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Transcript: Rep. Mike Pence on 'FOX News Sunday'

"FOX NEWS SUNDAY" GUEST HOST BRIT HUME: Amid all the political news, we've not heard much lately about what's going on with the wars in Afghanistan and Iraq.

For an update, we turn to Congressman Mike Pence, Republican of Indiana, who is just back from both countries. He comes to us today from Texas.

Congressman, welcome back to "FOX News Sunday."

REP. MIKE PENCE, R-IND.: Thank you, Brit. Great to be on.

HUME: Let me ask you first about Iraq. From what I've read of your trip, it sounds like your account is similar to others about there being progress on the military front in particular, correct?

PENCE: Well, I think there's been significant progress on the ground, but the fight is far from over.

I was part of a six-member bipartisan delegation that began in the northern region, the Kurdish region of Iraq. We met with officials there, saw the situation on the ground, spent time in Baghdad, and then got out to al-Anbar province, walked the streets of Haditha.

And I have to tell you, I was there a year ago in Anbar province and in Baghdad, and you can see both in the statistics and you can feel among Iraqis and among our own soldiers that there has been significant, if fragile, progress toward security and stability in Iraq, thanks to the surge and thanks, Brit, to extraordinary cooperation by Sunnis in the last year.

HUME: Well, let me ask, everyone says this about progress having been clear and demonstrable but fragile. Now, you've had a change of heart on the part of a lot of Sunnis. You noted that particularly in Anbar. You see that elsewhere as well.

And you see, as others have, an increasing ability of the Iraqis to fend for themselves. Why, then, is the progress said to be so fragile?

PENCE: Well, I think it's fragile — as the Kurdish prime minister told me over lunch, I think it's seen as fragile because while the enemy has been in many respects largely beaten back in the center part of the country and in al-Anbar province, as we saw in grim detail in the car bombing and suicide bombing in Baghdad this week, this is still a lethal enemy that will use deadly force to upend the progress of stability and democracy in this country.

And I have to tell you, I did run into anxiety among many Iraqi officials about talk of a precipitous American withdrawal from Iraq.

Several Iraqi leaders with whom we spoke with and, frankly, regular Iraqis on the street see the vital and critical importance of a durable American presence, at least in the near term.

And people understand the American soldier, combined with the cooperation of Sunni and Shia Arabs in this country, is the pathway toward stability and a successful free and democratic Iraq.

HUME: As you know, General Petraeus has been concerned as well about withdrawal, particularly the redeployment of some of the troops in Iraq to Afghanistan. Do you share his anxiety about that?

PENCE: I really do. You know, Afghanistan is going to have its own challenges. We got out in Acuna (ph) province after a lengthy meeting with President Karzai in Kabul.

And there's concern right now that there may be, you know, something of a counteroffensive by the Taliban this spring. And so some Marines are being transferred...

HUME: Do you think the forces...

PENCE: ... into the southwest provinces.

HUME: Do you think the forces there, NATO forces and U.S. forces, are in a position — are ready to deal with that, or unprepared, need more, or what?

PENCE: Well, you know, our military personnel are not going to be surprised. The Taliban has already been operating with military violence in about 10 percent of the provinces. I think they see it coming, Brit.

But look. Afghanistan is and will continue to be an extraordinary American and NATO success. Iraq right now is going in the right direction, but the fight is far from over.

But I have to tell you, it was — you know, even, you know, in a bipartisan delegation, I think we were all struck with the level of progress. Violence across the country in Iraq is down more than 60 percent from a year ago.

And as I walked the streets of Haditha, which is a town in the heart of al-Anbar province, where literally an American delegation would have been never been permitted to go, we walked down the street with a large security detail and were warmly greeted by people.

And I asked one Iraqi after another what the security situation was like, and one after another told me that this community, where a dozen people were beheaded a year ago by Al Qaeda — that the community of Haditha was essentially free of terrorist violence.

In fact, they were lobbying me for reconstruction dollars from Baghdad and urging me to support their efforts to rebuild their city.

But their concerns about security — as people can see from the video we posted on the Internet, their concerns about security were greatly diminished from anything I've ever encountered in Iraq.

HUME: Let me ask you a bit about political progress. A couple of major milestones appear to have been reached recently, but one of them, and that was the establishment of provincial elections, seems to have fallen by the wayside because the presidential council, as it's called, overruled the Iraqi legislature.

Is there any reason not to regard that as a major setback?

PENCE: Well, we certainly want to see the provincial elections. And the impression we got last weekend, Brit, is that there still remains a very strong possibility that we could see those provincial elections which would allow, you know, legitimate governments to be stood up in those various provinces of Iraq and allow those governments to begin to contract, as the Kurdish region has, with outside private interests, particularly in terms of oil infrastructure investment.

But look. As Ambassador Crocker told us over dinner, as the deputy prime minister, Barham Salih, told us, there has been significant political progress.

You know, many of my Democratic colleagues in Washington talk about the need for a diplomatic surge as well as a military surge, and I'm happy to report to you there has been one.

The adoption of the amnesty, de-Baathification law, the adoption of a budget, the distribution, even without an oil revenue agreement, of many of the oil revenues out to the province represents the kind of significant progress that I think the president thought would be possible if we were able to begin to get the security situation in Baghdad and Anbar in particular under control.

And we are seeing that happening, Brit.

HUME: Let me bring you back to the issue that has gripped us all so much lately — that is, the primary season. John McCain is now clearly going to be the nominee. He's somebody with whom you've had differences over the years on a number of issues.

You have suggested he needs to reach out, as others have, to conservatives, embrace them. How's he doing?

PENCE: Well, I did — in a speech at CPAC a few years ago — or a few weeks ago, forgive me, I encouraged John McCain to embrace the right, and I said, "The right will embrace you." And I'm pleased to see the Republican nominee is doing just that.

I think if John McCain continues to run on those aspects of his record that resonate with conservative Republicans — namely, John McCain was right on the military surge. He's strong on national defense, limited government, fiscal discipline, and has had a strong pro-life voting record.

If he runs on that record and then continues to surround himself with a team and a ticket that reflects a commitment to conservative values, I think conservatives like me are going to work our hearts out to see him become the 44th president of the United States.

HUME: His economic proposals are very much along the lines of the president's — continuation, in effect, which would require legislation, of the president's tax cuts and so on.

In the face of an economic downturn, which many say will turn into a full-blown recession, can that program, in your judgment, carry the day and win the election?

PENCE: I believe it can. You know, I spent some time here in Dallas yesterday with Phil Gramm, who is something of an icon to conservatives and people who believe in free market economics. He's very closely advising John McCain and very closely associated with the campaign.

And we talked about the choice the American people will face this fall. John McCain's going to talk about growing the economy by getting runaway federal spending under control and ending the earmarking culture, preserving the tax cuts and creating more incentives for investment.

Barack Obama and Hillary Clinton are simply talking about raising taxes on the most productive Americans and Keynesian-style increase in government spending the likes of which we've seen before.

I mean, in my judgment, that kind of a choice between a government-based, kind of Keynesian-style high tax solution and the solution that John McCain and his advisers like Phil Gramm are advocating will be a bright-line choice for the American people, and the American people are going to choose the free market solution. I believe it with all my heart.

HUME: Congressman Pence, a pleasure to have you. Thanks for being with us.

PENCE: Thank you, Brit.