The following is a partial transcript of the March 12, 2006, edition of "FOX News Sunday With Chris Wallace":

CHRIS WALLACE, HOST: With Republicans fighting amongst themselves, do Democrats have their house in order to take back Congress this fall? We want to talk about that with one of their key leaders, Senator Chris Dodd.

And, Senator, welcome back to "FOX News Sunday".

SEN. CHRIS DODD, D-CONN.: Good to be with you, Chris.

WALLACE: I want to start with something that General John Abizaid, head of U.S. Central Command, said this week about the opposition to the Dubai ports world deal. Here it is.

(BEGIN VIDEO CLIP)

GEN. JOHN ABIZAID, COMMANDER, U.S. CENTRAL COMMAND: I'm very dismayed by the emotional responses that some people have put on the table here in the United States that really comes down to Arab and Muslim bashing that was totally unnecessary.

(END VIDEO CLIP)

WALLACE: Wasn't there a good deal of demagoguery by Republicans and Democrats in opposing this ports deal?

DODD: Not necessarily. This hit a very, very responsive nerve, Chris, in the country. This didn't go away. This issue wasn't going to disappear. Some issues like this do after a few days.

When you have after — and now we're almost five years after 9/11, where still almost 90 percent, or more than 90 percent, of our ports are being controlled by foreign entities, less than 5 percent of the cargo coming in, year after year after year — Congress has tried to have better port security, going back to Fritz Hollings, my former colleague from South Carolina.

I've offered on four different occasions the Rudman report recommendations on port security, been defeated every time. Even in this budget, we'll be voting on this week, there's no separate line item, despite the glaring problems we have on port security in the country.

You know, you could argue some of the — I'm not going to say that every member of Congress who spoke on the issue, Republican or Democrat, necessarily chose words that I would choose, but it was indicative of the public feeling about this issue. And I don't think you can dismiss that.

WALLACE: But, Senator, does the United Arab Emirates represent a security threat? Over the years, we look back at your record, you have voted to sell UAE jet fighters, missiles. Since 9/11, they turned over the mastermind to the USS Cole. They allow our warships to use their ports. They allow our warplanes to use their bases.

I mean, did the UAE deserve this?

DODD: Well, I don't think they did. But I think I'd begin discussing this with the administration's failure to recognize that this is a country, again, that has some serious issues and problems. You just heard Duncan Hunter talk about some of the history here.

Remember, we had a very good relationship with a guy named Saddam Hussein not many years ago, either, in that part of the world. And today, of course, we have a very different situation on our hands.

I didn't like to hear some of the rhetoric I did, but the fact of the matter remains this is a country that has a very spotty record when it comes to national security issues. And the world did change on 9/11.

Now, my hope is that we'll deal with this issue more thoroughly and step back from it. And again, I point out, the administration should have set up at least a 45-day examination period here and didn't do that.

Now we need to look at this Committee for Foreign Investment. We need to have the CIA representative on that committee, the national intelligence director on it. There should be a pause when you have a foreign government going to operate a port at least to examine the national security implications today. That didn't happen at all.

So we need to reform that process. So not necessarily pointing a finger at the UAE or other countries here, but today to take a closer look at how these ports are being operated.

WALLACE: You have been in the Senate — I hope you won't mind me saying this — for a quarter century now.

DODD: Yes. A very young man I am.

WALLACE: What does it tell you about this president's standing when members of his own party desert him the way they did in the past couple of weeks?

DODD: Well, it's not unique. I've seen it happen over the last 25 years in Congress, Democrats and Republicans, particularly in the second term. But again, I think they get lazy, I think what happens. You know, the term limits — they're not going to run again. And so people begin to let down their guard.

Bob Kim — and I have a great deal of respect for — who's the undersecretary of treasury, who is in charge of the CFIUS program — why didn't someone raise their hand in that room and say wait a minute, here's a country with a record that's a little spotty, they want to operate six or seven major ports in the country, a $7 billion deal, shouldn't we check with the boss on this one?

I think the laziness of it, not paying attention — the cabinet secretary should have been on there, much better prepared for that kind of a thing. So this happens, and clearly the Republicans are getting ready for 2006 elections. They're worried about issues like this, and so they're going to distance themselves.

WALLACE: But let's talk about your party...

DODD: Sure.

WALLACE: ... because according to the polls, this should be a good election year for Democrats, but a number of top Democrats are worried. And in fact, when asked about the health of the Democratic Party about a month ago, you said this — and let's put it up on the screen — "A lot worse than it should be. We seem to be losing our voice when it comes to the basic things people worry about."

DODD: Well, again, at that point here, I was concerned we were going off on some tangents here and not coming back. But just recently, you'll see the kind of unity the Democrats have shown, just last week, on the issue of bringing up the lobbying reform, ethics reform package — dealing with this issue, allowing one of our colleagues to be able to offer an amendment or work out some time agreement to do so.

I think Democrats on issues of national security, support for our troops, for educating our children, health care, energy policy, are standing for progress for the future and for a better future — a better chance for people in this country.

WALLACE: But, Senator, your party keeps promising to put out a plan, an affirmative agenda of what Democrats stand for. They promised to put it out in November. They promised to put it out in January. They've promised to put it out this spring.

Now we still don't know when it's going to come out. What's the problem?

DODD: Well, no, they are doing it. I think we are doing it on issue by issue as they come along here. And again, you're going to see more of that in the coming days. But remember, we don't control either the Senate, the House of Representatives or the presidency.

WALLACE: But you control your own party. You can put out your own plan.

DODD: Well, and we are laying out these issues and we're doing it in a united way. Remember, we've got 45 Democrats in the Senate. You've got around 200 in the house — governors.

Putting all of that together with one coherent plan all the time is not necessarily easy, particularly when you're battling upstream as we are in the House, the Senate and dealing with the president every day.

WALLACE: Is it enough for Democrats simply to oppose the president?

DODD: Well, again, I don't think you can do that alone. I think people do want to hear proactive, positive ideas. And I think we've done that — again, I emphasize to you — on things like national security and support for our troops, a number of issues coming along — on energy policy, and education, on health care.

You're watching a very united Democratic Party here.

WALLACE: Not on Iraq. You're all over the place.

DODD: Not necessarily. There are some differences here, but basically people want to see us succeed.

WALLACE: Well, stay in, leave. I mean, that's a pretty big difference.

DODD: Well, I think generally, people want us to succeed. But also, again, we're not setting the policy. And again, you know, the president — again, look at some of the lead editorials today. This is cratering.

We're now three months since the elections and still no government in Iraq. And what we're saying is here this government has to get its act together. These people have to get their act together — certainly, the leaders of the Shias and the Sunnis. And if they don't, then nothing we're going to be able to do is going to save that country. That's really their responsibility.

WALLACE: Senator, I want to put up an article written by the editor of Slate Magazine, a magazine that's generally pretty friendly to Democrats, about three leaders of your party, House leader Nancy Pelosi, Senate leader Harry Reid, and Party Chair Howard Dean.

Here's what it said. Under the title The Three Stooges, it says, "The three of them have shown themselves to be somewhere between useless and disastrous as party leaders. Individually they lack substance and party smarts — Pelosi — coherence and force — Reid — and steadiness and mainstream appeal — Dean. Collectively, they convey an image of liberal elitism, disarray and crabbiness."

Other than that, Senator, I think he was a big fan. Doesn't he have a point?

DODD: No, not at all. Listen, in this day and age, with the ability to transmit information like that around — that's mild what you get sometimes. Get back to the major point here.

WALLACE: Well, I want to ask you about that, though. Are you really...

DODD: I totally disagree with that. Nancy Pelosi has been a wonderful leader in the House. Harry Reid is doing a great job of uniting Democrats, as I mentioned, on these issues I've talked about. And certainly, Howard Dean — they bring different perspectives.

And the party is not a party that's homogeneic in that sense. There are differences within our party. But that's one of the strengths of the Democratic Party. And each of these leaders I think brings that strength to this party.

That's one of the reasons why I think we're going to be very successful, and most people do as well, in the November elections, winning back the House, winning back the United States Senate, and setting itself in a very strong position to win the presidency in 2008.

WALLACE: But do Democrats have — pardon the expression — a Newt Gingrich, who in 1994 was so successful in setting out a vision, an affirmative plan that connected with the country and helped persuade them to vote for change — in that case to push out the Democrats who were in the majority in the House and the Senate?

Who's your messenger and what's your message?

DODD: Well, again, I'll tell you, in 1994, I watched those elections very carefully. The problem was less about Newt Gingrich as it was with — the president was in the mid part of that first term, and there were serious problems. The president's numbers were very, very low, not unlike the president's numbers today.

I think that probably had more to do with why the Congress went the different direction it did politically than Newt Gingrich, with all due respect. So I don't necessarily see that as the key to success in 2006.

The key is going to be a continued failure by this administration, its leadership in Congress, to provide an alternative sound idea of where we need to go as a people, and alternatively for Democrats to lay out some good ideas — is exactly what I think we're doing.

WALLACE: And finally, and we have about a minute left, lobbying reform. There was a period right after the 1st of the year where the Abramoff scandal — when it looked like this was a big, hot issue. There's a general feeling on Capitol Hill it's losing some steam.

DODD: Well, I'm worried about that, and I'm hoping that Bill Frist will bring this matter back up again. He could have the other day. We had a unanimous vote out of the Senate Rules Committee...

WALLACE: But didn't Senator Schumer put an amendment on?

DODD: That's very legitimate in the United States Senate. And the Democratic leader, Harry Reid, said by the way, we'll take this amendment off, give us a time certain for a one-hour debate, or a two- hour debate, after the consideration of this bill, and we'll take the amendment down and get back to lobbying reform.

And the Republican leader refused to do that. Now, my hope is we get back to this issue. It's up to the Republican leadership to set that back up on the agenda again. I'm not convinced they're going to do that. That would be a great mistake.

WALLACE: Senator Dodd, we're going to have to leave it there. Thank you...

DODD: Thank you, Chris.

WALLACE: ... as always, for joining us.

DODD: Thank you.

WALLACE: Always a pleasure to talk to you.

DODD: Good to be with you as well.