The following is a partial transcript of the Sept. 3, 2006, edition of "FOX News Sunday With Chris Wallace":

"FOX NEWS SUNDAY" HOST CHRIS WALLACE: With just 65 days to the midterm elections, some analysts believe Democrats are within striking distance of regaining control of the U.S. Senate. For more on the strategy of both parties, we're joined by the chairmen of the two Senate Campaign Committees, Republican Elizabeth Dole and, from New York, Democrat Charles Schumer. Welcome back to "Fox News Sunday".

SEN. ELIZABETH DOLE, R-N.C.: Thank you very much.

SEN. CHARLES SCHUMER, D-N.Y.: Good morning.

WALLACE: This week, top administration officials made the war on terror and the war in Iraq the prime issue, comparing it to the fight against the Nazis in the 1930s. Let's watch.

(BEGIN VIDEO CLIP)

RICHARD B. CHENEY, VICE PRESIDENT OF THE UNITED STATES: Some in our own country claim retreat from Iraq would satisfy the appetite of the terrorists and get them to leave us alone.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

DONALD RUMSFELD, SECRETARY OF DEFENSE: Some seem not to have learned history's lessons. Can we truly afford to believe that somehow, some way, vicious extremists can be appeased?

(END VIDEO CLIP)

WALLACE: Sen. Dole, which Democrats — and I'd like you to name them — which Democrats running for the Senate this year believe that terrorists can be appeased?

DOLE: Well, let me say, first of all, that I think what the administration officials were saying is that this is a very serious situation. They want the American people to realize that these are Islamic jihadists who are literally trying to destroy our way of life, destroy us, and they were raising the level of attention to just how serious it is.

WALLACE: I know, but ...

DOLE: And I just want to say — let me just mention that the tools that are needed to fight the war on terror, such as the Patriot Act — now, there are a number of the Democrat candidates who are against the Patriot Act — Sherrod Brown, for example, who's running against Mike DeWine in Ohio. I could name any number of — Bob Menendez I believe voted against the Patriot Act.

The terrorist surveillance program — many of the Democrats have raised concerns about this particular tool which enabled — the same kind of tool enabled the British to come across the plot to bomb a plane ... and the bank surveillance act and missile defense system — the Democrats have been against the missile defense system.

WALLACE: Do you think that goes to the level — and I'm going to give Sen. Schumer in a moment a chance to respond. Do you think that goes to the level of what Secretary Cheney called trying to appease the terrorists or what Vice President — Secretary Rumsfeld called, or what Vice President Cheney called trying to satisfy the appetite of the terrorists?

DOLE: I think that this is designed to raise the attention of the American people to the severity of these Islamic jihadists who are in a holy war, who, as I say, want to destroy us. It's a movement, and it's a very serious matter, and I think that's what they were trying to do.

WALLACE: Sen. Schumer, I'm going to give you an opportunity to respond, but I'd also like you, as you do, to answer the question — Sen. Barbara Boxer, one of your Democratic colleagues, has said that she is going to put in a resolution for a vote of no confidence in Secretary Rumsfeld.

What message do you think that sends to our troops and to our enemies in the middle of a war?

SCHUMER: OK. Well, first let me answer here, the analogy with World War II is just so flawed. There were many Americans who thought [Adolf] Hitler could be appeased. So did [Neville]Chamberlain. So did others. Nobody thinks these terrorists can be appeased.

Here's the fundamental difference. The Republican leadership doesn't have a real plan in Iraq. It's worse now than it was before. There seems to be no daylight at the end of the tunnel. And then in the rest of foreign policy, we're worse off with North Korea and Iran, which are gaining in terms of gaining nuclear weapons.

Even Afghanistan — their great victory is now seeming to weaker. The southern part of Afghanistan is controlled by the Taliban who allowed Al Qaeda free rein.

So when you don't have a good policy, that's the major difference. They think they can bring up these old chestnuts that they used in 2002 and 2004. But the fundamental difference is that Americans are not happy with the policies that are going on.

Everyone says — every poll says that the vast majority of Americans, Democrats and Republicans, think we need a change in direction in both Iraq and in foreign policy. So that's why ...

WALLACE: Sen. Schumer ...

SCHUMER: ... they're covering up. Now, as for the question about Rumsfeld ...

WALLACE: OK.

SCHUMER: ... the bottom line is this. Bill Clinton said it well, that we can be both strong and smart when it comes to foreign policy and the war on terror. We have seen a lot of strength from this administration, but not too much in terms of smarts. And with Democrats, they'll get strength and smarts.

WALLACE: OK.

SCHUMER: And I think what many Democrats...

WALLACE: I'd like you to answer the question if you could, Senator Schumer. Will Democrats push this resolution for a vote of no confidence in Rumsfeld? And what kind of message does that send to our troops in the field as well as our enemies?

SCHUMER: The message that it sends is very simple. It says that our policies are not going well, and it's not just Democrats that have called for Rumsfeld to step down. You just had a major Republican candidate do it yesterday.

And the reason is not that we shouldn't fight a strong war on terror, but Rumsfeld's not doing a very good job of it.

WALLACE: So you're going to push for a resolution. Yes or no?

SCHUMER: I believe there is a lot of sentiment to push for such a resolution, indeed.

DOLE: You know, if I could just say ...

WALLACE: Go ahead.

DOLE: ... just this point, that obviously war is hell. And while mistakes have been made — I mean, no war is executed perfectly. War is hell. And I think we need to keep this in mind as we discuss these issues.

WALLACE: Sen. Dole, I want to turn to another area. We could fight Iraq and the war on terror for this entire segment. But I want to turn to another key area in the race for Congress.

Republicans control the White House. They control the Senate. They control the House. And yet in the last two years, you've failed to act on Social Security reform, on immigration reform, on high gas prices, on ethics reform. On those specific issues, isn't that a record of failure?

DOLE: Let me just point out, you've got to look at the entirety of the record, no question about it.

WALLACE: No, no. I want to look at those four issues. Those are — among other things, immigration reform and Social Security reform were the president's two top legislative priorities.

DOLE: Well, the Social Security — the Democrats refused to come to the table. They simply would not sit down and talk about the issues. The president came forward with a strong proposal.

WALLACE: But you're the majority. You didn't even pass a bill out of committee.

DOLE: And the Democrats just absolutely locked arms and said we are not going to — we're not going to come to the table, we're not going to discuss this.

WALLACE: But again, you have the majority. You didn't even pass something out of committee.

DOLE: Well, I want to — I'd really like to talk about the broader picture, because I think there's been a great record of success.

WALLACE: But what about these issues?

DOLE: When the Democrats to...

WALLACE: That's my question.

DOLE: Immigration — the bill that came out of the Judiciary Committee, the first bill — the leader of the — the minority leader of the Senate, Harry Reid, would not permit but three amendments. Now, that is absolutely ridiculous that you would not have more than three amendments to a major piece of legislation.

Then finally when there was — and of course, we wasted days and days on that. Then the bill that was before the Senate — there were amendments which would have made that bill palatable, but they were turned down by the Democrats.

And imagine — this defies common sense — that illegal immigrants would be given Social Security. That really defies common sense.

WALLACE: All right. Let me move, if I can — forgive me. I do have to move on to Sen. Schumer here, because Democrats as well refused to come up — as Sen. Dole pointed out, Sen. Schumer, Democrats refused to come up with any plan to deal with Social Security.

You continued to block any drilling for new oil in ANWR. Also, your Senate leader bragged last year about killing the Patriot Act. Haven't Democrats over the last two years basically been obstructionists?

SCHUMER: Not at all. What we're trying to do is get the policies back in sync with what America wants. And again, most Americans — Democrats, Independents, even moderate Republicans — want a new direction.

Nobody wanted to privatize Social Security. And that's why many Republicans went against it. You're right, Chris — Democrats didn't block it.

On immigration, overwhelming majority of Democrats supported President Bush's plan. And it was the Republican minority in the Senate that — a minority of the Republicans in the House, rather, that refused to go along.

Now, we stand for a whole lot of people want. Should we be given the chance after Nov. 7? Here's what we're going to do. We're going to have real security. We're going to double strike forces and make homeland security much better.

We're going to have energy independence, a real energy plan that breaks dependence on big oil and goes after price gouging and finds alternatives. We're going to make college tuition deductible.

WALLACE: All right. Sen. Schumer, again, you know, I'm not trying to cut you off, but we want to talk about a variety of things very briefly.

DOLE: If I could just briefly say that the Democrats — a lot of people have said you know, they have no alternatives, no ideas, it's just obstruct, obstruct, obstruct, attack, attack.

Chris, they have an agenda. They just can't talk about it. It's sort of like the Trojan horse. I mean, the American people wouldn't buy it if they talked about it. The Trojan horse — you know, they take over.

If they were to take over the Senate, which they will not, then they would unfold what their agenda is — high taxes. Right away you'd get taxes going up. You'd get judges who would threaten our values. If you don't like ...

WALLACE: All right. Just on those — very briefly ...

DOLE: ... if you don't like the law, we'll just change it.

WALLACE: ... on those two issues, Sen. Schumer, how do you respond, on taxes and judges?

SCHUMER: Well, the bottom line is yes, we have an agenda. It's what the American people want. It's lower gas prices. It's college tuition deductibility. It's making the costs of prescription drugs lower. It's not the things that Sen. Dole mentions.

We've put together a plan. Democratic leaders Reid and Pelosi, packed by the overwhelming majority of the House and Senate...

WALLACE: Sen. Schumer...

SCHUMER: ... have done it Chris. Give me a chance to answer.

WALLACE: Well, I think you've had a chance, sir.

SCHUMER: That's what we will do.

WALLACE: OK.

SCHUMER: And the American people want it. And the only reason that we are so far ahead in so many of the polls is they don't like where President Bush is taking America. They don't like the rubber stamp...

WALLACE: OK. Sen. Schumer ...

SCHUMER: ... Republican Senate. And they want a change in direction.

WALLACE: I'm going to try...

DOLE: Prescription drugs, energy policy...

WALLACE: OK.

DOLE: When they were in, they didn't get it. We did.

WALLACE: Let's talk some math here, guys. And let me put up where the race stands right now. And you're the guys that are working on this all the time.

Democrats hold 18 of the Senate seats that are up this year, including one Independent. Republicans hold 15. And the Democrats need a net gain of six for a majority. As things stand now, we see seven Republican seats in these states that you see there with competitive races.

Sen. Schumer, you have to win six of those seven, or even more if you lose any of your Democratic seats. Isn't that a pretty tall order?

SCHUMER: It is a tall order. There's no question about it. But the wind is at our backs. The American people are not happy with the direction the president is taking America in. That's Democrats, moderate Republicans, Independents.

They want real change. We offer that change. Right now, Chris, we are ahead in five seats where we're challenging Republican incumbents. We're close in three others.

And, yes, it's a hard bill to take back the Senate. We're confident we're going to pick up seats. And if all the stars align correctly, we could take back the Senate.

WALLACE: OK. Looking at the map involving your race. According to the latest polls, these four states are in play. These are Democratic seats.

Given the math here, the fact that they have to pick up six of seven, and if they lose any of those then they have to pick up even more, is there any way you can lose control of the Senate?

DOLE: We're going to remain in control of the Senate. In fact, I'll put a wager on this with Chuck. I want him to take me out for a really nice dinner here if they take control of the Senate.

SCHUMER: Hey, Elizabeth, I will take you out for a dinner, win or lose.

WALLACE: All right. Let me ask you — we'll let you both play prognosticator here. Republicans now control the Senate 55-45. When all the votes are counted on election day — Sen. Dole, you go first — what will the breakdown be?

DOLE: Well, I'm just going to say we're going to control the Senate. We will remain in control of the Senate.

WALLACE: And Sen. Schumer?

SCHUMER: We will pick up a significant number of seats. If the stars align correctly, we will take back the Senate. We have nine seats in play now.

WALLACE: All right. And finally, Sen. Schumer, on another matter, you have gone after the White House and Karl Rove for years for allegedly leaking the name of CIA officer Valerie Plame.

You said it appears likely that he, Rove, was the source of the leak that outed her, that he no longer deserved the benefit of the doubt. You talked about him having to give back his security pass.

Now that it has been established that it was not Rove, it was Richard Armitage, the deputy secretary of state at the time — that he was the primary source for the story, Sen. Schumer, do you owe Karl Rove and the White House an apology?

SCHUMER: No, absolutely not. I has been determined not only that Armitage mentioned it, and that hasn't been fully determined yet, but that Rove did as well.

And let me tell you, again, whoever did it, for whatever reason, the act of putting the name of somebody who risked their life for the country and the people who helped that person is a dastardly act.

And there hasn't been a real apology from the White House. There hasn't been a real study as to how it happened and what to do to prevent it.

WALLACE: But, Sen. Schumer, it apparently was — you say a dastardly act, and you've talked about it as being a crime. The fact is the federal prosecutor, Special Prosecutor [Patrick] Fitzgerald, looked at it for months and decided to let Armitage go, did nothing.

As a matter of fact, he let Karl Rove go and said he was not guilty of any crime.

SCHUMER: OK. First of all, we do have an indictment here of someone not telling the truth. And second, it's a dastardly act. It didn't meet a criminal standard. And I always said I had full faith in Prosecutor Fitzgerald, and whatever he said in terms of the criminal standard I would abide by, and I always have.

But that doesn't take away from the fact that it never should have been done.

WALLACE: All right. Sen. Schumer, Sen. Dole, thanks so much for talking politics with us today.

DOLE: Thank you.

WALLACE: I've got to say, you guys really went at it. Thank you so much.