Transcript: Bush Chief of Staff

The following is a transcribed excerpt from "FOX News Sunday," May 1, 2005.

CHRIS WALLACE, FOX NEWS: Joining us now is the White House chief of staff, Andrew Card.

Mr. Card, welcome back to "Fox News Sunday." Always good to have you here.


WALLACE: First, North Korea. As we just said in the news, that country may have launched a missile towards the Sea of Japan. There are also reports they may be getting ready for an underground nuclear test next month. And, of course, all of this in addition to a top intelligence official saying this week that they now have the ability to put a nuclear warhead on top of a missile.

Does the White House believe that North Korea has turned a corner in its nuclear weapons program, is getting more aggressive? And what can do you about it?

CARD: Well, I think Kim Jong-Il, first of all, he hasn't kept his word with the United States. He had a treaty with the United States that was back during the Clinton administration. And that agreement was violated with great pride by Kim Jong-Il when he said, "We have a weapon and we're enriching uranium."

And so he's not someone that we have great confidence in, in terms of keeping his word.

We know that we'd like to see a nuclear-free Korean Peninsula; that's North Korea, South Korea. And we are working in a bilateral way with our partners like Japan, but we're working in a multilateral way in trying to call attention to the problems in North Korea, and we have the Russians and the Chinese and the South Koreans and the Japanese working very closely with us to try to have them recognize that, first of all, they must keep their word. Second of all, they must not have any program that would lead toward nuclear weapons.

And they've tested missiles before. This is not the first time of alleged testing of a missile.

So we know what their intent is, and we're trying to keep a good, close eye on them.

WALLACE: But what do you think their intent is?

CARD: Well, I think they're looking to kind of be bullies in the world, and they're causing others to stand up and take notice but they're not very constructive leaders.

And it's a regime that has not taken very good care of its people. The people in North Korea are suffering horrible, horrible lives. They are denied economic opportunity and they're denied freedoms.

And it's a country where the people are isolated from the rest of the world and Kim Jong-Il's leadership has not been constructive at all for North Korean people nor has it been constructive for the world.

WALLACE: All right, let's turn to the president's second-term agenda. His top domestic priority, Social Security reform, is now caught in a legislative logjam.

His nominee for U.N. ambassador, John Bolton, is in some trouble.

Your judicial nominees are still being blocked.

The president admitted this week there's nothing he can do short term to lower gas prices at the pump.

Is the president in danger of becoming a lame duck, and have the Democrats outmaneuvered you so far?

CARD: Well, first of all, I think your premise is wrong. The president is actually producing a lot of positive momentum for Congress to consider.

And Congress has already passed some important legal reforms. They passed bankruptcy reform. They passed energy bills in the House, and they'll be getting an energy bill passed in the Senate, and I think there will be one coming to the president's desk. He wants it there by the end of the summer.

We also...

WALLACE: But there must be some frustrations.

CARD: There are always frustrations in the legislative process, but I have seen a will to get things done from the House and the Senate.

Chairman Bill Thomas in the House Ways and Means Committee said that he was going to start working on Social Security reform and retirement reform, and that's a positive indication that he's intent on getting something done.

Chairman Chuck Grassley in the Senate, the Senate Finance Committee has already started hearings, and he's starting to make progress on Social Security reform. So...

WALLACE: Are you happy with the cooperation of the Democrats?

CARD: Well, we'd like to see more cooperation from the Democrats.

We have some serious problems in this country that must be addressed. We'd like to see the Democrats be part of the solution rather than just carp about the problem.

There are problems and we've got to work to solve those problems, and the Democrats should be constructive in their criticisms and come to the table and start to work to get things done.

WALLACE: Do you feel they're being obstructionists at this point?

CARD: On some issues I think they are. But we'd like to invite them to be -- to do the work for the American people and not to play partisan politics.

WALLACE: The president made a big proposal this week for progressive indexing of Social Security benefits: the idea that lower income -- lower earners would get a bigger increase in their Social Security benefits than higher earners would, although they would also get an increase in their benefits.

But some members of both parties say that what you've done with this plan is that you have turned what has always been a government- run pension plan for the middle class, that you have begun to turn it more into a welfare program for the poor.

CARD: Well, first of all, Social Security is broken. It cannot be sustained as it is currently under the law. And if nothing changes, everyone would get roughly a 24 percent cut in whatever benefits they may have been promised.

And understanding that anyone who is retired today or near retirement -- born prior to 1950 -- is going to get exactly what government made a commitment to get.

CARD: So if you're getting a check today, you will continue to get your check and it will be...

WALLACE: But what about this argument that you are turning it into a welfare program?

CARD: Well, the president says he wants to fix Social Security and he wants to make it better. And he doesn't want anyone who has worked their entire life and contributed into Social Security to have to live in poverty when they reach retirement.

So for future generations, he's said that he's going to make sure that there is a good, solid safety net for the poorest in America who have worked hard, contributed to Social Security and that they will have a safety net that will support them in their retirement. So we have to fix the system and we have to make it better.

At the same time, he wants to make sure that retirement is better. So he said we should have voluntary personal retirement accounts that people can contribute to, that would build equity and be their own money that they could pass on to their heirs if they so choose.

CARD: But it would be there to enhance the benefits that would come from Social Security.

WALLACE: But, Mr. Card, let's look at this chart, from the Social Security Administration, of how the president's indexing plan would affect different income groups.

There's a lot of numbers there, but let me try to explain them. Low earners retiring in 2075 under the president's plan would see no change in their annual benefits from what they would get under current law, their scheduled benefits and their indexing benefits. But, as you can see from making $90,000, they would only get 50 percent of their currently scheduled benefits.

Question: why should middle-class workers, who pay into the system their entire working lives, why should they not get the same increase in benefits as poorer workers?

CARD: They will get an increase in benefits as compared to what they would get if nothing were to happen in the Social Security system.

WALLACE: But not the same increase as the lower-income workers.

CARD: And that's because the president believes that we should work together as a society to make sure that no one who has worked their entire life, contributed to Social Security should have to live in poverty. And yet he wants to fix the system. He wants to fix the system by making some tough choices, having Congress participate in those tough choices in such a way that we don't jeopardize our economic growth and vitality. And he also wants to make the system better, to help those people who are at the lowest end of the income scale, and then to make a better retirement for individuals in the future generations, provide voluntary personal retirement accounts.

WALLACE: But, Mr. Card, two things. First of all, it sure sounds an awful lot like welfare. Not to say there's anything wrong with welfare, but it sure sounds a lot like welfare.

And a number of the middle- and higher-income workers would actually do better -- we looked at the numbers -- if Social Security runs out of its trust fund, goes bankrupt, as the president says, and just pays out what it gets from future payroll taxes. In fact, some of those workers would get a 27-percent cut in benefits, under your plan they're going to get a 50-percent cut.

CARD: Well, the president wants to fix the system. The system is broken. It cannot be sustained. The Democrats have said that we have a problem, but they haven't offered any solutions to the system. The president has offered solutions. It's now incumbent for the people to work on solutions to the problem. The president has outlined some parameters.

The program that you just talked about is a program that the president hasn't embraced in its entirety. He said it is constructed the right way, and he'd like to see Congress work with a program like that, or others, to help solve the Social Security problem, fix the system, make it better, and also provide for a better retirement with voluntary personal retirement accounts.

WALLACE: I want to turn to your ambassador, your nominee for ambassador to the U.N., John Bolton, and I want to ask you, if I can, a very specific question: have you, has the president asked John Bolton about these alleged incidents where he bullied subordinates and tried to get them to change their intelligence estimates?

CARD: I was with the president when he met with John Bolton, and he asked John Bolton the most important question: do you think the United Nations is a relevant institution that can do good things for the world and for the United States? And John Bolton said yes.

But the president wants to see the U.N. reformed. The U.N. needs reform. John Bolton is a very, very seasoned diplomat who has served this country for a long time. He's been confirmed by the United States Senate four times. He's done a very good job, and yes, he's a tough negotiator. And he stands up for what America believes is right, and what the president thinks is the right direction for this country. And he'll be a good -- in fact, he'll be an outstanding representative for the United States at the United Nations.

WALLACE: But, sir, if I may press on my direct question, have you, has someone in the White House staff asked him about these alleged incidents?

CARD: It's my understanding that these alleged incidents are rumors and innuendo, and there is nothing that I know that would stand in the way of John Bolton continue to serve this country with great distinction, and I think that he will be confirmed by the United States Senate.

WALLACE: Respectfully, I take it that means that you haven't asked him about these incidents.

CARD: We have talked to John Bolton about the whole nature of his background. He's had background checks. He's been reviewed. He's been confirmed by the Senate, and I know that he'll do a very good job when he's confirmed.

WALLACE: But look me ask you about this. You say it's rumor and innuendo. Reports are that former Secretary of State Powell and former acting CIA Director John McLaughlin both expressed concerns about John Bolton's fitness to be U.N. ambassador.

Why do you think it is that they and a number of very loyal Republicans have, in the words of Colin Powell's former chief of staff, said that he would be an abysmal ambassador?

CARD: Well, Secretary Powell and former acting Director of the CIA McLaughlin never raised those particular concerns to me or anybody else in the White House that I'm aware of.

CARD: John Bolton has the strong support of Dr. Condoleezza Rice, the current secretary of state. It was her recommendation that came to the White House. And the president took that recommendation. And John Bolton will do a very good job at the U.N.

The U.N. needs reform. John Bolton is the kind of leader that will help to bring reform to the United Nations.

WALLACE: Finally, I want to ask you one question about judges. About a dozen Republican and Democratic judges are reportedly working behind the scenes to try to find some compromise to avoid the so- called "nuclear option" where the Senate changes the rules on filibusters and the Democrats try to bog things down.

Will the White House accept any deal in which some of your nominees don't get up-or-down votes?

CARD: The president would like to see all of his nominees have an opportunity to get an up-or-down vote on the floor of the Senate. And the debate that is currently taking place right now is a debate within the Senate. It's about the Senate rules and how they will be conducted.

CARD: The president has just said, I'm sending you very good nominees, like Priscilla Owen, and she has had the highest rating from the American Bar Association. She served with distinction on other courts. And she should have a chance to have an up-or-down vote on the floor of the Senate. So the president would like to see his nominees have an up-or-down vote on the floor of the Senate.

For the vast majority of our history, judicial nominees have had a chance to get an up-or-down vote in the Senate. It's only been very recently where there have been filibusters used to block the opportunity to vote for a nominee for the courts. And we'd like to see the constitutional option such that all of our nominees have a chance to have a vote. And this is a Senate matter, though. The president said all the nominees deserve a vote.

WALLACE: You would like to see the constitutional option, then.

CARD: We'd like to see all of these nominees have a chance to get an up-or-down vote on the floor of the Senate. The president's nominated outstanding individuals that have won high praise from the bar association and their work on the courts, and they should have a chance to have an up-or-down vote.

WALLACE: And very briefly because we're running out of time, if they came back to you and said we've got a deal here but some of the nominees won't get up-or-down votes?

CARD: We'd like to see all of the nominees have an up-or-down vote. But we respect the nature that the Senate has to establish its own rules. They are Article I of the Constitution, the President is Article II.

WALLACE: Mr. Card, thank you so much for coming in and talking about a whole raft of issues. There's a lot on your plate these days.

CARD: Thank you, Chris.

WALLACE: Thanks an awful lot.