Updated

The following is a rush transcript of the October 23, 2011, edition of "Fox News Sunday With Chris Wallace." This copy may not be in its final form and may be updated.

CHRIS WALLACE, HOST: I'm Chris Wallace.

All U.S. troops will be out of Iraq by year's end and Libya's Muammar Qaddafi is killed.

Dramatic changes in the Middle East landscape offer both opportunity and challenge for U.S. foreign policy. We'll talk with Secretary of State Hillary Clinton and Republican Senator Lindsey Graham.

Then, a new phase in the 2012 Republican presidential race. With debates on hold for now, the candidates get down to real campaigning.

We continue our one-on-one series of interviews with Congresswoman Michele Bachmann.

Plus, the Romney-Perry matchup gets physical. We'll ask our Sunday panel how it shakes up the battle for the GOP nomination.

All right now on "Fox News Sunday."

(MUSIC)

WALLACE: And hello, again, from Fox News in Washington.

On Friday, President Obama announced he will keep a campaign promise and bring all U.S. troops home from Iraq by the end of the year.

Earlier, we spoke with Secretary of State Hillary Clinton in Uzbekistan about Iraq and the death of ousted Libyan leader Muammar Qaddafi.

(BEGIN VIDEOTAPE)

WALLACE: Secretary Clinton, the U.S. commander in Iraq, General Lloyd Austin, wanted upwards of 15,000 troops in Iraq next year. And the White House talked about 3,000 to 5,000. So, why is President Obama pulling all of the troops out?

SECRETARY OF STATE HILLARY CLINTON: Well, Chris, I think we should put this into the appropriate historical context. First of all, President Obama said that combat troops would leave Iraq by the end of this year. And before he ever said that, the Bush administration committed to with drawing all troops by the end of this year.

So, you have a bipartisan commitment to withdraw combat troops. And that was viewed as be appropriate given on the Iraqi security forces.

But we -- I always made clear, we were open to discussions with the Iraqis if they wanted some kind of continuing presence. And what we've agreed is a support and training mission, similar to what we have in countries from Jordan to Colombia. And we will be working with the Iraqis. We will also have a very robust diplomatic presence and we will fulfill what are the request that the Iraqis have made to us.

WALLACE: But if it were the general order of business, why was your State Department negotiating with the Maliki government until a few weeks ago to keep thousands of troops there?

CLINTON: This was an ongoing discussion. It started, you know, several years ago. It kept going and, at the end of the day, as in many discussions and negotiations, an agreement was reached that met the needs of both sides. The president has fulfilled the commitment he met to the American people. We've also, under the president's leadership, fulfilled the commitment requested by the Iraqis.

Iraq is a sovereign, independent nation with whom we have very god relations and we expect to have a continuing good strong security relationship for many years to come.

WALLACE: A wide range of foreign policy experts, though, say that Iraq is not yet ready to handle the possibility of sectarian violence or interference from Iran. Former Governor Mitt Romney said this after the announcement of the fallout, "President Obama's astonishing failure to secure orderly transition in Iraq has unnecessarily put at risk the victories that were won through blood and sacrifice of thousands of American men and women."

Secretary, how do you respond to that?

CLINTON: Well, first of all. We are all very moved by and grateful of the sacrifices of our men and women, those who lost their lives and those who were grievously injured -- they will never be forgotten and what they did should be honored in our country's history forever.

The point of our involvement in Iraq stated over and over again by people on both sides of the aisle was to create the opportunity for the Iraqis to have their own future without the oppression of a dictator like Saddam Hussein. Now, you can't on the hands say you are all for democracy and sovereignty and independence where people make their own choices, and on the other hand say when a choice is made that is foreseen by our own government -- going back to the Bush administration and validated by the Obama administration and the current government in Iraq -- that that somehow is not appropriate, because that is what we were there for: to give the Iraqi people the chance to make their own decisions.

So, we have a security presence with a support and training mission in Iraq. We have bases in the region with other countries. That's what you do when you're dealing with independent sovereign nations that have a will and decision of their own.

WALLACE: Secretary, let's turn if we can to Libya. The U.N. and human rights groups are calling for an investigation saying that if, as it appears from the videotape, that Qaddafi was executed, it was a war crime. And you are also coming under fire for what you said.

(BEGIN VIDEO CLIP)

CLINTON: We came, we saw, he died.

(LAUGHTER)

(END VIDEO CLIP)

WALLACE: Question -- do you regret what you said, Secretary?

CLINTON: Well --

WALLACE: And if I may, do you regret what you said? And do you feel Qaddafi was wronged? Or that he got what was coming to him?

CLINTON: Well, let's have an investigation. I fully support the United Nations' investigation and I fully support the Transitional National Council's own call for an investigation. I support it on the merits because it's important to find the facts, and I support it as part of what will be a challenging transition process.

You know, the Transitional National Council today is going to declare the liberation of Libya. They are then going to announce a new government. They need to make it clear that it will be a government to unify the country, to seek reconciliation, to make everyone who supported the former regime, as long as they don't have blood on their hands, fell safe and included in a new Libya.

And so, from my perspective, I think such an investigation would be very important to establish accountability, and rule of law, and pave the way for the inclusive democratic future that the Libyans tell me they want.

WALLACE: Secretary, do you regret what you said?

CLINTON: Well, you know, I'm not going to comment on that. We didn't even know what was happening at that time because it was an unconfirmed report.

WALLACE: I have to also ask you about the man who was convicted for Pan Am 103, Megrahi. You talk about the rule of law. Would you like to see him return to a Scottish prison?

CLINTON: Absolutely. I never thought he should have been released in the first place. And I've raised with the highest leadership of the Transitional National Council and I will raise again, as soon as they have a government, the United States' very strong feelings that this man should be returned to prison. That is the only appropriate outcome of what was in my view a miscarriage of justice when he was released.

WALLACE: Secretary Clinton. We have a couple of minutes left and I'd like to do a lightning round -- quick questions, quick answers.

You were just in Pakistan. And while you were there, you confirmed the fact that U.S. officials met with the Haqqani terror network in August. Do we want to kill them, or do we want to talk with them?

CLINTON: Actually, we are pursuing both, Chris. We have a policy of fight, talk and build. And we had a meeting at the request of the Pakistanis to gauge whether there was any basis for further talking. Certainly, the attack on our embassy, the truck bomb attack at one of our border outposts in Afghanistan gave a strong answer to the contrary.

But you don't make peace you're your friends. We know that from long experience. So, what we are trying to gauge who among the groups would be sincere and serious about an Afghan-led peace process.

And it's very absolutely understood that in order for any process to have a chance to succeed, the United States and Pakistan have to work with Afghanistan. So, we responded to a Pakistan request. We're testing out a lot of different approaches. But we're going to keep finding the guys who are killing Afghans and Americans and others.

WALLACE: Finally, the president has deployed 100 Special Forces to central Africa, to fight the Lord's Resistance Army, which has killed and displaced so many over the last couple of decades. The question I have is: why intervene in Uganda and Libya, but not Syria? What's the foreign policy principle at work there?

CLINTON: Well, first, let me say, Chris, that what we've seen from President Obama over the last two and half year and I think remarkably with the events of the last six months is that his kind of smart leadership in a complex world is paying off. He was the one who brought bin Laden finally down. He was the one who put together a coalition that eventually removed Qaddafi.

So, I think it's important that in this very complex, dangerous world, we have somebody in the White House who understands that America has to lead. Our leadership is essential. But we have to look at every situation and make the right decision.

CLINTON: So, the two that you mentioned -- one, we are not fighting in Uganda. We are sending support, advising intelligence resources to try to rid Africa of the scourge of the Lord's Resistance Army. It was welcomed by the Ugandans and others.

In Syria, we are strongly supporting a change from Assad and also in opposition that only engages in peaceful demonstration. And you do not have from that opposition as you had in Libya a call for and kind of outside intervention. So, I think that what the president has demonstrated in quite uncertain and challenging times is a kind of leadership that not only America and the world is looking for.

WALLACE: Secretary Clinton, we're going to have to leave it there. We want to thank you so much for talking with us and safe travels.

CLINTON: Thank you so much, Chris. Good to talk to you from Uzbekistan.

(LAUGHTER)

(END VIDEOTAPE)

WALLACE: Joining us now for more on all of this, a leading Republican voice on national security, Senator Lindsey Graham.

Senator, welcome back to "Fox News Sunday."

I want to start with a big point that Secretary Clinton made at the very end of the interview, that the president has exhibited smart leadership and it's the kind of leadership the world is looking for?

SEN. LINDSEY GRAHAM, R-S.C.: I think in the last year, he's made poor dangerous policy questions at the strategic level when it comes to Iraq. When your military commander who I trust says you need 15,000 to 18,000 in 2012 to secure the gains we fought for, and you have zero and you try to celebrate, that is pretty disappointing.

Israel has been thrown under the bus by this president. His standing in the state of Israel is very low. The Iranians don't fear us at all. They are trying to attack us here.

So, I would argue that Iraq and Afghanistan are being run out of the Chicago, not Washington, in terms of decisions.

WALLACE: What about in the argument that in last six months, Bin Laden is gone, Awlaki is gone, and now, Qaddafi is gone.

GRAHAM: Give him credit for making good tactical decisions, killing Bin Laden. He stuck to it. Well done, Mr. President. Using the drones in Yemen and Pakistan -- well done, Mr. President.

And not able to close the deal in Iraq is a serious mistake. Celebrating leaving with no troops behind is a serious mistake. Panetta said on a scale of one to 10 --

WALLACE: The defense secretary.

GRAHAM: Yes -- that Iraq ending well was an eight in terms of our national security. Ashton Carter said it was a 10.

When it comes to Afghanistan, he rejected the military advice given. There was never an option on the table to pull all the surge forces out by next September his election. He's compromised the second fighting season. He made General Allen's job so much harder. He's putting in question our success in Afghanistan and he ended Iraq poorly, fumbled the ball inside of the tent. I hope I'm wrong about what happens in Iraq, but they are dancing in the streets in Tehran.

WALLACE: Well, let me ask you about Iraq and let me take Secretary Clinton's argument. She points out quite rightly -- it was President Bush, in fact, of 2008, who negotiated the Status of Forces Agreement which called for all U.S. troops to be out by the end of 2011 and it was clear that Iraqis didn't want us there any longer.

GRAHAM: That is not clear.

WALLACE: Well, why did Prime Minister Maliki put in this poison pill, there could be no legal immunity for our troops?

GRAHAM: I went in Iraq in May to try to urge the Iraqis to support a following force. Every political leader I met with, including Prime al-Maliki, suggested they would do this. Our military commander said we need it.

The Iraqis have no air force. They have intelligence gathering capability. They have they need counterterrorism assistance. There are missions only we can do.

The Iraqis were in my view open-minded to this. This was a failure by the Obama administration to close the deal. The military commander said we needed 15,000 to 18,000 and we have none. So, that's the bottom line here.

At a time when we need troops in Iraq to secure the place against intervention by Iran and they had actors in the region, we are going into 2012 with none. It was his job, the Obama administration's job, to end this well. They failed.

WALLACE: Let's turn to Libya. You were a loud critic of Obama's decision to work within NATO and as one White House official put it so unfortunately, to lead from behind, but the Obama White House is pointing out now, topple Qaddafi without the loss of a single -- single -- American soldier and cost a billion as opposed to $805 billion in Iraq.

Was the president right and critics like yourself wrong?

GRAHAM: If I hear a Republican nominee embracing leading from behind, they will have a very difficult time in South Carolina.

It was right to take Qaddafi down. The president deserves criticism for being involved in the no-fly zone initially. He deserves criticism for waiting so long. Qaddafi was on the ropes. We let him off the ropes and we only got involved when he's about to massacre everybody in Misrata. Thank God for strong women I said at the time, but this idea --

WALLACE: The fact that Hillary Clinton who --

GRAHAM: Yes, who pushed the president, along with --

WALLACE: Susan Rice.

GRAHAM: Yes. So, at the end of the day, he came in to the game after Qaddafi reemerged and started killing by the thousands of his own people. But this whole period of time where he was left unattended, the war lasted longer, more Libyans got killed.

And here's the big mistake by leaving from behind. When you take American air power off of the table, NATO is a much weaker force and these thousands of surface-to-air missiles that are now compromised and chemical caches that were broken into, are result of the war lasting too long and the devastation in Libya that has to be now dealt with is all the result of allowing the war going on much longer. If you go to war, go to win. Don't leave from behind.

WALLACE: What do you make of this push by human rights organizations and we heard Secretary Clinton endorsed it today to have an investigation of the death of Qaddafi as a possible war crime.

GRAHAM: I'm for the rule of law, even for the worst among us. And when you want to talk about foreign policy security decisions, let's have an investigation. But let's give our American forces a jail they can use in the war on terror. He failed to close Gitmo.

President Obama said he would close Gitmo. Well, we're not closing Gitmo and he's not using Gitmo, so we don't have a place to put a prisoner. If we caught a high value target tomorrow, where do we put them? We're not longer the CIA to interrogate terror suspects. That's a huge mistake and we're starting to try to criminalize the world by putting terrorist in federal court, unlike any other war we've been involved in.

So, let's investigate what happened to Qaddafi, but let's have a detention policy to protect Americans. Let's stop reading terrorists the Miranda rights. This president for the last year and half has made some very poor national security decisions that I'm afraid were going to come back to haunt this country. I hope I'm wrong.

WALLACE: How do you answer the other question I asked Secretary Clinton about the distinction, putting troops or at least military intervention in central Africa, in Libya, not troops on the ground, but air strikes and doing nothing in Syria? She says we basically have to be smart and take it on a case by case basis.

GRAHAM: Well, the world community is a bit divided about Syria. I support putting people in Africa. That's where this war is headed, in Africa.

And this idea about sanctions working -- if Iran gets a nuclear weapon where they are headed, it will be the biggest change in our national security environment in my lifetime, and this administration is blowing it when it comes to Iran. They are not being strong enough when it comes to Syria.

Israel has been thrown under the bus.

And Iranians are still emboldened. They're going to have a shot in Iraq they would never had otherwise. And if the Iranians develop a nuclear capability, it's going to throw into chaos.

And Obama's policies when it comes to Iran is not working, and they have not been bold enough when it comes to Syria. We live in dangerous times, and a lot of political decisions are being made about foreign policy.

WALLACE: When you sat down, and I hope I'm not talking out of school. You say you always have to think of what your audience says and you said your audience today is the 2012 Republican candidates. What is that -- what is your message that you want to get them?

GRAHAM: Well, my message to the American people is that these decisions matter. I want the troops to come home. God knows they fought well in Iraq and the president is right to say they come home with their head held up high. But I want to end well.

What happens in Iraq now is going to be much more difficult in terms of the Iraqi people being successful. Iran is the biggest winner.

I want our presidential candidates to talk about foreign policy. What would you do with Gitmo? Would you use it? Would you let the CIA interrogate prisoners? What would you do in Afghanistan? Would you pull all the troops out by September of next year, compromising the second fighting season?

What would you do with Iran if they threaten if they try to kill an ambassador here on U.S. soil? What is your policy to stop the Iranians from getting a nuclear weapon?

At the end of the day, these decisions that President Obama is making I think are strategically unsound and our people need to step up and challenge him. We've got a jobs problem. We've got a national security problem that's growing by the day.

WALLACE: When you say they need to step, you think they have failed to do so, so far?

GRAHAM: They have not done it robust enough. The issues that I'm talking about: Iran having a nuclear weapon -- a nation without a viable jail on the war on terror, Iraq now being compromised, Afghanistan being compromised, our best friend in Israel feeling they can't trust us -- all these issues are worth more discussion on our side.

And President Obama, I would praise him if I thought he was right. If he left 10,000 to 15,000 troops in Iraq, I would have defended him. If he had given General Allen a chance to finish the job in Afghanistan and not shorten the fighting season for political reasons, I would have stood by him.

GRAHAM: I've tried to help him close Gitmo. But we can't, we should use it.

So, to the Republican Party, national security matters, step up on it.

WALLACE: Senator Graham, hot dose was strong coffee this morning. Thank you so much for joining us. And it's always a pleasure to talk with you, sir.

GRAHAM: Thank you.

WALLACE: Up next -- the 2012 Republican race enters a new stage and Congresswoman Michele Bachmann looks to make her move.

(COMMERCIAL BREAK)

WALLACE: With a long string of Republican debates now on a break, candidates are focusing on campaigning in key early states. We continue our series of 2012 one-on-one interviews with Congresswoman Michele Bachmann who is making her big push in Iowa. And that's where we find her today.

Congresswoman, you were sharply critical of President Obama's announcement Friday that he is pulling all U.S. troops out of Iraq. You said he should go back to the negotiating table, sit down again with the Maliki government -- to do what?

REP. MICHELE BACHMANN, REPUBLICAN PRESIDENTIAL CANDIDATE: Well, President Obama's team said they got what they wanted in Iraq, Chris. They got absolutely nothing. They got their hats handed to them.

Here, we have expended over $800 billion. Worse, we have expended over 4,400 American lives. We have nothing to show for it. We are essentially being kicked out of Iraq by the people that we expended our blood, and our treasure and our toil to liberate. And this is what we have handed to us.

We don't even have any troops left. It's very interesting. Any time that we ejected a dictator anywhere in the world, we've left troops behind. After Iraq, we'll have more troops left in Honduras than we have Iraq.

And probably, what's even more dangerous is the fact that Iran is waiting in the wings. They are looking to be the hegemony in the region, and they are looking to have a dominant influence in Iraq and this won't be good going forward.

WALLACE: But as Secretary Clinton said -- I hope you heard at the beginning in the program -- one of the reasons that we did what we did in Iraq is to try to create a sovereign country. And at least at the end of the negotiations, the Maliki regime seems to have decided they wanted us out.

BACHMANN: Well, I heard what the secretary of state said and that's true. They are a sovereign nation. But again, any time the United States has done this historically. We always left troops behind to secure the peace. This hasn't happened. And this was done in the insistence of Iraq. They did not want an American presence.

And it's clear to all why they don't want an American presence, because Iran doesn't want an American presence. If America is there, they can put up a resistance to Iran. This way if America is gone, there is no resistance, and Iran will have a clear hand and a clear field to exude their dominance and their influence in Iraq. That won't be good in the region, and this will continue to allow them for forays in that area and that's very dangerous.

WALLACE: Congresswoman, from the very start, you are a strong opponent of any U.S. military involvement in Libya. Here's what you told me in May.

(BEGIN VIDEO CLIP)

BACHMANN: This is a disaster in the make why President Obama's policy of leading from behind is an outrage and people should be outraged at the foolishness of the president's decision.

(END VIDEO CLIP)

WALLACE: Question -- if President Bachmann had been in charge, wouldn't Muammar Qaddafi still be in power?

BACHMANN: Well, he may be. But I stand by that decision. I think it was wrong for the United States to go in Libya.

Look where we're at today. Remember, again, Barack Obama said we were going into Libya for humanitarian purposes. It wasn't humanitarian purposes. It was regime change.

And what's the result? We don't know who the next leaders will be. Sure, there is a transitional council, but who will the real leader should be that takes over and runs Libya? It could be a radical element. It could be the Muslim Brotherhood. It could be elements affiliated with al Qaeda. We don't know yet who that regime will be.

But worse, we've seen the MANPADS go missing, and the shoulder- fired rockets that are very dangerous, that can fit in the trunk of the car. And there are some reports out there that they have perhaps even gone as far as Gaza. And, of course, that could be used to bring down a commercial airliner. This is a very bad decision and it's created more instability in that region, not less.

WALLACE: I'm a little bit confused though. Are you suggesting that we would be better off with Qaddafi's dictatorship still in effect?

BACHMANN: The world certainly is better off without Qaddafi. I agree with Lindsey Graham. The world is better off without Qaddafi.

But consider what the cost will be. We are only looking at a snap shot today. We're not -- the last chapter hasn't been written in on Libya.

And, again, we have to recognize that there are missing today chemical weapons, the shoulder-fired missile launchers, this is very serious. This could risk more human life because they're missing, and we also don't know who the next regime will be that will be taking over Libya. We knew who the devil was that was running, we don't know the next one.

And, again, this was leading from behind on the part of the administration.

And, remember, there was no clearly identifiable American vital interest that was ever designated. That needs to be our basis for putting any American in harm's way.

WALLACE: One of the big issues in the Republican race now seems to be major tax reform. Herman Cain has his 9-9-9 plan. Rick Perry is going to unveil his flat or flatter tax this week.

As a former tax lawyer -- and I'm going to have to ask you to be brief because we've got limited time -- what is your tax reform plan?

BACHMANN: Well, my plan is found at MicheleBachmann.com. It's called real jobs right now. I gave a major economic speech this week in San Francisco, at the Commonwealth Club. And my plan takes a page out of Ronald Reagan's blue print. It's the economic miracle that was brought in the 1980s.

When you flatten taxes and simplify taxes, that creates growth. I am a pro-growther. And as a former tax lawyer, what I want to do is abolish the United States tax code and have very flat tax rates that are very simple, that are the same for all Americans and for businesses across the United States, too.

So, mine is a very simple, very fair flat tax that abolishes the current tax code.

WALLACE: According to the polls, Herman Cain has taken a lot of your support among the Tea Partiers and social conservative. I want to ask about the comments Mr. Cain made this week on abortion. Let's take a look.

(BEGIN VIDEO CLIP)

HERMAN CAIN, REPUBLICAN PRESIDENTIAL CANDIDATE: It ultimately gets down to a choice that that family or that mother has to make -- not me as president, not some politician, not bureaucrat. It gets down to that family. And whatever they decide, they decide.

(END VIDEO CLIP)

WALLACE: Herman Cain now says that abortions, all abortions should be illegal, but it's the family's choice whether or not to break the law. Does that get him off of the hook?

BACHMANN: Well, that will be for the voters to decide. But I think it's been very troubling, because in the last few weeks, we've seen this happened time and time again with various statements.

And this is an issue you can't get wrong. The president of the United States can't get the abortion issue wrong, the life issue wrong. And President Obama's decision is that he's personally against abortion, but he doesn't believe that the government should intervene to protect human life.

That's essentially what Herman Cain said in his responses. He also came out and said that he was against protecting marriage between a man and a woman, and then he later came out and said he misspoke and said no, he's for it.

Then we also know that he gave an interview to Wolf Blitzer, when he had said that he would be open to negotiating with the terrorists that are in Guantanamo Bay, which includes, by the way, the mastermind of 9/11, Khalid Sheikh Mohammed.

You can't do that as president of the United States. You can't have all of these flip-flops in our nominee, one after another. And it's making the voters' heads spin.

I think it's giving people pause, and they're asking real questions about, what does he believe, truly, and how would he govern as president of the United States? And I can tell you, here in Iowa, people want to make sure that our nominee is 100 percent pro-life, 100 percent standing for marriage between a man and a woman, and they certainly don't want to see terrorists like Khalid Sheikh Mohammed released from Guantanamo Bay. That's non-negotiable. It's among the other items that have come out lately.

WALLACE: Yes.

We have got less than a minute left. I just want to ask you one final question.

A couple of your paid staffers in New Hampshire quit this week, and one of the reasons they said is that, except for a debate about 10 days ago in New Hampshire, you hadn't been in the state since June, which raises the issue, aren't you, in effect, all in, in Iowa? Don't you have to win in Iowa or you are gone?

BACHMANN: Well, we are replacing the staff that we have in New Hampshire. We have had a great week this last week, and we are focused on Iowa.

We've spent a great deal of time in New Hampshire prior to that, and also in South Carolina, and we're here in Iowa. We are focused in Iowa, and we're very grateful for it.

I won the Iowa straw poll. We have a great deal of enthusiasm and support here in Iowa, and we're conducting town hall meetings. We're getting to New Hampshire and we're getting to South Carolina as frequently as we can. We also recognize the process.

Iowa has stated January 3rd is now the date. So they're number one. So we're focusing on the very first state that will have a voice in the 2012 election. That's Iowa, and so that's why I am here today.

WALLACE: Congresswoman Bachmann, we're going to have to leave it there. Thank you so much for taking the time to join us, and we'll see you out on the campaign trail.

BACHMANN: Look forward to it. Thanks, Chris.

WALLACE: Up next, a big week overseas. When we come back, how our Sunday group tackles how the U.S. role will change in Iraq and Libya.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

PRESIDENT BARACK OBAMA: The United States is moving forward from a possession of strength. The long war in Iraq will come to an end by the end of this year. The transition in Afghanistan is moving forward, and our troops are finally coming home.

(END VIDEO CLIP)

WALLACE: President Obama touting what he called a string of successes in American foreign policy.

And it's time now for our Sunday group -- Brit Hume, Fox News senior political analyst; David Drucker from the Roll Call newspaper; Kimberley Strassel of The Wall Street Journal; and Fox News political analyst Juan Williams.

So, Brit -- and we've heard a lot of very differing arguments today-- what do you make of the president's announcement he's pulling all troops out of Iraq by the end of the year?

BRIT HUME, FOX NEWS SENIOR POLITICAL ANALYST: Well, it's a statement more in relieve and achievement of a campaign promise than it was an announcement of victory. Obviously, major military progress and political progress has been made in Iraq, but as all the generals always say when they brief on this, the gains are reversible, the structure there is shaky, and whether this will all turn out happily, we can certainly hope it will all end well, but whether this all will turn out happily or not remains to be seen.

WALLACE: David?

DAVID DRUCKER, ROLL CALL: Well, I think we're not going to know how well this all turned out and how successful it's going to be for the Obama administration for a few years, until we see how the Iraqi government transitions, how it does defending itself, and Iran's influence in Iraq, because if Iran ends up as a major player in Iraq, I think you could say diplomatic failure.

However, I think it was interesting in listening to Secretary Clinton how much she said this is a validation and a part of what was also the Bush administration's strategy to clearly hear Obama has no problem aligning himself with the former president.

WALLACE: Well, particularly because it gives him bipartisan cover in this particular case.

You know, Kim, I was struck that she acted as if this was just the natural order of things, when it was just a couple of weeks ago that her State Department was negotiating to try to keep thousands of troops in. On the other hand, the Iraqi government, under pressure from its Shiite factions, especially Muqtada al-Sadr, the radical Shiite cleric, they wanted the U.S. out. They viewed this as an occupation.

So how much more could Obama have done?

KIM STRASSEL, WALL STREET JOURNAL: Well, they could have made this work. We're talking about the United States of America and the leader of the free world. Also, Maliki fundamentally did want the United States there longer. Now, he has to oversee a coalition of people that includes factions that are friendly with Iran, and they did want the United States out, but they could have made this happen if they wanted to.

And, in fact, the way the president announced this yesterday, I sort of thought -- I mean, it did go to Brit's point. It sounded as though it was more an interest in the political outcome of this. They just decided at some point that they weren't going to do this anymore, and now it works out well. The president can say, I fulfilled a campaign promise. Congress can go about now saying we've got money to spend on other things, and everyone's happen, but this is a very fragile situation.

WALLACE: Juan.

JUAN WILLIAMS, FOX NEWS CONTRIBUTOR: I don't think it's so fragile. I think unless you want to make a commitment -- I heard some of this, this week, that, gee, you know what? We're still in Germany. We're still in South Korea. We're still in Japan. You know, 40, 50 years after World War II.

Why are we leaving so preemptively? It seems rash.

It seems to me like we've been there 10 years. It seems to me like 4,500 Americans have died. It seems to me like 100,000 Iraqis have died, and its' time for us to pull out.

Now, the question is -- and this is what we are hearing this morning -- is, what comes next? I am not sure that al-Maliki and the Iranians are such great friends. I think that, obviously, you have a Shiite-dominated south, and there is a possibility of some interference there, but, you know, there's all sorts of complexities, beginning with Saudi Arabia's relationship with Iran. We saw that in terms of the attempted assassination. And I think that to somehow say directly there's a link between Iran now going to dominate Iraq is mistaken.

WALLACE: Let's turn to the other big story, to Libya.

With now not only the ouster of the regime, but the death of Qaddafi, Brit, does Obama's policy of leading from behind look smarter?

HUME: It looks better today than it did. My own view is -- well, let me put it this way -- I think there's a good argument that could be made that if we had intervened more forcefully and forcibly sooner than we did with air power, his government and he might have been toppled very early in the game, when he was on very shaky ground, and that the decision to handle it the way the administration handled it prolong the bloodshed and prolonged the suffering, and gave us ultimately this messy ending. But look, the guy is gone, and that is the single most important central fact of this, and why the president, I think, will have some ground to stand on when he claims this as a victory.

WALLACE: And David, the Obama administration never fails to point out, and legitimately so, one, that we did this without the loss of a single American life. Two, it was cheap. I hate to put it that way, but it cost a billion dollars, which, as someone said, is a rounding error in the Pentagon. And it also had the look of an organic Libyan effort, rather than the U.S. toppling another regime.

DRUCKER: Given our economic environment, and given the fact that we're Afghanistan and Iraq, I don't think there was any other way to do this but with a light footprint. I think it's a matter of the style.

Had this not gone well, then the leading from behind factor becomes an issue. And Americans always have a problem with the appearance of the country looking weak. But above everything else, they prioritized results. In this case, the administration ended up with results -- at least so far -- and so it works you out.

WALLACE: Kim, you look like you're knitting your brow.

STRASSEL: No, no. I mean, I just wonder, though, at what cost?

I mean, again, this should have been a no-brainer at the beginning. This man, Qaddafi, had killed more civilians in the world than any other man other than Osama bin Laden. He was a international terrorist.

And when this came about, this could have been done -- and he was on the ropes -- this potentially could have been over in weeks, at a great savings of loss of life in Libya, at least. And instead, there was hemming and hawing. And I think this exposed a lot of weaknesses. It disclosed weaknesses within NATO. It certainly begs the question about America and its use of power in the world, invited a lot of backlash from Congress which we had to deal with here. And so I'm not necessarily sure it was a very big victory.

WALLACE: Juan?

WILLIAMS: You're not sure it was a big victory?

STRASSEL: Well, in the end.

WILLIAMS: In the end, it was clearly a victory.

STRASSEL: Yes, but it could have been a better one.

WILLIAMS: I mean, the United States eliminated -- it could have been better, you think, if the United States had put troops in?

STRASSEL: No, but if we had led from the front, if we had been more forceful. We had to be dragged into this, basically, by the Europeans. The president was very slow to come around.

WILLIAMS: I don't think so. I think that the president was slow to say we're going to put American troops on the ground, and there was certainly no political support for that here in the United States. And I think there would have been consequences to putting troops on the ground in another Muslim country, given that we had a presence in Iraq, Afghanistan, troubles with the Pakistanis. So, I think that he was able to manage this in the best way possible.

Now, the question is -- and I think you are exactly right -- exposed major flaws in terms of NATO, and it was U.S. intelligence and ultimately U.S. military armaments that carried the day for the rebels. So the U.S. was engaged in another war, but I think it was done in such a way as to not harm our relationships in the Middle East, and that's critical.

WALLACE: Brit.

HUME: I just have a couple of thoughts about this.

It's not yet clear that this concept of leading from behind is a policy, or whether it was just a practice that was applied in this case, because you have to ask the question, when it comes to Syria, are we leading from behind, are we leading at all? Similarly, with Iran. It doesn't appear that the effort to keep Iran from getting a nuclear weapon is succeeding, except by virtue of their own technical stumbles and whatever efforts are being made to mess their computer systems up and sabotage their armed system, their nuclear program. So, you know, I think there is a lot to be seen.

WALLACE: We're out of time.

But let me just ask you real quickly, Brit -- you hear all this stuff about we should have an investigation, war crimes, the killing of Qaddafi. Are you offended by the way Qaddafi ended?

HUME: Well, it does look like they captured him and then they just decided to kill him, which isn't pretty, but I don't think the world is going to mourn him for very long, and I think all of this remains fodder for the far left and various quarters, and if there's an investigation, so what?

(LAUGHTER)

WALLACE: And on that note, we have to take a break here. But when we come back, the debate showed the Republicans field isn't afraid to mix it up, but now the campaigners look to hit the campaign trail hard. 2012 politics, next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

MITT ROMNEY, REPUBLICAN PRESIDENTIAL CANDIDATE: I don't think I've ever hired am illegal in my life. And so I'm afraid -- I'm looking forward to finding your facts on that, because that just doesn't --

GOV. RICK PERRY, REPUBLICAN PRESIDENTIAL CANDIDATE: I'll tell you what the facts are.

ROMNEY: Rick, again -- Rick, I'm speaking. I'm speaking.

PERRY: Your newspaper -- the newspaper --

ROMNEY: I'm speaking. I'm speaking.

(END VIDEO CLIP)

WALLACE: The unforgettable moment this week when presidential candidates Mitt Romney and Rick Perry went toe-to-toe.

And we're back now with the panel.

So, let's start with a look at the latest RealClearPolitics average of recent polls to see where the field stands now. Let's put it up.

As you can see, Herman Cain and Mitt Romney, far ahead of the field, followed by Rick Perry, a distant third, and the rest of the candidate in single digits.

I guess there are several questions. You can take any of them you want, Kim.

Can Cain stay on top? Can Perry bounce back? And can any of those other candidates break out?

STRASSEL: Well, I mean, I think it's quite remarkable that Cain has stayed where he has for more than 10 days, a couple of weeks, especially because he now is just getting hammered on all sides of these questions of his 9-9-9 plan, on foreign policy. Abortion became a big issue this week.

I mean, he's now -- it's hot in the sunlight, and he is right in the middle of the sun right now. So we'll see in the next couple of weeks.

The big question here, is Romney -- especially now that you are having Perry come out with this flat tax plan this week, there's going to be a lot of enthusiasm about that, and talk in the base about livening this up in terms of economic policy. And Romney is still someone that's a little bit timid on this, and he, I think, is going to have to pick up his game some if he want to compete in this realm.

WALLACE: Juan, your overview?

WILLIAMS: Well, I think that the ads were run by the campaigns this week were quite interesting in that you suddenly see that Romney really perceives Perry, despite what you saw on those poll numbers, Perry as is his primary rival, the anti-Romney. He doesn't take Cain seriously.

I think everybody in the Romney campaign expects that Cain will go away, and it will be about his book tour and about his speaking fees. But they think that, in fact, Perry is about to be resurrected.

He has money and he has a message, and he's a very strong and commanding presence. And what you saw on the debate stage this week I think, again, is evident that Romney fears Perry. That's the alternative that they think could knock them off path, even though Romney has more money and it looks like he has a clear path to the nomination.

WALLACE: Let's talk about Herman Cain.

As Michele Bachmann suggested in the interview, he had, I think you could fairly say, two big gaffes this week, Brit. First of all, he suggested to CNN that he would consider trading all of the prisoners at Guantanamo for a single U.S. hostage. This, of course, after the prisoner swap in Israel. And he also said that, you know, government shouldn't be telling families what to do in abortion, it's their choice.

Now, he tried to walk both of them back, but how much damage has been done?

HUME: I think serious damage has been done. For all of the disaffection with professional politicians that we see in this cycle and, to some extent, in the congressional election, in the end, particularly when you are running for president, it is not an advantage to be without long experience. And Herman Cain's lack of experience is what is leading to these stumbles and missteps and misstatements.

The abortion blunder was kind of inexplicable. I mean, it doesn't walk it back when you say it ought to be the person's choice, but, oh, yes, it's also illegal. I'm sorry, that doesn't help. So I suspect that Herman Cain may have peaked and may begin to decline. And just on one other point, there is a lot of people that think that this moment in the debate where Mitt Romney and Perry got into it with each other was helpful to Perry. I couldn't disagree more. I think Perry took an unmistakable, cheap shot at Romney on immigration. Romney --

WALLACE: Explain why.

HUME: Well, what he said was, that Romney had hired an illegal. It turns out it was a company that he had hired, which unknown to him, had hired illegals. He told them to stop it. They said they would. And then, when they didn't do that, and more illegals got hired, he fired the company.

Now, that is something that no smart politician would try to make an issue of. Perry did, and then when he kept trying to interrupt Romney, when Romney was explaining, that made Perry look bad, too. So I think he made a double blunder on that, and I think he came out of it much the worse.

WILLIAMS: You think Romney looked good when he said, well, I can't hire illegal immigrants, I might run for president? I think that didn't look so good either.

HUME: That wasn't the most artful way of putting it, but his explanation, it seems to me, holds up.

WALLACE: David?

DRUCKER: Well, I think we have begun this week to see the cracks in Herman Cain.

First of all, he's getting the attention you get as a top-tier candidate. You saw he changed up his 9-9-9. All of a sudden, I guess it's not as simple as he said it was. And it is very easy, Chris, to attack this in a 30-second television ad.

All you have to say is, your taxes are going up. And he can argue all that he wants about, you didn't do the math right, and check with my team and not your team, and that policy analysis group isn't really independent, but people, they just don't have time for all of this.

The second thing you've seen is what happens when you have an undisciplined candidate. And I'd love to disagree with Brit just to make it fun, but the truth of the matter is, when you have limited campaign experience, and you're under the white-hot spotlight of running for president, this is what can happen.

And I think the reason that Romney hasn't attacked Cain is he hasn't had to. People like us have been looking at his plan and writing all sorts of things, and it's taking care of the problem. If there's any threat he has, it's Perry and the $15 million, and a very friendly persona if you get him away from the debates, and that's ultimately his competition.

WALLACE: You know, let's tell a dirty little secret, which is that we, because we don't want this to be Obama-Romney for the next year, want to see a Republican primary race.

And I get the sense, Kim, that you are suggesting that there's going to be an effort, whether on his part or on our part, to kind of resuscitate Rick Perry.

STRASSEL: Well, yes. We're not the only ones that don't want an Obama-Romney. I mean, the White House is out there, and they are going to try to undermine Romney as much as they can, make this go on as long as it can, and have the other Republicans in the field damage him as much as they can.

WALLACE: But do you think that Perry can salvage his campaign? I mean, he was up at 38 percent in the polls when he first got it. He's now, as we just showed, a distant third, at 13 percent.

STRASSEL: It's been a huge plummet.

Now, the legacy of Herman Cain, wherever he goes, is that people like Rick Perry have seen what his merit is, and he inspired a lot of Republican primary voters with the simplicity of it.

DRUCKER: A flat tax.

STRASSEL: So this -- right. Tuesday, we're going to see Rick Perry announce his flat tax, and what he is betting is that it does not have all of the drawbacks that Herman Cain's plan does about a national sales tax, for instance, you can't make those sort of complaints.

It's got a little bit of a history. Of course, Steve Forbes did this, so he's going to have some ready-made defense and arguments for making it. And he's going to go out there and try to pull black, claw back some of that enthusiasm riding off of Herman Cain and Romney.

WILLIAMS: Let me just say that the issue here, I think, for lots of Republicans is, is Mitt Romney a real conservative on all the flip- flops? And you hear them from Perry. But when it comes to Herman Cain, what's stunning is, Herman Cain is not just leading in that RealClear average, he's leading now in Iowa.

He's leading around the country. It's just amazing. They think he is an authentic, genuine person, and a real conservative.

WALLACE: We'll see how the polls change after this week.

Thank you, panel. See you next week.

Don't' forget to check out "Panel Plus," where our group picks right up with the discussion on our Web Site, FoxNewsSunday.com. We'll post the video before noon Eastern Time.

Up next, we hear from you.

(COMMERCIAL BREAK)

WALLACE: Time now for some comments you posted to our blog, "Wallace Watch." And many of you wrote about the continuing struggles of the U.S. economy.

Wayne Johnson sent this: "The individual spender is the driver of the economy. You can fill all the banks, Wall Street, and corporations full of cash, but unless the consumer has disposable income, there will be no improvement in the economy."

A.M. Deis (ph) from Fort Walton Beach, Florida, wrote, "The United States is no longer the big dog in the world. We are already up to our chins in quicksand, and need to start concerning ourselves more with fixing our economic problems."

Please keep your comments coming. You can find us at FoxNewsSunday.com.

And that's it for today. Have a great week, and we'll see you next "Fox News Sunday."

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