Updated

The following is an excerpt from FOX News Sunday, Jan. 25, 2004.

CHRIS WALLACE, HOST, FOX NEWS SUNDAY: So is John Kerry the Democrats' answer to reclaiming the White House? We turn now to the man who first needs to win here Tuesday.

Senator Kerry, good morning. Good to have you with us.

U.S. SEN. JOHN KERRY, D-Mass.: I'm glad to be here. I'm sorry to cut it so close. And it's great to be here in the "Fox Coop," or whatever you call it.

WALLACE: "Fox Box." Here, I'm going to give you some water if you want to drink some.

KERRY: No, I'm doing great, thank you. I appreciate that.

WALLACE: All right, I'm going to give you 30 seconds right at the top to say what you think of that Newsweek poll, which shows you now beating the president.

KERRY: Well, I'm not here to talk about polls, and I don't look at the polls. I want to talk about why I'm the best person to beat George Bush.

And I think I am because I have 35 years of experience in fighting against powerful interests to get things done, that really represent the concerns of people, real people. And because I have 35 years of experience in helping America be safer, more secure, in foreign policy, military affairs, security affairs.

I think Americans want leadership, Chris. I've shown leadership through those years, and that's what I intend to do to put America back on track.

WALLACE: All right. No doubt in tribute to your standing in the polls, Republican National Chairman Ed Gillespie has begun attacking you. And on Friday, he noted the fact that the ADA, the Americans for Democratic Action, has given you a rating, the liberal group, has given you a lifetime rating of 93 percent, meaning that you have voted their way 93 percent of the time, and that Ted Kennedy only has a rating of 88 percent.

And then, Gillespie said this. Listen.

(BEGIN VIDEO CLIP)

ED GILLESPIE, CHAIRMAN, REPUBLICAN NATIONAL COMMITTEE: Who would've guessed it? Ted Kennedy is the conservative senator from Massachusetts.

(END VIDEO CLIP)

WALLACE: Senator, are you more liberal than Ted Kennedy?

KERRY: That is so funny. I almost — first of all, it's flattery. I'm complemented that they're attacking me that way.

Secondly, it proves what I'm saying, that I'm the strongest person to go against George Bush, or they wouldn't be attacking me this early.

Thirdly, as they say in the South, that dog won't hunt.

KERRY: I'm the guy who led the fight to put 100,000 cops on the streets of America. I've been a prosecutor. I've sent people to jail for the rest of their lives.

I led the fight in 1985, with Fritz Hollings and others, to reduce the deficit and be fiscally responsible with Gramm-Rudman- Hollings.

I have fought again and again against special interests that divert the taxpayers' money and put it into favored, powerful crony deals.

I fought to protect the middle class in the course of this campaign so we don't raise taxes. I voted for lower taxes. I voted to create jobs.

I don't think that's going to work.

WALLACE: All right, but let me ask you...

KERRY: I voted for welfare reform. I mean, I...

WALLACE: Let's look at some of the other issues, though.

KERRY: Sure. Happy to.

WALLACE: OK. Over the years, you have voted against banning partial-birth abortions six times. You voted against the Defense of Marriage Act, which defined marriage as a union of a man and woman...

KERRY: Yes, yes.

WALLACE: ... and you have voted against the death penalty, even for terrorists who kill Americans overseas — let me finish — although I know that you later changed your mind on that.

Any second thoughts about those other votes?

KERRY: No, absolutely not, Chris. They were votes of principle, and let me explain them, and I'll be able to explain them to Americans.

I don't support marriage among gays. I've said that many times. That was not my position. But I also don't support the United States Senate being used for gay bashing, for, sort of, discriminatory efforts to try to drive wedges between the American people.

WALLACE: But, wait a minute, Senator...

KERRY: The job...

WALLACE: If I may say just say, on that one, it passed 85-14.

KERRY: Yes, because a lot of people...

WALLACE: Most Democrats voted, you know, for the bill, and Bill Clinton signed it.

KERRY: Because it's an issue that scares people. I said that I do not support marriage, but I don't support the Senate being used to drive wedge issues.

There was no issue when we voted on that. That was politics. And I think it was the politics of discrimination. And that's what I said on the floor. Go read what I said. What I said was, "I don't support marriage. But I do not support..."

WALLACE: You mean gay marriage?

KERRY: Gay marriage. I don't support gay marriage. But I also support equal protection under the law. I support not having a president who wants to drive wedges between people and try to divide Americans...

WALLACE: But that was — Bill Clinton was president then.

KERRY: Look, you have to ask him why he signed it. You have to ask others why they voted for it. I'm telling you that while I don't support marriage among, you know, for gays, I do support rights. I support equality. I support equal protection under the law.

And, you know, with respect to — what was the first...

WALLACE: You voted against banning partial-birth abortions six times.

KERRY: Yes. But I'm against partial-birth abortion, as are many people. But under the law of our land, I believe it is a constitutional right for a woman to be able to make a choice with respect to her health.

If a doctor — all we wanted to do was allow a doctor, two doctors, to be able to write a letter saying that if there were grievous bodily injury to the woman — grievous bodily injury, not just health, but grievous bodily injury — that they ought to have the right to be able to make a medical decision.

The Republicans didn't want that because they wanted, again, to drive a wedge issue. That doesn't mean — you see, these things, they're always more complicated than people think. And what we need to do in America is have an honest conversation about the future of our country.

People aren't frankly — that's not what divides America. What divides America, whether it's in the South or Southwest, North, Northwest, people want jobs, Chris. People want health care. People want schools that work. People want clean air to breathe and clean water to drink. And we're going backwards on every single one of those major issues before the country.

Now, what the Republicans want to do is divert it...

WALLACE: But...

KERRY: ... Let's have a little cultural war over here while people aren't working. Let's have a little labeling war over here while people don't have health care. Let's try to label Kerry, even those he's been strong on defense, strong on national security, strong on welfare reform...

WALLACE: Let's talk about national security.

KERRY: ... strong on jobs.

WALLACE: Let's talk about national security. In 1995, you were the only sponsor of a bill to cut $1.5 billion from intelligence spending over the next five years.

KERRY: Right.

WALLACE: And in 1997, you said that the intelligence apparatus was too big...

KERRY: Absolutely.

WALLACE: ... there were higher priorities.

KERRY: Right.

WALLACE: And then in 2001, after 9/11, you complained and said, "Why wasn't our intelligence better?"

KERRY: Let me tell you exactly why I did that. I went to Moscow shortly after the fall of the Soviet Union. I got out of an airplane, and I looked around me, and there wasn't a light, barely, that worked in the airport. There wasn't a new truck in the parking lots.

I went to the foreign office, and there were 12 telephones on a desk. And I asked, "This guy must be really important. Why does he have 12 phones?" They said, "Because they don't know how to hook up all the phone lines into one phone."

And this was the country that we supposedly had to fear marching through Poland...

WALLACE: But the intelligence, obviously, could have helped against the...

(CROSSTALK)

KERRY: Intelligence failed us, because — I was on the Intelligence Committee. What we were trying to do, some of us, was push the funding not into technical means — there was a fascination always with satellites and listening devices, not with human intelligence.

I've always been somebody who has felt that we needed human intelligence. That's our failure. That was the failure with respect to 9/11. That remains the greatest gap in our intelligence.

So I wanted to reduce some spending from the national technical means and change the culture of our intelligence gathering. I believe we need to strengthen that, obviously now, post-9/11, but I wrote a book in 1996, Chris, called "The New War," and in that book, after that vote, I wrote about how we needed to strengthen our ability to be able to fight international criminal crime, including terror. In fact, I wrote a chapter called "The Globalization of Terror," and I said, four years before New York, it'll take one megaterrorist event in one of our cities to change life as we know it in America.

I think we deserve a president who does see ahead and who knows how to allocate resources correctly.

WALLACE: Senator, let's talk about that, seeing ahead. One of the joys of being a front-runner is, you're getting hit not only by the Republicans...

KERRY: No, I like it. They're...

WALLACE: ... but also by your fellow Democrats.

KERRY: ... emptying out the wastebasket, and it's great. We're going to be able to deal with each of these, and I'm happy to.

WALLACE: All right.

KERRY: I'll answer any question.

WALLACE: Terrific.

Governor Dean yesterday said that — questioning your judgment, said, here's a guy who voted against going to war against Saddam Hussein in 1991 after he'd invaded Kuwait, but on the other hand he voted for going to war against Saddam Hussein in 2002 when it turns out there may not have been a threat.

KERRY: Well, you see, once again that's a framing of the issue that's incorrect.

But, secondly, it's interesting, you know, Governor Dean, in the last few days, after saying, two days ago, he was going to stop running a negative campaign, has attacked Alan Greenspan, attacked all of his opponents and attacked me.

Now, I wonder...

WALLACE: What does that say to you?

KERRY: Well, I wonder when he's going to stop running the negative campaign he said he was going to stop running.

Now, I'm happy to answer that. I did indeed vote the way I voted in 1991. I thought we ought to kick Saddam Hussein out of Iraq. I said so on the floor of the Senate. But with the memories of Vietnam, I also thought we ought to take a couple of months more to build the support in the country.

With respect to this time, I voted to give the authority to the president to use force under a set of promises by the president as to how he would do it: build a legitimate international coalition, exhaust the remedies of the United Nations, and go to war as a last resort. He broke every single one of those promises.

And that's why I'm the best candidate to run against him and beat him, because I knew we had to hold Saddam Hussein accountable but I knew how to do it the right way. President Bush did it the wrong way.

WALLACE: While we're discussing Iraq, David Kay, the chief U.S. weapons inspector, says he's now concluded that Iraq had no stockpiles of biological or chemical weapons before we went to war.

KERRY: Right.

WALLACE: And now Secretary of State Powell says, you know what, Kay may be right.

What do you make of that?

KERRY: It confirms what I have said for a long period of time, that we were misled — misled not only in the intelligence, but misled in the way that the president took us to war.

And, again, I repeat, Colin Powell came to our committee. I personally asked him the questions, along with Paul Sarbanes. And we went down the list of 16 resolutions at the U.N. that they'd given as a reason to go to war.

He eliminated every one of them, with the exception of one. The only rationale for going to war, according to Colin Powell, who spoke for the administration, were weapons of mass destruction. That was the license he was given by the United States Senate.

Now, we had inspections going on. The U.N., Hans Blix said, "They haven't complied completely, but we'd like to inspect a little further." The president...

WALLACE: But if I may ask you...

KERRY: Let me just finish now. The president...

WALLACE: Let me just ask you specifically about this. Did...

KERRY: The president cut off that process. He chose the date to start this war. He said, the time for diplomacy is over.

I talked to Kofi Annan...

WALLACE: But you voted — in your decision to support it — I've looked at your speech on the floor of the Senate. You talked about these weapons of mass destruction. Obviously you read the intelligence.

KERRY: Yes.

WALLACE: Do you believe that Colin Powell, the president, when they were talking about this threat, were speaking in good faith and just were misled, as you were, or do you think they cooked the books?

KERRY: I don't know the answer to that. I trust Colin Powell implicitly. He's a friend of mine, and I think he's a terrific person, and I would not want to believe that...

WALLACE: Do you trust George W. Bush?

KERRY: I believe that Dick Cheney exaggerated, clearly.

When they talked about weapons of mass destruction that could be deployed in 45 minutes, there were none.

When they talked about aerial devices that could deliver, there were none. When they talked about the linkage to Al Qaida that they've now exaggerated, but they themselves said then there was no smoking gun. They said it. Now they say there was a linkage.

I think there's been an enormous amount of exaggeration, stretching, deception.

And the question is still unanswered as to what Dick Cheney was doing over at the CIA personally in those weeks leading up to the war.

WALLACE: And when you see what David Kay said, do you believe that the president was part of a willful effort to mislead the American people?

KERRY: I would never suggest that about a president of the United States without adequate evidence. I don't know the answer to it. But I do know this...

WALLACE: But you're suggesting it about the vice president?

KERRY: I know the vice president either misspoke or misled the American people, but he did so in a way that gave Congress men and women, who have since said — I mean, very good people, good Americans who voted in good conscious, have stood up and said, "I was misled."

This administration has to be accountable for that. And they haven't yet accounted for it.

WALLACE: All right, Senator. We have to take a break. But when we return, I want to ask you about a lot of other questions, including your decision to put $6.5 million of your own money into your campaign.

KERRY: Sure.

WALLACE: More with John Kerry as we continue from the campus of St. Anselm College in New Hampshire, right after this break.

And welcome back to the campus of St. Anselm College in Manchester, New Hampshire, where we're talking with the front-runner for the Democratic nomination, Senator John Kerry.

No, don't shake your head.

KERRY: I hate the word, and I'm telling you, I'm fighting for every vote in this — I'm going door-to-door today. We're working right up to the last minute.

WALLACE: Well, you're going to really, then, hate what I'm about to ask you, which is to preview what a Bush-Kerry debate would sound like.

KERRY: I wouldn't even begin to think about it. I'm focused on New Hampshire.

WALLACE: Well, you can do it on the issues.

In the State of the Union speech this week, President Bush talked about taxes. He called for making his tax cuts permanent, and then he said this. Take a listen.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Unless you act, Americans face a tax increase.

(END VIDEO CLIP)

WALLACE: Senator, don't you have a long record of voting against tax cuts?

KERRY: No. I voted — when I came to the Senate in 1985, the highest rate of tax was 72 percent. I voted to lower it to 28 percent. I have voted for capital gains tax cuts. I voted for incentives for businesses to grow.

In fact, my plan for America is to have a tax cut for business, a manufacturing tax credit to help us create manufacturing jobs. George Bush has ignored manufacturing jobs in America. We've lost 270,000 jobs in Ohio in the last few years. We've lost one-fifth of the manufacturing base in New Hampshire.

WALLACE: But if I can get back to taxes, you have voted...

KERRY: Let me just speak to what George Bush just said.

WALLACE: Well, about the taxes, though.

KERRY: Well, you just had George Bush on TV saying...

WALLACE: ... saying you're going to give a tax increase.

KERRY: But do you know what he said? Did you hear him? He said, "Americans face a tax increase." That's misleading, that's wrong, that's not true. Rich Americans face a tax increase, because the fact is, most Americans are going to be protected under my plan because I'm not raising taxes on the middle class.

I will not roll back, like some of my opponents in the race — I don't want to get rid of the child-tax-credit increase. I want to protect people to raise their children. I'm not going to get rid of the 10 percent bracket. I don't want people taxed at 15 percent, like some of my opponents. I'm not going to put the marriage penalty back in place.

What George Bush is really fighting for, he's fighting this phantom, because I'm not saying, "Raise taxes." But I am going to roll back the tax cut for the wealthiest Americans, and that's who he's trying to protect. The people at the top have gotten the most money, and we can't do health care...

WALLACE: Senator, let me ask you about that, if I may. You have voted against the marriage penalty relief at least a dozen times.

KERRY: Now, that was...

WALLACE: In 1996. Let me finish now.

KERRY: OK.

WALLACE: You voted to eliminate the $500 child tax credit, and you voted against the Bush tax cuts.

If you had your way over the years, wouldn't taxes on middle- class people be higher than they are now?

KERRY: No, because I proposed alternative tax cuts. See, that's what happens. People take one vote, but there are probably about 10 or 15 votes on the same issue, and they're different proposals.

I voted against his proposal and in favor of my proposal. And that's exactly what I'm going to propose to the American people this time.

I have a proposal. I am going to roll back the tax cuts for the wealthiest Americans. This is what counts, what's happening now. My proposal is to roll back the wealthy tax cuts, so we can invest in health care for all Americans, and education, and keep the promise George Bush made about leaving no child behind.

He wants to protect the wealthy people, just like they did in the Medicare bill, where they are pushing seniors off of Medicare into HMOs, where, for $139 million of lobbyist fees, they created $139 billion of windfall profits to the drug companies.

WALLACE: Senator...

KERRY: Those are the things that the American people object to.

And I'm going to be fair to the middle class, but I'm not going to allow a tax cut for the wealthiest people to stand at the expense of health care for all Americans.

WALLACE: I want to get away from issues for a few moments and talk to you about this...

KERRY: Well, this campaign is about issues.

WALLACE: Well, no, it's also about your character, the odyssey, people trying to size you up.

You went through a rough patch, obviously, in this campaign, in terms of the polls, in terms of contributions. What did you learn about yourself, and what did you learn about being a candidate running for president?

KERRY: Chris, I think that I knew what I knew about myself, because I learned it a long time ago. I have been in tougher situations than this. And I knew that when you get in a tough situation, you dig down into yourself.

I also knew, from reading history and from talking to others who've run for president, that running for president is a test of your character. The American people want to see what you're made out of.

And so, I understood that I needed to go step by step, one foot in front of the other each day, to prove to people that I can deal with the tough task of leading our nation in difficult times.

I had confidence in my candidacy. You mentioned earlier I put some of my own money in. Yes, I did, because I believed in the choice that I was trying to offer America. I believe in myself and my ability to offer that.

KERRY: And ultimately, I had confidence that the moment would come where we would be able to break through and make a difference.

WALLACE: What was that conversation like with your wife, Teresa, when you said, "Honey, I'm going to take a $6.5 million loan against our house"?

KERRY: My wife has been unbelievable and extraordinary in this effort, campaigning her heart out beyond anything that I anticipated or could have expected.

WALLACE: She didn't say, "6.5 million?"

KERRY: No, you know what she said? She said it's the right thing to do because we're not just fighting for the country, but we're also fighting for honor and for reputation and for what we believe in. And I think those are important qualities.

She has won me enormous number of votes, and I know that and I honor that. And my wife is fond of saying — you know, she's going to be, as people get to know her, they know that she's just the most straightforward, down-to-earth, nurturing, connected person on earth.

And I tell you, they're going to — they love her already. And the more they get to know her, the more they're going to have a sense that she would make a great first lady. And I think — and I look forward to people getting to see that.

WALLACE: Let's look ahead. A week from Tuesday, there are seven contests, all over the country. And the best I read, you have not had commercials in almost any of those states. You have almost no paid staff in any of those states...

KERRY: That's not true. We're in 20 states. We've been in 20 states all year. We pulled some people out at the last minute to do some work in Iowa for, obviously, you know, wise reasons, but they're back and on the ground. And we're doing very well in those states.

I think, you just watch over the course of the next week. I'm going to be campaigning vigorously in all of those states. I look forward to being there. We're going to contest. And I think you're going to see a very significant change over the course of the next week.

WALLACE: Are you going to write off South Carolina to John Edwards?

KERRY: I'm not writing off anywhere.

WALLACE: You have no ads there. You have only seven paid staff.

KERRY: I'm not writing off anywhere. We're going to contest, you know, both campaigning personally as well as on the air and other ways, in every one of those states. And I'm very excited.

Fritz Hollings, Senator Hollings, came on board and is part of my campaign. Alex Sanders, who was the Senate candidate last time, is on board and working for me. We have enormous support from members of the House and Senate there, others who have been supportive. General Steve Cheney, former commandant of the Marine Corps at Parris Island.

I'm very excited about our prospects. And we also have enormous support in Michigan, Arizona, New Mexico. We're doing very well.

And I think as we — if the voters of New Hampshire, which is what I'm focused on now — this is the place to be focused on. You take one step at a time. You take nothing for granted.

WALLACE: Senator...

KERRY: I come out of...

WALLACE: ... I do have to interrupt to ask you about one final terrible issue. It's the unkindest cut of all: the Republican sneak attack.

Please look, if you will, at the monitor, and there you can see it. There he is. Tom Brady, quarterback of your New England Patriots, in the first lady's gallery at the State of the Union speech.

Senator, has President Bush stolen Tom Brady from you?

KERRY: You'll have to ask Tom Brady. I like Tom Brady enormously. I love his football. I think what the Patriots are doing is spectacular. I'm a fan. It doesn't matter. And I...

WALLACE: Are you going to let that stand? I mean, that's terrible.

KERRY: Well, Tom will make it up, you know. Bob Kraft, the owner, is a good pal of mine, and he's supporting me.

And yesterday, I got to be out of the ice with guys like Ray Bork (ph) and Cam Neely (ph) and Kenny Hodge (ph)...

WALLACE: We should point out (inaudible) Boston Bruins...

KERRY: I'm telling you, for a kid like me, who grew up with those guys as our heroes, I'm in seventh heaven still. I'm on a high.

WALLACE: You scored two goals. Did they let you score them, sir?

KERRY: If you play with the Bruins, they make you look good.

(LAUGHTER)

WALLACE: Senator, thank you. Thanks so much for joining us, and safe travels on the campaign trail.

KERRY: Thank you very much.

WALLACE: We'll see you down the road.

KERRY: You bet.

WALLACE: Thanks a lot.

KERRY: Thank you.