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WALLACE: And hello again on this Memorial Day weekend from Fox News in Washington.
As we remember those who had given their lives defending our country, we continue to face foreign policy challenges. Here to tackle all that is Senator John McCain.
And, Senator, welcome back to "Fox News Sunday."
SEN. JOHN MCCAIN, R-ARIZ.: Well, thanks for having me on, especially on Memorial Day.
WALLACE: There has been another massacre in Syria. Government forces killed more than 90 people, including more than 30 children. You can see some of the bodies stuck up like cordwood here, in the village of Houla. And the White House has apparently decided going to start vetting some of the rebels to see whether or not they are Islamic radicals and then perhaps to let other Arab countries arm them. Is that enough?
MCCAIN: Of course not. It is about a year too late. You know, this is a shameful episode in American history. It began back in 2009, when we refused -- when the president of the United States refused to speak up on behalf of the demonstrators in the streets of Tehran and gone from one episode to another.
Here we have over a year and we're now talking about possibly vetting some people. Nearly 10,000 people have died. This is a brutal regime of incredible proportions. And, by the way, if Bashar Assad failed, in the world of General Mathis, the head of our Central Command, it is the greatest blow to Iran in the last 25 years because it would cut off them from Hezbollah, Syrian is the most important client state, et cetera.
Horrible things are happening in Syria. This administration has a feckless foreign policy which abandons American leadership. I know because I visit with these people, that they are ready to help these people and they are helping them some. But it cries out for American leadership.
American leadership is not there.
WALLACE: Let me follow up there. There's a story on the front page of The New York Times today that President Obama is considering trying to get Assad out diplomatically with the help of the Russians. How likely do you think that is?
MCCAIN: Again, here we are a year later and 10,000 killed and main supplier of arms, we are going to convince them our hopes rest on convincing them to ease out Assad, comparing it to Yemen which there is no comparison.
It's really just a sad story. And what the conclusion you can draw is that this president wants to kick the can down the road on all of these issues until after the election. Medvedev -- telling Vlad I'll be more flexible after I'm reelected.
And it's really an abdication of everything that America stands for and believes in. And on Memorial Day, we should be especially moved by this incredible inaction and failure to assert American leadership.
WALLACE: You were saying just before we came on the air that you see a pattern -- in Syria, in Afghanistan, in Pakistan, with the Pakistanis thumbing their nose at us by taking this doctor who apparently helped to find bin Laden, sentencing him for 30 years in prison treason, that you see a pattern of the other countries sort of dissing the U.S.
MCCAIN: You have to look at it in its entirety because when you look at one country, you are puzzled. This has to do with a foreign policy led by a president who does not believe in American exceptionalism.
So, it began in Iran when we failed to stand up in 2009. In Libya, we, quote, "led from behind". The war was much longer because we didn't use American air power.
With Iran, clearly, we're kicking the can down the road. How many times have seen North Korea and Iran in these different negotiations that have taken place?
In Afghanistan, obviously, the Taliban believed that we are leaving.
In Pakistan, why would they directly insult America by putting a doctor who helped us apprehend and take out the most notorious terrorist in the world and they put him in prison for 33 years. It's because the Pakistanis believe that we are leaving. This president -- have you ever heard the word "victory" come through the lips of this president. We are always talking about withdrawal, withdrawal, withdrawal.
And, of course, Iraq is unraveling because we didn't leave a residual force there and in the negotiations with Iran. Could I just give you a quote of Catherine Ashton, who is the E.U. foreign policy chief about the negotiations with Iran?
Quote, "What we have now is some common ground and a meeting place where we can take that further or forward."
I'm not making that up. So, we continue we continue -- they're going to meet in Moscow next week, and meanwhile we are accepting enriched uranium, which we had said they couldn't do, and the Iranians have not been deterred.
Meanwhile, the Israelis are watching with great concern as there is no chance in the progress --
WALLACE: Let me ask you about Iran. As you say, there was a round of talks and all they agreed was another round of talks next month in Moscow, meanwhile the Iranians continue to install more centrifuges and there were also traces found at one of the sites of highly enriched uranium than we know about -- not 20 percent but 27 percent.
Question: is it time to give up on diplomacy?
MCCAIN: I think that it is time to draw red lines for the United States and Israel together. The president of the United States said it is unacceptable to get nuclear weapons and --
WALLACE: What do you mean by red line?
MCCAIN: Stopped the enrichment, allow the IAEA inspectors in --
WALLACE: And give them a deadline.
MCCAIN: At least red lines. If you cross the red line all options are on the table.
WALLACE: Well, you all options are on the table, we always sat that.
MCCAIN: I can't sit here in front of you and say I'm absolutely in favor of military action. But there has to be a red line that they cross they must face the consequences.
Now, that action take a variety of ways besides all out air attacks. But the fact is, the Iranians despite the harm to their economy and there have been significant harm to their economy, have not changed iota from the path they are on.
WALLACE: Let me ask you about another county, Egypt, which has just held a first round --
MCCAIN: Should I just say finally on that?
MCCAIN: That option has to be on the table and the Iranians have to know that otherwise, there will be no success in these negotiations.
WALLACE: Egypt has just completed its first round of the first free elections for president ever. It looks like there's going to be run off between Mohammed Morsi of the Muslim Brotherhood and Ahmed Shafiq, a former general who was Mubarak's last prime minister.
Do we support Shafiq because he would keep close relations with Israel and the U.S. and because he would block the Muslim Brotherhood from taking control of the entire country and possibly creating an Islamic state?
MCCAIN: We can't weigh on this, Chris. It would help whoever, we are not -- there is a strong anti-Americanism in Egypt for a whole variety of reasons. But we have to stay out of it, if it's a fair democratic process, we have to recognize the result of and we have work with whoever wins.
WALLACE: What if it is a Muslim Brotherhood president and a Muslim Brotherhood parliament?
MCCAIN: I think that could have consequences. But I would always point out there is different gradients of the Muslim Brotherhood. They were once the only opposition to Mubarak in Egypt. Mubarak was going to go, and anybody who doesn't think that doesn't recognize the hinge of history.
And so, we have to work with the regime. I am very worried mainly about their economy, which is running out of hard currency. They are facing extreme economic difficulties and we have to respect that election if it is free and fair and work with who ever is the winner.
But I would say right now, there's a very strong possibility of polarization of Egyptian society no matter who wins.
WALLACE: We turned to Afghanistan. We talked about American soldiers in harm's way. We still have 90,000 troops. We're going to get down to about 60,000 by the end of the summer and the president has set a time line with the NATO allies to get all of our forces in two and a half years.
WALLACE: You and other critics of the president say that we shouldn't have this timeline. We need more time to help train the Afghan forces so they can defend themselves.
Here's my question: who is training the Taliban? They don't seem to need 10 years of training to fight. Why do our allies need 10 years to train?
MCCAIN: Well, for a variety of reasons, including insurgency warfare doesn't receive the training that it does for a regular military counter-insurgency.
But most importantly, again, the Taliban believed that we are leaving. The president has announced withdrawal after withdrawal.
The president has overruled the recommendation of military commanders who he has -- not recommended -- who he has put in their positions. And the president has increased the risk every time. Famous story about the Taliban captive and the American interrogator. And he says, you've got the watches, we've got the time.
That's what the Taliban believe today. There's the Haqqani network working with the ISS, killing Americans.
WALLACE: Pakistani intelligence.
MCCAIN: There is still corruption in most levels. And also now, the administration plans on reducing the Afghan national army by some 100,000 at a time when they would be in the most severe economic difficulties. Again, we the entire region believes that the United States of American is withdrawing. They have to live in the neighborhood and they are making accommodations and that's not good for America.
WALLACE: Before I'll let you go, I want to talk briefly about 2012 politics. You have criticized President Obama for going after Mitt Romney and Bain Capital as, quote, "class warfare at its worst."
So, we had our researchers look at what you were saying four years ago about Mitt Romney when you were running against him in the primary.
MCCAIN: Here we go.
WALLACE: And you said this about Romney. "He managed companies, and he bought and sold, and sometimes people lost their jobs." And your campaign manager said this about Bain. "You go and buy companies, you strip away the jobs, and then you sell them."
So, weren't you engaging in the same kind of class warfare?
MCCAIN: First of all, I don't speak for my campaign manager, he speaks for himself.
But, in fact, this is the free enterprise system. The only place in the world that I can recall where companies never failed was the old Soviet Union. This is what investors do in free enterprise and capitalistic system. When you take $5 million in a warehouse and you end up with Staples, I would argue that that's what it's all about.
And yes, free enterprise system can be cruel. But the problem with this administration is that small business are the one who had suffered the most, the kind that need investors, the kinds that don't need the hundreds of pages, thousands of pages of regulations that continue to plague them and have them hold back on the hiring investment.
And this is Memorial Day and I thank you for having me.
WALLACE: Well, I was just -- I wanted to in 30 seconds or whatever time you need as the son and grandson of military men and as a war hero yourself.
MCCAIN: And a son in the Navy. One who was in the Marines, too.
WALLACE: Your thoughts on Memorial Day.
MCCAIN: It's a great honor of my life, it was to have the opportunity long ago and far away to serve in the company of heroes. Men like James Stockdale and Bud Day, and Robbie Reisner and Bill Lawrence. They inspired us to do things that we never would have been capable of.
Our motto was "home with honor". And because of their leadership and their love for us, we did come home with honor.
WALLACE: Senator McCain, we want to thank you for coming in today. And especially on this weekend, we thank you for your service to the nation. Thank you very much.
Up next, the Obama contraception mandate the Catholic leaders are now challenging in court. The archbishop of Washington, Cardinal Donald Wuerl, joins us next.