"FOX NEWS SUNDAY HOST" CHRIS WALLACE: Joining us now, two of the leading voices in the congressional battle over Iraq: Carl Levin, chairman of the Senate Armed Services Committee, who comes to us from his home state of Michigan, and Republican Senator Lindsey Graham, who is in his home state of South Carolina.
Gentlemen, this week Democratic congressional leaders sit down with the president to discuss the war funding bill while House and Senate conferees try to work out what they'll actually send the president.
Senator Levin, you know, because he's said it over and over, that the president will veto any bill that attaches a timetable for withdrawal, so what are Democrats, either before or after the veto, going to send him that he can actually sign?
SEN. CARL LEVIN, D-MICH.: Well, we're going to send him, first of all, hopefully, a very strong bill which would say that we're going to begin to reduce troops in four months as a way of telling the Iraqi leadership that the open-ended commitment is over, not just rhetorically but, in fact, to try to force them to take responsibility for their own country.
If we don't have the votes to override, and it appears that we don't, but we never know until that vote is taken, we will then hopefully send him something strong in the area of benchmarks as the second best way of putting pressure on the president to put pressure on the Iraqis.
And those benchmarks would hopefully have some teeth in them, telling the Iraqis that the open-ended commitment is over and that they must meet their own benchmarks which they set for themselves to reach a political settlement on the sharing of resources and the sharing of power, or else there's going to be a response in terms of reduction in support both militarily and economically.
That was the recommendation of the Iraq study group, and I would think that that would be the second step. It's not as strong as that first bill, which we hope to send him, but promptly thereafter, if he vetoes it and we can't override, we will send him something I believe that has some very strong, clear statement about the Iraqis needing to meet their own benchmarks and consequences if they don't.
WALLACE: Senator Levin, there's also been some talk among Democrats about sending him a smaller spending bill what Senator Obama says giving him a shorter leash so he would have to come back to Congress more often. What do you think about that idea?
LEVIN: Well, I think that's a possibility, but less likely because it's a fairly short period that this supplemental lasts. It only lasts through the end of September.
So I think we have to make a very strong, clear statement to the president. Now we're going to support the troops there's no doubt about it we're going to fund the troops there's no doubt about that but we're going to try to use this opportunity to change this course.
The president was told by the people last November they want a changed course in Iraq. He has not done it. He's gotten us in deeper militarily, although there is no military solution. We're going to try to use this opportunity to change course.
WALLACE: But bottom line, Senator Levin, before I bring in Senator Graham, the Democrats will not allow money to run out for the troops.
LEVIN: That is absolutely correct. We've made that clear. We never have allowed that to happen. As a matter of fact, it was Congress that added $20 billion last year to the president's request.
WALLACE: Senator Graham, what do you think of what you're hearing from Senator Levin, and specifically this idea of some sort of benchmarks, maybe benchmarks with teeth, that would say the Iraqi political side has to live up to its part of the bargain?
SEN. LINDSEY GRAHAM, R-S.C.: Well, number one, the president will veto the legislation in its current form, and he should. If you really want to support the troops, don't cut their legs out from under them.
We sent Petraeus off 81-0. He got unanimously approved by those voting in the Senate. He had a specific game plan in mind. Timetables, timelines for withdrawing troops, benchmarks that give your enemy a road map of how to drive us out of Iraq are bad ideas.
These are congressional micromanagement of the war that will have short- and long-term effects. The president will veto this bill. He should veto it.
And I do believe that timelines and deadlines undercut Petraeus. They empower the enemy and people start making political deals, Chris, in Iraq when America leaves, not what's in the best interest of Iraq in the future.
So I don't buy this at all. I think it's disastrous. If you want us out of Iraq, just cut off funding. Don't bleed General Petraeus dry and undercut him.
WALLACE: Let's talk about the situation on the ground in Iraq.
Senator Graham, you just came back from a trip there where you said that you had seen some and you were somewhat couched in this some signs of progress from the surge.
WALLACE: The New York Times reported this week and let's put it up on the screen in the first seven weeks of the surge, 116 U.S. soldiers were killed. That's actually up slightly from the 113 who were killed in the seven weeks preceding the surge.
And A.P. reports that the number of Iraqi civilians who have been killed over these seven weeks is down in Baghdad, but actually up dramatically in the rest of the country. And of course, we've just seen more carnage this weekend, bombings in Karbala and again just today in Baghdad.
So, Senator Graham, where is the progress?
GRAHAM: The progress is on political, economic and military fronts. I went to Anbar province, the western part of Iraq. Sixteen of 21 tribal sheiks have now joined with the coalition forces and rejected Al Qaeda.
The sheiks made a call to join the police force. Seven hundred people had to be turned away in Anbar to join the Iraqi police force.
There are parts of Sadr City that we've never gone into before. The mayor of Sadr City joined with us to try to clean that place out. Al-Sadr is on the run.
There's a rule of law program in place where a Sunni and Shia were tried on the same day for killing different people. The Shia police captain was tried for torturing Sunnis. A Sunni insurgent was tried for randomly killing civilians. There is progress.
It is a fight on our hands. Baghdad is the central fight. We're gaining ground in Baghdad and the insurgents are moving out of Baghdad. Only three of the five brigades are in place.
Now is the time to pour it on politically, economically and militarily, and build on this momentum. We're not going to let car bombers define the fate of Iraq, our own national security. That's the hardest problem to control.
I'm not going to give in to that. I know there are things going on in Iraq other than car bombing that make me cautiously optimistic the surge is working. Give it a chance. Don't undercut.
Timelines, deadlines when you start withdrawing troops, it just kills everything we're doing.
WALLACE: I'm going to let Senator Levin respond in a moment, but I want to ask you one more question, because you said, Senator Graham, that one of the keys is political progress, and I think everyone agrees ultimately...
WALLACE: ... that this is going to have to be won by political reconciliation. But let's look at the record.
WALLACE: For all of President Bush's talk in January about Iraqi benchmarks, the government there still has not passed oil revenue sharing, not allowed members of Saddam's Baathist party into the government and army, not scheduled local elections and not started amending the constitution.
I guess I have to ask you again, Senator Graham, where's the progress?
GRAHAM: There's a lot of progress on the oil front. The council of ministers have passed an oil agreement. It needs to be ratified by the parliament. Here's where Senator Levin and I...
WALLACE: But it's been sitting in the parliament for weeks, Senator.
GRAHAM: Well, the parliament got bombed yesterday. It's pretty hard to be a democracy when people are shooting at you.
WALLACE: Well, wait a minute. It was sitting there for weeks before the parliament got bombed, sir.
GRAHAM: My point is that it took us 13 years to write our Constitution. Then we had our own civil war. Political reconciliation is moving forward.
Did we tell the Iraqis while we were there, Senator McCain and myself, they need to get on with it? Yes. Senator Levin understands political reconciliation is necessary to win in Iraq. He has a different way of getting there.
The day you set timelines and deadlines, you undo the ability to reconcile, you empower our enemy, and you give them a road map to defeat us. So I do expect soon rather than later a local election law to be passed.
The Sunnis are ready to vote. The Sunni Anbar province has had a dramatic turnaround. They boycotted the '05 election. If local elections were held, I do believe Sunnis would vote in large numbers, and that is a test for me of the Maliki government.
Let's move on with this. But I do understand that statements made by Congress are just not to the Maliki government. They're to the insurgents and Al Qaeda members.
I don't want to push the Maliki government by congressional action that will empower the terrorists. That's the difference between me and my Democratic friends.
WALLACE: Well, let me bring in your Democratic friend, Senator Levin.
And I want you to respond to that, but I also want you to respond to Vice President Cheney, who went after Democrats this week, comparing what you're doing now to what George McGovern did in Vietnam back in the '70s. Let's watch.
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VICE PRESIDENT DICK CHENEY: That was the last time the national Democratic Party took a hard left turn. But in 2007, it looks like history is repeating itself.
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WALLACE: Senator Levin, how do you respond to Vice President Cheney?
LEVIN: Well, no, I'm going to respond first to Senator Graham.
You know, he talks about pouring the pressure on. The pressure which is being poured on is military pressure. There is no military solution there. There is only a political solution.
We've got to pour the pressure on the Iraqi political leaders to reach a political settlement. They made commitments that they would reach political settlements on oil revenues, on power sharing and on other things by last December.
The president, over and over and over again our president has said, "We are going to hold them to their political commitments." Is the president serious about holding them to their political commitments? Did he mean what he said?
They've been dawdling over there in Iraq politically for four years. This insurgency, which has now taken place in spades in Baghdad, is something which is fairly recent.
They had plenty of time to reach a political settlement. They committed to do it. The Iraq study group said they must do it. If they don't, there should be consequences.
All we've gotten from this administration is hollow rhetoric about the Iraqi leaders need to meet their commitments. But there's no teeth behind the hollow rhetoric of this administration.
WALLACE: And what about Vice President Cheney?
LEVIN: Vice President Cheney has zero credibility. I don't think anybody more than 5 percent or 10 percent of the hardcore solid Republican base believes much that Vice President Cheney says. He has no credibility.
He's been wrong consistently on Iraq. He has misled the people consistently on Iraq. He has misstated. He has exaggerated. And I don't think he has any credibility left with the American people.
WALLACE: Senator Levin, let me ask you, then, about another Republican. John McCain this week blistered Democrats, talking about how your party reacted when you succeeded on the Senate floor in attaching this timetable for withdrawal to the spending bill. Let's watch.
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SEN. JOHN MCCAIN, R-ARIZ.: Democratic leaders smiled and cheered as the last votes were counted. What were they celebrating? Defeat? Surrender?
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WALLACE: Senator Levin, are Democrats playing politics with the war?
LEVIN: What we are doing is taking our responsibility very, very seriously, which is to change the course in Iraq. The president will not do it. He just sends more military forces into Iraq when there's only a political settlement.
And we are very, very serious about what the American people said in November. They want a change of course. The Republican leaders will not change course. It's going to take Democrats that are going to have to force this change.
And by the way, ironically, according to today's New York Times, Senator McCain was using our votes that he voted against using our votes in Iraq at a dinner with Maliki to put pressure on Maliki to reach a political settlement.
Senator McCain and I think Senator Graham was at that dinner according to the New York Times, told Maliki that those votes portend a reduction in support of Americans for the Iraqis. And I'm glad he said that to Maliki.
WALLACE: But let's ask somebody who was at the dinner.
Senator Graham, is that true?
LEVIN: I'm glad he used that pressure, by the way.
WALLACE: Senator Graham?
GRAHAM: We have been putting pressure on the Maliki government every time I've been there. I've been there for six trips.
The precondition to political reconciliation is security. The biggest mistake we made as a country and the Bush administration made was let security get out of hand.
We're reinforcing Iraq politically, economically and militarily. This surge is just not about 21,500 troops. It's about a political, economic and military strategy to bring about the conditions for reconciliation.
The Democratic bill that the president is going to veto undercuts everything we've done in a positive way. It may be intended to empower Maliki and to push him forward, but it empowers those who are trying to destroy Maliki. It empowers Al Qaeda.
And the president should never again give in at all to deadlines and timelines by the Congress to destroy our chance to get this right in Iraq.
We have pushed Maliki. Democracy is hard. I am optimistic sometime this fall or sooner there will be a local election deal. There will be oil revenue sharing so the Iraqis will have something to fight for, not just against.
WALLACE: Senator Graham...
GRAHAM: But it took us 13 years to write our own Constitution, and people are dying for their freedom in droves in Iraq. I want to stand behind them.
WALLACE: Senator Graham, we have about a minute left, and I want to ask you about one area, and I apologize for interrupting you.
GRAHAM: That's all right.
WALLACE: On Tuesday, Attorney General Gonzales will testify before the Senate Judiciary Committee. You're a member of that.
Obviously, as his op-ed piece in The Washington Post indicated today, he understands he's in real trouble. What do you want to find out from him? What does he need to do to save his job?
GRAHAM: Well, from the evidence I've seen, I don't believe that there was any firing of people to stop an investigation. He needs to explain what he did and why he did it.
There are three or four different versions of his role in this, and he needs to bring clarity to what he did and why he did it. And we'll just wait and see what he has to say.
WALLACE: But at this point, do you feel that he can save his job, can turn this around, or has he been so badly wounded?
GRAHAM: Well, he has been wounded. The op-ed piece explains in pretty good detail it was not about firing people for investigating friends or not investigating enemies. If that holds, yes, he can save his job. I can still work with him.
But he has got an uphill struggle to reestablish his credibility with the committee, given prior statements. And let's hear him out.
WALLACE: Senator Graham, Senator Levin, we're going to have to leave it there. We want to thank you both so much for coming in and talking with us. Please come back.