Sen. McCain talks Syria, Iran and tensions with Pakistan; Cardinal Wuerl on Catholic institutions vs. Obama administration

This is a rush transcript from "Fox News Sunday," May 27, 2012. This copy may not be in its final form and may be updated.


On this Memorial Day weekend, the U.S. faces military and diplomatic challenges. We'll discuss stalled talks with Iran, continuing tensions with Pakistan, and the war in Afghanistan with one of the GOP's leading voices on foreign policy, Senator John McCain.

Then, Catholic institutions take the Obama administration to court about its insurance mandate on contraception. Is it an issue of religious freedom or women's health? We'll ask a top church official pushing the legal challenge, Cardinal Donald Wuerl, archbishop of Washington.

Plus, are President Obama's attacks on Mitt Romney's business record working? We'll ask our Sunday group which side has the winning message.

And power player of the week. Remarkable story of devotion to country and sacrifice you won't want to miss.

All right now on "Fox News Sunday."


WALLACE: And hello again on this Memorial Day weekend from Fox News in Washington.

As we remember those who had given their lives defending our country, we continue to face foreign policy challenges. Here to tackle all that is Senator John McCain.

And, Senator, welcome back to "Fox News Sunday."

SEN. JOHN MCCAIN, R-ARIZ.: Well, thanks for having me on, especially on Memorial Day.

WALLACE: There has been another massacre in Syria. Government forces killed more than 90 people, including more than 30 children. You can see some of the bodies stuck up like cordwood here, in the village of Houla. And the White House has apparently decided going to start vetting some of the rebels to see whether or not they are Islamic radicals and then perhaps to let other Arab countries arm them. Is that enough?

MCCAIN: Of course not. It is about a year too late. You know, this is a shameful episode in American history. It began back in 2009, when we refused -- when the president of the United States refused to speak up on behalf of the demonstrators in the streets of Tehran and gone from one episode to another.

Here we have over a year and we're now talking about possibly vetting some people. Nearly 10,000 people have died. This is a brutal regime of incredible proportions. And, by the way, if Bashar Assad failed, in the world of General Mathis, the head of our Central Command, it is the greatest blow to Iran in the last 25 years because it would cut off them from Hezbollah, Syrian is the most important client state, et cetera.

Horrible things are happening in Syria. This administration has a feckless foreign policy which abandons American leadership. I know because I visit with these people, that they are ready to help these people and they are helping them some. But it cries out for American leadership.

American leadership is not there.

WALLACE: Let me follow up there. There's a story on the front page of The New York Times today that President Obama is considering trying to get Assad out diplomatically with the help of the Russians. How likely do you think that is?

MCCAIN: Again, here we are a year later and 10,000 killed and main supplier of arms, we are going to convince them our hopes rest on convincing them to ease out Assad, comparing it to Yemen which there is no comparison.

It's really just a sad story. And what the conclusion you can draw is that this president wants to kick the can down the road on all of these issues until after the election. Medvedev -- telling Vlad I'll be more flexible after I'm reelected.

And it's really an abdication of everything that America stands for and believes in. And on Memorial Day, we should be especially moved by this incredible inaction and failure to assert American leadership.

WALLACE: You were saying just before we came on the air that you see a pattern -- in Syria, in Afghanistan, in Pakistan, with the Pakistanis thumbing their nose at us by taking this doctor who apparently helped to find bin Laden, sentencing him for 30 years in prison treason, that you see a pattern of the other countries sort of dissing the U.S.

MCCAIN: You have to look at it in its entirety because when you look at one country, you are puzzled. This has to do with a foreign policy led by a president who does not believe in American exceptionalism.

So, it began in Iran when we failed to stand up in 2009. In Libya, we, quote, "led from behind". The war was much longer because we didn't use American air power.

With Iran, clearly, we're kicking the can down the road. How many times have seen North Korea and Iran in these different negotiations that have taken place?

In Afghanistan, obviously, the Taliban believed that we are leaving.

In Pakistan, why would they directly insult America by putting a doctor who helped us apprehend and take out the most notorious terrorist in the world and they put him in prison for 33 years. It's because the Pakistanis believe that we are leaving. This president -- have you ever heard the word "victory" come through the lips of this president. We are always talking about withdrawal, withdrawal, withdrawal.

And, of course, Iraq is unraveling because we didn't leave a residual force there and in the negotiations with Iran. Could I just give you a quote of Catherine Ashton, who is the E.U. foreign policy chief about the negotiations with Iran?

Quote, "What we have now is some common ground and a meeting place where we can take that further or forward."

I'm not making that up. So, we continue we continue -- they're going to meet in Moscow next week, and meanwhile we are accepting enriched uranium, which we had said they couldn't do, and the Iranians have not been deterred.

Meanwhile, the Israelis are watching with great concern as there is no chance in the progress --

WALLACE: Let me ask you about Iran. As you say, there was a round of talks and all they agreed was another round of talks next month in Moscow, meanwhile the Iranians continue to install more centrifuges and there were also traces found at one of the sites of highly enriched uranium than we know about -- not 20 percent but 27 percent.

Question: is it time to give up on diplomacy?

MCCAIN: I think that it is time to draw red lines for the United States and Israel together. The president of the United States said it is unacceptable to get nuclear weapons and --

WALLACE: What do you mean by red line?

MCCAIN: Stopped the enrichment, allow the IAEA inspectors in --

WALLACE: And give them a deadline.

MCCAIN: At least red lines. If you cross the red line all options are on the table.

WALLACE: Well, you all options are on the table, we always sat that.

MCCAIN: I can't sit here in front of you and say I'm absolutely in favor of military action. But there has to be a red line that they cross they must face the consequences.

Now, that action take a variety of ways besides all out air attacks. But the fact is, the Iranians despite the harm to their economy and there have been significant harm to their economy, have not changed iota from the path they are on.

WALLACE: Let me ask you about another county, Egypt, which has just held a first round --

MCCAIN: Should I just say finally on that?


MCCAIN: That option has to be on the table and the Iranians have to know that otherwise, there will be no success in these negotiations.

WALLACE: Egypt has just completed its first round of the first free elections for president ever. It looks like there's going to be run off between Mohammed Morsi of the Muslim Brotherhood and Ahmed Shafiq, a former general who was Mubarak's last prime minister.

Do we support Shafiq because he would keep close relations with Israel and the U.S. and because he would block the Muslim Brotherhood from taking control of the entire country and possibly creating an Islamic state?

MCCAIN: We can't weigh on this, Chris. It would help whoever, we are not -- there is a strong anti-Americanism in Egypt for a whole variety of reasons. But we have to stay out of it, if it's a fair democratic process, we have to recognize the result of and we have work with whoever wins.

WALLACE: What if it is a Muslim Brotherhood president and a Muslim Brotherhood parliament?

MCCAIN: I think that could have consequences. But I would always point out there is different gradients of the Muslim Brotherhood. They were once the only opposition to Mubarak in Egypt. Mubarak was going to go, and anybody who doesn't think that doesn't recognize the hinge of history.

And so, we have to work with the regime. I am very worried mainly about their economy, which is running out of hard currency. They are facing extreme economic difficulties and we have to respect that election if it is free and fair and work with who ever is the winner.

But I would say right now, there's a very strong possibility of polarization of Egyptian society no matter who wins.

WALLACE: We turned to Afghanistan. We talked about American soldiers in harm's way. We still have 90,000 troops. We're going to get down to about 60,000 by the end of the summer and the president has set a time line with the NATO allies to get all of our forces in two and a half years.

WALLACE: You and other critics of the president say that we shouldn't have this timeline. We need more time to help train the Afghan forces so they can defend themselves.

Here's my question: who is training the Taliban? They don't seem to need 10 years of training to fight. Why do our allies need 10 years to train?

MCCAIN: Well, for a variety of reasons, including insurgency warfare doesn't receive the training that it does for a regular military counter-insurgency.

But most importantly, again, the Taliban believed that we are leaving. The president has announced withdrawal after withdrawal.

The president has overruled the recommendation of military commanders who he has -- not recommended -- who he has put in their positions. And the president has increased the risk every time. Famous story about the Taliban captive and the American interrogator. And he says, you've got the watches, we've got the time.

That's what the Taliban believe today. There's the Haqqani network working with the ISS, killing Americans.

WALLACE: Pakistani intelligence.

MCCAIN: There is still corruption in most levels. And also now, the administration plans on reducing the Afghan national army by some 100,000 at a time when they would be in the most severe economic difficulties. Again, we the entire region believes that the United States of American is withdrawing. They have to live in the neighborhood and they are making accommodations and that's not good for America.

WALLACE: Before I'll let you go, I want to talk briefly about 2012 politics. You have criticized President Obama for going after Mitt Romney and Bain Capital as, quote, "class warfare at its worst."

So, we had our researchers look at what you were saying four years ago about Mitt Romney when you were running against him in the primary.

MCCAIN: Here we go.

WALLACE: And you said this about Romney. "He managed companies, and he bought and sold, and sometimes people lost their jobs." And your campaign manager said this about Bain. "You go and buy companies, you strip away the jobs, and then you sell them."

So, weren't you engaging in the same kind of class warfare?

MCCAIN: First of all, I don't speak for my campaign manager, he speaks for himself.

But, in fact, this is the free enterprise system. The only place in the world that I can recall where companies never failed was the old Soviet Union. This is what investors do in free enterprise and capitalistic system. When you take $5 million in a warehouse and you end up with Staples, I would argue that that's what it's all about.

And yes, free enterprise system can be cruel. But the problem with this administration is that small business are the one who had suffered the most, the kind that need investors, the kinds that don't need the hundreds of pages, thousands of pages of regulations that continue to plague them and have them hold back on the hiring investment.\

And this is Memorial Day and I thank you for having me.

WALLACE: Well, I was just -- I wanted to in 30 seconds or whatever time you need as the son and grandson of military men and as a war hero yourself.

MCCAIN: And a son in the Navy. One who was in the Marines, too.

WALLACE: Your thoughts on Memorial Day.

MCCAIN: It's a great honor of my life, it was to have the opportunity long ago and far away to serve in the company of heroes. Men like James Stockdale and Bud Day, and Robbie Reisner and Bill Lawrence. They inspired us to do things that we never would have been capable of.

Our motto was "home with honor". And because of their leadership and their love for us, we did come home with honor.

WALLACE: Senator McCain, we want to thank you for coming in today. And especially on this weekend, we thank you for your service to the nation. Thank you very much.

Up next, the Obama contraception mandate the Catholic leaders are now challenging in court. The archbishop of Washington, Cardinal Donald Wuerl, joins us next.


WALLACE: Some 43 Catholic organizations sued the government this week, seeking to overturn the mandate that many religious institutions must insurance to cover contraception.

Joining us now, one of the church's leaders behind that effort, Cardinal Donald Wuerl, archbishop of Washington.

And, Your Eminence, welcome back to "Fox News Sunday."

CARDINAL DONALD WUERL, ARCHBISHOP OF WASHINGTON: Thank you. It's good to be back with you.

WALLACE: The White House makes several points countering your lawsuit. Let's take a look at those. They say almost 99 percent of women, including Catholic women use contraception at some point at their lives and many struggle to afford it. So, they call this a women's health issue. They also note that 28 states already require health insurance plan to cover birth control.

Your response.

WUERL: This lawsuit isn't about contraception. It is about religious freedom. Embedded in the mandate is a radically new definition of what institutes a religious community, what constitutes religious ministry -- brand new and never fortified in the federal level. That's what we are arguing about.

The lawsuit said we have every right to serve in this community as we have served for decades and decades. The new definition says you are not really religious if you serve people other than your own and if you hire people other than your own. That wipes out all of the things that we have been doing, all the things that we contribute to the common good -- our schools, our health care services, our Catholic charity and even parish soup kitchens and pantries. All that's wipe out.

WALLACE: Let me pick up on that, because the White House says -- the famous accommodation by President Obama, that they changed the mandates so that the insurance companies that you are dealing with, to provide health insurance coverage to your employees have to provide the birth control for free and that the charities and the schools and the hospitals, don't have to do anything.

WUERL: This is one of the reasons why we say the accommodation didn't change anything, because so many of our institutions, certainly the archdiocese, is self insured. We are the insurer.

So, when you say, don't worry, we changed this and only the insurer has to pay. And we are the insurer, there is no accommodation.

WALLACE: But they're saying, well, over the next year, we are taking public comment on this. And we will tweak that regulation so that the self insurers will not have to provide the birth control.

WUERL: Last time the government said we are going to hear from you, 200,000 suggestions went in and not one of them was accepted.

What was in the presentation before the request for suggestions was exactly what the administration reported out. By the way, it's a law. It's a law right now.

All of this conversation about we'll find a way around it, that's conversation. What's law right now, is that that definition is what we are going to have to live with. And that's why we went to court, because in the United States, if there is an impasse on the individual rights, we're going to court and that way you scrape away all of the politics.

WALLACE: I don't know if you've heard about this. But if you haven't, I'll inform you. What do you make of the fact that the broadcast network spent grand total of 19 seconds on their evening newscast -- 19 seconds -- covering the lawsuits by the 43 Catholic organizations; what do you make of that?

WUERL: Well, it is puzzling because they are focusing so much attention on the pope's butler. It seems to me that somehow they missed the boat. And they missed the story.

And that's why it is so important that we have a moment like this.

WALLACE: You think it's political bias on the part of the networks?

WUERL: I think we have to look at it in the much larger picture. And, certainly, people have their own mindset. That's one of the reasons why we continue to say to our people, the issue is religious liberty.

WALLACE: I want to pick up on that, because as you well know, there is a split within the Catholic Church on this issue -- 13 Catholic dioceses did file lawsuit. But that means more than 180 did not file a suit. And some of your fellow bishops, especially in California, are saying that this seems to be part of a political campaign by some conservative leaders against President Obama.

WUERL: I don't know where that is coming from. One bishop was quoted, issuing a statement that he is totally supportive of all of this, including the lawsuits. I don't know where the story is coming from. I know it's out there.

But again, this is one of the reasons why it's important to have a program like this where we can speak directly to people, rather than have --

WALLACE: Are you saying there is no split on the church on this issue?

WUERL: I have yet to see any split at all. And again, the bishop who was quoted he was concerned issued a statement saying that what was said about him was not his position.

As to how many dioceses went into court. When we had the great decision of the Supreme Court that said you can't segregate public schools. It was one case. That didn't invalidate the argument that segregation was wrong.

So, when you say there's a division in the church because not every diocese that went to court. There are diocese and institution and universities, hospitals all over the country who went to court. The idea was to make this representative of the church in the United States.

It would be physically impossible to get every diocese into court at the same time.

WALLACE: Meanwhile, Mitt Romney came out this week for allowing federal funds to be used by low income parents to send their kids to any public school or even to some private school and parochial schools. You support that idea, don't you?

WUERL: The idea that money should follow the child, we all pay the taxes. We are all paying taxes for education. Why doesn't that money follow the parents of the kids?

For example, here, if you live in the District of Columbia, if you are very wealth or have a lot of support, you can send your child to a very exclusive private school. But if you live in this inner city, if you live in some of the poorest neighborhoods, you don't get an option.

That's why the Catholic Church is there, that's why we have our schools in the inner city saying we'll give you a chance to get a decent education and we'll pay for it. But wouldn't it be fair, wouldn't be just, wouldn't be really honest if every child a chance at a real, true, academically excellent education. And one way to do that is to let the parents have a choice.

WALLACE: Do you think that Mormons are true Christians?

WUERL: I never define other people. I define myself. That's why we are in court. I define myself.

I don't want the president to define me, so I'm not going to define somebody else.

WALLACE: Finally, and you were saying, oh, well, the attention being given to it, but it is a story, it is a fascinating story, so I'm going to ask you about the time we have left, the pope's butler has been arrested for allegedly leaking confidential documents, including personal letters to the pope to the news media, and these documents seem to show cronyism and corruption inside of the Vatican.

What would you tell concerned Catholics?

WUERL: I wouldn't worry about what I am reading in the newspapers about something that media has reported in Italy about something that someone said is going on. I'm not altogether certain that the butler's access to some documents is really the major concern of the church or should be a major concern of the people United States of America today. We have so many other issues. One of them, for example, is we are going to be celebrating Memorial Day. We are going to be turning our attention to those brave women and men who died in the defense of this country, of its freedom, of its Constitution, and of the ability of all of us to carry on our way of life. I think that's where our focus should be this coming Memorial Day as we simply recognize who we are.

By the way, that's one of the reasons we are in court. We are saying, we're saying, we've been told the reason we buried in flags these brave men and women, is because they were defending our freedom and Constitution.

WALLACE: Well done, Cardinal. Thank you so much for joining us and it's always an honor to speak with you, sir.

WUERL: Thank you. It's a great joy to be with you.

Up next, the Sunday panel discusses Mitt Romney's continuing attacks on Mitt Romney's business record. Is that strategy working?



PRESIDENT BARACK OBAMA: The job of a president is to lay the foundation for strong and sustainable broad- based growth -- not one where a small group of speculators are cashing in on short term gains.

FORMER GOV. MITT ROMNEY, R-MASS., PRESIDENTIAL CANDIDATE: There's no question but that he's attacking capitalism, in part, I think, because he doesn't understand know how the free economy works.


WALLACE: President Obama and Mitt Romney going after each other on the issue dominating the campaign these days, the role of private equity and who is more qualified to put America back to work.

And it's time now for our Sunday group, Brit Hume, Fox News senior political analyst; Kirsten Powers from the Daily Beast website; The Wall Street Journal's Kimberly Strassel; and Jeff Zeleny of the New York Times.

Well, Kim, I want to start with your column in The Wall Street Journal this week, in which you said that Mitt Romney's alleged brand of vulture capitalism is timid, mild, compared to Barack Obama's. Explain.

KIMBERLY STRASSEL, WALL STREET JOURNAL: Well, I think the argument here -- I think you just heard the president talk about this. He said the rap on private equity and Bain and Romney is that somehow this is profit-driven; free enterprise is ruthless; and that the job of the president should be much more than that and that's why Romney is unqualified

Actually, what's interesting here is you've had an example of how the president actually does view capitalism and how he would do it, because he's done it over the past three years with Solyndra, with Detroit.

And what you have are examples of -- what that proves is that, even when the government is running business, which it seems to be his idea of how you do it, you still get bankruptcies; you still get layoffs. What you also get is tens of millions of dollars of lost taxpayer money and subsidies and mandates and political favoritism of the sort you saw in the bailouts, for instance, United Auto Workers being put ahead of corporate bond holders.

And so this is what he prefers. This ought to be a contrast that Romney's out there making.

WALLACE: Kirsten, do you think that's fair?

KIRSTEN POWERS, THE DAILY BEAST: I think it's a totally fair contrast to make, and I do think the Obama administration overpromised on a lot of things, in particular on the green jobs, though I think a lot of the criticism for Solyndra is a little overstated because it was such a small portion of the overall money that was spent in that program.

The issue that the White House is trying to make with Romney, and Romney is pretending that he thinks this is about an attack on capitalism, which it's not at all -- and the administration could do a greater job making clear they're not attacking private equity. What they're saying is private equity is not about creating jobs. It's about creating wealth. And Romney is conflating wealth creation with job creation.

And that's fine, but you don't find any private equity person -- and they're not there to make -- create jobs.

WALLACE: Brit, a number of top Democrats this week undercut the president, criticized him for his attacks on Bain and private equity, so many that the Republican National Committee put out a video listing all the critics. Take a look.


(UNKNOWN): Deval Patrick.

(UNKNOWN): Chuck Schumer.

(UNKNOWN): Senator Feinstein, Senator Joe Manchin.

(UNKNOWN): Kirsten Gillibrand.

(UNKNOWN): Chris Coons.

(UNKNOWN): Governor Ed Rendell.


WALLACE: But the Obama campaign said this weekend that they are not backing off; they're going to continue the attacks on Bain and in fact they're going to broaden it and link it to Governor Romney's record as governor of Massachusetts. Are they making a mistake?

BRIT HUME, FOX NEWS: Well, I thought, Chris, when this issue first arose during the primary campaign, that Romney needed to be prepared for it to come even harder during the general and that he would need to make a very broad defense, not simply by saying, yes, we have lost jobs in some of our enterprises we invested in but we created a lot more jobs, or something like that.

I thought he needed to make a broad-based defense of private equity investment and linking it to the growth of the economy, the -- the renewal of American business, in many cases, and so on. I'm beginning to think that I may have been wrong about that, that this has been so clumsily handled by the administration; so many Democrats have recoiled from it, that I'm beginning to think that maybe he doesn't need to do that, that this is -- this is turning out to be, kind of, a blind alley for the Obama administration going there, because of several things.

One of those is -- or the examples that Kim cited in her column so ably, but the others are that the president has, through -- with fundraisers, members of the administration and so forth, innumerable ties to private equity and to big Wall Street heavies and so on that the -- that the whiff of hypocrisy on his part becomes unmistakable. So I'm beginning to think this attack isn't working. And I thought it well may, originally.

WALLACE: Jeff, there's a narrative out there right now that, between the blowback from some Democrats about Bain and the fact that the president has gone so negative, so personal on Romney so early, that he's stumbled out of the gate.

Do you buy that?

JEFF ZELENY, THE NEW YORK TIMES: I think we don't -- it's too early to know if he's stumbled out of the gate. I think the reality is the Obama campaign had always planned to use the two months of the summer -- really, May, June and July, to try and define Mitt Romney. So that's what we're seeing right now. We're not sure if it's being successful or not.

The rollout of Bain Capital was really nothing short of a disaster for them, and they had a lot of time to do this, at least in the eastern Atlantic and coastal region. But...


WALLACE: ... like the governor of Pennsylvania and the mayor of Newark have their own ties to private equity.

ZELENY: All Democrats, right. But what really matters is how this is, sort of, being internalized by voters in Ohio and Wisconsin and Michigan.

But I think it's -- it's far too early to say that the president's campaign has stumbled coming out of the gate. I think it looks like they're not quite up to speed on the campaign. Like, they've had a year to get this ready.

But the Romney campaign is in fighting form. They've just finished a primary and it's clear that the Obama campaign is a little slower here, but they are really trying to define Mitt Romney.

So we'll see. Come August, we'll see where Mitt Romney is standing. If he's as strong as he is in August as he is right now, the Obama campaign is in real trouble. And they realize that. And it's going to be a very tight election, but I think the ups and downs of the weeks are not as important as how these voters are internalizing some of these messages now. WALLACE: Well, let me pick up on that with you. Because presidents -- incumbent presidents seeking reelection generally tend to be somewhat slow in getting off the presidential mantle, pedestal, in attacking their opponent. Usually, it's midsummer, July, August, before they start saying it's always my opponent. Up until then, this president is going after Romney personally, negatively, by name. And David Axelrod, the president's chief strategist was -- basically said there's no point in being coy about this.

Is the brand of Obama as a uniter -- is that just something they can no longer afford?

ZELENY: I think they can afford it. I mean, the brand has to be of a fighter. That's what some Democrats have wanted to see all along here.

But, I mean, it's no mistake that this is happening. They're doing it on purpose because they're trying to define Mitt Romney. Who better to try and define him but the president himself?

They've tried surrogates defining him for the last year or so. So the president is aggressively going after him.

And of course he is going to lose some of the brand of independent votes here. But even if this Bain thing is not perfect for Democrats, this is still being fought on Romney's turf. Every one of these stories is still pointing out that he is a business leader, that he has business experience. And that's why voters are giving him strong marks even though they're not exactly sure what he would do on the economy. They're still -- sort of, have hope that Mitt Romney could handle this better than this president.


STRASSEL: Well, I mean, I think that that is part of the disquiet of Democrats, though, which is that, yes, he is coming out; he is -- he's attacking very hard, but what they're worried about is that, since he's come out of the gate, we've had a week of discussion about contraception, a week of discussion about student loans and now this very hard and heavy hit on Mitt Romney.

The question is, how does he define himself? This election is going to be about jobs. And there is a worry out there growing among Democrats that this president is, sort of, rushing hither and there, to all of these different subjects. He's not actually saying how is he going to fix these poor unemployment numbers?

WALLACE: I must say I am struck by that, too. There seems, Kirsten, to be precious little conversation by the president about, one, what he has accomplished in his four years in office; and, two, a kind of understandable plan for what he want to do over the next four years.

POWERS: Well, I mean, they understand that this is a referendum on him and they're trying to make it into a referendum on Romney. So -- because obviously the economy is not doing as well as they would like it to be. The polls are showing he's really struggling with white working class voters.

And so what they want to do is they want to convince people that Romney does not have the experience to create jobs. And so that's why they're going after this Bain thing. And remember that they had other attacks that didn't work, that he had no core and then, you know, he was -- they go through these different things and they don't quite stick. And now this is the one that they've latched onto.

WALLACE: Brit, final thought?

HUME: I just -- I thought about this -- Kirsten has referenced this twice. The president and his team seems to think that this idea that you're creating wealth is unrelated to creating jobs.

Look, every business person who runs a hamburger stand understands you're trying to make a profit. And the business of making a profit has jobs as a byproduct. It's not as if there's some favorite industry out there called "Jobs R Us" which is in business for the purpose of creating jobs. That isn't how it works.

And it makes the president sound, I think, to even -- to even people who are not deeply sophisticated about Wall Street like he doesn't get how the whole system works. I think it may in fact be true that he doesn't get how the whole system works.

WALLACE: All right. We have to take a break here. When we come back, the civilian massacre in Syria and stalled talks with Iran. The Sunday panel breaks down new challenges for the U.S. overseas.


WALLACE (voice-over): Still to come, our "Power Player" of the week.

UNIDENTIFIED FEMALE: We have got to work together to make sure that Travis' legacy lives on.

WALLACE (voice-over): The first lieutenant was rescuing some of his wounded comrades when he was killed by a sniper.

UNIDENTIFIED FEMALE: We have got to honor him the way he would want to be honored.

WALLACE (voice-over): Stay tuned. Our panel will be right back.



WALLACE (voice-over): That was the scene in the Syrian village of Houla, where more than 90 people, including more than 30 children, were massacred by government forces, an attack that is being widely condemned by the U.S. and other countries.


WALLACE: And we're back now with the panel.

Brit, could this massacre be the tipping point? Could the U.S. now get involved, start arming or providing indirectly through other Arab countries arms and find some way to try to force Assad out?

HUME: Well, you know, it could, and particularly if the administration decided at long last that it was going to follow up on the doctrine that it proclaimed when -- during the intervention in Libya.

Remember, responsibility to protect, which was considered by the so-called international community and by the U.S. as a reason for intervening, remember, to prevent the bombing of Benghazi, where there was (inaudible) massacre of this type was inevitable.

Well, now we've seen a series of atrocities in Syria. The administration has basically remained on the sidelines, although there was, you know, a vituperative denunciation by the secretary of state on this attack on Houla yesterday.

We don't yet see the president trying really to make the case for some sort of military intervention on our part or with other countries. And that's -- when we start to hear that, then I think we may be able to say, yes, this was a tipping point.

WALLACE: Kirsten, is it your sense that the administration will remain on the sidelines or get more involved?

POWERS: At this point I don't think they've given an indication that they're going to do anything but remain on the sidelines. That doesn't mean that they wouldn't be moved. I mean, there certainly was a point with Libya that you didn't know that they were going to get involved and then they sort of turned on a dime and decided they were going to.

And this is what -- this -- those types of decisions box them in, because then there is the question, why Libya and why not Syria. You know, they would say -- they say that they thought a genocide was happening in Libya and perhaps they don't consider what is going on in Syria as being as serious. But it obviously --


WALLACE: Nine thousand plus killed.

POWERS: (Inaudible) a terrible situation but they don't seem to be reacting to it with the same sense of urgency.

WALLACE: Let me move, Kim, to another trouble spot that I discussed with John McCain and that's Egypt. There's now been -- this should be good news -- a runoff.

There's going to be a runoff in the first free presidential elections in Egypt, and it's going to be between Mohammed Morsi, who is the -- a member of the Muslim Brotherhood, and former general Ahmed Shafiq, who is Mubarak's last prime minister. Is this another case where we have to remain on the sidelines even though obviously we are not crazy about the idea of the Muslim Brotherhood taking control of the presidency and the parliament?

STRASSEL: But what you do see there happening, which is good news, is you see a movement toward free and timely elections, which is what needs to happen. Now not everybody there is thrilled with these two choices, including a lot of Egyptians.

But you are seeing some good omens, for instance, now that you've had a couple more of these candidates who've been -- got out of the race because it's the last round. You have the two who are remaining, moving in a little bit more centrist fashion, trying to sort of get the voters, the supporters of these other people.

And again, most important thing, you can't really move ahead in Egypt until you have this settled. And there's been a lot of complaints about military council rule. This is a first step toward making sure that that transition happens.

WALLACE: Jeff, looking at the situation in Syria and Egypt and the continuing stalemate and looming deadlines in Iran -- and we'll get to that in detail in a minute -- how much do you think foreign policy, how much of a role will foreign policy play in this campaign?

ZELENY: Up until right now, it's played a shockingly small role in this campaign. I mean, we've talked about Afghanistan a little bit, but not even that much, given the fact that there is an ongoing war there.

But there's very little conversation just as we move into the general election, which we are, I think we're probably going to hear more from the Romney campaign on what he thinks the administration should be doing.

And there is a big opening here for him, I think. I mean, I would not be surprised at all if he sort of follows the lead here of Senator McCain, who was very aggressive this morning on your air, calling it a feckless policy, a feckless administration. Those two are spending Monday campaigning together, Governor Romney and McCain.

So I think it's going to play more of a role here in the end. But what happening in Egypt is just a great example. I mean, a year ago, it looked like the revolution was such a good thing. But now the hope for any type of a middle ground is not necessarily there. So it's a worry for this administration, but I think an opening for the Romney campaign.

WALLACE: But where are -- you know, and I hate to be so cynical about this. Where are the votes on foreign policy? I mean, is this country so war-weary that if, you know, the Obama campaign certainly seems to think that getting out of Iraq, getting out of Afghanistan, staying on the sidelines in Syria, that's where the public sentiment is now.

ZELENY: You're probably right on that, and there's definitely a weariness in terms of spending and other things. I mean, that's one of the reasons that it's hard to imagine that four years after 2008, when McCain was the nominee and eight years after 2004, when national security sort of -- the policy against Democrats was the central theme, Republicans now are just as eager to sort of end the war in Afghanistan and spending and things.

But I do think there aren't votes specifically on foreign policy. But it becomes a leadership issue, and it is going to behoove Governor Romney, I think, to start talking more about this. He understands these issues.

He's a very smart guy. So I think it's not going to be central focus. The economy is. But I would expect to hear more foreign policy in the debate certainly at the end of this general election.

WALLACE: Brit, as we mentioned with McCain, the U.S. and our allies met with the Iranians this week in Iraq and held another round of meetings. And the only tangible agreement was they're going to hold a third round in Moscow in mid-June. Is diplomacy going to run out at some point, where does this go?

HUME: Well, it looks like diplomacy is not going anywhere, and that the Iranians are stalling, which is what they have been doing for years. This will go on the ledger, I think, of foreign policy failure. If things go from bad to worse in Iraq, that might end up there as well. The situation in Afghanistan, where we are leaving, may deteriorate as well.

This administration had a case to make on foreign policy and they got rid of bin Laden. You know, the president says we're ending these conflicts. But if it starts to go south in a number of different places -- and the world often doesn't cooperate with your political schedule -- the president could end up deeply on the defensive about foreign policy going into this election.

Now, it is true that this country is war-weary, weary of the expense and weary of the loss of life and all the rest of it. But it is also a custom to the United States playing the leadership role in the world. And when things start to go badly, people more or less, without articulating it with specifics, expect the U.S. leadership, the president to do something about it.

And if he appears to be failing to do something about it or not even trying, I think that could be a serious burden on his reelection chances.

WALLACE: Kirsten?

POWERS: I think the campaign will be 100 percent about jobs and very little about foreign policy. On the substance of Iran, I think the White House feels completely different about it. They think the sanctions are working. They think that Iran is getting weaker and so their hope is that they will and the diplomacy will work. And so we have to wait and see what happens with --

(CROSSTALK) WALLACE: You mean that they feel that, for instance, in July when the oil embargo actually goes into effect that then you will begin to see the weakening on the part of the Iranians?

POWERS: They already feel that there is weakening, because Iran is having trouble selling oil.

WALLACE: But they're continuing to centrifuges and enriching, and...

POWER: Right, but the point is, the more trouble they have selling oil, the more likely they are to come to the table, that's the view, because that's where they make the bulk of their money, that's what supports their government.

So -- but the sanctions already in effect are making it very, very difficult for them to sell that oil.

WALLACE: Kim, you've got about 30 seconds.

STRASSEL: Well, to Brit's point. Things tend blow up precisely because there's of a lack of U.S. leadership. And that I think the worry for the Obama administration is that they kind of ceded out the Syria process to the U.S. That's not going very well. They're hoping to sort of nurse Iran through until after the elections. But if Israel decides to act, for instance, or there continues to be great violence in Syria then they get the reputation of having moved in there. So that could come back and reflect badly on them.

WALLACE: All right. We're going to have to leave it there. Thank you, panel. See you next week.

And don't forget to check out panel plus where our group picks right up with a discussion on our web site We'll post the video before none Eastern time. And make sure to follow us on Twitter @FoxNewsSunday.

And because we are a full service show, we want to remind you about my wife's Lorann's new cook book. Mr. Sunday's Saturday Night Chicken. Go for our web page, for her recipe for butter flied grilled chicken. I can assure you it is perfect for a holiday weekend.

Up next, a special power player of the week you don't want to miss.


WALLACE: It's all too easy to think of Memorial Day weekend as the start of summer, a time for barbecues and other family get togethers, but of course there is a much deeper meaning to this holiday. Here's our power player of the week.


RYAN MANION, EXECUTIVE DIRECTOR, TRAVIS MANION FOUNDATION: Every day is Memorial Day to me and I think it's important that every day is Memorial Day to the rest of this country.

WALLACE: Ryan Manion knows all about devotion to country and the sacrifice that can demand, because her family has lived it. She and her younger brother Travis grew up in the military, their dad Tom was a marine.

MANION: The first song that my brother and I ever remember the two of us singing the Marine Corps Hymn.

WALLACE: Travis excelled at everything he did. He went to the Naval Academy intending to follow in his father's foot steps. The attack on 9/11 only deepened his resolve.

MANION: He wanted to be in the fight. He wanted to be there with his men. He wanted to get out and go as quickly as he can.

WALLACE: Travis was on the second tour in Iraq in 2007 when his unit was ambushed in Fallujah. The first lieutenant was rescuing some of his wounded comrades when he was killed by a sniper.

He had exposed himself.

MANION: He did on two occasions.

WALLACE: To save some of his comrades, and in fact all of them survived.

MANION: They did.

WALLACE: when the family learned of his death back in Doylstown, Pennsylvania, they were devastated, but also determined.

MANION: We've got to work together to make sure that Travis' legacy lives on. And we've got to honor him the way he would want to be honored.

WALLACE: His mother Janet started the Travis Manion Foundation and it was what kept her going.

JANET MANION, FOUNDER, TRAVIS MANION FOUNDATION: I feel some comfort in the fact that knowing he died for his country and he loved what he did.

WALLACE: The goal is to honor the fallen by challenging the living through private donations and corporate sponsorships from companies like GM and Comcast, they provide challenge grants. One went to the family of Lance Corporal Shane Harris who was killed in 2006 for a project in Guatemala.

MANION: They built a house for a family in like five days. And the only thing that showed it was for Shane Harris is a tiny plaque about the door. And it says in memory of Shane Harris.

WALLACE: but in 2010 the Manion's faced another tragedy when Navy SEAL Brendan Looni (ph) Travis' best friend and roommate at the Naval Academy was killed in Afghanistan. The two families decided to bury their boys together at Arlington National Cemetery.

MANION: There is nothing more beautiful than knowing that they lay together with all these warriors and heroes and that they are side by side just like they were at the academy.

WALLACE: Last Memorial Day President Obama visited their graves and talked about their devotion to duty.

OBAMA: Brotherhood, sacrifice, love of country.

WALLACE: But the story doesn't end there.

Last September, Janet Manion was diagnosed with stage four lung cancer. She fought nine months while continuing to run the foundation before she finally succumbed in April just days before the fifth anniversary of Travis' death.

In her will there was one special directive.

MANION: That the Travis Manion Foundation continues on through family and friends.

The person that inspires me, the reason why I am standing before all of you is my brother Travis.

WALLACE: Ryan Manion took over from her mom to continue finding ways to carry on her brother's legacy.

MANION: I don't know how many times I've had the saying said to me in the last three weeks since my mom died, wow, you have got some big shoes to fill. And I do. And I couldn't be more proud of the family that I have.

WALLACE: And so Ryan and the rest of the her family will spend this Memorial Day at Arlington honoring Travis and Brendan and all the others.

MANION: Don't be afraid to go up to a family that you know has lost a loved one in the war and just say thank you. Because just knowing that people remember is one of the greatest feelings that a family of the fallen can have.


WALLACE: After we talked, Ryan gave me this bracelet. It has the names of Travis and Brendan and this inscription, "warriors for freedoms, brothers forever."

If you would like to find out more about the Travis Manion Foundation, you can go to the web site And some time this weekend, remember what Ryan said just say thanks to those who gave their lives for our freedom.

We'll see you on the next "Fox News Sunday."

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