The following is a partial transcript of the July 29, 2007, edition of "FOX News Sunday With Chris Wallace":

"FOX NEWS SUNDAY" HOST CHRIS WALLACE: Joining us now, Senator Russ Feingold, who's in his home state of Wisconsin.

And, Senator, we want to give you a chance to respond to Speaker Gingrich. You don't want to wait till General Petraeus issues his progress report in September to start pulling U.S. forces out.

But the fact is that so far this summer, the number of American troops killed this month of July is down. Shiite death squad activity is down sharply. And in Anbar province, some of the Sunni sheiks have broken with Al Qaeda.

Are you, in fact, ignoring some signs of success, some signs that the surge is working?

SEN. RUSS FEINGOLD, D-WIS.: And I'm happy to acknowledge any signs of success, but the truth is since this surge began, we've had some of the highest numbers of American deaths and some of the greatest tragedies in Iraq of the entire period.

I do not buy the notion that the surge is working. I do not buy the notion that somehow Petraeus is going to be able to tell us that things are moving in the right direction. And in fact, he'll come back in September and he's going to say, "Let's wait till the end of the year."

So this is an endless game that continues this tragedy, and I think it's just the opposite of what Speaker Gingrich said. The truth is this is draining America's strength. It is costing us $12 billion a month.

We're losing over 100 people almost every single month, and it is hurting us in the fight against those that attacked us on 9/11. So this disaster has to end.

And a number of Republicans, of course, now have voted saying, "We can't just wait till September. We've got to get this done."

WALLACE: So I want to make sure I've got this clear, Senator. If General Petraeus comes in September, issues his progress report and indicates, obviously, not that we have a Jeffersonian democracy, but that things are better on the ground in Iraq, are you willing to change your position, or is your mind already made up?

FEINGOLD: Well, I'll listen to whatever he says. But he's not going to be the only person I consult with. We've heard from the White House and generals before about how there's no civil war, about the insurgency is in its last throes, and time and again it proved not to be true.

So I'll give all the respect to General Petraeus' remarks that are due, but every indication I get — and I'm on the Intelligence Committee and the Foreign Relations Committee, so I get a lot of information on this — suggests that it is virtually impossible that he's going to be able to give the kind of rosy scenario that you've concocted here.

WALLACE: Senator, let's turn, if we can, to Attorney General Gonzales, who seemed to get into a new controversy this week when he and the director of the FBI seemed to contradict each other about a dispute within the administration back in 2004, a fight so fierce that Gonzales ended up going to the hospital bed of then-Attorney General Ashcroft. Let's take a look.

(BEGIN VIDEO CLIP)

ATTORNEY GENERAL ALBERTO GONZALES: The reason for the visit to the hospital, Senator, was about other intelligence activities. It was not about the terrorist surveillance program that the president asked the American people.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

FBI DIRECTOR ROBERT MUELLER: The discussion was on a national — an NSA program that has been much discussed, yes.

(END VIDEO CLIP)

WALLACE: Senator, according to this morning's New York Times, Gonzales may actually have been right. The dispute may have been over — and this gets very technical — the computer searches of databases, not the interception of phone calls.

But in any point, it's a fairly technical issue we're discussing here. Does this really rise to the level of appointing a special prosecutor to investigate the attorney general for perjury?

FEINGOLD: You bet it does. This is technical, and it is classified, but there's really nothing more important than not having the attorney general of the United States tell false statements to Congress about these programs and about what's going on.

Now, the truth is that the attorney general, in my view, has at least lied to Congress and may have committed perjury, and I think we need to have somebody who's able to look at both the classified and non-classified material in a way that he can actually determine whether or not criminal charges have to be pursued.

We can't do that through the press. We can't do that through The New York Times. We can't do that through FOX News.

The only way it can be done fairly is through the request that four of us have made, which is that a special counsel be appointed through the Bush administration, through the attorney general's office, and that they look at it and determine whether something has happened here that I think has happened, which is I think perhaps a crime has been committed by the attorney general on this matter.

WALLACE: You think it would be a crime if it turns out that they were arguing about whether the dispute was about computer data mining or interception of phone calls? Do you think that's worth a perjury investigation?

FEINGOLD: Well, this is a very significant area of our national security, all of this area, the part that's been publicly discussed and the part that has not been.

And if the attorney general has committed perjury or has made false statements to Congress or has obstructed justice, certainly there should be a special counsel to determine if charges should be brought.

Why wouldn't you do that on such an important matter?

WALLACE: Well, you talk about national security. While you're calling for a special prosecutor, the director of national intelligence wants Congress to do something that he says is vital to protect our safety.

He wants changes in the Foreign Intelligence Surveillance Act, or FISA, as it's called, which at this point he says hinder the ability of the United States to intercept communications between one foreign terrorist in a foreign country and another foreign terrorist in another country.

In fact, would you push to fix that law before Congress leaves for its August recess?

FEINGOLD: See, what you just described is exactly the kind of thing we should be doing. Communications between two foreign sources is something that all of us have publicly said we can agree should be changed.

But that's not what they're pushing for, Chris. What they're doing is trying to change immunity laws. They're trying to take items that go through the normal courts and put them into secret courts. They're trying to basically gut the FISA law as part of this process.

So it's the old game they play. They did it on the Patriot Act. They did it on military commissions where they threw all kinds of inappropriate things. They bring up something that everybody agrees on, and then they throw the kitchen sink in and try to jam it through at the last minute.

This is an outrageous attack on the privacy of the American people. Why shouldn't they propose something that we can agree on? We could get that through in one day.

WALLACE: Well, I grant you that the FISA reform the administration is calling for is a lot broader than just this one issue, but why can't Congress, in this next week or in one day, as you said, pass this one simple measure which would allow the U.S....

FEINGOLD: Chris, if that's the...

WALLACE: Let me just finish, Senator, asking the question — that would allow the U.S. to intercept communications between a foreign terrorist in one country and another foreign terrorist in another foreign country?

FEINGOLD: Well, as long as it's two foreign countries, we have a deal. That's fine. I agree with that.

And that's not what they're proposing, though, Chris. They're trying to do things that go well beyond that, that involve domestic situations, and this is the scam they play every time.

A perfectly reasonable thing which you just stated begins it, and then they throw the kitchen sink in. That is not what they're proposing. If they want to do foreign to foreign, we can do it tomorrow.

WALLACE: Meanwhile, this week a House committee held two White House aides in contempt, and a Senate committee issued a subpoena for Karl Rove to testify, all in the investigation of the firing of U.S. attorneys.

Senator, so far, Congress has been investigating this issue all year. You've heard from 14 witnesses. You've received 8,500 pages of documents.

Can you point to a single smoking gun, any hard evidence, that the White House has done anything illegal?

FEINGOLD: I think clearly with regard to the NSA surveillance program that we've been talking about...

WALLACE: No, no, I'm talking about the U.S. attorneys, sir.

FEINGOLD: Well, I believe they probably have. I can't give you anything definitive on that, but I do believe there's been terrible misconduct and misleading approaches here.

And look. My view is that our first priority is getting us out of Iraq. We have had successes in terms of raising the minimum wage. We are going to pass a major lobbying and ethics bill. We've passed an energy bill. We've got the pay-go rule back in place. This is what we spent six months on.

But now we have started some accountability. This was a week of accountability — a censure resolution proposal that I made, the call for the special counsel, the issuing of contempt orders.

This administration is trying to prevent us from learning the facts about these situations that you've asked me about. Until we can learn the facts, how do we know whether they have committed anything illegal?

That's something that we as members of Congress have an obligation to find out, not just a question of whether we should do it or shouldn't do it. We need to ask these questions or we're not doing our job.

WALLACE: But you know, I think the question is, is this really going anywhere? Is this substantive oversight or is this political theater?

I mean, the point is on the U.S. attorneys which we're talking about, six-month, seven-month investigation, 8,500 pages of documents, 14 witnesses, and you say yourself as a member of Senate Judiciary you haven't found any hard evidence that the White House has broken the law.

FEINGOLD: Well, I happen to think they probably did break the law here, but I don't think the investigation is over, and...

WALLACE: But do you have any evidence of that?

FEINGOLD: ... until we — well, that's why we're asking for people like Karl Rove and others to come down and testify so we can actually examine the evidence.

We haven't had access to the evidence. How are you supposed to examine it when you can't look at it?

WALLACE: Finally, while all this is going on, as you pointed out, you plan to introduce legislation or resolutions this week to censure the president, two resolutions.

When you tried this last year, only three Democrats signed on to your motions or to your resolutions. Wouldn't the American people rather see Congress do something about lower drug prices, about energy policy, about student loans, all part of the Democratic agenda, that you haven't passed so far rather than engage in this political theater?

FEINGOLD: Well, Chris, that's just not true. We have passed a major energy bill in the Senate. We have passed major legislation on student loans and higher education. The fact is we have done those...

WALLACE: But forgive me, Senator, but none of it has gotten through Congress.

FEINGOLD: Well, the fact is the minimum wage increase got through Congress, and I think by the end of this week you'll see a major lobbying and ethics reform bill passed that's going to be one of the most important bills in 30 years in this area that actually gets at some of these abuses from the Abramoff scandal.

So it's a myth that nothing's been accomplished. But it is time to address the matter of the illegal and other conduct of this administration.

This administration, honestly, has been one of the worst in American history. It has abused the American public with regard to the Iraq invasion in terms of misleading us as we got in and misleading us as we stayed there.

They have attacked the rule of law on everything from illegal wiretapping programs, to the writ of habeas corpus, to torture policies, to abuses under the Patriot Act. It has been a shameful record.

And there needs to be some historic recognition that these things are wrong. If the Congress does nothing, what will our children and grandchildren say when they look at the historical record of an administration that has abused the American people?

WALLACE: Senator Feingold, we're going to have to leave it there. We want to thank you so much for talking with us today.

FEINGOLD: Thanks.

WALLACE: By the way, we invited White House officials and Republicans on the Senate Judiciary Committee to defend Attorney General Gonzales. We had no takers.