Following is a transcribed excerpt from Fox News Sunday, Oct. 13, 2002.
TONY SNOW, FOX NEWS: American officials fear a recent series of terror attacks may signal the beginning of a new offensive in the war on terror.
A car bomb in Bali, Indonesia, destroyed a crowded nightclub Saturday, killing at least 187 people and wounding 300 more. A second bomb exploded near the U.S. consular office, but no one was injured there.
No group has claimed responsibility for the attacks, but many experts fear that Indonesia, the most populous Muslim nation, is becoming a haven for terrorists.
Also this week, Lance Corporal Antonio Sledd was killed in Kuwait by a gunman with a possible link to Al Qaeda. And authorities in Yemen say they believe terrorists set off an explosion last week that ripped through the hull of a French oil tanker.
Finally, Ayman Al-Zawahiri, Usama bin Laden's number-two man, issued an audiotape that threatened new attacks against Americans. U.S. officials think the tape was recorded recently.
Now, these events all unfolded during a week in which both houses of Congress authorized the use of military force if necessary against the regime of Saddam Hussein.
What's next in the war on terror? For answers we turn to Assistant Senate Minority Leader Don Nickles. Also here with question, Brit Hume.
Senator Nickles, first, based on the latest news story, is Al Qaeda up and running again?
SENATOR DON NICKLES (R-Okla.): Well, it looks like there's a lot of terrorist factions and, I would assume, some of them with relationships with Al Qaeda.
And we've had some success -- you saw these incidents in the last few days, but we've had some success internationally. And there was some terrorists that were intercepted and captured in Italy, in Germany, the United States, so we're making some progress. But there's a lot of terrorists out there, a lot of people who want to do damage.
It's all the more reason for Congress to pass the homeland security bill. We haven't done that yet. We assured the president that we would. We's asked us umpteen times to do it, but we had this big dispute over whether we're going to expand the power of public employee unions or we're going to give the president the discretion he needs to put this department together.
But we have real problems and real challenges with terrorists, and so I think we need to do everything we can to protect our homeland and our friends overseas as well.
SNOW: Are you worried that we need more force in Afghanistan at this point to continue fighting Al Qaeda?
NICKLES: Well, Aghanistan's just a little part of it. I think we've had remarkable success in Afghanistan, both in defeating the Taliban -- if you think of it, most of the war was won, we had about 200 troops on the ground. It was a phenomenal success in Afghanistan.
But there are still some remnants there, there are still some some remnants in Pakistan, there are still some remnants in the United States. You know, when you have people arrested in Buffalo and Oregon, you realize, wait a minute, this network of terrorists has expanded throughout the world, and we have to be ever vigilant, we have to be ever aggressive.
SNOW: So we need a lot of resources?
NICKLES: Well, we're putting in a lot of resources.
SNOW: Now, Democrats argued last week, not many of them, 23 in the Senate, but some of them argued against a war resolution in Iraq. And one of the key arguments was that this, in fact, is going to weaken our ability to wage the war on terror militarily elsewhere in the world.
How do you respond?
NICKLES: Well, I disagree with that. I think they're coupled. You probably have the largest terrorist regime in Iraq. And so we have to be very aggressive in both fronts.
And I think we've had good success. The resolution that we passed in the Senate, I think, was a very positive step.
It's interesting, though, the same people that said that, we voted in 1998 to take appropriate means necessary to enforce U.N. resolutions against Iraq. That was unanimous. That was done in one day. And then, now, after a week of debate, some people are saying, "Well, wait a minute, maybe we didn't really mean that in 1998."
BRIT HUME, FOX NEWS: Senator, do you suspect or fear that this round of shootings in the Washington D.C. area may be terrorist-related?
NICKLES: I kind of doubt that it is.
NICKLES: I don't know why, that's just a suspicion. It's strange, we're unaccustomed to this anywhere in the United States, and anytime you have somebody that's a mass murderer that's doing it and he's doing it in a a way different than somebody's done it before, it creates a lot of unease.
But for whatever reason, I don't know, I haven't suspected it being a terrorist. It doesn't fit any of the profiles we've seen in the past. It could be, I hope not.
You know, this is somebody who obviously doesn't care about human life and enjoys playing this game of killing people and killing innocent people, including kids. You know, I hope he's captured soon.
HUME: Back to the Hill, Senator. You mentioned the terrorism, the Department of Homeland Security bill. What is your understanding of what is going to happen on that? Is this going to pass before Congress goes home?
NICKLES: Well, I'm kind of starting to doubt it. I think we're going to go home probably next Thursday or Friday, and it hasn't happened yet. Maybe it'll break in the next couple of days. But the president wouldn't want...
HUME: What's the hold-up?
NICKLES: Well, the hold-up's this big dispute over are we going to take away some of the president's existing authority in dealing with public-employee unions? The Democrats are trying to enlarge the power of the public-employee unions, and the president says, no, he's not going to do that. He needs the flexibility to put this department together.
HUME: Well, they obviously have a side of the story, too, Senator. But this has always had the earmarks of an issue that, under normal circumstances, could and would be compromised. Do you not see any sign of that at this point?
NICKLES: Well, I would like to that we would pass a bill, give the president at least the same authority that he has today when he deals with FAA.
HUME: So, there's no change on that?
NICKLES: Well, not undercut the president's existing flexibility and authority to say he can waive certain rules when it comes to national security.
HUME: All right, one more terrorism-related bill is the terrorism insurance bill. That's been in a logjam for a long time. It's been in conference. What's the state of play on that?
NICKLES: The state of play basically is the Democrats say we don't want to have a terrorist reinsurance bill...
HUME: I haven't heard them say it that way exactly, Senator.
NICKLES: Well, let me state, they don't want to have a bill unless they also have the right to be able to sue the victims of terror. And they want to have...
HUME: Sue the victims, excuse me?
NICKLES: Yes, they want to have the power...
HUME: Sue on behalf of the victims.
NICKLES: No, they want to be able to sue the people that own the buildings, who are victims of terror. They want to be able to have unlimited liability or be able to sue them. And we're saying, no, no, let's exempt the people -- the World Trade Center, should the trial lawyers be able to go after the owners of the World Trade Center?
We're saying, if the federal government's going to back this insurance up and write big checks, we want to make sure not only can they not -- that the trial lawyers not only sue the government, but also not sue the victims of the terror, the people...
HUME: So that bill's dead?
NICKLES: No, it's still possible it could be saved. We were very close to saving it last week, but unfortunately it looked like the Democrats said, well, wait a minute, we don't want to have this small amount of protection against the owners of these buildings.
SNOW: Senator, let me show you a Fox News Opinion Dynamics poll. We asked people what concerned them the most as we head into the election, and the results are pretty interesting.
What they said was that their number-one fear, or their number- one issue was the economy and jobs, 45 percent. Terrorism and war was only 29 percent. Democrats are saying right now that that needs to be the issue.
The president has talked about the economy, but so far all he's offered is the terrorism insurance bill that you have suggested. That's 300,000 construction jobs. Two million people have lost work since George W. Bush took office.
What does he have as an economic stimulus plan, and why isn't he putting something before your chamber and the House right now?
NICKLES: Well, Tony, the president has a lot of ideas that would create jobs. Unfortunately the Democrats have stifled it. As a matter of fact, what the Democrats are doing now is throwing stones at the president. But if you look, what are they offering? It's nothing.
NICKLES: But let me just give you a couple of examples. The best thing we could do to help the economy would show some fiscal discipline. Under the Democrats in the Senate, we haven't passed a budget, first time since 1974.
SNOW: The president also signed a farm bill that most people agree was laden up with pork, literally and figuratively, billions of dollars over. But he figures, OK, I need both sides here, and the president has not vetoed a bill in what is now the freest-spending Congress in a generation.
NICKLES: Exactly. You mentioned the freest-, biggest-spending Congress in a long time, and that's my point. The Democrats, we haven't passed a budget, we haven't passed appropriation bills. The president hasn't had any appropriation bills to veto because the Democrats -- we haven't passed them. This is grossly irresponsible. And we didn't pass the appropriation bills because we didn't pass the budget.
SNOW: Well, still, as Brit said, we know that there are two sides of the argument. What Americans want to hear is what the president's plan is. What specifically has he put before you to vote on that has not yet been taken up?
NICKLES: Well, you mentioned the terrorism reinsurance bill. That would probably free up -- well, that would help us do billions of dollars' worth of construction projects.
He's also proposed a national energy plan that would create hundreds of thousands of jobs. Unfortunately we haven't been able to get that through Congress, and it's in conference right now. But the Democrats say, oh, we don't want to have drilling in ANWR, heaven forbid, that might make us less dependent on the Middle East for oil...
SNOW: In terms of taxes or other issues...
NICKLES: The president has proposed -- thank goodness the president passed his tax package when the Republicans were still in control of the Senate, because that put money in people's hands, that helped reduce the impact of the recession that we inherited from the Clinton administration.
He's also said, let's make some of these tax cuts permanent.
We did pass a stimulus package that had accelerated appreciation (ph). That also helped cushion the negative impacts...
SNOW: But you're talking about what's happened in the past. You've got an election coming up...
NICKLES: But the president's also said, let's make these tax cuts permanent, let's help make sure people can count on it. The president's also said, let's show some fiscal discipline. And again, no budget, no appropriation bills.
You know, so a lot of people are throwing stones in Congress. I mean, look around, wait a minute. Alan Greenspan said that there's two things you could really do to help the economy: one, show fiscal discipline -- Congress certainly hasn't done that -- and then to help assist trade. We did pass the trade promotion authority. I think that was a positive thing that this Congress did.
SNOW: Prediction -- I think I know the answer -- do you think Republicans are going to get the Senate back?
NICKLES: I think we will. I think we have an excellent chance. There are a lot of really close races out there.
HUME: Which of those close races -- we know which some of them are -- which are the ones you think that you're going to have a pick up?
NICKLES: I think we'll pick up in New Jersey, we have an excellent chance. And that's with Doug Forrester, despite the fact that the Democrats are trying to change the rules.
HUME: He's behind, though, now.
NICKLES: Well, he's by a couple, but the very games that they are playing, I think people will resent that in New Jersey.
HUME: Where else?
NICKLES: Also, we have an excellent chance in Georgia. Saxby Chambliss is just a couple of points behind.
NICKLES: He's been gaining in every poll I've seen for the last month or so. Good chance in Georgia.
I think in Missouri we're going to win with Jim Talent. I think in Minnesota, Norm Coleman will beat Paul Wellstone. John Thune can win in South Dakota. And we have a pretty good chance in Iowa.
HUME: Well, that sounds like almost a sweep there, Senator. Which races do you figure you might lose?
NICKLES: I don't think we'll lose any.
SNOW: (OFF-MIKE) Arkansas.
HUME: How about Arkansas? You're not afraid of losing...
NICKLES: I that we'll win. I was in Arkansas with Tim Hutchinson. We had 400-and-some-odd people. Tim Hutchinson's going to win that race.
SNOW: All right, Don Nickles, thanks for the predictions and thanks for joining us.
NICKLES: Thank you.