Transcript: White House Shake-Up

The following is a partial transcript from the April 23, 2006, edition of "FOX News Sunday With Chris Wallace":

CHRIS WALLACE, HOST: In his first week as White House chief of staff, Josh Bolten showed there's a new sheriff in town. Take a look. Karl Rove lost the policy coordination part of his job as deputy chief of staff. Press secretary Scott McClellan stopped down, and Rob Portman went from U.S. trade representative to the director of the Office of Management and Budget.

What will these and likely other changes mean for the Bush White House? We turn to two men who helped revive other presidents, Leon Panetta, who served as chief of staff for Bill Clinton, and Ken Duberstein, who was Ronald Reagan's chief of staff at the end of his second term.

And, gentlemen, welcome to "FOX News Sunday."

KEN DUBERSTEIN, FORMER WHITE HOUSE CHIEF OF STAFF: Great to be here, Chris.

LEON PANETTA, FORMER WHITE HOUSE CHIEF OF STAFF: Nice to be with you.

WALLACE: Thank you, Mr. Panetta. As we said, Josh Bolten has made a number of changes in this first week.

Mr. Panetta, let me start with you. What strikes you about what he either did or failed to do?

PANETTA: Well, I think it was an important step for him to come in, to take charge. If anything, I think Ken and I both agree that there should have been some changes made in the staff probably after the first term so that everybody would have been in place as you go into your second four years.

But better late than never, and I think he's made some changes. He's put some new people in place. I think it's the kind of thing you have to do. But ultimately, the real test is going to be whether or not they can impact on policy.

WALLACE: Yes, we'll get to that in a moment.

But let me ask you about the personnel shifts, Mr. Duberstein. Some are saying it is too late, as Mr. Panetta suggests, and also that it's too little. You're basically shuffling a bunch of people who were already within the administration.

DUBERSTEIN: Gee, I couldn't disagree more. I think this is refresh, reboot, re-energize. I think Josh this week has demonstrated, number one, he has the president's confidence. Number two, he's going to make change, but not change for change sake but, rather, where he thinks it is most necessary.

Look, an appointment of Rob Portman at OMB — it is not simply OMB director, but also a trained, experienced congressional hand. Moving Karl, the administration's MVP, into just doing the politics for the campaign this November — but remember, politics and policy always coexist in any administration — putting a new face on.

They haven't replaced Tony Snow — excuse me.

WALLACE: Freudian slip.

DUBERSTEIN: No, not at all.

WALLACE: But the press secretary.

DUBERSTEIN: The press secretary with Scott — and perhaps it is Tony. But that's a new face on the administration. So I think it's been a very positive week. I agree with Leon, it should have been happening earlier, but better late than never.

WALLACE: All right.

Let's talk, Mr. Panetta, about what you are discussing, the fact that in the end it's policy, not personnel, that's going to make a difference. Let's look at the latest Fox News/Opinion Dynamics poll which shows that this president has really driven into a political ditch. Let's look at the numbers.

Mr. Bush's job approval rating, as you can see there, is now the lowest of his presidency at 33 percent. Why do people disapprove of this president? Almost half say the war in Iraq. A quarter say he's generally doing a bad job. And 22 percent say they disagree on issues.

Mr. Panetta, isn't that the real problem, the facts on the ground, whether it's the war in Iraq or at the gas pump? I mean, isn't it policy, not personnel, that's going to affect how people feel about this president?

PANETTA: Well, there's no question, it's a little bit like, you know, changing players on a losing team. It makes the coach feel good. It makes the fans feel good. But you've got to put points up on the board.

And this administration is facing, frankly, an unprecedented series of crises that really threaten to turn this country into a second-rate power. I mean, the fact is it's not just the war in Iraq. It's not just the threat that we face with Iran.

It's record gas prices. It's a record deficit. It's crises here at home in health care, immigration, other areas that confront the American people. If the president and the new team don't deal with those issues, then, very frankly, he's going to find it very tough to govern in these next few years.

WALLACE: Mr. Duberstein, I want to ask you — and I'm sure you disagree with everything that Leon Panetta just said, but I want to ask you about one aspect of that, and that is Iraq.

I want to show you another poll number here. Only 35 percent of the American public now approve of the job that Defense Secretary Rumsfeld is doing. As a political matter, just to, in effect, get people to take a fresh look, would it help or hurt the president to remove Rumsfeld?

DUBERSTEIN: I remember a Rumsfeld rule from his book of rules. There's only one person in any White House, in any administration, who is indispensable, and that's the president of the United States. And so I think you have to follow that instruction.

WALLACE: Well, you kind of ducked it.

DUBERSTEIN: Not at all.

WALLACE: Well, are you saying, in effect, that you think that just to give people a fresh look, whether it's merited or not, in terms of policy, that...

DUBERSTEIN: No, what I'm saying is that only the president can decide. All of us can be kibbutzers on the side, but if the president is satisfied that Don Rumsfeld is important to stay, whether it's because of Iraq or working on the Pentagon reorganization, that's his decision.

But from a political matter, remember, the only person who is indispensable in any White House is the president, not the secretary of defense.

WALLACE: Let me talk to you, to try and get some historical perspective about what you did, you and Mr. Panetta, to bail out your presidents.

Mr. Duberstein, you came in with Howard Baker back in 1987 to help Ronald Reagan at the depths of the Iran-contra scandal. What do you think was the most important thing that you and Senator Baker did?

DUBERSTEIN: Well, I think there were several things, not just one thing. Number one, everybody was referring to Ronald Reagan as they are to George Bush, as a lame duck. In our case, they were also talking about Ronald Reagan being a dead duck. That was two years to go in the administration.

It was not only Howard Baker and me, but Frank Carlucci and a little known general at the time, Colin Powell. It was reestablishing not simply management at the White House, but get out of that bunker mentality with the press, start defining some ways you can win things on Capitol Hill, and focus your energies on the big things internationally — in our case, the then-Soviet Union, and the Gorbachev summit meetings, INF treaty, tear down this wall. But I think what we brought was a measure not only of management, but also of credibility and trust that came from the Congress and the press which helped Ronald Reagan get back on his feet.

WALLACE: Mr. Panetta, you took over as chief of staff for Bill Clinton in June of 1994 when that White House was widely seen as being in disarray.

What do you think is the most important thing you did to try to get the Clinton White House back on the tracks?

PANETTA: Well, you know, it's the same thing, I'm sure, that every chief of staff is worried about. You basically establish a strong chain of command. You try to establish discipline. You try to establish focus so that the White House staff is working as a team for the president.

But let's not kid anybody. And I think it's true for Ken Duberstein as well as it's true for Leon Panetta, that in the end, it was the president who ultimately turns these things around.

Bill Clinton confronted a Republican Congress on the budget, was willing to draw the line with them. He was willing to invest in education, had a strong economy going for him, was willing to make other investments in our society.

It was those steps ultimately that won the presidency for Bill Clinton.

WALLACE: But let me follow up. We have less than two minutes left. Mr. Panetta, talk about the relationship between the chief of staff and the president, and what is it that Josh Bolten needs to be saying both in terms of substance and maybe also just in terms of their relationship when he's alone with George W. Bush in the Oval Office?

PANETTA: It has to be a relationship of trust. The president and the chief of staff have to be able to trust one another, and the chief of staff has to be willing to tell the president what he may not want to hear.

If the chief of staff isn't doing that, then, frankly, nobody else usually does that. I think they've got to have a very good relationship. They've got to have one of trust. And they've got to be willing to work together in order to ensure that both the staff as well as the president is getting the policies of the administration implemented.

WALLACE: And, finally, Mr. Duberstein, how unvarnished was the message that you were able to give to Ronald Reagan in 1987-88, and what does Bolten need to do with Bush?

DUBERSTEIN: I think Josh Bolten is well equipped to be a reality therapist to President Bush the same way walking into the Oval Office I had to tell the president not what he wanted to hear, but what he needed to hear. Now, I always joke that I used to be 6'4" before I became chief of staff. The answer is you have to tell it like it is. As Leon said, it makes sure that everybody else on the White House staff follows suit.

What I started with I want to end with. I think Josh Bolten demonstrated that when he opens his mouth, the voice you hear now is George Bush's. It is that level of trust and confidence even one week into the job that I think is really going to help Bush get back on his feet with Josh Bolten really managing the team.

WALLACE: Mr. Duberstein, Mr. Panetta, we want to thank you so much for joining us and giving us some historical perspective on the events of this week.