Obama administration shifting Mideast alliances? Plus, Carly Fiorina on crowded presidential field

This is a rush transcript from "Fox News Sunday," March 29, 2015. This copy may not be in its final form and may be updated.


The latest on the German plane crash.

And Iran's influence spreads across the Middle East. But is the Obama administration fighting against Iran or alongside it?


JOSH EARNEST, WHITE HOUSE PRESS SECRETARY: We have put intense pressure on extremists inside of Yemen. And it has mitigated the threat that they pose to the U.S. and the West.

SEN. JOHN MCCAIN (R), ARIZONA: Our closest allies in the region no longer trust us. They believe that we are siding with Iran.

WALLACE: As the White House presses for a nuclear deal with Iran, is the Middle East on the brink of regional war? And what is the U.S. strategy?

We'll ask the former director of the Defense Intelligence Agency, Lieutenant General Michael Flynn.

Then, as the Republican presidential field starts getting crowded, how will candidates stand out. We'll talk with the only woman and only former CEO among the GOP hopeful, Carly Fiorina.

Plus, Harry Reid is getting out while Ted Cruz gets in.

SEN. TED CRUZ (R), TEXAS: I am announcing that I'm running for president of the United States.

WALLACE: Our Sunday group discusses a busy week in politics.

And our power player of the week. Ted Kennedy's widow, Vicki, on bringing her husband's love of the Senate to the next generation.

VICKI KENNEDY: Welcome to the Senate in Boston.

WALLACE: All, right now, on "Fox News Sunday."


WALLACE: And hello again from Fox News in Washington.

We begin with breaking news on the investigation into that Germanwings flight that crashed in the Alps this week. There are new revelations about the co-pilot, who officials say deliberately flew the plane into a mountain side.

Senior foreign affairs correspondent Amy Kellogg joins us now from the crash site with the latest -- Amy.

AMY KELLOGG, FOX NEWS SENIOR FOREIGN AFFAIRS CORRESPONDENT: Chris, the most dramatic quotes from people who knew co-pilot Andreas Lubitz, come from a woman is a former flight attendant, a flight attendant, and claims that she was a former lover. She told the German newspaper "Bild" that Lubitz had once told her, Chris, that one day he would do something heinous that the whole world would remember him for. And he used to wake in the night screaming, "We're going down, we're going down."

Now, "Bild" on Sunday had published some snippets from the cockpit voice recorder in which the captain slams the cockpit door with some apparently blunt instrument while shouting, "For God's sake, open the door."

"The Daily Mail" reports today some details about Lubitz' last girlfriend, the teacher he was supposedly hoping to marry. "The Mail" says she broke it off to his recently controlling and Jekyll and Hyde like behavior.

In another twist, "Bild" reports that she is pregnant. Now, "Bild" (ph) quotes a senior Dusseldorf investigator as saying they found lots of psychiatric medication in Lubitz's apartment and personal notes indicating that he was profoundly depressed. Also, there are numerous reports he had a serious vision problem. All of this taken together might support that something that flight attendant reportedly said about him, that he may have crashed the plane because he feared he would never be able to obtain his dream of becoming a long haul flight captain with Lufthansa.

He may also have feared losing his pilot license. Finally, Chris, a senior French investigator said yesterday that while no one is disputing the version of events out there and while Lubitz's personality is relevant here, it's important that other scenarios remain open including the possibility there may have been some sort of mechanical issue -- Chris.

WALLACE: Amy Kellogg reporting from the French Alps. Amy, thanks for that.

Now, let's turn to the Middle East which is spiraling into a regional conflict where the U.S. finds itself on both sides of the divide. And the growing chaos raises questions about President Obama's strategy and nuclear talks with Iran.

Fox News national security correspondent Jennifer Griffin explains where things stand now.

JENNIFER GRIFFIN, FOX NEWS NATIONAL SECURITY CORRESPONDENT: Chris, the growing concern at the Pentagon is that while the U.S. military is fighting ISIS on behalf of Iraq, Iran's influence is spreading, forming in essence a Shiite crescent across the Middle East.

Iran's influence in neighboring Iraq has grown since U.S. forces pulled out at the end of 2011. Three weeks ago, Iraq and Iran launched an operation to retake Saddam Hussein's hometown Tikrit from ISIS. The move surprised U.S. commanders.

This week, after the Iranian-led operations stalled, U.S. warplanes launched air strikes over Tikrit at the request of the Iraq government. Before doing so, the Pentagon demanded the Iranian-backed forces led by General Qassem Suleimani pull back. Some accused the U.S. of serving as Iran's air force.

Meanwhile, in Yemen, another Iranian-backed Shiite proxy overthrew the government this week. The Sunni government of Saudi Arabia began air strikes. Egyptian warships are steaming toward Yemen. The Pentagon was again caught off guard.


MCCAIN: General Austin, when were you told by the Saudis that they were going to take military action in Yemen?

GEN. LLOYD AUSTIN, CENTCOM COMMANDER: Sir, I had a conversation with the shah (ph) right before they took action, so it was shortly before.


GRIFFIN: Meanwhile, Secretary of State John Kerry facing a deadline Tuesday, is trying to hammer out the details of a framework agreement to curtail Iran's nuclear program, negotiations that Sunni governments oppose -- Chris.

WALLACE: Jennifer Griffin, reporting from the Pentagon. Jennifer, thank you.

For more, let's bring in Lieutenant General Michael Flynn, who retired as director of the Defense Intelligence Agency last summer, after holding almost every top military intel post.

General Flynn, welcome back to "Fox News Sunday."


WALLACE: President Obama's policy in the Middle East, as we just heard, is complicated. But I want to lay out three main points. Let's put them up on the screen.

We're fighting against Iranian-backed rebels in Yemen. We're fighting on the same side as Iranian-backed militias in Iran. And meanwhile, we're trying to negotiate a nuclear deal with Iran.

But the FOX brain room, our research department, did this remarkable chart -- take a look at this -- to show what our dealings with Iran and Saudi Arabia right now really look like. For a closer look, because it bares study, go to our Facebook page.

But, General Flynn, can you explain what the president's grand strategy is for the Middle East?

FLYNN: Yes. So, Chris, let me just start by sort of stating two big points. One, where we are and then what do we do about it.

I think where we are right now, we have almost a complete breakdown of order in the Middle East, a new Middle East is essentially struggling to be born.

The second thing is, we have Iran on the march. Iran is clearly on the march. As Jennifer Griffin's commented highlights, both in Iraq also Syria, Lebanon, Yemen and other parts of the Middle East. We have a takeover of Islam by radical extremists. And I think this is very dangerous and it's both Shiite and Sunni, we can't forget that.

We also have, what I would call, a real sort of a pushback by the Sunni governments and their lack of trust and their lack of respect for the United States. And I think that at the end of the day, we have just this incredible policy confusion, never mind what our strategy is to execute that policy.

WALLACE: But let me ask you about that because it seems to be a patch work of alliances where in some countries we're on the side of Saudi Arabia and the Sunnis. In other countries like Iraq, we're on the side of Shiite and Iran. Can that work?


So, let me just start by saying as an intelligence officer, intelligence has to be part of the calculus of every strategic level of decision. And, right now, I don't -- my sense of where the policy is at is sort of -- and I hate to say it like this -- but it's almost a policy of willful ignorance. And to me, we have some major problems that we are dealing with and here we are talking to Iran about a nuclear deal with this almost complete breakdown of order in the Middle East.

One of the things that we have to keep in mind on Iran is Iran is also a country with ballistic missiles, cyber capabilities. They are also still a state-sponsor of terrorism. And here we are dealing with them as though we're going to give them a carte blanche. I know it's going to be some number of years to have a nuclear capability -- I mean, give me a break.

WALLACE: Well, let's talk about Iran because the main point is clearly that Iran is on the march. Let's put up this map because they've got growing power in Iraq, in Syria, in Lebanon and in Yemen. And this week, Saudi Arabia and Egypt finally decided that they were going to push back against Iran and here is what the Saudi ambassador to the U.S. told me about Iran.


ADEL AL-JUBEIR, SAUDI AMBASSADOR TO THE U.S.: They want to dominate the region. Their officials have made no bones about publically saying how proud they are to control four Arab capitals, Beirut, Damascus, Baghdad and Sana'a. We will not tolerate any aggression against the kingdom of Saudi Arabia or our allies.


WALLACE: We will not tolerate any aggression.

Question, how close are we to a sectarian regional war in the Middle East?

FLYNN: Yes, we're not close. We're there.

I mean, this is what's going on. And we have to face reality and not try to assume that we are going to be able to say something and hope that that's going to be -- that our policy will be carried out because we say something. We have to face the reality that we are in right now. And that reality is there is a sectarian war.

We also have to acknowledge, Chris, that both Iran and these radical Islamists, these extremists, they -- we have to acknowledge that they do not like our way of life. In fact, they have stated that they want to see the destruction of our way of life.

And I think that -- I think that our leadership has to be really clear with the American public not to scare the American public but to inform them, to tell them exactly what it is that we are facing. I mean, that line and block chart you showed, that's -- if it was confusing to your audience, it's probably confusing to many in the government. And that's also part of the entire sort of policy and strategy that we are following.

It is a state of confusion. And like I said, I can't say it any stronger, I almost feel like our policy is a policy of willful ignorance rather than facing the reality that we actually have right now.

WALLACE: You talk -- you mentioned before, Iran has ballistic missiles. Pakistan could conceivably come in on the Saudi side -- the Sunni side. First of all, where would Iran use ballistic missiles and how dangerous could this potentially get, this sectarian warfare?

FLYNN: The escalation of the challenges that we are looking at -- first of all, it's not going to -- we're not all going to suddenly wake up and peace will be breaking out in the Middle East. We are going to face increasing complexity in the Middle East and the escalation of this conflict, this sectarian civil war that's ongoing between Iran and the Sunni -- various Sunni countries is going to be going on for some time. So, the escalation of that and the application of other capabilities with the potential of ballistic missiles -- certainly cyber is already going on. Other terrorist acts on both sides and from our interests, we have to make sure that we take care of those things -- those allies, those partners that we have. To me, it's a really important issue.

WALLACE: All right. You referenced the fact that we are just a couple days away from the deadline, Tuesday night, midnight, for a framework nuclear deal between the U.S. and our allies on the one side, and Iran on the other. I guess I got a couple of questions. First of all, does it make any sense to be negotiating this deal now given Iran's march across the Middle East? And secondly, from what you hear about what's being negotiated on Iran's nuclear infrastructure and the pace of lifting sanctions, is it a good deal or not?

FLYNN: Yes. That Saudi ambassador that was on just a little while ago only a couple years ago would have been blown up in a restaurant here in Washington, D.C. and other Americans that have gone to that restaurant that night would have been killed had some good luck and some good law enforcement work not been accomplished.

So, that was all sponsored by Iran. Iran is a state sponsor of terrorism, according to our State Department. The guy that you showed, Qassem Suleimani, the head of the IRGC, Quds force, he is one of the leading individuals who is still designated as a -- as a terrorist.

WALLACE: What do you think about negotiating this deal?

FLYNN: We should stop right now and take a deep breath, step back and look at everything that's going on instead of -- it's although we're in this nuclear deal and we see some light at the end of the tunnel that's going to walk us into a new level of nirvana -- I don't know how else to call it. And, in fact, that's not -- that light is not a light that's going to expose us to some new world. That's a train that's heading in our direction.

I will tell you that we have to make sure that we step back and understand the full breadth and scale and scope of what's happening in the Middle East before we cut a deal with Iran. I think it's dangerous.

WALLACE: Pardon?

FLYNN: I think it's very dangerous.

WALLACE: The key, of course, if there is a deal, is would we be able to verify it? Would we be able to know that Iran is doing that they're complying with the agreement?

Last Sunday, I spoke with the CIA Director John Brennan who expressed great confidence that between what our own intel and what the verification procedures will be, that we will know. Here's what he said.


JOHN BRENNAN, CIA DIRECTOR: I think we've gone to school on some of those developments over the last decade or so, so that we can now have a better plan and opportunity to verify some of the things that they are saying that they're going to do and not do.


WALLACE: Is Brennan right? Do you share his confidence that we would know what Iran is doing on its nuclear program? Forget the regional side of it. And what are the chances that Iran could or might be able to build a secret nuclear facility we'd know nothing about?

FLYNN: Yes. Here is -- again, you showed a clip of General Austin not knowing what one of our closest allies in the region are doing. That's the Saudis going in to do air strikes in Yemen. So, what makes us think that we are going to have -- you know, as much information as we're going to need to be able to verify this -- you know, whether or not the Iranians are developing a nuclear weapon or not. We have not had a lot of luck in that in the last 30 years, if not in the last couple of years.

And I -- so, I don't trust Iran. And I have seen a lot -- what I know, Chris, about what I've seen over certainly the last 10 years, if not the last 30, they are not a nation to be trusted.

WALLACE: Final question, we have about less than a minute left. If you are still head of the Defense Intelligence Agency as you were until last summer, and you were advising the president right now, briefly, what would you say to him about this nuclear deal and what would you say to him about the policy we have now where we're on one side in one country and the other side in the other country?

FLYNN: I would say stop all engines on this nuclear deal. Take a step back. Really take a deep dive look at everything going on in the Middle East. It's not just the Middle East. It's all of North Africa. It's parts of West Africa. It's Central Asia.

Chris, this is a growing threat. It has clear consequences on our national security. We -- if it's not existential today, we should not wait for it to be existential. In my belief, my experience, my judgment, we have to stop what we're doing and take a hard look at everything going on in the Middle East right now, because it's not going in the right direction.

WALLACE: General Flynn, thank you. Thanks for coming in today and helping explain what's going on in the region and what's at stake. It's not a pretty picture.

Thank you, sir. Please come back.

FLYNN: Sure.

WALLACE: Up next, growing chaos in the Middle East and U.S. policy under fire. Our Sunday group joins the conversation.

Plus, what would you like to ask the panel about President Obama's strategy for the region? Just go to Facebook or Twitter @FoxNewsSunday, and we may use your question on the air.



ADEL AL-JUBEIR, SAUDI AMBASSADOR TO THE U.S.: It is the Iranians who have been on the offensive and have been acting aggressively towards the Arab countries. This is something that we cannot tolerate.


WALLACE: Saudi Arabia's ambassador to the U.S. explaining why a coalition of Sunni nations moved this week to oppose Iranian-backed rebels in Yemen.

And it's time now for our Sunday group. Syndicated columnist, George Will, Carol Lee, who covers the White House for "The Wall Street Journal", Matt Kibbe, head of the Tea Party group Freedom Works, and former Democratic Senator Evan Bayh.

So, Carol, what do White House officials -- how do they view the decision by the Saudi-led coalition to take on Iranian proxies in Yemen? And how do they explain the fact, as I was trying to get -- discuss with General Flynn, that we're on one side against the Iranians in Yemen but we're on the other side kind of alongside the Iranians in Iraq. How do they explain that?

CAROL LEE, THE WALL STREET JOURNAL: Well, their argument is that their goal is to try to side with whoever they need to, essentially, to get rid of the worst of the worst actors. And so, what you've seen is all the traditional alliances that the U.S. has had in the Middle East have sort of broken down and none of them apply in this current situation. And you have a dynamic where the president's strategy of not engaging so much in the Middle East and withdrawing a little bit and pursuing this nuclear agreement with Iran had taken priority.

And now, he's -- that's complicating his agenda across the region. And the strategy is now to partner where they need to partner and keep their eye on the ball, which is the big prize for them is this Iran deal. And the result is that it's -- the Middle East is in a state of increasing chaos and the question is whether this is a strategy that's going to be sustainable going forward. You already see it challenging the president in Iraq and his -- in Afghanistan, as you saw this week, where he slowed the draw-down for troops there.

WALLACE: George, you and I talked earlier this week on "SPECIAL REPORT", and you said you thought it was a good development that the Arabs, in this case the Sunni Arabs, Saudi Arabia and the coalition, are standing up and fighting their own fight instead of depending on us. But when you hear -- see what's going on, when you hear what General Flynn says, is there no danger from a regional conflict across the Middle East?

GEORGE WILL, SYNDICATED COLUMNIST: There's no aspect of this that isn't dangerous. But as General Flynn said, the region-wide sectarian war is not hypothetical, it's now actual. Remember the breakup of Yugoslavia, that was bad enough when you had nations being reborn, Croatia, Sarajevo, Serbia, all the rest. This is nationality being eclipsed by sectarianism. It's much more volatile and it's much more dangerous.

And there are two lessons from this I think. Pat Moynihan used to talk about the liberal expectancy. That was the belief that modernity came, pre-modern forces, religion and ethnicity would lose their history-shaping power. That's all we read about nowadays from these supposedly pre-modern forces dominating the modern age.

Second, I think if you look at this, region-wide chaos, you realize how feasible (ph) is the theory we left 10,000, 20,000 forces in Iraq, none of this would be happening. This is beyond our power to control with the few forward deployed troops.

WALLACE: And then, adding to all of this, of course, the on-going and intensifying U.S. and allied talks with Iran about its nuclear program. We asked you for questions for the panel.

And we got this on Facebook from Joy Flick. She writes, "Why is anyone taking this so-called Iranian nuclear 'deal', in quotes, seriously when by Kerry's own admission it is unenforceable and not legally binding. I have to sign a more biting contract with the vet to have my dog's teeth cleaned."

Senator Bayh, couple of questions. What do you make from what you hear of where the negotiations are headed? And how do you answer Joy Flick?

EVAN BAYH, FORMER U.S. SENATOR (D-IN): Well, I think joy's skepticism is warranted, Chris. The negotiation are heading toward what will probably be a very general pronouncement this coming week, but the real deadline is June the 30th and the devil will be in the details there.

Do we get a real inspection regime that allows us to go anywhere, any time, including on military bases to see what the Iranians are up to? That's number one.

Number two, no immediate sanctions relief. Is it put off until some point in the future where they have shown that they are behaving by an agreement, not just saying they will behave according to an agreement, because all your guesses are correct, Iranians can't be trusted.

And finally, there will be automatic re-imposition of sanctions in the event of any kind of valuation. So, it's got to be an agreement with specificity and with teeth. We're probably not going to know that until June 30th.

The final thing I would say, the Iranians admitted to a weaponization program that existed until 2003. They're not willing to come clean about that. If they're not willing to come clean about that, we probably can't trust them with anything else. So, I think Joy's skepticism is warranted. Let's see what kind of agreement we come up with.

WALLACE: What about the argument -- you've just said that we asked and have been asking for years for them to tell us -- I think since 2009 what they have before. They're refusing to tell us that. We know they're a bad actor across the Middle East. What about General Flynn who is basically saying, stop, don't continue down this road with the Iranians?

BAYH: Well, real skepticism is warranted, Chris. And I think --

WALLACE: No, but he's saying more than real skepticism. He is saying break it off.

BAYH: Well, I think that if we can't get an agreement that has real teeth in it, and we shouldn't have an agreement. The problem is, the alternative isn't exactly a walk in the park either. I mean, really at the end of the day it's probably the use of force, which is a euphemism for going to war against Iran, there are real consequences to that which would adverse to the United States.

But if it comes right down to it, the two questions are -- are we willing to accept an Iranian -- a nuclear Iran? And if the answer to that is really no, which I think it should be, are we prepared to deal with that now or are we going to put it off and force our children to deal with it at some point that's more favorable to Iran?

So, the bottom line is, if it's a bad deal, the general is right, no deal. And we consider our options.


MATT KIBBE, FREEDOMWORKS PRESIDENT: I think the problem with this administration and the problem with presidential leadership, it's all about credibility and restraint. And this administration looks a little bit desperate. And they want to deal no matter what. That's not a good negotiating position.

I think conversely, you know, the Iranian economy is in the tank because of economic sanctions, because of falling oil prices, because of some of their military adventurism across the region. I think we should be negotiating from a position of strength, but we're not now.

WALLACE: Let me ask you, we have about a minute left. Carol, I talked with the top White House official about 10 days ago who said that he bet there won't be a deal. What are you hearing about the possibility or the likelihood that there just won't be a deal, this is all going to fall apart?

LEE: Well, what they're saying now is they're closer than they ever have been and the likelihood is they will get a deal in the coming days. I mean, I think that's where their view is now.

The question is how the president handles Congress on this? And I think there's a growing acknowledgement inside the White House that Congress is going to vote on something one way or another and so, the question once and if they get a deal is whether the White House tries to shape some sort of legislation that they can think they can live with in the intervening months between the end of March and June 30th.

WALLACE: And June when they get the final deal.

All right. We have to take a break and we'll see you all later.

Up next, former Hewlett-Packard CEO Carly Fiorina goes after Hillary Clinton as he considers a possible run for the Republican presidential nomination. What do you think of Fiorina and the rest of the potential GOP field for 2016? Let me know on Facebook or Twitter @FoxNewsSunday and use the #fns.


WALLACE: Amid a crowded 2016 Republican field, the challenge now becomes finding a way to stand out. If she runs, former Hewlett-Packard chief Carly Fiorina would have no trouble doing that as the only woman in the GOP field. In recent weeks, she has also become a leading critic of Democratic front-runner, Hillary Clinton.

Ms. Fiorina, welcome back to "Fox News Sunday."

CARLY FIORNIA, FORMER HEWLETT PACKARD CHIEF: Great to be with you. Happy Palm Sunday.

WALLACE: Well, thank you.

What are the chances that you're going to run for president?

FIORINA: Very high.

WALLACE: You're a former businesswoman. Give me a number.

FIORINA: Higher than 90 percent.

WALLACE: Really?

FIORINA: Yes, sir.

WALLACE: So what would prevent you? Why aren't you willing to announce right here today, I'm a candidate for president?

FIORINA: Well, because, you know, we need -- as other potential candidates are doing, we need to make sure we have the right team in place, that we have the right support, that we have the right financial resources lined up, just as all the other potential candidates are doing.

WALLACE: And when would you announce?

FIORINA: Probably late April, early May.

WALLACE: If you run, and it would be in a field of current and former governors, several current senators, why should Republican voters pick you?

FIORINA: Because I have a deep understanding of how the economy actually works, having started as a secretary and become the chief executive of the largest technology company in the world because I understand how the world works and know many of the world leaders on the stage today because I understand technology, a transformational tool, because I understand bureaucracies -- how they work and how you need to change them and our government is a huge bureaucracy, and because I understand executive decision-making, which is making tough calls in tough times with high stakes for which you're prepared to be held accountable.

WALLACE: OK. Let's talk specifically about your experience as a business executive. Beyond the typical Republican talking points, not to say that they're wrong, but what are your ideas that are different about the economy and about dealing with our national debt?

FIORINA: Well, I think we have two fundamental structural problems in our economy. One is that we have tangled people up in a web of dependence from which they can't escape. We're leaving lots of talent on the field. Secondly, we're crushing small businesses now.

Elizabeth Warren is right, crony capitalism is alive and well. Big business and big government go hand in hand. But for the first time in U.S. history now, we are destroying more businesses than we are creating. And so, while we have 10 banks, too big to fail, now have become five big banks too big to fail, 3,000 community banks have gone out of business, and that's where family-owned and small businesses get their chance. That's important because small businesses create two thirds of the new jobs and employ half the people.

So, if we want mainstream and the middle class going and growing again, we've got to get small and family-owned businesses going and growing again. Washington, D.C. has become a vast unaccountable bureaucracy. It's been growing for 40 years. We have no idea how our money is spent.

I think there are two things that would help tremendously. One, zero base budgeting, so we know where the money is spent. We're talking about the whole budget and not just the rate of increase.

And two, pay for performance in our civil service. We have -- how many inspector general reports do we need to read that say, you know, you can watch porn all day and get paid exactly the same way as somebody who is trying to do their job?

WALLACE: But, Ms. Fiorina, and you know this is coming, your record at head of Hewlett Packard, and you were the CEO for five and a half years, and you were the first woman to lead a Fortune 100 company, is going to be controversial. Let's put up some of the things on the screen.

During your five and a half years, you laid off -- the company laid off more than 30,000 American workers, many of those jobs went to India and China, and Hewlett-Packard stock fell 49 percent and the board of directors fired you.

Isn't that a record that you're going to get hammered with?

FIORINA: Well, I'm very proud of our record. We took Hewlett-Packard from about $44 billion to $88 billion in six years. We took the growth rate from 2 percent to 9 percent. We tripled the rate of innovation to 11 patents a day. We quadrupled cash flow.

We went from a market laggard to a market leader in every product category and every market segment. And we grew jobs.

It is true that I managed through the worst technology recession in 25 years. You will remember the NASDAQ has only now recovered to its dotcom boom highs after 15 years. So, virtually, every technology stock was down over that same period.

And while it's true that in a technology recession, we had to lay people off, many of those people were in Europe and elsewhere, and the truth is we outsourced more California jobs to Texas than we did to India or China, demonstrating we have to compete for every job.

WALLACE: But you know what's going to happen. If you were the nominee, exactly what happened to Mitt Romney. There were 30,000 American jobs that were lost and they can get two or three or 200 people to go on and say, well, Carly Fiorina got a $20 million severance package, I lost my job. I mean, they'll make you look like an unfeeling multimillionaire.

FIORINA: Well, first, I think you're reading the Democratic talking points because it was not all American jobs. But of course, laying people off is the last resort. It's a terrible thing to have to do.

But when you are managing through the worst technology recession in 25 years, sometimes there are tough calls that need to be made for the overall health of the enterprise. And in the end, we took a company that was really struggling and turned it into an exceedingly successful company where overall jobs grew.

WALLACE: You seem to take special delight in going after Hillary Clinton. And here is one of your greatest hits.


FIORINA: Unlike Mrs. Clinton, I know that flying is an activity, not an accomplishment. I have met -- I have met Vladimir Putin, and I know that his ambition will not be deterred by a gimmicky red reset button.

Mrs. Clinton, please name an accomplishment.


WALLACE: That's pretty good stuff. What is your basic case against Hillary Clinton?

FIORINA: Hillary Clinton lacks a track record of accomplishment. She is not candid, which suggests her character is flawed. And I think now in e-mail gate, we not only have a situation where she is clearly not being candid. I mean, her saying all those e-mails she erased were just her and Bill chatting is a little bit like Richard Nixon saying those erased moments on the tape were he and Pat talking. That's ridiculous. There's more than that.

But I also think there's a confidence issue now. Anyone in 2015 to say you can't have two e-mail accounts on a single device obviously doesn't understand technology. When she talks about we had Secret Service agents guarding our server, for heaven's sakes we're not concerned about the server being stolen. We're concerned about the server being hacked.

WALLACE: All right. Let me pick up on that, because Clinton's lawyers, the latest development is late Friday, they told the House Benghazi committee, there's no point going after the server because we have wiped clean all of the e-mails and so all of those 30,000 private e-mails, so-called private e-mails are gone. One, what do you make of it? Two, what do Republican investigators do now?

FIORINA: Well, I think it was part of the plan all along that the Clintons had. Look, I think it was very deliberate that they had a private server. I think it was very deliberate that she used a personal e-mail account. I think this clearly was a deliberate effort to shield her communications.

I don't quite know what the investigators can do at this point, but I know this, we need a nominee who will bring this up in the general election. The reason Benghazi was not enough of an issue in the 2012 election is because, unfortunately, our nominee pulled his punches when he had an opportunity to remind the American people of the Benghazi tragedy and scandal.

WALLACE: So, what are you saying, you won't pull your punches on Hillary?

FIORINA: Oh, I will not pull my punches -- not now and not in a general election.

WALLACE: Some people have suggested, even as I ask it, it sounds sexist, you're really running to be the running mate, that you would the person to lead the attack against Hillary Clinton. It would be easier for you as a woman attacking another woman and that you would in a sense neutralize the vulnerabilities the Republican Party has with women?

FIORINA: You know, I come from a world outside of politics where track record and accomplishments count, words don't. If I run for president, it's because I can win the job and it's because I can do the job.

WALLACE: Would you even consider being the running mate?

FIORINA: Well, when you start asking all the other candidates that question, then maybe we'll have that conversation.

WALLACE: Fair enough. Carly Fiorina, thank you for coming in. Always good to talk with you. And we will be following your big decision.

FIORINA: Thank you so much, Chris, for having me.

WALLACE: Please come back here, and let us know.

FIORINA: All right.

WALLACE: When we come back, the week in politics. Ted Cruz gets in while Harry Reid steps out. Our panel will chew over that and more.


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Be part of the discussion and weigh in on the action every "Fox News Sunday."



SEN. HARRY REID (D-NV), MINORITY LEADER: We have to be more concerned about the country, the Senate, the state of Nevada than us. And as a result of that, I'm not going to run for re-election.


WALLACE: Senate Minority Leader Harry Reid announcing his decision not to seek re-election in 2016. And we're back now with the panel.

Matt, what is Harry Reid's legacy as a Senate leader?

MATT KIBBE, FREEDOMWORKS PRESIDENT: Well, the Democrats are definitely celebrating his "by any means necessary" approach to passing President Obama's agenda.

But I think ultimately the legacy of Harry Reid is going to be viewed of as very destructive, because he has torn apart the traditions of the Senate that cooling off process, the respect for the individual senators and nothing shows that more than the way he went after the filibuster. And what happens, I wonder, when Ted Cruz is majority leader. Will the Democrats be celebrating Harry Reid's tradition then?

WALLACE: We should point out, it used to be that for nominations, executive nominations, cabinet members you need 60 votes and he reduced it to simply majority of 51 votes.

KIBBE: He did. It's a hard to put the genie back into the bottle, and the inability of individual senators, particularly Republicans to get amendments, to have their voice heard in this process, that's bad for both Republicans and Democrats. It's bad for the tradition of the Senate and the intentions that the Founders had for it.

WALLACE: I want to pick up with that on you, Senator Bayh. You served with Harry Reid for years. I think it's generally agreed that he did President Obama's bidding or certainly worked alongside him bottling up House Republican legislation so it never went to a vote, let alone forcing the president to veto it.

But you do hear criticism, not just from Matt but from some of the -- from some agreed Senate colleagues who say he weakened the institution, he prevented amendments, he prevented legislating, and that he made it harder for the Senate to do its business. Do you think there's some truth to that?

EVAN BAYH, FORMER U.S. SENATOR (D-IN): Chris, I served under four leaders, two Republicans and two Democrats. Over the 12 years I was in the Senate, I saw more and more of that under both parties.

And I think it's really a reflection of the times in which we live and which the basis of both parties is very estranged from one another. That leaves to more polarization and gridlock in the United States Senate. And so, to combat that, you saw the concentration of power in the hands of leader on both sides. And I think you'll see Senator McConnell now, maybe not quite as much as Senator Reid, but suffered those same frustrations. How do you get things done?

So, there's a real premium upon -- it's almost a parliamentary system. All the senators got to vote in line, down the party line. That really is not in the tradition of the Senate, where you had big senators who were independent and make a difference.

So, I view Senator Reid's leadership as really being a reflection of our times. His pugnacious style may have contributed some, but I think really all the leaders had to deal with the same phenomenon he did.

WALLACE: While Reid is leaving, Republican Senator Ted Cruz became the first official candidate in the 2016 Republican race. Here he is.


SEN. TED CRUZ (R), TEXAS: I think there is an urgency to what we're facing in politics that's unlike anything you or I have ever seen before. I think it's now or never. I don't think we've reached the point of no return yet, but we are close.


WALLACE: George, where do you think Cruz fits in the Republican presidential field? And what do you think are his realistic chances to win the nomination?

GEORGE WILL, SYNDICATED COLUMNIST: We've seen this movie before, Chris. In 1964, Republicans nominated Barry Goldwater, partly on the theory called conservatives in the woodwork, that there were enormous number of conserves who only offered candidate who ignored what Cruz calls the mushy middle, they'd come out of the woodwork and form a national majority. Well, Goldwater's 27 million voters, of whom I was one, suffice to carry six states.

The question for Mr. Cruz for anyone seeking the Republican nomination is this -- given that 18 states and the District of Columbia with 242 electoral votes voted Democratic in six consecutive elections and if the Democratic nominee holds that base, he or she will spend the fall looking for 28 electoral votes and will find them. Given that, they have to ask the question, what red -- what blue state are you going to flip specifically? Can Ted Cruz campaign effectively in one of those 18 states? Pennsylvania -- how is he going to do piling up big majorities to carry the state in the suburban counties, Bucks, Montgomery, around Philadelphia? I'm skeptical.

WALLACE: Let me bring in Matt Kibbe, who represents the Tea Party and which loves Ted Cruz. Where is George getting it wrong?

KIBBE: My community loves Ted Cruz. We're looking at Senator Rand Paul. We like Governor Walker.

The question is the right one, but understand that politics today is more disintermediated. And all you have to do is look at Ted Cruz's fund raising numbers in his first week. He raised over $2 million in just a few days. And that mechanism, using the Internet and social media, is an opportunity for more unconventional candidates to be more competitive.

WALLACE: What about his argument that you've got this huge Democratic electoral advantage? Back in the '80s, the Republicans had the electoral nap on their side. There's big Democratic electoral advantage, and you've got a candidate who is basically talking about getting more conservatives, not reaching out to the moderates and the independents.

KIBBE: Right, and his approach is very different than Senator Rand Paul's. And that's the test -- all of these candidates that I just mentioned, how Ted Cruz performs in purple and blue states is something I would be watching, because we want to win, just like everybody else. We think there's an authenticity of running on principles that matter that can bring out new voters. But this is -- this is something we'll see.

WALLACE: Carol, I'm going to bring up another interesting development what I just talked to Carly Fiorina about and that was the announcement from Hillary Clinton's lawyer, who thought that we were going to get back to Clinton lawyers, on Friday that they have wiped the server clean. There's no point in even going after it. All of those e-mails, the government ones and the so-called private ones are gone.

Where does that leave this controversy?

CAROL LEE, THE WALL STREET JOURNAL: This probably isn't the last time you'll hear the Clinton lawyer phrase. She runs for the presidency. I think this is -- continues to be a problem for her just because it feeds -- there's a number of story lines that are feeding this narrative that the Clintons don't play by the same rules as everybody else, that there are trust issues there.

And you know, this issue now is -- I mean, there's nowhere that this can go except if the mails are no longer there, then she -- it now comes down to a battle of whose word do you take and can she convince voters that she did the right thing and did what she said she was going to do?

WALLACE: George, is -- does this go nowhere? In a sense, some would argue with a view of history, she burned the tapes.

WILL: Yes, she did. A week ago, the question is she hiding something? Now the question is and it will go on forever -- what did she hide?

WALLACE: Matt -- go ahead.

BAYH: Chris, I'm a frugal man. I will bet everyone here a steak dinner, this will not be an issue in the upcoming election. And the reason for that is that if you don't like Hillary Clinton, this is just more proof of there she goes again. If you like Hillary Clinton, it's more proof that she's getting untreated fairly.

For those swing voters, they're asking themselves, what does this have to do with me? Jobs, wages, health care, education -- and therein lies the difficulties of the Republican candidates. They're not making this election about what it should be about, which is the welfare of the American people.

WALLACE: Matt, what does this have to do with the average person?

KIBBE: I think the myth of Hillary Clinton's inevitability of the nominee, this is one more chink in that story. But I'm going to boldly predict that the American people, on both the Democratic and Republican sides, are putting a premium on authenticity and they're not really interested in a coronation of another Clinton and another Bush.

WALLACE: And, I mean, I guess that's the question, does it speak to her character, her openness, her transparency, and does that matter?

BAYH: Well, she's called for all of the e-mails that she's turned over to the state department to be released. Those that were put --

WALLACE: The ones she didn't destroy.

BAYH: Well, correct. But the ones that she destroyed were her personal e-mails which Mitt Romney and Jeb Bush and others said did away when they left the governorship of their states. This is not uncommon.

WALLACE: To be continued. Thank you, panel. See you next Sunday.

Up next, our power player of the week: Vicki Kennedy on her husband's vision to inspire new generations about the U.S. Senate.


WALLACE: Whatever you thought of him, Ted Kennedy loved the Senate, serving there for almost half a century. Now, it will play just as big a role in his legacy as it did in his life.

Here is our power player of the week.


VICTORIA REGGIE KENNEDY, EDWARD M. KENNEDY INSTITUTE: He loved public service. He believed in making a difference and he wanted to inspire new generations to feel the same way.

WALLACE (voice-over): Vicki Kennedy is talking about the Edward M. Kennedy Institute for the U.S. Senate -- a labor of love she just completed for her late husband. Students and tourists using handheld devices will learn about Senate history and procedures, all leading up to the main attraction.

V. KENNEDY: Welcome to the Senate in Boston.

WALLACE (on camera): I mean, I've been on the Senate floor. There's no difference.

V. KENNEDY: Isn't it exciting? Teddy wanted people to feel that sense of awe. I mean, I feel it every single time I walk in here.

WALLACE (voice-over): It is the world's only full scale replica of the Senate chamber.

Mrs. Kennedy took us to a copy of her husband's desk for his 46 years in the Senate.

V. KENNEDY: I think he loved being in the back row because he could see everything that was going on. So this was his desk. His brother, Senator John F. Kennedy, sat at this desk and carved his name in it, just as Teddy carved his name in it.

WALLACE (on camera): So that must have meant the world to him.

V. KENNEDY: It meant everything to him, absolutely.

WALLACE (voice-over): But this isn't a museum piece. So-called senators in training will learn about the issue of the day, debate it, and try to persuade a majority to pass a bill.

V. KENNEDY: They caucus. They're passing amendments. There's even a little mini filibuster possibility for three minutes.

WALLACE (on camera): What if the Senate votes to conservative way.

V. KENNEDY: Then it does. That's really exciting.

WALLACE: So, the fix isn't in for the liberal side here?

V. KENNEDY: The fix is definitely not in. No, the whole notion is to have no bias one way or another, and to really have a free and open debate.

WALLACE: Well, you had the most liberal voting record in the Senate in 2005 and you're still called -- I don't know if that's a compliment or not, the liberal lion of the Senate.

SEN. TED KENNEDY (D), MASSACHUSETTS: Well, my view is that programs change but our values don't change.

WALLACE: The institute is nonpartisan. Your husband was proudly, fiercely partisan.

V. KENNEDY: He was the proudest Democrat that there was, but the great thing about Teddy was that he always listened to the other side and worked so well with the other side.

WALLACE (voice-over): The hope is visitors will leave the institute inspired to give back to their communities and to demand Washington do its job better. I talked with Mrs. Kennedy in a recreation of his senator office, complete with some of the original mementos that meant the most to him, such as this letter from his mother Rose.

V. KENNEDY: She says, she watched him on a particular interview and said, Teddy, please say if I were president, not if I was president because it's a condition contrary to fact.

WALLACE: Which is why the institute is not just about politics, it's personal.

V. KENNEDY: It was very important to him that this project be finished. And he said that to me. He said, "You're going to finish this, aren't you?" And I said, "You know I will."

WALLACE (on camera): At the end he said that?


WALLACE: And you did.

V. KENNEDY: And I did, with a lot of help.

WALLACE (voice-over): For a moment, surrounded by family photos and the balls her husband used to throw to his dogs, it was all too much.

V. KENNEDY: I see all this memorabilia and I feel -- that's a tough one, you know? That's a little -- that's a tough one.

WALLACE: But in the end, the Kennedy Institute is not about the past but our future, at a time when Washington has never seemed more broken.


UNIDENTIFIED MALE: Madam President --

V. KENNEDY: I think it says, we don't need to be discouraged. We've done it before. You look throughout history, men and women of goodwill have come together and addressed the great challenges facing our nation and we can do it again.


WALLACE: President Obama will speak at the dedication of the Kennedy Institute tomorrow. And Joe Biden will preside in the chamber in Boston just as he does in the real Senate.

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

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