The following is a rush transcript of the June 19, 2011 edition of "Fox News Sunday With Chris Wallace." This copy may not be in its final form and may be updated.

CHRIS WALLACE, ANCHOR: I'm Chris Wallace.

With our nation's military fighting multiple wars while facing budget cuts, there's a change coming at the top.

(MUSIC)

WALLACE: As the secretary of defense nears his final salute to the troops, we'll ask him about Afghanistan and Libya, whether Pakistan can be trusted. And working for two very different presidents. It's a special exit interview with Defense Secretary Robert Gates.

Then, I have been waiting months for this one.

(BEGIN VIDEO CLIP)

STEWART: I come on "Fox News Sunday", be hard on me, unless I'm announcing I'm running for president.

(LAUGHTER)

WALLACE: Candidate or not. We'll grill the bad boy of political comedy about liberal media bias, Fox News, and what he really thinks of President Obama. Jon Stewart in his first appearance on a Sunday talk show.

Also, the president and congressional Democrats pick apart the GOP budget without coming up with one of their own. We'll ask our Sunday group whether playing the waiting game is paying off.

All right now on "Fox News Sunday."

And hello again from Fox News in Washington.

We have political odd couple this week. We'll talk with comedian Jon Stewart a little later. But, first, we're honored to sit down wit Defense Secretary Robert Gates, just days before he leaves office -- having serve Presidents Bush and Obama in his demanding job.

Mr. Secretary, welcome back to "Fox News Sunday."

DEFENSE SECRETARY ROBERT GATES: Thank you.

WALLACE: Today marks the 90th day of U.S. involvement in Libya. Congressional critics say that s that the administration is now officially in violation of the War Powers Act. If Congress cuts off funding, pulls us out of Libya, what do you think are the consequences for U.S. national security and our standing in the world?

GATES: Well, we've been through this on a number of occasions, even since I've secretary, where Congress has threatened to cut off funding in Iraq and on several occasions and so on. Frankly, I think cutting off funding in the middle of a military operation when we have people engaged is always a mistake.

By the same token, I would say that, you know, I was in the White House and the NSC staff not long after the War Powers Act was passed. And I believe that President Obama has complied with the law, consistent in a manner with virtually all of his predecessors. I don't think he's breaking any new ground here.

WALLACE: And so, therefore, you don't think he's in violence of the War Powers Act?

GATES: No. And I think -- but I think he's been clear as well, that he would welcome the Congress passing a resolution of support.

WALLACE: Secretary Gates, is the U.S. involved in the hostilities in Libya?

GATES: The way I like to put it is from our standpoint at the Pentagon, we're involved in a limited kinetic operation. If I'm in Qaddafi's palace, I suspect I think I'm at war.

WALLACE: President -- the reason I'm asking, of course, is that President Obama, and you kind of duck the question very ably I must say. President Obama told Congress this week that the War Powers Act does not apply to what's going on in Libya.

The official White House report to Congress said this -- "U.S. military operations are distinct from the kind of hostilities contemplated by the War Powers Act." And the president reportedly rejected the legal opinion of the Pentagon's general counsel, Jay Johnson, as well as the Justice Department's Office of Legal Counsel.

Question: are you comfortable with that?

GATES: I think that the president is in a position to take the advice of variety of people. And also on legal, as other matters, that he has the opportunity to make his own decisions. I think that -- in fact, I'm confident that he would not make judgment along these lines if he were not confident that he was acting a constitutional manner.

WALLACE: Well, I understand that you're saying that he's confident and comfortable with the fact that he is operating a constitutional manner. But, you know, to someone who sees we're spending, what, $10 million a day, we have drones bombing Libya, we have surveillance, we have intel -- how is that not hostilities?

GATES: Well, I'm going to defer to the White House and to the president on the legal interpretations.

WALLACE: You said that getting involved in Libya in the first place was the only major disagreement that you have had with this president. Do you agree with the current strategy of letting NATO take the lead of as it's being called the strategy of leading from behind? Is that a strategy for success?

GATES: I think it's absolutely the right strategy. When this operation started, the president, we were at war in Iraq, still. We had 50,000 troops in Iraq. We had 100,000 troops in Afghanistan. We had 24,000 people engaged in Japanese earthquake relief. We have a number of commitments around the world.

And so, the arrangement and the understanding the president had with our key allies from the very beginning was the U.S. would come in heavy at beginning, establish a no-fly zone and then hand off the operation to our allies and that we would recede into a support role. That was his decision going in and he stuck to it.

WALLACE: But can this work? Can this get Qaddafi out of power?

GATES: Yes, I think -- actually, I think it can in over time. I think --

WALLACE: Time, meaning?

GATES: -- talking to various people, the chairman and others, I think we all sense that the Qaddafi regime is getting weaker by the day. Their military forces are being attritted every.

So, I think it is a matter of time. I do know -- I can't make a prediction how long it will take. But they clearly are getting significantly weaker as this effort goes along.

WALLACE: President Obama is now deciding how many troops to pull out of Afghanistan as part of the July drawdown that he announced back in December of 2009, when he announced the troop surge.

The Wall Street Journal reports that the military wants to keep -- the majority, the vast majority of the 33,000 surge forces there, to the fall of 2012, through two more fighting seasons. Is that true?