Following is a transcripted excerpt from Fox News Sunday, December 16, 2001. 

TONY SNOW, HOST, FOX NEWS SUNDAY: With us now to talk about the war on terror and the resumption of political hostilities in Washington is former Democratic vice presidential candidate Senator Joseph Lieberman. 

Also here, our Fox News panel: Brit Hume, Washington managing editor of Fox News; Mara Liasson, national political correspondent for National Public Radio; and Juan Williams, national correspondent for NPR. 

Senator Lieberman, Iraq. 

U.S. SENATOR JOSEPH LIEBERMAN, D-CONN.: Yes. 

SNOW: Where? What do we do? 

LIEBERMAN: Well, I was encouraged by Secretary Powell's comments today. I thought they were a little bit more forward leaning, both to state what is true, but I haven't heard that loudly before, which is that three years ago, Congress adopted the Iraq Liberation Act. And it said loud and clear that it's national policy of the United States to change the regime in Baghdad, to get rid of Saddam Hussein. 

I think it's very important that that begin with support of the Iraqi opposition. Because they can, if helped by us, play a role in Iraq similar to what the Northern Alliance and the Pashtun and others have played in Afghanistan. 

The fact is that the war against terrorism cannot end before Saddam Hussein is out of power in Iraq, because he is the world's most powerful terrorist. He has the means, as you discussed with Secretary Powell, and he certainly has the motive, which is the continuing deep desire for revenge against the United States. So we better get rid of Saddam before we declare victory in the war against terrorists. 

MARA LIASSON, FOX NEWS: But, Senator Lieberman, you're not advocating going to war against Saddam the way we did against the Taliban. In other words, you're saying support the Iraqi National Congress until they get to the point that they can be a proxy for us, which they're not now? 

LIEBERMAN: Mara, those decisions I ultimately leave to the military. 

I tell you, I wish that our government had started implementing the Iraq Liberation Act early in 1999 and since, which meant supporting the Iraq opposition. If we had, we might have been in a position now to begin actual military combat against Saddam Hussein's regime, but we didn't. 

So we've got to get it in place and leave it to the military to decide when we're ready to strike. He's obviously not locked the inspectors out of Iraq for the last three years because he didn't like their personalities. He's developing — has chemical and biological and is developing nuclear weapons, I'm convinced. 

BRIT HUME, FOX NEWS: Senator, back to Afghanistan for a moment. If indeed Usama bin Laden has escaped for now, how big a blow is that, first of all, militarily and psychologically to the cause? 

LIEBERMAN: Well, I mean, psychologically, we have moved with our allies on the ground in Afghanistan to achieve a great victory, which is to defeat the Taliban and now apparently to defeat Al Qaeda in Afghanistan. 

But remember the old sports expression, it ain't over till the fat lady sings. In this case, it ain't over till the big guy, bin Laden, is killed or captured. 

So it's — there's reason to celebrate what appears to be the cessation of hostilities in Afghanistan and, therefore, a victory. But wherever bin Laden goes, Al Qaeda will remain alive and a threat to us. So we have to pursue and capture or kill him. 

JUAN WILLIAMS, FOX NEWS: Senator Lieberman, so what do you do if you capture Usama bin Laden? 

LIEBERMAN: Well, I always have believed, as Secretary Rumsfeld has said, that Usama bin Laden will be killed either by himself or his own troops because he will not want to be taken captive. Or, because he's surrounded by a force, he'll be killed in a final battle. 

But if for some reason he surrenders, he certainly should be brought before a military tribunal. 

WILLIAMS: Now, on that point, the U.S. has said that they will take Zacarias Moussaoui to trial in a U.S.-style court. You have come out and said you're opposed to that, you think a military tribunal should be used. Ted Kennedy, your colleague, your Democratic colleague, has said, this is totally appropriate, otherwise a military tribunal would amount to an end run around the U.S. justice system. 

Why are you opposed to having this man brought to trial in the United States? 

LIEBERMAN: You know, I think part of the problem here is that we are seeing this pursuit of people like Moussaoui as traditional criminal investigation and prosecution. 

It's not that. What happened on September 11 was not just another domestic crime, not a domestic murder, not even a mass murder. It was an act of war. 

And military tribunals are established to try people who violate the laws of war. And the most significant cause for a military tribunal is if someone in war attacks and kills civilians. 

Well, Moussaoui, by the information in the indictment, did just that. He was a co-conspirator with bin Laden and the 19 others who brought themselves to their death in those horrific attacks. So he's not a citizen. He does not deserve the rights given to an American citizen tried in a criminal court. He's a war criminal. 

And I appeal again to President Bush and to Attorney General Ashcroft to reconsider this decision. Because if Moussaoui is not brought before a military tribunal, who will be? 

HUME: Well, Senator, let me — I can't help but ask this question of somebody who is a member in good standing, indeed perhaps one of the leaders of the Democratic caucus, a number of whose other leading members, Senator Leahy and others, believe that the administration made a terrible mistake by even issuing the order under which military commissions or tribunals could be established. 

I take it, therefore, that you disagree strongly with your colleagues about that and believe, indeed, that the administration so far has not been aggressive enough to your satisfaction on military tribunals, correct? 

LIEBERMAN: There's a couple of parts to that, Brit. 

First, the authority of the president to appoint military tribunals during times of war is well-established throughout our history, and it's been sustained by the Supreme Court. 

I think what Senator Leahy and other colleagues are concerned about is the due process of those military tribunals. And I believe that the administration ought to be forthcoming in the guidelines that it issues to reassure those who think that these will be secret star chambers, which I believe that they will not be. 

Then the question is, who do you use the military tribunal for? And Zacarias Moussaoui may — I say this with particular poignancy this morning, as we fear that bin Laden has escaped from us in Afghanistan — Zacarias Moussaoui may be the person most closely connected to the attacks against us on September 11 that we ever have in our hands. 

I fear that, with all the circumstantial evidence in the case against him, if you bring him before a federal district court, with all the rights that defendants have in those courts, this big fish may get away, and that would be outrageous. 

LIASSON: Senator Lieberman, I'm going to switch subjects for a minute and talk about the Middle East. Secretary of State Powell did not seem ready to state what the consequences would be if Yasser Arafat does not do what the U.S. has been demanding over and over again, which is crack down on Hamas. 

Do you think that the U.S. should spell out clearly what the consequences should be, and if so, what should they be? 

LIEBERMAN: Well, there's not a lot of options here, I mean, it seems to me that the rising and justifiable chorus of frustration with Chairman Arafat's leadership is going to reach a pitch. 

And the only alternative is to — the fact is that, at some point, regardless of what the administration does, if Arafat does not control the terrorist elements within his control, and arrest those outside of his control in Hamas and Islamic Jihad, there will, I predict, be a rising bipartisan chorus in Congress demanding that we, the United States, suspend our relations with him. 

LIASSON: Will you lead that chorus? 

LIEBERMAN: Not yet. I think he deserves some time to go at this. 

Incidentally, let me add just a word here. In terms of the next steps in the war against terrorism, unfortunately, Arafat has lost control of some elements of the Palestinian community. But Hamas and Islamic Jihad are sponsored and given homes in Damascus and Tehran. 

To me, the most immediate next step in the war on terrorism for the United States is to begin to pressure Syria and Iran to cut off support for Hamas and Islamic Jihad and Hezbollah, because... 

LIASSON: Before Iraq? 

LIEBERMAN: Yes, that, because there's a fire going on now, an explosive fire between the Israelis and the Palestinians. 

SNOW: Senator... 

LIEBERMAN: If we don't stop it, it could spread to the region and truly affect America's stability. 

SNOW: Senator, as we were getting ready for this segment, we talked about political battles here on Capitol Hill. We better get to those before we're done. 

LIEBERMAN: OK. 

SNOW: Does the economy need a stimulus now? 

LIEBERMAN: I think it does. The reports on the economy are mixed. There's a little bit of good news. But, look, the painful reality is that in the last three months, more than a million Americans have lost their jobs. Retail spending was down dramatically in November. 

So while we shouldn't overstate what a $70 billion stimulus package could do in a $10 trillion economy, it's going be more helpful than not. 

(CROSSTALK) 

WILLIAMS: ... always saying that this is Mr. Bush's recession. Would you as a Democrat agree with that? 

LIEBERMAN: I'll tell you this. There was a business cycle that, after all the great years of the 1990s, was bound to have some effect. That's part of it. 

I do that the Bush economic program, and particularly the impact of a tax cut on long-term interest rates in the United States now begins to have an effect in creating the recession. 

Let's put it this way. I think that while some natural economic forces have brought us in a recession, the Bush economic program has deepened it and is not helping us get out of it. 

HUME: Do you want to raise taxes? 

LIEBERMAN: No, I don't want to raise taxes. 

HUME: Well, isn't that you get out of a hole like this? Your belief is that the tax cut presumably is too big. So you'd like to make it smaller, wouldn't you? 

LIEBERMAN: I think that what we've got to do is try to get us back in balance. We had several years in which... 

HUME: How do you do that, Senator? 

LIEBERMAN: Right now we've got to stimulate the economy. So I'd say we do it in the way that is temporary. That's the most important thing. 

I think some of the business depreciation cuts are important right now. I think the rebates to taxpayers — I like the idea of a national... 

HUME: So you want more tax cuts. 

LIEBERMAN: ... sales tax holiday. Short-term and limited, so we don't dramatically increase the deficit that's already coming. 

SNOW: Senator, final question. Senator Daschle wants to extend unemployment benefits even though the economic research indicates that when you extend those benefits, you extend unemployment. In fact, that was one of the insights behind welfare reform. If you set a date certain for getting rid of benefits, people find jobs. 

Would you not like to see more money spent instead on helping people find jobs rather than extending unemployment? 

LIEBERMAN: Look, Tony, in the best of all worlds, we would do both. I think there is a need for — obviously, the most important thing is for the government to act in a way to help the business community, the private sector, grow again. That's the way jobs are created. 

And some of the tax cuts I've just talked about, a national sales tax holiday for 10 days. I even think we can find some bipartisan agreement on a short-term capital gains cut to help that happen. 

The most important help, as I talked to unemployed people around the country, or people who are afraid they're going to be unemployed, the most important help they want is with their health care for their families. And I think we're in reach of a bipartisan agreement that can make that happen. I hope we do it. 

SNOW: Before Christmas? 

LIEBERMAN: Yes. I mean, it's got to be before Christmas or it's not going to happen because, though we're here a lot longer in Washington than we thought, we're sure going to go home for Christmas. 

SNOW: All right. Senator Lieberman, thanks for joining us. 

LIEBERMAN: Thank you. 

SNOW: Thanks. 

Copyright © 2001 by eMediaMillWorks, Inc. No portion of this transcription may be copied, sold or retransmitted without the express written authority of eMediaMillWorks, Inc.