FOX "Fox News Sunday" - Transcript

Interview

By:  Lindsey Graham
Date: Nov. 30, 2008
Location: Unknown

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

(Intro music plays.)

Terrorist attacks in Mumbai put national security back on the front burner just as President-Elect Obama prepares to announce his foreign policy team.

Will discuss both with two key senators: Lindsey Graham, a leading Republican voice on national security, and Democrat Claire McCaskill, top Obama ally in the Senate.

Graham and McCaskill, only on "FOX News Sunday."

Then, Tuesday is Election Day in Georgia again. Will Democrats be able to pick up another Senate seat and get their filibuster-proof majority? We'll ask Saxby Chambliss, the Georgia Republican who's trying to keep his job, in an exclusive interview.

Also, now that the president-elect's economic team is in place, how will they try to jump-start the economy? We'll ask our Sunday Regulars: Brit Hume, Mara Liasson, Bill Kristol, and Juan Williams.

And our Power Player of the Week shows us the new front door to our Nation's Capitol.

All right now on "FOX News Sunday."

(Intro music ends.)

And hello again from FOX News in Washington.

As Indian officials try to discover who caused the carnage in Mumbai this week and why, President-Elect Obama is set to announce his national security team.

Joining us now to discuss both are two leading senators who sit on the Armed Services Committee: Lindsey Graham, Republican from South Carolina, and Claire McCaskill, Democrat from Missouri, who joins us from St. Louis.

Senator Graham, let me start with you. You were leaving today on a congressional delegation, along with John McCain and Joe Lieberman, to Iraq and Afghanistan. Now the State Department is talking about seeing if they can get you into Pakistan and India.

SEN. GRAHAM: Right.

MR. WALLACE: If you go to those two countries, what message are you going to try to send them?

SEN. GRAHAM: Well, I hope we can go to India just to show solidarity with the Indian government, the Indian people. You know, I don't think we've paid enough attention, as a nation, to India.

Just to express our sympathy, but also an understanding that what happens in India matters here, and try to make sure there's not an overreaction. Where did the terrorists come from? Who paid for their efforts? Where were they trained? And see if we can make sure that a dialogue between Pakistan and India takes place that's helpful, that gets to the root cause of the problem.

MR. WALLACE: Explain. What's the danger of an overreaction between India and Pakistan? And particularly, not just between the two countries, but in terms of U.S. foreign policy?

SEN. GRAHAM: Well, the danger is there's a lot of history of terrorism coming out of Pakistan to the region, and there's Indian elections. And it'd be very easy for an Indian politician here soon to start demagoguing their neighbor, Pakistan.

And so make sure that the -- when the intelligence chief from Pakistan comes to India, that's a major event to me. To be involved, to have us sitting at the table with the Pakistan-Indian government and intelligence officials, trying to figure this out so that we can get to the root cause of it.

Is it about Kashmir, or is it a al Qaeda-type effort that's not specific to geography, but just as an ideology they're trying to push? Who are these people and what was their agenda?

MR. WALLACE: The key is not to get any overreaction from either side.

SEN. GRAHAM: Yeah. You know, there's an element of trying to control Kashmir by violence. Then there's the al Qaeda agenda that really is not attached to Kashmir at all.

Who are these people? Where does their support network come from? And not let it bleed over and heighten Pakistan-Indian tensions at a time that Afghanistan is very much in peril.

MR. WALLACE: Senator McCaskill, one of the linchpins of President-Elect Obama's South Asia policy has been to try to get India and Pakistan closer together so that Pakistan can thereby focus on its western border and al Qaeda and the Taliban.

How much damage does the Mumbai attack do to that policy, and how should President-Elect Obama respond?

SEN. MCCASKILL: Well, Lindsey's correct, and the Obama administration is very focused on making sure that we do not have a full-blown conflict between Pakistan and India.

Obviously, the Kashmiri border has been a sticking point for these two countries for a long, long time. And they both have nuclear power. India is a strong democracy.

Pakistan, obviously, is struggling a little bit.

So the Obama national security team is going to be looking how we strengthen the entire region and continue to focus on where the terrorism threats are.

And this attack should remind everyone that what Barack Obama's been saying for 18 months is really ringing true right now, that the terrorist threat that our nation faces is really Pakistan and Afghanistan right now, as opposed to the single-minded focus we've had on Iraq over the last several years.

MR. WALLACE: But with the obvious tensions and at least the preliminary indications that whether they had any kind of official or rogue government sanction, the intelligence service sanction, it does appear that at least some of these terrorists came from Pakistan.

How does President-Elect Obama mean to avoid increased tensions and an overreaction from either Pakistan or India, Senator McCaskill?

SEN. MCCASKILL: Well, obviously, he's -- we've got to have aggressive and principled diplomacy between these two countries. Pakistan has been our ally and they need to continue to be our ally. Clearly, India is very important to us as a nation.

But to keep Americans safe, we are going to have to make sure that we hold Pakistan accountable for the terrorist training activity that's ongoing in Pakistan.

We've been paying them a lot of American dollars to root out terrorism within their borders and, frankly, they haven't been as accountable as they need to be for those dollars.

And so we need to continue to strengthen these relationships and do everything we can to make sure these two countries work out these differences in a way that does not involve a full-scale military conflict.

MR. WALLACE: Mr. Obama is set to name his national security team this week, and let's take a look at what seem to be his nominees.

Hillary Clinton as secretary of State, Defense Secretary Robert Gates to stay on at the Pentagon, and former Marine Commandant James Jones as national security adviser.

Senator Graham, you were very critical of Obama during the campaign. You said that he has, quote, "terrible judgment" about Iraq and sitting down with foreign terrorists, and you also said this: "I would dread the day that Senator Obama took the oath and became commander in chief."

Senator, after seeing what appears to be his national security team, do you want to revise that opinion?

SEN. GRAHAM: Yeah. I think what I need to do now, as someone who fought hard against President-Elect Obama and lost, is do everything I can to help him be a good commander in chief.

As to the picks, Secretary Gates is a great choice. He led us through some difficult times in Iraq, and if Iraq had become a failed state, we would be talking about a lot more on this show than just Pakistan and India. We'd be talking about a region in chaos.

So Gates understood -- understands the need for the surge. He understood how it worked, and I think he's a great choice.

Jim Jones, known him for a long time. Former NATO commander. He opposed the surge early on, but he's a four-star general with a lot of national security knowledge.

Senator Clinton is a friend, is known throughout the world. Very smart. A little harder line than Senator Obama took during the campaign.

The one thing I would say to President-Elect Obama, you've got great people around you, but listen to General Petraeus.

MR. WALLACE: Who, of course, was the architect of the surge and now is the CENTCOM commander.

Senator McCaskill, back in 2007, you were very critical of Defense Secretary Gates, as he began to surge troops into Iraq. Why is he now the right man to pull troops out of Iraq?

SEN. MCCASKILL: Well, first of all, the SOFA agreement that has been executed --

MR. WALLACE: Yeah, we should say that's the status of forces agreement that allows U.S. troops to stay in Iraq.

SEN. MCCASKILL: Exactly. But the important part about the SOFA agreement is it embraces the kind of timetable that Barack Obama made a foundation of his campaign.

And let me say this about Secretary Gates: Even though there may have been times I disagreed with him, and maybe Barack Obama disagreed with him, this is a man who clearly holds the highest level of the military accountable for mistakes, which has been very impressive to all of us. He has solid relationships on both sides of the aisle.

And what these picks say about Barack Obama is that the kind of change that he's embracing is that you don't just pick the people who were on your side during a campaign; you pick the best you can find.

That's an important change for Washington. In the old days, only the people who supported the winning candidate were ever selected for important members of the Cabinet.

Clearly, what he is showing America is he wants the best and the brightest, and he doesn't care about their political stripes.

MR. WALLACE: But, Senator McCaskill, are you concerned because Bob Gates has been very open about the fact -- and yes, the status of forces agreement says that all the troops have to be out by 2011.

But Mr. Obama's timetable is much quicker than that. It's in --middle of 2010. And he wants a firm deadline for pulling them out. Bob Gates has talked about doing it based on conditions.

Are you satisfied that Secretary Gates will follow Barack Obama's orders?

SEN. MCCASKILL: Absolutely. And by the way, the SOFA agreement says also that the troops need to be out of major populated areas in 2009.

So this is really quite an agreement, from an administration that had steadfastly maintained that no timetable was ever going to be put in place.

This is clearly a timetable. The Iraqi people have demanded it. The Iraqi government has accepted it and we have accepted it. And now we've got to execute it.

And we all have confidence that if Senator Obama names Secretary Gates this week, that he is the man that has the confidence of the military and can execute it well.

MR. WALLACE: Looking at it from the other point of view, Senator Graham, are you convinced that Bob Gates will follow orders and has -- and how do you understand -- why would he agree to execute a timetable that he has opposed for years?

SEN. GRAHAM: Well, it's my hope that by picking Gates that President-Elect Obama understands that you have someone who has seen Iraq through difficult times.

And quite frankly, the campaign is over, but we would not have this agreement without the surge. In January of 2007, Iraq was in chaos. It was the addition of troops, called the surge, over time, that brought about political stability.

There is -- disagreement --

(Cross talk.)

MR. WALLACE: I know, but I'm talking about the next year and a half.

SEN. GRAHAM: Well, here's what I'm saying. I think President- Elect Obama has seen in Secretary Gates someone who allowed the commanders to come up with a new strategy to get us to stability.

The goal is to leave where we're more (superior ?), not less. And I am hopeful, by picking Secretary Gates, that he will listen to him, Petraeus and Odierno, as to how we get out of Iraq.

We've gotten an agreement that says 2011. There's a likelihood we'll renegotiate to have some footprint past 2011. Even President- Elect Obama mentioned that.

MR. WALLACE: So you see it as a --

SEN. GRAHAM: So picking him and listening are two different things. I hope the pick is an acknowledgement that the man that he picked saved Iraq from chaos, and he will listen to this man and his team as he tries to get us out of Iraq.

MR. WALLACE: So you're suggesting that the pick of Gates might mean that Obama would reconsider his deadline?

SEN. GRAHAM: Well, the point -- I think it means he acknowledges that he was successful in turning Iraq around from a failed state to a stable state. I hope he will listen to the commanders and Secretary Gates and get our troops out in a way that we leave behind an Iraq that's aligned with us in the greater war on terror.

History will judge us not on the day we all left, but by what we left behind. And I think Bob Gates understands that better than anybody I've met.

So I want to applaud President-Elect Obama for these picks. These are good people. But it's one thing to pick them; it's another thing to listen to them. I think he's going to do both. At least I hope he will.

MR. WALLACE: And Senator McCaskill, I guess the question a lot of people are going to be asking now is, is Bob Gates going to be listening to President Obama, or is President Obama going to be listening to Bob Gates?

SEN. MCCASKILL: Well, I think, obviously, Barack Obama is going to set the policy. But clearly, he's going to listen to different views.

If you look at -- whether it's his economic team or whether it's the conversations we've had about the potential national security team, we're talking about a variety of opinions. We're talking about different kinds of backgrounds, different kinds of political alliances.

This is someone who really does lead by listening to different points of view and finding the best course forward. He is not afraid to be challenged by people around him. He wants to be challenged, and that's how he finds his way to the strongest policy for the Americans.

I think that his listening ability is shown by the way he is picking his Cabinet, and I think America should be very proud of that.

MR. WALLACE: Senators, we've got less than three minutes left and I want to talk about one other area.

Senator Graham, the Big Three automakers are supposed to come back this week with a plan, a better plan as to how they would spend $25 billion in a government bailout.

You've got BMW making cars in South Carolina. Is there --

SEN. GRAHAM: Very good deals this summer --

MR. WALLACE: Say again?

SEN. GRAHAM: (Inaudible) -- very good deals --

MR. WALLACE: Yeah? Well, I'm glad to hear that.

Is there anything that U.S. car companies could say in expressing a plan that could convince you to vote for giving them billions of dollars in taxpayers' money, when BMW is going to get nothin'?

SEN. GRAHAM: To be honest with you, no. I don't believe this is a good idea, to take $25 billion and give it to the three major car companies, with -- which I think have a business plan that's doomed to fail.

I think they either need to consolidate, go into bankruptcy, come out stronger. But at the end of the day, I -- what do I know about running a car company?

The idea that you would take three failed car companies, bring it to 535 members of Congress and let us pass judgment on it doesn't make a lot of sense to me.

I don't know how to run a car company, but I do know that the model they've created will not sustain itself in a global economy. And that model needs to change, and I shouldn't be the one having to figure out how to do it.

They need to do it in the private sector.

MR. WALLACE: Senator McCaskill, I want you to weigh in on this. What do you need to see from the Big Three? And give us the kind of specifics -- not just we need to see a plan -- the kind of specifics you need to see that would convince you to vote for this bailout.

SEN. MCCASKILL: Well, we obviously have to see cash flow. We have to know what the financials are internally, particularly Chrysler, since it's a private company.

We need to understand what this money is going to be used for and why it makes sense for the American people to invest in these companies. I've got no problem with investing in American manufacturing, as long as it's a good investment.

And we need to behave like a bank, and we need to make sure that we get all those internal financials and that we feel comfortable that this is a good investment for the American taxpayer.

I'll tell you, I just went out and bought a new American car this week. I'm not sure how many Americans would be excited about buying a car from a company in bankruptcy. But I'll tell you, I bought a new hybrid Tahoe, Chevy Tahoe, and it's a terrific car.

And what America needs to do is take a deep breath and say shouldn't we be buying American products right now? And I hope a lot of people in America -- we build a lot of good American cars in Missouri. A lot of jobs are at stake in my home state.

I hope that a lot of people think about Santa Claus and American cars this year.

(Laughter.)

MR. WALLACE: I just want to say, first of all, I'd like a Christmas present from you, Senator McCaskill --

SEN. MCCASKILL: (Laughs.)

MR. WALLACE: -- and secondly, that Chevy Tahoe and BMW approved this message.

Senator Graham, Senator McCaskill, we want to thank you both so much for joining us this holiday weekend.

It's always a pleasure, and both of you, please come back.

SEN. GRAHAM: Thank you.

SEN. MCCASKILL: Thank you.

MR. WALLACE: Up next, the GOP braces for a final Senate showdown in Georgia, as Democrats try to pull off one more key victory. We'll speak with incumbent Saxby Chambliss about the Tuesday runoff, right after this short break.

(Announcements.)

MR. WALLACE: Almost a month after the election, the makeup of the Senate remains in flux, with Democrats holding 58 seats and still pushing for a filibuster-proof majority of 60.

In Minnesota, there's a recount going on with Republican Senator Norm Coleman leading Al Franken by less than 300 votes. And in Georgia, a Tuesday runoff will determine the winner because earlier this month, none of the candidates got 50 percent of the vote.

Joining us now from Atlanta is the Republican incumbent, Senator Saxby Chambliss. We should note we invited his opponent, Democrat Jim Martin, to join us, but his campaign turned us down.

Anyway, Senator Chambliss, we're very delighted to have you.

With so much at stake, political heavyweights have been swarming to the state of Georgia over these last few weeks. And let's take a look: John McCain campaigned for you. Sarah Palin will be down there tomorrow.

Meanwhile, Bill Clinton and Al Gore appeared with your opponent and Barack Obama made this radio ad.

PRESIDENT-ELECT BARACK OBAMA: (From videotape.) Jim supports my plan to cut middle class taxes, make sure every American has access to affordable health care, stop spending $10 billion a month in Iraq, and get our economy moving again.

MR. WALLACE: Senator -- or, President-Elect Obama, of course, referring to your opponent, Jim Martin.

Question, Senator. Is this referendum, in effect, a runoff on President-Elect Obama -- if you support his policies, vote for Martin; if you want to block them, vote for you?

SEN. CHAMBLISS: Well, I don't think necessarily so. As I've said all along, Chris, when President-Elect Obama, who is our president-elect and he is going to be our president, come the end of January, when he's right and when he proposes initiatives that are in the best interests of Georgia, I'm going to be with him.

But when he wants to raise taxes on everybody, when he wants to tinker around with the Second Amendment, when he wants to do things that are not in the best interests of Georgians, then I'm not going to be with him.

But I don't think it's necessarily a referendum on him per se.

MR. WALLACE: But you have campaigned against the president- elect and the Democrats. I want to take a look at something you said a few days ago. "If the Minnesota race was lost and this race was lost, then they" -- meaning the Democrats -- "will have a blank check."

SEN. CHAMBLISS: That's exactly right. And Jim Martin, my opponent, is committed to doing everything that the president-elect wants him to do. And I'm simply not going to do that.

You know, our government was based on a check-and-balance system, the administrative, legislative, judicial. Within the legislative we've always had a check-and-balance by design.

And if we give him a blank check, then I think it will not be in the best interests of the country. And I'll continued to promote that over the next 72 hours.

MR. WALLACE: Let's break down, Senator, the numbers in this race. On Election Day you got 49.8 percent of the vote, just shy of the 50 percent you needed to win the seat outright. Jim Martin got 46.8 percent.

During early voting for November 4th, back on Election Day, blacks cast 35 percent of the ballots. Now, in the early voting in the runoff with Mr. Obama no longer on the ballot, they make up 23 percent of the early voting.

Isn't that a big advantage for you, Senator?

SEN. CHAMBLISS: Well, listen, I have never conceded one vote. And I've reached out to the African American community from day one; I'll continue to do that.

So I think the fact that at the end of the day there was an African American turnout of, like, 31 percent of 4 million votes -- and I actually got 49.98 percent; came very, very close to getting that 50 percent plus one. But what that shows is that there were an awful lot of African Americans that voted for me.

But at the same time, you know, we're reaching out to all voters to try to make sure they return to the polls. I got more votes than Obama. I beat my Democratic opponent significantly on November the 4th, and if voters turn out again in the same ratios and in the same numbers, then obviously we'll win again.

MR. WALLACE: Well, they clearly aren't going to turn out in the same numbers overall, because this obviously is not a general election. There's no presidential election; there's just the Senate runoff, which leads a lot of people to say this is basically about turnout. How many of your supporters you get out in a sharply diminished electorate, as compared to how many voters Jim Martin turns out.

And how do you counter the estimated hundred Obama field operatives who are apparently supporting Martin in this race?

SEN. CHAMBLISS: Well, it is about turnout. And I hand the Obama team credit. They did a great job on November 4th.

We've also got a great ground game. We turned out on November 4, and we've been working hard on the phones as well as on the ground, folks going door to door. This's just been very humbling, Chris, to see the support that my team has garnered here.

And I'm very, very proud of the fact that we have an operation on the ground that's going to be able to turn out the vote, and that is what it's about.

Runoffs always fall off from a general election, and it's about getting our people back to the polls. And I think Republicans are going to turn out, Independents are going to turn out and support us, as well as conservative Democrats will support us.

MR. WALLACE: Let's talk about some of the issues in this campaign. And we want to turn a clip from an ad from your opponent, Jim Martin. Here it is.

(Video clip begins.)

NARRATOR: Listen to Saxby Chambliss. (Voice of Senator Chambliss.) "We may not be in a recession. I don't know what that term means." Saxby Chambliss doesn't understand what a recession means?

(Video clip ends.)

MR. WALLACE: Your opponent, Jim Martin, says that you voted for the Bush policies that got us into this mess and he notes that you voted for the $700 billion bailout in September; he voted against it.

SEN. CHAMBLISS: Well, he says he would have voted against it. Of course, the guy that he's joined at the hip with, President-Elect Obama, voted for it.

You know, that clip's interesting.

That was about four seconds out of a 40-minute speech I gave that morning, and which, incidentally, when I made that statement I was quoting Alan Greenspan, who I have a lot more confidence in than I do Mr. Martin's judgment on the economy.

You know --

MR. WALLACE: But Senator, may I -- (cross talk) -- Senator, may I just bring you up on that? Because that quote, when you said, "I don't know if we're in a recession. I don't know what that means." You said that in July of this year and, in fact, in April of this year, several months before Alan Greenspan had said we're headed into a recession.

SEN. CHAMBLISS: Yeah, well, you know, there was a real question about what is the definition of a recession. Chris, if you'll remember, it was supposed to be two consecutive months of negative GDP, and at that point in time we hadn't seen that.

But economists disagree on the technical definition of recession, and obviously that's what I was talking about.

But the fact is, here's what I did know and this is what I said then and what I continue to say now. People in Georgia are hurting. We've had a -- we're the fifth, number five state in the -- in foreclosures. We have folks who are losing their jobs.

And what I want to do is make sure that we put Georgians back to work. Those that are working, we keep their jobs, and we've got to have policies in place that will do that.

That's exactly what I was talking about then and what I continue to talk about now.

MR. WALLACE: But Senator Chambliss, the Martin camp says that you have been far too trusting of Treasury Secretary Paulson and the bailout, which you voted for. And they point out to what you said -- and we're going to put it up on the screen -- a couple of weeks ago.

You said, "If the smart people in the financial community think this is the best way to go, I think we have to respect that. I do trust folks who deal with these issues on a daily basis, like folks in the financial community."

Senator, after everything we've seen in the last month or so, do you still trust Wall Street, and would you still vote for the financial bailout?

SEN. CHAMBLISS: Well, I didn't say I trust Wall Street; I said people in the financial community. And I think Hank Paulson is a smart guy and I listen to what he says. But he's not the only one I listen to.

Listen, I talk to dozens and dozens of bankers in Georgia, both from small community banks to big banks. I talk to businesspeople who were seeing their lines of credit pulled and were starting to have to -- or, having to lay people off.

Those are the kinds of people that I listen to, to make sure that we put policies in place that are going to free up this credit market, going to ease this crunch that we found ourselves in.

And, you know, there comes a point in time, from a military standpoint, you trust your military leadership. From a business standpoint, you have to trust business leaders.

And sure I listen to those folks, and sure I've based my opinions on what they've said.

MR. WALLACE: Senator, we've got about a minute left, and I just want to ask you, summing up in terms of the overall scope of this race, what do you think the effect will be if Democrats win in Georgia on Tuesday, win in the recount in Minnesota, and achieve their filibuster-proof majority?

SEN. CHAMBLISS: Well, I think what you're going to see is an awful lot of liberal judges, activist judges going on the bench. I think you're going to see a universal health care plan that will take away the right of people to choose their physician that they want to go receive treatment from.

You're going to see an economic stimulus like you won't believe, and it's all going to be put on the back of taxpayers. The one that's in place now needs the opportunity to work. You're going to see the automobile industry receive a huge blank check just to fill in their cash flow needs.

And, you know, it's just not the kind of situation that I think Georgians nor Americans want to see happening in Washington.

MR. WALLACE: And real briefly, Senator, are you saying that if you get that 41st Republican vote, you can stop all that?

SEN. CHAMBLISS: I don't know that we'll be able to stop all of it, but Georgians are going to be able to count on my vote to do what's right for them, Chris. And Americans are going to be able to count on my vote to do what's right for them.

And I hope that we can shape legislation to the point to where it's better or, if need be, that we'd be able to stop some of the legislation that's not in the best interests of the Georgians and Americans.

MR. WALLACE: Senator Chambliss, we want to thank you so much for talking with us today, and we'll see how things turn out on Tuesday night.

Thanks again, sir.

SEN. CHAMBLISS: Thanks, Chris. Good to be with you.

MR. WALLACE: Up next, is the terror attack in Mumbai Barack Obama's first foreign policy crisis? We'll ask our Sunday Regulars after this quick break.

(Announcements.)

PRESIDENT GEORGE W. BUSH: (From videotape.) We pledge the full support of the United States as India investigates these attacks, brings the guilty to justice, and sustained its democratic way of life.

MR. WALLACE: That was President Bush on Saturday commenting on the Mumbai terrorist attacks and what needs to happen next.

And it's time now for our Sunday Group: Brit Hume, Washington managing editor of FOX News, and FOX News contributors Mara Liasson of National Public Radio, Bill Kristol of The Weekly Standard, and Juan Williams, also from National Public Radio.

Well, before we get into what the massacre in Mumbai means for U.S. foreign policy, let's talk about the attack itself -- hitting targets across the city and holding a major world capital hostage, I must say, for three days.

Brit, your thoughts?

MR. HUME: Well, we don't really know yet. I mean, it was obviously a very well-planned, well-executed attack. And it had, I think, the desired effect in the sense that it shocked and appalled and horrified the world.

And obviously it had the same effect on India, which is a teeming, tumultuous place with an enormous mix of people. The Islamic population is relatively small, but there's a bloody history here, going back to the partition of India into India and Pakistan. And there's always the threat that that kind of violence can erupt again in a very major way. So this was obviously a shrewdly planned attack.

What we don't know is whether this is more a reflection of the trouble that never has stopped existing between India and Pakistan, or whether this is a part of the sort of worldwide Islamist terror movement, or both.

MS. LIASSON: Yeah, look. The other thing that was surprising about it was how vulnerable Mumbai was. I mean, there have been terrorist attacks for a long time in India, and between Pakistan and India.

And those commandos, who operated pretty heroically to rescue people, they were flown in from New Delhi. There was nobody local there.

And I think it's pretty astounding that you can launch that kind of an attack, at so many points, coming in from the sea, and cause that kind of damage for that many days. So that's kind of an internal thing for India, but clearly it shows that even this long after 9/11, there are so many cities that are vulnerable.

And as Brit said, we don't know exactly who did it. Of course, there's a lot of feeling in India that Pakistan was behind it and that retaliation should be taken. And that's something that -- United States definitely wants to restrain.

MR. WALLACE: Bill -- I mean, when Mara says, and that certainly is a speculation that it -- that it had Pakistan elements. Does that mean it's rogue groups, terrorist groups in Pakistan, or does it have -- certainly not the sanction of the civilian government, but perhaps sanction from some of the rogue elements inside the intelligence services?

MR. KRISTOL: The experts seem pretty confident that the group that's behind it is Lashkar-e-Taiba, which was this -- which is an Islamist group founded originally out of the grievances in Kashmir.

But if you go online --

MR. WALLACE: Which is a disputed province between --

MR. KRISTOL: Disputed province between India and Pakistan. But Lashkar also has a pamphlet that all -- that they've published, that they all believe in, "Why we wage jihad." And I haven't been able to get a full translation online, but if you read the summaries of it, it's this classic al Qaeda, Islamist doctrine.

They wage jihad to recapture all Islamist lands, in Europe and in Asia, to kill the infidel and to kill Hindus, to kill Jews, et cetera. And of course, that's what the attack was.

If this were just a Kashmiri issue, why did they go to the Jewish Chabad House and kill Jews? And why did they want to kill foreigners and wealthy Indians and attack the symbols of Indian success? So it is part, I think, of the worldwide jihadist attack.

And I think, for all the complications -- and we can criticize India's security, I think we have been -- our government has not done enough to show solidarity with the Indians: the world's largest democracy, a good partner and ally of ours economically and strategically.

And the idea that Secretary of State Rice isn't yet on her way over there to visit and show solidarity, I'm a little surprised by that. I think she'll do it this week, but I really think it's very important.

This is a -- you know, the criticism of the Bush administration is always what happened to the public diplomacy? This is a moment where we can really show solidarity with what is maybe our most important strategic ally in the world. And I think we could do a little more to do that.

And I think Obama's statements have been good and President Bush's statements have been good, but I think there's a little more we could do.

MR. WILLIAMS: I just -- I worry that it's more complex. In fact, I would say that there are those in the American intelligence community who would say Pakistan's a very important ally.

And the new president there, Zardari, and his attitude towards going after al Qaeda in the mountains of Pakistan is so essential, if we are ever to capture bin Laden and if we're ever to tamp down on what's now -- since Iraq has been taken off the map as a terrorist training ground for the moment -- and I'll give credit to the surge there, if you like -- (chuckles) -- you do have to do something about what's going on in Pakistan.

So you have to -- you can't take sides; you can't just say yeah, India's our friend and Pakistan is not, given the tensions that have existed.

What's surprising to me, Chris, was that it was just 10 people. I --

MR. WALLACE: Well, we're not sure of that. Yeah.

MR. WILLIAMS: They think that it was just 10 people who came ashore and picked 10 sites and created this chaos over three days. And it's amazing to me that you see what damage can be done on an ongoing basis. It's just -- it's horrifying.

But from the Obama perspective, for the president-elect, his policy has been we need to have broad regional cooperation to go after al Qaeda. And what this does is it breaks it down.

Because now you have the reemergence of these tensions between Pakistan and India that will take attention away from fighting terrorists.

MR. WALLACE: Brit, I'm sure a lot of people -- I must say, I thought, as this week unfolded, of Joe Biden's prediction during the campaign about the world is going to test this young, inexperienced leader, Barack Obama, some time in the first six months. Who knows whether that's what was in these people's minds.

But what can Barack Obama -- what can George Bush, for the next two months, and then what can Barack Obama do in terms of trying to prevent a real heightening in tensions in India and Pakistan and, as Juan suggests, getting -- prevent Pakistan from taking its eye off the ball of what's going on with the Taliban and al Qaeda on its western borders?

MR. HUME: Well, one senses that the hesitancy that the administration has shown, that Bill was critical of, about going over there and showing solidarity with India, is a reflection of what Juan was talking about, which was the need to have some balance. Because we count both those two countries as allies.

And in fact, when you look across that part of the world these days, you do see a band of countries aligned with -- or, allied with the United States that, to the likes of al Qaeda and its supporters in the world is not a promising thing.

I mean, India really is an important ally, and has been for quite a long time, and that relationship has been strengthened. At the same time, though, the hotbed, the fount of a lot of what goes on in the world over there is Pakistan, which remains one of the most dangerous and danger-inspiring places on Earth.

So I think there is probably some need for balance, and the United States could play a very important role between those two countries, which veer between working together and fighting. And obviously, that's an opportunity.

MR. WALLACE: Bill, do you think, as the only person, I suspect, on this panel -- and I hate to -- if I've misspoken, please correct me -- to have read the Lashkar-e-Taiba Web site.

I mean, what's the -- what would be -- and it's always hard to try to ascribe a strategic geopolitical motive. Is it that they want to create tension and, perhaps, warfare between Pakistan and India and, therefore, that will benefit their Islamic ambitions?

MR. KRISTOL: Sure. Though they also just want to kill Hindus and Jews and Christians and Muslims who don't subscribe to jihad. I mean, I don't think we should overcomplicate this.

Look, they have connections to the Pakistani intelligence; there's no question about that. It's also clear that the new Pakistani civilian government has tried hard to move, at least rhetorically, against some of the extremists. I think we help that Pakistani government --

Brit is right; we can't just be -- go be in solidarity with India and ignore Pakistan. But we need to tell the Pakistanis more, I think, solidly than we have in the past, that you can't distinguish between sort of bad terrorists, al Qaeda, and terrorists who might be useful to you by keeping things on a boil in Kashmir -- that you need to really crack down on any terrorist group that does something like what the Lashkar seems to have done in Mumbai, and that that is a non- negotiable.

And I think we should offer to help the Pakistanis go after them. They seem to have training camps in the northwest frontier, as well as in Kashmir. If we don't go after them, there's a real danger India will go after them.

MR. WILLIAMS: Well --

MR. KRISTOL: So our weakness, our seeming to be hesitant would, I think, encourage more tensions, more Indian unilateral action, than if we're very strong in showing solidarity with India and offering our help to deal with these terrorist groups.

MR. WALLACE: All right. We have to take break here.

But coming up, on the heels of the attack on Mumbai, President- Elect Obama announces his war Cabinet. What do his choices say about his foreign policy? More from the panel in a moment.

(Announcements.)

MR. WALLACE: On this day in 1993, President Clinton signed the Brady Bill. The law requires a prospective handgun buyer to wait five business days while authorities complete a background check.

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

(Announcements.)

PRESIDENT-ELECT BARACK OBAMA: (From videotape.) What we are going to do is combine experience with fresh thinking. But understand where the -- the vision for change comes from first and foremost: it comes from me. That's my job.

MR. WALLACE: That was President-Elect Obama reacting to criticism that the choices he is making for his Cabinet do not represent the kind of change he campaigned on.

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

Well, as I discussed earlier with the two senators, Mr. Obama is set to name his national security team this week. In fact, we now learn that he is going to name -- well, Senator Hillary Clinton -- let's put it up there -- as secretary of State. We understand he's going to name her at 10:40 Eastern Time tomorrow morning. And please watch the announcement on FOX News Channel.

Whether -- we're not sure the rest are going to come tomorrow -- but Bush Defense Secretary Robert Gates apparently staying on at the Pentagon, and retired Marine General James Jones as national security adviser.

Juan, let's start with Gates, and I wanted to ask you the question I asked McCaskill and Graham. How do he and the president square off what are rather sizeable differences about how the end game in Iraq should play out?

MR. WILLIAMS: Well, you've got to remember, Gates was a member of this group that was looking over the war in Iraq and was not an initial supporter of the surge.

But what he has come to, I think, is an understanding of the importance of the effort, and I think he understands who's the commander in chief, which ultimately what it comes down to.

You asked the question of Senator McCaskill, will he take orders from the president? I mean, to me, of course; you've got to take orders. That's the commander in chief.

The difficulty here, I must say, Chris, is for lots of people who felt that there should be some representation for people who were opposed to the war, because clearly that was a principal tenet of Barack Obama's primary campaign in which he said that he wants an immediate end to the war.

The way that things are shaping up now, there will be no immediate end to this war, that it will go on certainly through 2011 when the status of forces agreement says that the U.S. has to be out.

But the kind of immediate first-day-let's-get-out, that seems to be off the table. Because what you've got now --

MR. WALLACE: Well, wait. That was never Barack Obama's policy anyway.

MR. WILLIAMS: I thought it was Obama's policy.

MR. WALLACE: I think he talked, didn't he, about 16, 18 months?

MS. LIASSON: No, no. Sixteen months was his schedule.

MR. WILLIAMS: He said let's start -- day one I'm going to call the generals into my office --

MS. LIASSON: To make a plan.

MR. WILLIAMS: -- and let's make plans to get out, rather than --

(Cross talk.)

MR. WALLACE: Well, do you think that's going to change?

MR. WILLIAMS: I think it's changed. I think what you've got in place with Jones, I think what you've got in place with Gates and Senator Clinton -- or, Secretary-of-State-to-be Clinton -- is a group that's very pragmatic. It's going to look at conditions on the ground.

It's all of the kind of moderating, hithering and dithering that Obama was concerned about in the first place for an ill-conceived war.

MS. LIASSON: Hmm.

MR. WALLACE: Brit, is that how you read the appointment of Gates and this whole team, that Obama's going to go back on the 16- month timeline?

MR. HUME: No, I don't. (Chuckles.) I don't. I think that the timeline basically now --

Look, this represents a view, I think, that the war is basically won. That doesn't mean it's over, but it means that as a strategic matter, the war is won and that the level of intensity of the war itself and the reaction to it in the United States will subside further with time, and that the timetable that is set forth in this status of forces agreement is probably good enough.

Obviously, if you can get out sooner, you would, no matter what president you were. So I think that's what it represents.

It also represents a view, I think, on Obama's part that if you're going to do anything in Washington, whether it's bring about change or not bring about change, it's a lot better to try to do that without a lot of rookies on your team.

Because rookies do not do very well in Washington, and never have. And candidates who've come in and brought a lot of people who were with them when they were governor of wherever, and they -- and they thought were really going to be great at whatever job they took have -- it hasn't worked out terribly well, particularly in the White House itself, but also in key Cabinet positions.

So I think it represents a recognition of that as well.

MR. WALLACE: Mara, are you surprised that Mr. Obama chose Gates at Defense, or are you surprised that Gates agreed to stay on?

MS. LIASSON: I guess maybe I'm more surprised that Gates agreed to stay on than that he chose him. I think choosing him makes a lot of sense.

I think if there was any concern during the campaign that Obama would somehow kind of reflexively and literally stick to this 16-month timetable, that's gone. I mean, he's a pragmatic guy.

The war is ending, mostly because of a surge he opposed, but worked. And Gates was instrumental in that. Gates comes out of the kind of Brzezinski-Scowcroft wing of the Republican Party. He is a pragmatist.

I think that he's been -- the choice of Gates has been received very well on both sides of the aisle. As Brit says and, actually, as Hillary Clinton said during the campaign, you need experienced people to help you make change.

And when Obama says, look, I'm the change -- he is such a huge change. You don't have to have change be something cosmetic where everybody in your Cabinet is new and never been heard from before.

But I'm not surprised he picked him. I think that all -- everything he's been doing has been reassuring, centrist, and pragmatic, since he's been elected.

MR. WALLACE: Bill, let me ask you about that, and I'll have you represent the liberal wing that -- the left wing of the Democratic Party --

MR. KRISTOL: That's (me ?).

MR. WALLACE: -- because you know them so well.

When you look at those three -- Clinton, Jones and Gates -- they all come from the centrist, pro-military establishment. How do you explain the fact that there's not an anti-war, left-wing Democrat in the group?

MR. KRISTOL: Because Obama is not the change. Mara said Obama's the change, because we're so used to saying that for the last year. But in what foreign policy area is Obama the change?

He's going ahead and increasing the number of troops in Afghanistan, something that's already in course under the Bush administration. He's going to go with the Bush schedule with drawdown in Iraq, not his -- what he proposed during the campaign.

He's going to be a strong partner with India, he's going to fight terrorism, he's going to work with NATO, he's going to increase -- I hope he sticks with this -- defense spending and the size of the Marines and the Army. There's no -- I think he's going to continue Bush's foreign policy, basically, for better and worse. I hope he continues it a little better, actually and is a little tougher on certain things.

But with Iran, he's going to -- he'll have some token negotiations with Iran, but he'll end up with the same choice Bush would have had in terms of having to perhaps -- to threaten, certainly, and perhaps use military force to stop the nuclear program.

So Obama is not the change; that's the simple answer. And his appointments reflect that.

MR. WILLIAMS: I can't believe -- cosmetic? Come on, Mara.

MS. LIASSON: (Off mike.)

MR. WILLIAMS: Cosmetic -- to bring in people who have different points of view is now cosmetic?

I agree you've got to have experienced people to play the game in Washington. But it's not cosmetic to say, you know what, I don't think this was a good war. I think it was a waste of American treasure and a waste of American intelligence.

MS. LIASSON: Who would you've put in as Defense secretary who represents that point of view?

MR. WILLIAMS: Oh, you could -- look, you could go from Carl Levin, you could go to lots of people across the board who would represent the idea that, you know what, we opposed this war and we think it's been the major mistake over the course of the Bush administration.

In terms of their response to the 9/11 attacks it was a mistake and it was a misappropriation of our resources, instead of going after al Qaeda and the Taliban.

So that's all I'm saying.

MR. WALLACE: But Juan, Bill brings up a good question. Why didn't Obama do that? And is it because he isn't the change?

MR. WILLIAMS: I don't know about that. The change is -- that's political. You can make a decision; I think he was poking fun at Obama. But I do --

MR. WALLACE: I don't think, in terms of policy, he was.

MR. WILLIAMS: Well, no, but in terms of the change, he's not the change on this, clearly. Bill is right, exactly right. But you know what, he is a change in terms of people saying, you know what, I trust that he's not about ideological motives here.

He's not part of any neoconservative front; he's not doing this because his daddy was insulted by somebody. He's doing this for American interests, and that's what he wants to portray.

But in terms of changing American policy from this war preoccupation, maybe the best I can say is he's going to put more forces in Afghanistan, and he's going to go after bin Laden.

MR. WALLACE: Briefly, with the time we have left, Brit, let's talk about the economic team, which Obama made official this week. And let's take a look at them.

Tim Geithner at Treasury, Paul Volcker to lead the Economic Recovery Advisory Board, Larry Summers to head his National Economic Council, the policymaking arm in the White House.

What do they tell you about how President Obama intends to jump-start the economy?

MR. HUME: Not much new here, Chris. (Laughter.)

And Paul Volcker, in particular, is a noteworthy selection. Yes, he's an éminence grise of Wall Street and so forth, but remember what he represented.

He was brought in first by Jimmy Carter and then retained under Ronald Reagan as the Fed chief. To do what? To wring the inflation out of the economy. We had a -- something that economists up to that point had thought not possible, a combination of both inflation and stagnation in the economy. Stagflation, it was called.

It was a deadly situation. It was a terrible economic crisis at the turn of the decade, and Volcker's job was to get the inflation out. And he did that by raising interest rates to very high levels -- very high levels.

And the effect of that was to put the economy into a truly nasty recession, the worst downturn since the Great Depression to date, at that point. It got -- it was effective, but it was -- the liberals on the Hill were howling.

I covered hearing after hearing after hearing where they were -- it was rending of garments and tearing of hair and gnashing of teeth. (Mild laughter.) And Volcker would sit there with his cheap cigars that he liked to smoke then and tell them, in his deep and powerful voice, that this was what had to be done. It was remarkable.

MS. LIASSON: But that's step two, a long way down the road.

First, the deficit is going to go sky high, and they're going to spend gazillions of dollars in trying to stimulate the economy. And then they'll maybe wheel Volcker in -- (chuckles) -- in an attempt to cut -- (inaudible).

MR. WALLACE: All right, panel.

See you next week. Thank you.

Time now for some mail, and most of it was about our behind- the-scenes look at Air Force One.

Dave Davidson from Oxon Hill, Maryland, writes, "Several times during my career I witnessed Air Force One land outside the U.S. Each time I saw it, I was filled with pride. Thanks for showing us the inside."

And Susan Hood from Montgomery, Illinois, sent this: "I feel privileged to have gotten such an intimate, detailed look at something so top-secret. I know you said it was five years in the making, but it sure was worth the wait."

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

Up next, our Power Player of the Week.

(Announcements.)

MR. WALLACE: It has taken more than six years and cost millions of your tax dollars, but Washington is finally getting an exciting new addition to its landscape. Here's our Power Player of the Week.

MS. ROUSE: The Capitol Visitor Center is the new front door for the United States Capitol. It's where we now welcome the nation.

MR. WALLACE: Terrie Rouse will oversee the new Center, and she couldn't be more excited about Tuesday's grand opening.

MS. ROUSE: We will welcome visitors from around the world; we will welcome eighth-graders; we will welcome families.

MR. WALLACE: What all those folks will see is a massive underground complex, three-quarters the size of the Capitol itself, that first allows security to screen everyone coming in and then provides a fascinating introduction to the nation's legislative branch.

On Wednesday, Rouse gave us a tour, starting in Emancipation Hall, which has three times the footprint of the Capitol Rotunda. The first stop, the original plaster cast for the statue "Freedom," which sits atop the Capitol.

MS. ROUSE: As we approach the Freedom statue, you really can get a feel for the grandeur. You know, on top of the building in the bronze is one thing, but here you're actually approaching it.

MR. WALLACE: (To Ms. Rouse.) Nobody gets this close to the real statue, and it's just beautiful.

Just beyond the statue are exhibitions which offer all sorts of ways to get up close and personal with Congress.

MS. ROUSE: The piece that everybody wants to touch, and you can, it's a touchable dome of the Capitol.

MR. WALLACE: (To Ms. Rouse.) Wow. You know, you do want to touch it!

MS. ROUSE: Right.

MR. WALLACE: If that's not enough, there are interactive screens with more opportunities to see Congress.

(To Ms. Rouse.) You can get dizzy in the Rotunda.

And there are two theaters where you can see short films about the House and Senate -- (audio plays in background) -- and, if they're in session, watch them live on television.

MS. ROUSE: People can come in and sit down and pause, if they will. They can watch 10 minutes of it, they can watch five minutes of it.

MR. WALLACE: (To Ms. Rouse.) And I've got to tell you, having done it, this feels very much as if you're in the gallery overlooking the floor of the Senate.

Congress talked about building a visitor center for decades, but work started after two tragedies.

First, in 1998, a deranged gunman ran past security and killed two Capitol Police officers. And then there was 9/11. (Audio in background.)

MS. ROUSE: We had to bolster things; had to bolster security, had to bolster our vigilance. So the ability to get people into the door was a problem.

MR. WALLACE: The project itself became a problem. It is opening three years later than originally scheduled and, at $621 million, at more than double the initial estimate.

But Terrie Rouse, who has spent her career working in museums, thinks most Americans will approve of the final product.

MS. ROUSE: I want to be standing at the door when the eighth- grader leaves and you can overhear them saying, "Mommy, Daddy, I can't wait for the day that I can vote."

That moment when I stand and look through the skylight, sort of every night and every morning, I am reminded that we are representing a nation and we are representing the nation to the world. So it just chokes me up every time I think about it.

MR. WALLACE: Rouse estimates the new Center will double the number of people who visit Congress to 3 million a year, and it is opening on the 145th anniversary of the day the Freedom statue was placed on top of the Capitol Dome.

And that's it for today. Have a great week, and we'll see you next "FOX News Sunday."

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