This is a rush transcript from "On the Record," July 1, 2009. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: Did Secretary of State Hillary Clinton put pressure on President Obama to step up and be tougher on Iran? Well, The Washington Times newspaper says yes, it did happen. After the June 12th election, President Obama was cautious, said only that he had deep concern, but then on June 23rd, President Obama changed. He got tougher in his words towards Iran. His new words? He said he was appalled, outraged, and for the first time, he said that he strongly condemned the Iranian government's violence against protesters.

So why the change in President Obama? Now, according to The Washington Times, Secretary Clinton had been pushing for stronger language about the regime's crackdown on protesters, and finally President Obama agreed to go for the tougher language. But here's the unusual part. He didn't tell the State Department he was changing his tone.

Joining us in Washington is Liz Cheney, a former deputy assistant secretary of state for the Middle East. Find that unusual or not, assuming this to be correct?

LIZ CHENEY, DICK CHENEY'S DAUGHTER: Well, assuming it to be true, I do find that unusual. I think if it's true, Secretary Clinton was right. There have been reports for a long time that she's more hawkish than the president is, and this would seem to be some evidence of that.

I think the thing that's concerning about it is it's very hard to understand exactly how foreign policy is being made in this administration. And when they had to put somebody out publicly to talk about the policy, the person they put out was David Axelrod, who's a political strategist. And I think it is causing people to have some concern about, you know, what role Secretary Clinton is able to play, what access she has, what role the national security adviser, Jim Jones, has, and whether the people that really have the president's ear on foreign policy tends to be more of his political analysts, his political strategists, rather than the people that one would normally expect to be playing a key role.

VAN SUSTEREN: Are you saying that you would expect -- I mean, with the exception that she's got a bum elbow -- and I don't -- I mean, that's now said she's not going to be traveling to Russia next week because of this elbow. I have no idea whether this is just, you know, Washington talk or whether this is, you know, something to keep her out of play -- but that she should be out talking more, that she should be more representative on the foreign policy? Are you saying that she's being sort of pushed aside?

CHENEY: I think that it's very surprising that we don't see her out more. I think they've created this structure where they've got a number of envoys. And the latest announcement we heard is that Dennis Ross seems to be moving from the State Department over the White House, and he's going to have a rather large portfolio that mirrors in some ways, I think, General Petraeus's portfolio at CENTCOM, which, you know, again is a very kind of - - an unusual structure.

And I think in most administrations, if you look back, when there's been a major foreign policy issue, the secretary of state, the national security adviser, those are the ones who are the public face of that issue. They're the ones who are out explaining to the American people why the decisions that were made were made.

And I think it causes confusion among our allies, among foreign governments, among people at the United Nations who sort of say, Well, if we want to influence policy, if we want our voice to be heard, should we be asking to see David Axelrod? You know, who is the person we're supposed to be talking to on the inside? I think people are having a hard time figuring that out.

VAN SUSTEREN: Some of the envoys, like George Mitchell -- he has -- you know, he has a rich history in terms of experience, whether, you know, one agrees with him or not. So it's not like these envoys are just sort of people they pulled out of a hat. Maybe David Axelrod is a political person, but some of them have, you know, some foreign policy experience.

What's -- what do you think of this envoy -- I mean, that they're sending envoys out? Are they stripping her portfolio, Secretary Clinton's portfolio?

CHENEY: If I were Secretary Clinton, I would be troubled by it partly because the envoys -- and you're absolutely right, they are experienced, in some instances. But it's not clear who they report to. You know, if they're a presidential envoy and they're reporting to President Obama, what role, then, is Secretary Clinton playing?

And as the secretary of state, as the lead diplomat for the nation and as the president's, you know, most important and most senior foreign policy adviser, in most administrations, those secretaries have wanted those people to be reporting to them so they can actually control and be sort of the most prominent voice for the president on foreign policy.

VAN SUSTEREN: All right, Iran. It's awfully quiet there. Is that -- was that a missed opportunity for the United States? Is it over in terms of -- and has Ahmadinejad successfully clamped down on this protesters?

CHENEY: I do think it was a missed opportunity. I think, obviously - - you know, I think it was shameful that President Obama was not clearer from the very beginning that the United States stands with people who are seeking their freedom, the people who were fighting in the streets of Teheran and other cities.

I think that it's not over, though. I think that what we have seen is sort of a sign of some real cracks in the regime there. I think that, ultimately, the mullahs will find it hard to hang onto power. I think that their hold and their control and sort of the fact that they've had to so tightly clamp down sends a real message about, you know, the fact that all is not right within the regime and within the government there.

VAN SUSTEREN: Except one thing, is that they never got the military or the police, the protesters. You know, the guns were always on the other side. And it's -- you know, until you can get -- you know, you crack that element, you get that element...

CHENEY: Well...

VAN SUSTEREN: That's -- that's a huge -- I mean, that's a big deal.

CHENEY: Well, I mean, they -- clearly, they were using the politics and the mechanics of fear. I mean, to shoot a woman in the face because she's protesting in the streets sends a very clear message and obviously has a very clear chilling effect. And it's why it would have been so important for President Obama, for the United States to be very clear that -- you know, at one point, he called it a debate. And I think when you hear language like that, it sends a message that we don't really have a stake in this. We don't have an interest. And I think that was a missed opportunity for us.

VAN SUSTEREN: Liz, thank you.

CHENEY: Thanks, Greta.




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