the kind that would begin to pay off the debt and produce jobs and so forth with the current policies that are in place, and my sense is that we cannot, that it will be very difficult.

We'll have tremendous focus from the president in terms of his discourse on jobs, but I don't think the policies in place can bring them in volume enough to save his party in the election this year.


EASTON: The big accounting scandal of this year is going to be the Chinese economy. We hear reports that they're growing at an 8, 9 percent clip. In fact, a lot of economists think they're growing at much less, 5 to 6 percent.

And it's really that the government is throwing money into the state-owned enterprises, building these gorgeous factories, producing all this stuff with no one to sell to. And that means -- what that means for the U.S. economy is dumping a lot of Chinese goods here and fewer Chinese resources available to buy U.S. Treasuries.

WALLACE: Bill Kristol?

KRISTOL: You know, I'm bearish on the economy, too, I guess. I think we could see a beginning of stagflation again. We will have rising interest rates, rising inflation. Unemployment will stay high. Rising public debt, rising tax rates.

It's not a recipe, I think, for a strong economy. We've really missed this chance. I think the country has missed a chance to sensibly fix the economy. Instead, we bailed out the big banks and done nothing about the economy.

WALLACE: And, Juan Williams?

WILLIAMS: Now you're wrong. I'm bullish on this economy. This economy is going good guns. The problem is that when it comes to employment, it's not going to do so well so quickly.

So I would say, still, 8 percent unemployment by time of the midterms, which is not good for the Democrats, but what are you going to do? It's tough. But the -- but if you're investing on Wall Street, go for them. You're going to win.

WALLACE: Eight percent by November? That's very optimistic.

Thank you, panel. We'll keep all of this on tape, embarrass you with it at various points. See you next week. And don't forget to check out the latest edition of "Panel Plus" where our group here continues the discussion shortly after the show ends on our Web site, And that's also the same address you can use to post your comments. We'll be right back.


WALLACE: As we end our first show of the new year, we want to thank all of you for allowing us into your homes each week. We know how important Sundays are, and we do our best to inform and, yes, entertain you.

Now, here are the names of the people who work so hard to put this program on the air. From all of us here, have a great new year and we'll see you next "Fox News Sunday."

For more visit the FOX News Sunday web page.
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