FOX NEWS SUNDAY the least of ObamaCare's worries? What are Tehran's nuclear ambitions after deal with Iran?

Health care experts James Capretta and Neera Tanden sound off


This is a rush transcript from "Fox News Sunday," December 1, 2013. This copy may not be in its final form and may be updated.

CHRIS WALLACE, HOST: I'm Chris Wallace.   

The Obama administration says it met its deadline to fix But it is also telling people there is no rush to sign up.


WALLACE: As more enrollment deadlines are pushed back, is the website the least of ObamaCare's problems?

We'll ask two health care experts on opposite sides of the debate, James Capretta and Neera Tanden.

Plus, our Sunday panel weighs in on White House efforts to lower expectations for ObamaCare's online relaunch.

Then, skepticism over last week's deal with Iran that President Obama is calling a victory for diplomacy.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We cannot rule out peaceful solutions to the world's problems. Tough talk and bluster may be the easy thing to do politically, but it's not the right thing for our security.

WALLACE: But will the deal halt Iran's nuclear ambitions?

We'll discuss that and the growing confrontation with China with former CIA and NSA director, General Michael Hayden.

And our power player of the week this holiday season is not your typical turkey farmer.

UNIDENTIFIED FEMALE: I'm really happiest when I'm engaged in working and thinking and striving.

WALLACE: All, right now, on “Fox News Sunday.”


WALLACE: And hello again from FOX News in Washington.

The President promised by the end of November, the problems plaguing would be fixed. And a new administration report released this morning cites, quote, "dramatic progress."

But does that mean the Web site to enroll in ObamaCare is fully functional? And what about the larger program? We'll have a fair and balanced debate between two experts in a moment.

But, first, we turn to Fox News correspondent Peter Doocy for the latest -- Peter.

PETER DOOCY, FOX NEWS CORRESPONDENT: Chris, federal officials promised that would work smoothly for a vast majority of users starting today. But that has not been the case so far because this morning, the critical verification system is unavailable. That's the system that confirms identities and make sure people are receiving proper coverage information. And applications cannot be submitted without this important step. The site says this particular problem should be solved within 24 hours.

And there is another error much earlier in the process as well, when the site asks if an insurance agent or navigator is assisting you with your application. After clicking that none of these people are offering any guidance, the next screen incorrectly displays a message declaring the opposite. The banner says, you told us another person is helping you. Furthermore, an address associated with has sent several erroneous e-mails this morning with an alert suggesting that logging in at the Web site will reveal a new message. However, no message ever appeared.

Officials have said November 30th was not a magical relaunch date for, and that like any site, they predict there will be times moving forward when it does not perform optimally.

Despite all of today's problems, White House officials say they have now reached their goal and that 50,000 consumer are now able to simultaneously use for a total of 800,000 visitors a day. If traffic surges past the site's new capacity, a brand-new feature is designed to cue visitors up and then send follow-up e-mails with suggestions about better times to visit -- Chris.

WALLACE: Peter Doocy with an early status report on the Web site. Peter, thanks for that.

Joining me now, two experts on health care: Neera Tanden, president of the Center for American Progress. She was a key member of the administration team that wrote and passed ObamaCare.

And James Capretta with the Ethics and Public Policy Center.

Well, it's only been hours since the upgrade of From what you can tell so far, Jim -- start with you -- has it been fixed?

CAPRETTA: Well, it's very hard to tell. We're not going to know for at least a month or so.

Look, the real test of is whether or not you make the right payment for the right people to the right insurance plan. It's very easy to fix the front end enrollment if you turn off controls on the back end. It's very clear from multiple media reports that the system is still not accurate when it makes payments to the insurance plan.

In fact, they're doing a workaround. They're going to actually make large lump sum payments to the insurance plan, based on self- reporting from the insurance companies instead of actual individual subsidy calculations.


CAPRETTA: So, they're working around the whole problem instead of actually solving it.  

WALLACE: Well, let me pick up on that with you, Neera, because what we hear is that while the IT specialists have been scrambling on the front end of -- the idea that you can sign up for it -- there are still problems that the website is sending -- still sending inaccurate information to the insurers and they still haven't even billed the process for payments to the insurers.

That's a big deal, isn't it?

TANDEN: Well, actually that process is known as an 834 file. That process is working much better. It is absolutely the case that this is a fundamental aspect of this and a good benchmark of this is when we have Medicare prescription bills, the Part D program, we actually had hundreds of thousands of seniors being sent to the wrong -- they got the wrong pharmaceutical information. That's a big problem.

So, we want to avoid that problem that already happened in the past. We want to make sure it doesn't happen again. And we are finding that the administration has found over the last week that that has been a much improved process. Obviously, the test will be in a month. But I think that the idea of doom and gloom around that is overstated.

WALLACE: All right. Let's talk about the question of cancellations, because as I say, this is not a Web site problem. It's a lot of problems that have to be fixed.

There has been so much attention to the millions of individual policyholders who have had their policies canceled.

Let's put this up on the screen. In the first month, for every one person that got insurance, 50 people lost coverage. But it now turns out millions more will lose employer policies. Back in 2010, the administration projected about 14 million people who now get health insurance through their jobs will lose that by 2019. Other government estimates are even worse.

Neera, hasn't the President misled all of us about the possibility that we could lose the plans we have?

TANDEN: So, first of all, on these, I haven't seen these estimates of 14 million people from employer-based --

WALLACE: That was from CMS.

TANDEN: That was a higher coverage. CBO has done projections since then. They are much lower than that.

So, I think -- I think we can really find the facts on these numbers. So -- but first and foremost, I would say, look, the president has apologized for the issues around lost coverage for statements he's made. But we should recognize what happened here really, which is that people -- people have -- are -- they're getting insurance notices that they have lost coverage that there other plans available to them, and 70 percent of people actually will get subsidies for health insurance.

Well, we aren't seeing in these data is how many people will be better off from the Affordable Care Act. We're only focused on the insurance lost plan, but there are better plans for many of these people. And I think that's what has gotten really lost.

And the fact is, we have hundreds of thousands of people and hopefully millions of people who will get better health care than they had before.

WALLACE: I want to pick up on coverage in a minute. But I want to ask Jim the same question.

Is it or is it not the case that this isn't just a question -- an issue of problem with people with individual policies, but that a lot of people who get their health insurance through their small business employer or even big corporations are going to lose that coverage?

CAPRETTA: They will. The law requires -- especially small businesses to pay premiums as a large group now, instead of just for the individual enrollment in their company. So, if you have a healthy company and you're small, your premiums are pretty low today, you're going to get cooled with a larger group in the future and your premiums are going to go up. Moreover, you have to buy more expansive coverage that is compliant with the new law.

So, lots of small businesses signed up for 2014 are going to get notices in the coming months saying, hey, you can't get your old plan anymore. The same problem that individuals face, these problems are going to wipe all the way out through the small business community.

TANDEN: I can just make a point about this? James Capretta has a health care plan that he's put out, that he asked for small -- he asked for tax credit. He said we should convert employers to tax credits. Estimates of that were that there would be 11 million people who would lose health care coverage, the coverage they have, and they'd be dumped on to different kinds of health care plans.

So, I have to -- and, you know, John McCain supported a health care plan that had 20 million people lose the coverage they had. So, without better alternatives. So, I think the idea that --


WALLACE: I don't --

TANDEN: No, no --

WALLACE: With all due respect, I don't want to get into the plans that don't exist. I want to get to the plan --

TANDEN: I know. But I'm just saying, it's a little hypocritical to hear complaints about coverage loss from someone who's authored a plan --

WALLACE: All right. Thirty seconds to respond about a plan that doesn't exist. Go ahead.

TANDEN: It doesn't, no. But it's your plan. So, criticizing the president for a plan that would have less --

WALLACE: OK. We have your point.

Mr. Capretta?

CAPRETTA: She's wrong. My --

TANDEN: I'm not.

CAPRETTA: Yes, the plan I drafted, which I would love to have Congress and other people consider, would not actually affect the vast majority of people in employer based coverage because it wouldn't change the exclusion.


TANDEN: That's true. Millions of people would lose coverage.

WALLACE: I'm sorry. I want to talk about ObamaCare. I don't want to talk about Capretta care.

TANDEN: I just think it's not -- it's unfair.

WALLACE: Let's turn -- because you brought up, and it's an important thing. This isn't just an insurance issue, it's the coverage issue. It's the health care that you're getting in the end.

Jim, is it true that the cut costs that many of these new plans under ObamaCare will sharply limit your access to doctors and hospitals, as much as Medicaid does today?

CAPRETTA: That's correct. Most of the plans, especially the silver plans and lower cost plans in the exchanges have very narrow networks. Some in Los Angeles don't include the most visited commercially based hospital systems that are used by commercial insurance.

So, yes, the answer is this is going to feel a lot more like the Medicaid program with a narrow network of doctors, a narrow set of hospitals you can use. If you go outside that system, you pay a lot more. It is a very narrow network people are finding. It's going to be difficult, frankly, through the website, the website is not good enough to figure out if your doctor is in the plan. But when you can figure it out, a lot of people will find out their doctor is not in their plan.

WALLACE: All right. Neera, I want to put up, continuing this conversation, a quote from an editorial over the weekend in "The Wall Street Journal." Let's put this up on the screen.

They say, "The awful irony of this new ObamaCare health care system is that all adults now enjoy mandated pediatric vision benefits, even if they don't have kids. But parents can't take their daughter to an expensive children's hospital if she really gets sick."

Isn't it -- if I may, let me ask the question.

TANDEN: Yes, please?

WALLACE: Isn't it true that to meet the increased cost of these mandated coverage, all of these expanded benefits, that a lot of parents are -- a lot of people are not going to be able to use the hospitals and doctors that they currently have.

TANDEN: So, here's the reality of this situation. There are insurers who are offering narrower networks, right?

WALLACE: Under ObamaCare?

TANDEN: Right. So, in the exchanges, there are people who are offering narrower networks under the new law, right? For -- and you pay less for those plans. You can pay more for a plan that has a larger network. That is -- that is the issue here. There are choices in the market. People are paying more for better benefits.

Now, I think a really important point here is that the vast majority of people in the insurance exchanges have never had health insurance before. So, you're not -- they're having a new choice here, which expands health care coverage for them.

There are some people who had health insurance who are going into the exchanges and they face an option here, which is just like conservatives have been telling us for a long time, you should have options, and if you want more expensive care, you should pay for it yourself. That is the situation we get here.

WALLACE: I get the point. I don't think there's any question if you're currently uninsured, you can get health insurance coverage you're better off.

TANDEN: Which at the end of the day, will be the vast majority of people in the exchanges.

WALLACE: The question is whether or not the people who currently have policies are going to get better coverage or not. What about this question as to, you know, Neera says, OK, look, there are bronze, gold, silver and platinum, and the fact is, if you get a cheaper plan, you have less choice?

CAPRETTA: Well, I think people that are getting their plans canceled in the individual market are finding that the premiums are going up on average. People looked at them very carefully. On average, people that are in the individual market today, buying insurance, paying premiums, are going to see about a 30 percent to 50 percent increase in their premiums for worse coverage. Higher deductibles, higher deductibles --


TANDEN: Without the subsidies. Without the subsidies.  

CAPRETTA: No, with the subsidies.

TANDEN: That's not accurate.

CAPRETTA: And people that are young and healthy are going to see 50 percent to 100 percent --

WALLACE: All right. And that brings me to the final point I want to discuss here, and that is this question of whether or not ObamaCare has massive income redistribution.

Neera, is it not the case that younger, healthier people are going to pay more than they currently do -- you got to let me ask the question.

TANDEN: I didn't say anything. I didn't say anything. I'm just getting ready.

WALLACE: You're warming up. That young healthy people are going to pay more than they currently do in order to subsidize the extra benefits for older sicker people? Isn't that income redistribution?

TANDEN: Let me be crystal clear about this, because I think there's been a lot of misinformation here about the -- broad statements about younger, healthier people. The truth is, the people with health insurance today, 85 percent -- vast majority of people have employer based coverage, that's staying in place, Medicaid, Medicare, you're talking about people today who have health insurance in the individual market, which is, you know, 5 percent of the entire system.

WALLACE: That's 15 million people.

TANDEN: I appreciate that. I appreciate it.

And you're saying that some people may have to pay a little bit more and the idea of the Affordable Care Act is that they have a much better health care plan, because the challenge we have in this --

WALLACE: It sounds to me like you're saying yes, that they --

TANDEN: The challenge we have in this whole system -- no, no.

WALLACE: But it sounds like what you're saying is younger, healthier people are going to paying more to subsidize older, sicker people.

TANDEN: I'm not saying they're going to pay more for subsidies. It depends on their income and a whole variety of issues. A lot of younger people are seeing a much better deal in this whole system.

The problem is you're talking about issues where it's highly -- there is a big question about whether younger people should actually have a much better deal in the system because they're going to get pooled with a lot of other people. That's why --

WALLACE: Jim, is that a better deal or -- final word, is it a better deal or not?

CAPRETTA: Much worse deal. People today, if they're young and healthy can get relatively inexpensive insurance in the open individual market.

You're right about income redistribution, though. If you think about it, it's $250 billion a year in Medicaid expansion, in the subsidy structure, that's basically being paid for by people on Medicare, through Medicare cuts, and a lot of tax increases.

If you want to know what the bill is really about, people in their most honest and candid moments will admit that it's basically taken $250 billion a year out of taxes and Medicare and moving it into the Medicaid expansion and the subsidy structure. This other premium subsidies are also occurring between young and the old. But it is a massive, massive income redistribution.

TANDEN: It's just not fair to say that they're not getting a better health care plan. That's the challenge with the individual markets today, to act like it's a good plan -- people have good systems. The challenge now is not really insurance for a lot of people because when you get sick, it is not their premium. That's the concern.

WALLACE: All right. I never thought we were going to settle this today, we're not. But it was an interesting discussion, and please come back, both of you. And thanks for coming in this holiday weekend.

CAPRETTA: Thank you.

WALLACE: Up next, 2.0, will the Web site work? What about other problems with the plan? Our Sunday panel joins the discussion when we come back.

And share your thoughts on the ObamaCare rollout with your friends on Facebook, where FOX NEWS SUNDAY is on all week.



UNIDENTIFIED MALE: So what did you want to talk to me about?

UNIDENTIFIED FEMALE: We know you don't have health insurance.

UNIDENTIFIED MALE: We love you no matter what, but it's time to get covered.

UNIDENTIFIED MALE: That's it? Health insurance?


UNIDENTIFIED MALE: I know. And I'll do it. I just thought -- never mind.


WALLACE: An ad from Organizing for Action, the advocacy group for President Obama, pitching family talks about Obamacare this holiday season.

And it's time now for our Sunday group: Fox News senior political analyst, Brit Hume; former Democratic congresswoman, Jane Harman; syndicated columnist, George Will; and former Democratic senator, Evan Bayh.

Well, as of midnight, I was going to say we have a new and improved, but I guess it's an old and improved Web site that the administration is touting made dramatic progress. White House officials emphasize, though, the focus should not be on the deadline, it should be on the continuing process of getting it better and better.

Having said that, Brit, don't they have a lot riding on how this goes, the next few weeks?

BRIT HUME, FOX NEWS SENIOR POLITICAL ANALYST: Of course. I think the website is a little better. We were on it yesterday, just to see what, you know, might be out there, what might be available. The site works better. You can get through and check plans.

It's not going to remind you anytime soon of or eBay, but it's in the clunky sort of way it works. In the state of Virginia, which we were -- where we live, we were seeing what might be available to -- that might be comparable to the wonderful plan we have here at Fox, and there was -- there were plans available from exactly one company.

The best plan available, for my wife, had -- we tried to see how many of her doctors were covered by -- included in the plan, zero.

Now, that's one person. Many others will have a different experience, those who get subsidies are likely to do well under this, but I think there are going to be continuing complaints and problems going forward, pretty serious ones.

WALLACE: Congresswoman Harman, you voted for ObamaCare in 2010. How do you explain all the problems, not just with the Web site, but with the entire plan and the kind of experience that Brit just talked about?

WALLACE: Congresswoman Harman, you voted for ObamaCare in 2010. How do you explain all the problems, not just with the Web site, but with the entire plan and the kind of experience that Brit just talked about?

HARMAN: The bill is enormously complicated and more so because of the fight to get enough votes to pass it, all Democratic votes, I should add. I think it was better in its early phases on the Energy and Commerce Committee, where I served on the health subcommittee, when it was bipartisan, and maybe in hindsight, it would have been better to put it in pieces, but I don't think this experiment is over.

The rollout has been a mess. It is hopefully better today. But will matter is in six months or whatever the right time frame is, will there be enough people across the spectrum from sick to healthy in the exchanges to create a comparative market so the price of health care is affordable to those who have very little or no money, and is -- goes at least -- stays about steady to other --

WALLACE: That's a very open question at this point, about whether it's going to work the way you're suggesting.

HARMAN: I agree it's an open question, but I'm betting it will work. I remember the big fights about single-payer which I opposed and about the public option, which was a government plan to compete with private plans. We sort of kind of have that.

But the goal of it was, a competitive market, something Fox -- fair and balanced Fox -- ought to love, where people have a choice, as you said before, between the bronze plan and the silver and gold plan --

WALLACE: Silver, gold, platinum.

HARMAN: Yes, yes.

WALLACE: George, are you betting it is going to work?

WILL: Well, we've wagered the health care system on this bet, so it better work.

I recommend everyone reading the prose (ph) that was released this morning with the status report. It said, there was an unacceptable user experience -- that's the 2013 understatement of the year -- that they made substantial progress.   And this is lovely. It says, "While there is now more work to be done, the team is operating with private sector velocity and effectiveness." Now, that's progress when the government says we aspire to the private sector. But it does go on to say that there will be more progress in the weeks and months ahead, which means months, at least into the late winter and perhaps early spring.

But let me suggest that way over the horizon, about six months from now, 100 million people get their insurance from Medicare, Medicaid, 171 million get it from their employers. Watch the employers, because if they start dumping people into Medicare and into Medicaid, and the doctors then say, the burdens are too high, and the reimbursement is too low, we're not seeing Medicaid pensioners, then all hell is going to break loose.

WALLACE: Well, you're nodding in agreement, Senator. I hate to note that back in 2010 you voted for ObamaCare. Has it worked out the way you thought it would?

BAYH: No, not so far. Clearly, the rollout has been a disaster and it's still a work in progress. I think we need to separate this into short-term and long-term -- short-term, very problematic. And first impressions tend to be lasting. So, it's going to take some time in the court of public opinion to turn this thing around.

There are going to be some more dislocations coming as your guests in the first segment indicated. Co-pays may go up, deductibles may go up, people may have their coverage dropped and have to go into the exchanges. That's going to be disconcerting.

So, short-term, troubling. It may really be problematic for the 2014 midterm elections. Long-term, the jury is still out and substance is going to ultimately determine whether this is a success or not. The most important thing of all is, does it keep costs down? That's what people care about more than anything else.

There is some preliminary data, I want to stress preliminary, that costs have been kept down for a number of reasons. If ObamaCare is driving that, and costs continue to come in lower, that will be important. Do the exchanges work, do healthy people get involved? That's critically important. We'll know that by March 31st.

Finally, look at Massachusetts. They had a whole host of problems there at the beginning. And yet have gotten to a point where it's working fairly well, seems to be reasonably popular in that state. Hopefully, for those who support the bill, that's the trajectory that will be followed.

Last thing, I comment on the ad that you're in, one of the ultimate ironies here is I think the health insurance industry is sitting back with tens of millions of dollars in ads waiting to go on TV to promote the law to get people to sign up. That could have an impact on public opinion.

HARMAN: I also don't think -- George just said 170 million people might be dumped into Medicaid. I don't think it will work that way. A lot of them have good incomes. They won't be on employer- sponsored plans, but they will have incomes to shop around and if this competitive model works, the fair and balanced competitive model for health care, then they may be able to find better options than they had.

WILL: I'm not saying the 171 million will be dumped. I'm saying that a significant number are -- the conversation and the election year 2014 is going to be about that fraction, and the doctors reacting against Medicaid.

HARMAN: I see.


HUME: Well, first of all, the question of costs. Costs started leveling off around the time of the big economic downturn around 2008. They remain essentially flat, or grown only slightly since.

So whether we can attribute any of these cost savings to ObamaCare I think is doubtful. And that does remain a big question.

The second question, of course, is the one that affects everybody individually, their own personal costs.

And a big test is going to be when people are forced to go on to the exchanges to buy the health insurance that they try replace the policies that they lost, whether they will find something comparable at a price that's similar to what they were paying or affordable to them. I think that question is really out there to be answered yet because the anecdotal evidence we have so far is that sticker shock is affected a huge number of the people who have gone shopping.

WALLACE: Not just sticker shock. I mean, there is also the question that is brought up with Neera Tanden. I mean, if it turns out the doctors you wanted to see or the hospitals you needed to go to are no longer available to you, because if you, let's say, as Neera said, all right, you can get the platinum plan, but we can't afford the platinum plan, if you're using coverage, that's a big problem --


HUME: Only exchange experience we had yesterday, there was no platinum plan available. I was able to find one later on which seems to work fairly smoothly in distinction from the Obamacare Web site, but not on the exchanges.

This thing is a mess. And remains --

WALLACE: Well, all right. We have to take a break here. We'll have the panel back in a little bit.

But up next, the nuclear deal with Iran and the growing confrontation with China. We'll talk with former CIA and NSA director, General Michael Hayden.

And tell us what you think, share your thoughts on Obama foreign policy with other “Fox News Sunday” viewers on Twitter at #fns.


WALLACE: Critics in this country and the Middle East continue to question the nuclear deal the U.S. and its allies worked out with Iran. And there is increasing concern about the new air defense zone that China has declared over disputed territory in the East China Sea. Joining me now to discuss this and more, former CIA and NSA Director Michael Hayden, and, general, welcome back to "Fox News Sunday."


WALLACE: Do you look at the new six-month deal with Iran as a reasonable first step to test their intentions or do you worry that it leaves too much of Iran's nuclear activity and infrastructure in place?

HAYDEN: Well, it is not like we had a whole lot of good choices with regard to Iran and their nuclear program, Chris. And I'm willing to let this deal kind of run. But let's be honest with ourselves, all right. We have accepted Iranian uranium enrichment. There is no question about that. That's a different red line than we used to have. I understand that. That may be a result of the facts that have changed on the ground. On the Iranian program of the past ...


WALLACE: Let me stop you for a second. Because John Kerry would sit here right now and he would say there is nothing in the agreement, we do not recognize their right to enrich.

HAYDEN: Well, actually, it says in the agreement that we will come to an agreement with regard to their right to enrich, which is very different than the U.N. Security Council resolutions to date that says they do not have a right to enrich. Chris, at the end of the day, Iran's going to be a nuclear threshold state. Now, before you think that's condemnatory of what's going on, what we have to do is to push that threshold back as far as possible, and that will identify -- that would define whether this was a good idea, or a bad idea. Right now, the Iranians are far too close to a nuclear weapon. We have hit the pause button. Now we have got to negotiate hitting the delete button with them.

WALLACE: What is your view, big picture, and I'm sure you studied this as CIA director what is your view of Hassan Rouhani, the new president of Iran, and of his new government? You see them as relative moderates who are maybe because of the sanctions working hard to end Iran's isolation, or do you see them more as just playing us and still determined to have a nuclear weapon at the end of the day?

HAYDEN: Yeah, it is probably a mix of all that. And I, you know, it is a bad bet to bet on moderates and not moderates in another country. Rouhani is a pragmatist, though. Perhaps, not a moderate, but a pragmatist. And at the end of the day, Chris, we are going to have to negotiate this. And so, it might be a good judgment that Rouhani, and particularly his foreign minister Zarif, is just about the best deal we can get in terms of interlocutors within the Islamic Republic.

WALLACE: Let's turn to China, which has declared a new air defense zone over something I must say prior to a couple of weeks ago I didn't know it existed, the Senkaku Islands, you can see them there, you can get a nice Christmas vacation there, in the East China Sea. And they continue their territorial dispute with Japan, which also claims control of the Senkaku Islands. General, what is it in your view, your analysis, what is China up to and what do you think of the U.S. decision to send B-52s, surveillance planes, to challenge over that territory, to challenge China's new declaration that it has air rights over those islands?

HAYDEN: I was actually surprised by the Chinese move, Chris. And I view it to be both dangerous and dumb. Dangerous because you realize the first crisis in the Bush administration was a collision between an American reconnaissance aircraft and a Chinese fighter and we barely captured that. Dumb because China was very aggressive in '09 and 2010, making these claims around there - what they kind of territorial seas. I mean they treat the South China Sea or they want to treat the South China Sea they way you and I treat Lake Michigan. No one is going to accept that. And the product of those Chinese steps, Chinese missteps, where we'll get to keep Marines in Okinawa, we have joint exercises with the Philippines, we have Marines in Australia, and we get the home corps U.S. Naval combatants in Singapore. I mean this is bad from the Chinese perspective. I really don't understand why they did it.

WALLACE: So how far should the Obama administration go in confronting China, certainly in rejecting their claim of an air defense zone, and what is the danger of a flashpoint?

HAYDEN: Yeah, there is a real danger of a flashpoint. But unfortunately, I think we're going to have to continue to do what we did last week, which is to put two unarmed B-52s in the Chinese air defense identification zone and not reporting in to Chinese air traffic controllers.

WALLACE: All right. Let's turn - there is a lot on the plate here, the foreign policy plate. Then there is Afghanistan, where Afghan president Hamid Karzai has refused to sign a bilateral security agreement or BSA as it is called, with the United States until sometime after the election in 2014 and also he has to get some of his demands met first. National security advisor, president Obama's National Security Advisor Susan Rice responded to that. Here she is.


SUSAN RICE, NATIONAL SECURITY ADVISOR: If the agreement isn't signed properly, what I said to the president is we would have no choice, we would be compelled by necessity, not by our preference, to have to begin to plan for the prospect that we will not be able to keep our troops here because they will not be invited because of the BSA will not have been signed.


WALLACE: And that's the threat, general, is that the U.S., which had said that we along with our allies intended to keep a residual force, which was going to be 10, 15,000 troops in Afghanistan after the general pullout at the end of 2014 that we might have to go to the zero option and just pull out all troops and all aid entirely. Should we make that threat, should we be willing to take that, if you don't sign this agreement, we're going to pull out entirely?

HAYDEN: That kind of behavior really doesn't work very well with Karzai. Look, I know President Karzai. I actually personally even like him. I've been in one on one meetings as director of CIA where I needed his knowledge and approval of activities. I found him to be a reasonable man. But certainly, Chris, I mean, this is nothing more than a temper tantrum on the part of Karzai. And somebody in this relationship has to act like an adult. That's us. This agreement is going to be signed. The Loya Jirga supports it. Most of the ...

WALLACE: Loya Jirga, which is the major - all call ...

HAYDEN: Right.

WALLACE: Approves (inaudible). They had a major meeting just a week ago.

HAYDEN: Exactly. And most Afghans realize, without American troops, you don't get NATO troops, without American and NATO troops you don't get economic aid from the West. They know this is about the survival of Afghanistan. I would council patience on our part, if we have any harsh words for the president of Afghanistan, we should share them in private.

WALLACE: Is Hamid Karzai unstable?

HAYDEN: He acts erratically, but I don't want to judge the man. I don't think his life experience has prepared him for the burdens that we in history have put on him. And therefore I'm somewhat sympathetic, which is different than saying we should make concessions.

WALLACE: Finally, I want to talk to you about your old place of work, the National Security Agency, top administration officials are now talking about splitting off control of the cyber warfare command, which is now controlled jointly by the head of the NSA, to make those two separate jobs because they say to give them both to the NSA director gives too much power to one man. What do you think of that idea?

HAYDEN: I actually think the idea is good, but not for the reasons the administration has put forward. This is not about the concentration of power. This is about the overburdening of responsibility. I was the director of NSA. I thought it was actually a full-time day work. I don't know you can be the DRMSA (ph), as we called him, and a four-star combatant commander. So again, it's not about the overconcentration of power. It's just that the responsibilities have grown too great.   WALLACE: And intelligence officials are now talking about their real concern that NSA leaker Edward Snowden may have put together something that's been called a doomsday cache of top secret documents, much more damaging than anything he's released so far, and that they will be released if anything happens to him. Do you think that that is a legitimate and real concern?

HAYDEN: I've seen those reports, Chris. I have no reason to doubt them.

WALLACE: Do you believe it?

HAYDEN: I have - again, I'm not in government, I don't know the secrets. But it's the kind of thing that someone as clever as Snowden has shown himself to be, would probably do.

WALLACE: And is there anything we can do about it?

HAYDEN: Well, it's very, very hard. This is, Chris, I'll be very candid with you, this is catastrophic for the safety and the security of the American nation, what this very narcissistic young man has done.

WALLACE: And to that degree, is it a good insurance policy and should the lesson be, lay off Snowden because you don't want this doomsday cache to be revealed?

HAYDEN: No, I wouldn't think that's right either. So, that's a bit like a negotiating with terrorist, I don't think we ought to do that either.

WALLACE: General Hayden, thank you. Thanks for sharing part of your holiday weekend with us and we thank you very much for your candid comments on the whole range of subjects.

HAYDEN: Thank you.

WALLACE: When we come back, our panel joins us again to discuss U.S. policy towards Iran, China and Afghanistan.


WALLACE: President Obama this week defending his controversial deal with Iran to limit its nuclear program in return for an easing of some Western sanctions. And we're back now with the panel.

Well, Congresswoman Harman, you heard General Hayden talking about this deal and the positives, and also the -- potentially the negatives. The worry is that basically that this interim deal with Iran ends up being the final deal, that they end up just short of a nuclear weapon, but with a strong nuclear capability, while the sanctions regime is weakened. Your thoughts?

HARMAN: Well, first, who would have thought that the plot of "Homeland" would be behind real life? I mean, kudos to John Kerry and Wendy Sherman for really moving forward (ph)--   

WALLACE: We need to say for those who don't know, "Homeland" is a show on Showtime, very good show, and they are about to try to kill -- I probably shouldn't say --


HARMAN: Don't give it away. Good grief, Chris.

WALLACE: I don't know what's happened.


HARMAN: OK. But -- tune in. But so who would have thought that? This is an interim deal. I think what this does is it aligns the world's clock, the Israeli clock, the American clock, the -- pick a place, the Iranian clock, to a six-month clock. Let's see what happens. There is a long way to go between an interim deal and whatever is the final outcome. And I think Congress is going to consider enhanced sanctions and will pass a bill. I think they will pass a bill in the next month or so, but the sanctions won't take effect until six months and one day from now, or five and a half months and one day from now.

And there is jubilation in the streets of Iran. I think a lot of Iranian people are fond of Americans and have been withering through this 34-year period of hell.

The polling in the United States shows that 2-1, people favor this, and if it doesn't work, favor enhanced sanctions.

So I think if we are adroit, and I think John Kerry has been very adroit, along with the world, Catherine Ashman (ph) and others, we will insist on much tougher benchmarks, and we will end up in a place where Iran has civil nuclear capabilities, but no more any near time chance of a weaponized nuclear program.

WALLACE: George, I know, when we talked last week, when the deal was just first announced, you were very skeptical. But what about this argument that you hear from Congresswoman Harman and from General Hayden, let's give it six months, and let's see where we are at the end of the six months? And obviously you're not just waiting, you're negotiating during that whole time.

WILL: Look, understand, all our choices are terrible. And if we wind up with them a screwdriver's turn away from weaponization, we should consider ourselves lucky. If they stop at the breakout point.

The critics of the agreement say three things. They say it is terrible because it really makes it impossible for the United States credibly to threaten an air attack. B, without that, the Israelis certainly cannot do it by themselves; and, C, it throws us back on a policy of containment.

I agree with the critics, except on one point. I think those are all excellent things. I think the worst thing we could possibly do is, A, for Israel to attack, it would be the worst mistake in the history of the state of Israel. For us to attack, that is to attack a fourth nation in that region, this one with 77 million people, would be another calamity, and therefore it seems to me if we can slow their progress toward nuclear weapons and get them to stop short of weaponization, we should consider ourselves very fortunate indeed.

WALLACE: Let me switch subjects. As we mentioned, there is a new kind of surprising standoff with China, which has just declared a new air defense zone, basically air defense rights over the Senkaku islands, some call it in the South China Sea, others say in the East China Sea. There you see them just east of Taiwan.

This is a territorial dispute it is having with Japan, as to who has control over these basically, as you can see there, pieces of rock.

Senator Bayh, how big of an issue is this?

BAYH: It is not that big right now, Chris, but in the future it is potentially very big. I agree with General Hayden, it is both dangerous and dumb. We used to have these encounters with the Soviets from time to time where aircraft would get too close to one another, we monitored one another. That can probably be handled, although it increases the chances of accidents.

This is going to continue, because you have an increasingly wealthy country spending more on its military, and I think the most important point, Chris, is they have intentionally stoked the forces of nationalism within China to divert people's attention away from other things that they may be unhappy about domestically.

Nationalism, once unleashed, can go on any sort of unproductive direction. That's really the long-term danger. But it has had the somewhat helpful, from our point of view, consequence. It will drive the Vietnamese, the Filipinos, the Japanese, into a much closer alliance with us. So it is a long-term problem, can probably be managed, but watch out for nationalism in China.

WALLACE: Brit, critics suggest that for all the Obama administration's talk these days about pivoting from the Middle East to a new focus on Asia, that what China sees is a president who desperately wants to stay out of all foreign entanglements, and therefore there is some weakness there, a vacuum that they want to fill.

HUME: That's the thing you worry about with a range of these administration moves that this president, unlike many of his predecessors, does not see the United States as necessarily the great bulwark in the world order, and that he prefers a more passive role, leading from behind, if you will, and that that provides the temptations for regimes like the Chinese, the Iranians and others, that they now have more freedom of movement because the president of the United States is indisposed to take tough measures. And that is, I think, kind of where we are. And indeed, there is a unity among these differing issues and differing places in the world, in that they test the resolve of the Obama administration, which these countries and their leaders suspect is not strong.   

WALLACE: Speaking of testing the resolve of the Obama administration, we talked about Afghanistan, and Hamid Karzai, the president of Afghanistan, is refusing to sign a bilateral security agreement that had been worked out with the Obama administration. He says he's going to wait until after the elections next spring. He's also making new demands that we restart the peace talks with the Taliban, release Afghan prisoners from Guantanamo Bay, and also real sharp limits on the ability of U.S. troops to go into any Afghan homes. There have obviously been some civilian deaths there. What do we do with Karzai, Congresswoman?

HARMAN: Well, there is an election next year, which hopefully will be a fair election. The one in 2009 was not a fair election, the one in which there were ghost ballots and all kinds of other excesses, and unfortunately we did not intervene. This time maybe, although he says he's living next door, we'll have a more independent president. I think on this BSA, Susan Rice has it right.

WALLACE: The security agreement.

HARMAN: Yes. It has been negotiated.

It is approved by the Afghan Loya Jirga constitutional or whatever assembly and it should not be renegotiated. I just want to make one other comment about this, rebalance toward Asia. I think our position isn't leading from behind. I think our position is partnership with the nations of Asia with whom we have strong trading and historic defense relationships and supporting ASEAN and supporting these other groups, which the administration is doing is the best buffer against China, hopefully over time its TPP passes, the trade promotion agreement ...

WALLACE: If I can just get back to Afghanistan for a moment. There was a very interesting article in the paper today, because at the same time, and this tells you something about Karzai, at the same time that he's condemning the U.S. for inadvertently killing some Afghan civilians in one of their villages, there was a terrible slaughter by the Taliban and boo from President Karzai. What does that tell you?

WILL: Well, it tells us, he is - he has - he has an uncertain trumpet because he has an uncertain constituency. And the fact is, we're now in the 13th year of the longest war in American history and if he really forces the country, particularly Congress, to stand up and ratify staying there, particularly if our troops are, a, minimal, and b, under rules of engagement that make their function, either bad or dangerous, then he'll find out how ready we are to turn our back and leave.

BAYH: Of course, you mentioned the show, and "Showtime," Karzai's behavior reminds me of one of my favorite movies "Blazing Saddles" where a character holds a gun to his own head and says stop or I'll shoot. I mean unless the man is suicidal, and futures of this country is at stake here, he's going to have to give in. So, we need to remain calm, make no concessions, this will work itself out. One final point, I think we're seeing some fallout from the decision to not do anything in Syria following the use of chemical weapons. We see that in Tehran with regards to their nuclear ambitions, we see that with regard to China being more assertive. Once the parliament voted not to use force, once it became clear the American people and the Congress had no stomach for it, the rest of the world saw what the consequences of that would be and they're behaving accordingly.

WALLACE: All right, panel, thank you. Thanks for coming in this holiday weekend. Up next, our "Power Player" of the week. A Thanksgiving tradition on "Fox News Sunday," oh boy, dancing with turkeys.


WALLACE: Here's our holiday riddle we first asked you two years ago. Who founded a huge tech company, created a successful cosmetics business, and now raises turkeys like the Indians did? The answer, our power player of the week.


SANDY LERNER, AYRSHIRE FARM: Farm with the land, farm with the seasons, know your soil, know your rainfall, know your weather, know your animals.

WALLACE: Sandy Lerner is talking about sustainable farming. Raising livestock and growing vegetables without the chemicals that are so common in what she calls factory farming. Just days before Thanksgiving, she took me out to see and, yes, to dance, with her 1300 turkeys. Heritage breeds that trace back to the Indians.

LERNER: Come on, raise your arms. Gobble, gobble, gobble, gobble. Gobble, gobble, gobble, gobble, gobble.

WALLACE: Lerner is mistress of Ayrshire farm. 800 acres in Upperville, Virginia. But as interesting as her business is how she got here. She grew up on a farm in California, making enough from raising cattle to send herself to college.

LERNER: What I learned was to love work. I'm really happiest when I'm engaged in working and thinking and in striving.

WALLACE: She got into computers. And in 1984 she and her then husband started Cisco Systems that found a way to link networks of computers, the foundation of the Internet. But six years later, venture capital people were running Cisco.

(On camera): How do you get fired from a company that you started?

LERNER: We just basically got taken to the cleaners and part of that was if you don't have an employment contract, I got fired by the same guy who fired Steve Jobs.


WALLACE (voice over): Lerner had a second act. She started a cosmetics company called Urban Decay, with edgy colors for women like her. And in 1996, she bought Ayrshire Farm.

LERNER: It's historically been people who had disposable income who made strides in farming. Look at George Washington or look at Thomas Jefferson.

You're such a pretty girl. This is Pretty is, this pretty does.

WALLACE: She raises shires, warhorses that go back centuries. Scotch highland cattle, and those turkeys, which she says taste better because of the lives they live.

(on camera): How much is an Ayrshire turkey cost as compared to what I get in the grocery store?

LERNER: Well, our turkeys are expensive. They're between, I think they're running this year about $160 to $200.

WALLACE (voice over): At those prices there are questions about how to make this kind of farming profitable. But while Lerner is determined to run a sound business, it is not just about the bottom line. There is a 40 room mansion on the farm.

(on camera): What is it like living there?

LERNER: I don't know.

WALLACE: What do you mean?

LERNER: I live in a little log cabin and I love it.

WALLACE: Do you think you're a bit eccentric?

LERNER: I am now that I'm rich. I used to just be weird.

WALLACE (voice over): And so just days before Thanksgiving, Sandy Lerner and I danced with the turkeys. She grew up on a family farm. And she wants to see those values live on.

LERNER: I'm a cowgirl. I can tell what cows are thinking. It is very much my success as the farmer, which is what George Washington was. He wanted to be a really good farmer. And I think I've been -- I've become a good farmer.


WALLACE: Sandy Lerner sold about 1,000 turkeys this Thanksgiving. And she donated 60 turkey dinners with all the trimmings to local charities. That's it for today. Have a great week. And we'll see you next "Fox News Sunday."

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