Following is a transcribed excerpt from Fox News Sunday, Jan. 19, 2003.

TONY SNOW, FOX NEWS: Since deciding not to run for president, Senate Minority Leader Tom Daschle has cut loose on President Bush.

(BEGIN VIDEO CLIPS)

SEN TOM DASCHLE, D-S.D.: I must say, there is only one word I can think of. This plan is obscene.

DASCHLE: We don't yet know what the administration's official position is. We have not been briefed on Iraq.

DASCHLE: I think it sends a shockwave through the community.

DASCHLE: We can't afford the money for 1,075 FBI agents, but we can afford an $89,000 tax cut for 226,000 millionaires.

(END VIDEO CLIPS)

SNOW: Senator Daschle joins us now. Also here, Brit Hume, Washington managing editor of Fox News.

Brit?

BRIT HUME, FOX NEWS: Senator, the administration is saying today that the president has all the authority he needs, from the U.N. and elsewhere, to conduct a military operation against Saddam Hussein's Iraq if he chooses to do so. Do you agree with that?

DASCHLE: Well, Brit, I think what the president has to do is two things. First of all, he has to continue to share with the American people his evidence that there is a compelling, imminent threat on the part of Iraq. Secondly, I think he has to demonstrate that he has lived up to the U.N. obligations and that clearly all diplomatic means have failed before we take military action. If he's done those two things, then I think you'll see generally the American people support him.

HUME: Right, but what about just the narrower question of whether he has the authority from Congress and the U.N. to act if he chooses to do so?

DASCHLE: I think he has the authority that Congress gave him, so long as he fulfills his obligation under that resolution.

Keep in mind, that resolution required a number of things. Some of the things he has not done so far. It required a 60-day report after the resolution had passed. That hasn't been provided to us yet. It provided ongoing -- a requirement for ongoing consultation. That hasn't really been done. We haven't seen Don Rumsfeld since October 16th in a briefing to the entire Senate.

So clearly, I think there has to be greater consultation. There has to be a willingness to report to the Congress and the American people, and there has to be a willingness to live up to the obligations of the U.N. So far, I would say, those things have not been done to most people's satisfaction.

HUME: What about your satisfaction, or lack of it, with what Saddam Hussein has done and not done? What about the initial report he was to make, which was supposed to declare everything he had? Even the French, I think, found that deficient.

Do you think that Saddam Hussein has committed a further material breach since the passage of the U.N. resolution?

DASCHLE: Well, Brit, I think it's fair to say that whether or not Saddam has totally complied to his obligations is something that I don't think anybody can say satisfactorily.

HUME: Are you satisfied with what you've seen so far?

DASCHLE: No, I'm not satisfied. Absolutely not.

HUME: Well...

DASCHLE: No, I think there has to be a lot more willingness on the part of Saddam and his government to comply. There has to be a lot more forthcoming information. There has to be a willingness on the part of the Iraqis to allow complete access. So far, I think you've seen a modicum of willingness to do that.

But clearly, this ought not be a unilateral act by the United States. This should not be something the United States does alone. I don't think it would be in our interests for the United States to come off as the Red Coats in all of this. We've got to make sure we've got that international coalition and that we're consulting adequately not only with the American people, but with the international community.

HUME: Well, does that international coalition that you would like to see mean -- necessitate a further U.N. resolution before there could be any military action?

DASCHLE: Well, Brit, I think that remains to be seen. I think that it is important for us to assure the American people, as well as the international community, that the U.N. is with us.

That can take a lot of different approaches. I think the more the U.N. can demonstrate its commitment to the U.S. effort, the more we can show that this is an international effort, I think the stronger the support we have in the United States.

SNOW: You said a minute ago that the president needs to demonstrate that there's a compelling, imminent threat. Those were your exact words. Has he?

DASCHLE: So far, I don't think he has. I think that there is -- there are two real issues here, Tony.

The first is, to what extent does he have weapons of mass destruction? In that regard, there is no clear-cut evidence that there is a compelling, imminent threat.

There's another goal, and that is regime change, something that I've supported for a long period of time. That, too, is something that ought to be the subject of a great deal of this effort.

The question is, how do you bring it about? Do you do it through the U.N.? Do you do it in an international effort? I believe that that is the only option we have available to us, to do it through the international community.

SNOW: And to wrap up Brit's question, if the U.N. -- because it's pretty clear the French and others, for whatever reasons, seem ready to stonewall any efforts to take military action.

If the president does all the other things you've suggested, would it then be appropriate, in your view, and would the Senate support the president, if he assembled a so-called coalition of the willing, as President Clinton had to do in Bosnia?

DASCHLE: Well, that's hypothetical, Tony. My feeling is, obviously, that the most significant thing he can do is to continue to work through the U.N. and the international community.

If that fails, then obviously he has to make a very difficult choice: Can he take willing partners and build the coalition? That's been done before. Is it as strong? Clearly not.

He had promised the Congress and, I think, the American people that he would work through the U.N., that the U.N. coalition would be part of whatever international effort we'd make. That, to me, is still the criteria by which we judge the success of an international effort.

SNOW: Is there anything you'd do differently?

DASCHLE: Well, I think that the most important thing I'd do differently, if -- and we don't know what the president's going to do -- but I think it's very, very critical for the president to be a lot more consultative with the Congress than he's been so far.

As I say, he's failed to meet that 60-day deadline of reporting to the Congress as to exactly what his intentions are and what the circumstances are. That report is over a month old now.

I think there has to be more consultation. I think you'll see Republicans and Democrats saying that.

SNOW: You've been very critical of the president on getting involved in the University of Michigan admissions case.

Let me ask you a question. Isn't it racist to assume that black students cannot compete on a par with white students?

DASCHLE: Tony, that isn't what we're saying. All we're saying is that it's very important in our society to have diversity, to have equal opportunity.

SNOW: But the president says that.

DASCHLE: Well...

SNOW: What he says is that the University of Michigan has tilted the scales in its admission policies, and it is assumed that black and Hispanic students simply don't compete on a par with white students and, therefore, need some extra points when it comes to admission to the law school and the undergraduate institution.

DASCHLE: Tony, I think what the president is saying is that he's for diversity so long as it happens by accident.

I don't -- you know, when you look at the...

SNOW: When does he say that?

DASCHLE: He said he's for affirmative -- for trying to ensure diversity, but look at what's happened at the University of Texas. They abolished the affirmative action program. You saw African- American admissions for law school drop 88 percent. You saw Hispanic admissions drop 64 percent. That's at the University of Texas.

What we're simply saying, and what the University of Michigan is saying, is that, along with your family connections, along with whether or not you can shoot a basketball, along with whether or not you come from a rural area or an economically deprived area, race ought to count, race ought to matter.

HUME: Well, isn't what the president's really saying here, it's not that race should not count at all or should not be a factor -- what it strikes me from the brief that was filed is that he and his legal team are saying is, this was so large a factor as to constitute, in effect, a quota, and that while race may be taken into consideration, when you award 20 points to certain minority groups and not others on the basis of race and, say, as has been pointed out, only 12 for your test scores, that that is out of whack and constitutes, in effect, a quota.

Would you disagree with that idea?

DASCHLE: I strongly disagree with that, Brit. I don't think that's at all what Michigan is saying.

What Michigan is saying is that, look, there are a lot of different factors that make up the diversity of a student body, race ought to be one of them, and that there ought to be some way with which to ensure that, as you calculate how you create that diversity, without quotas, without any emphasis on exclusive consideration of race, that there ought to be an opportunity to consider that as a major factor in creating the diversity that you look for, not only on a campus but in society itself.

SNOW: Does your office employ different standards in order to ensure diversity?

DASCHLE: My office takes into account a lot of different factors, including race, absolutely. We want diversity. We really want...

SNOW: But what I'm really saying is, in terms of professional qualifications, you want good people, and you go out...

DASCHLE: Absolutely.

SNOW: ... and you try to find people who meet the standards.

DASCHLE: But you know what, Tony? I'm sure you do it at Fox News too. You really want the wealth that comes with diversity.

Now, you have probably different ways of doing it here than we might have in our office. All we're simply saying is that using this point system is a way that works for a university.

Now, it may not be the only way, but you can't simply ask for diversity and not have a plan to get there. I think that's really what the president is saying. He wants diversity so long as it happens by accident.

SNOW: All right. We're going to play beat-the-clock here. I want to get in one issue very quickly, and it's taxes, because, again, a big difference between you and the White House on this.

Isn't it true that the White House's plan would, in fact, have people at the upper-income brackets paying a larger share of federal income taxes than before and people at the lower ends paying a smaller share?

DASCHLE: Well, it isn't a question of how much the -- obviously the people at the top pay more. That's the nature of the progressive system.

SNOW: But their burden would actually -- no, but their burden would increase under the president's plan.

DASCHLE: I haven't seen those figures. I would -- my inclination would be to dispute them.

The top 5 percent of those in the income scales today are going to generate over 50 percent of the benefits, Tony. That's a given.

And the real question is, first of all, is it stimulus? That's really how this whole thing started is, we wanted to create stimulus. Well, only about 5 percent of the president's plan stimulates the economy this year -- 5 percent.

We said it ought to be fair. Well, it just doesn't seem to me to be fair when you're sending my troops from Ellsworth Air Force Base abroad and giving these millionaires an $89,000 tax break.

SNOW: Well, again...

DASCHLE: But the most important thing is recklessness. You know, it's a tax increase for people at the state level right now. You're going to see -- there was an article in The Post this morning about how taxes are actually going to go up as a result of this.

SNOW: Well, it depends on how governors handle it. And as you know, a lot of Republican governors say they don't want to cut spending, so they're going to increase taxes. But isn't that a decision local officials have to make? George Bush can't take responsibility for what governors are doing back in their states.

DASCHLE: Well, he can and he can't, Tony. It seems to me that if there's a $90 billion shortfall and if this tax plan will exacerbate that $90 billion by up to $10 billion more, requiring these governors to go out and figure out how you close another $10 billion gap, it seems to me the president has some responsibility.

SNOW: So, as the leader of Senate Democrats, will you look for ways to cut spending and pledge that you will do everything to do -- to hold the budget in line and even cut spending to make sure we don't have expanding deficits?

DASCHLE: Well, we've go to -- there's no question, we've got to bring down the deficit. We're going to create a huge deficit if this tax plan goes into effect. I think that we have a bipartisan obligation to make sure that happens.

HUME: Is the president's proposal to eliminate the personal income tax on dividends, what's often called the double taxation of dividends, is that dead in your view?

DASCHLE: I think it's too early to say, Brit. I don't think there's a lot of life. You have a lot of Republicans who have expressed opposition to it, in part because of the fiscal nature, the consequences fiscally, in part because of the unfairness. There are some serious problems there on the Republican side, not just the Democratic.

HUME: Would it encounter a filibuster, in your estimation?

DASHCLE: Well, if they bring it up, of course, under reconciliation, that wouldn't be an option for us. But...

HUME: Under the Budget Act.

DACHLE: ... we'll have to look at our options and see what happens.

SNOW: All right, Senator Daschle and Brit, thank you both for the parliamentary procedure at the end as well.