The following is a partial transcript of the April 8, 2007, edition of "FOX News Sunday With Chris Wallace":

"FOX NEWS SUNDAY" HOST CHRIS WALLACE: And we're joined now by two of the best minds in American politics, Senator Charles Schumer, who joins us from his home state of New York, and here in studio, former Speaker of the House Newt Gingrich.

Gentlemen, happy Easter and welcome back to "FOX News Sunday."


SEN. CHARLES SCHUMER, D-N.Y.: Happy holiday to all.

WALLACE: Let's start with the growing confrontation over the White House and congressional Democrats over Iraq war spending.

Senator Schumer, you are going to, in the next few weeks, send the president a bill that attaches a timetable for withdrawal to $100 billion in spending for the troops. Now, we all know that the president is then going to veto it.

My question is what happens next. Having made your political point, will Democrats then strip the timetable from the bill and send the troops the money they need?

SCHUMER: Well, first, Chris, you're right, we have two goals throughout. One is to fully support our troops.

In this resolution that we will send the president, we are giving actually even a little more money for the troops than the president has requested. And nothing — nothing — will stand in our way of supporting the troops in every way.

But, second, at the same time, we believe very deeply that we need a change in strategy in Iraq. We are now basically policing a civil war. The age-old enmity between the Sunnis and the Shiites is displaying itself in Iraq, as everyone knew it would, and our troops are busy policing that civil war. That is nothing — nothing — that the American people...

WALLACE: But, Senator, my question...

SCHUMER: ... bargained for.

WALLACE: Because we have limited time, my question is will you — when the president vetoes it, will you then strip the timetable out and just send a clean bill with just the spending?

SCHUMER: Look, the president's view is the only way you can support the troops is do exactly what he wants, to rubber-stamp what he wants. That is not what we will do.

Should he veto this bill, which means he will be vetoing the money for the troops, we will try to come up with a way, by talking with the White House, trying to compromise with the White House, that both supports the troops and yet changes the strategy in Iraq, which we feel is misguided.

And by the way, 70 percent of the American people feel it's misguided. If a change in strategy means not supporting the troops, then 70 percent of the American people don't support the troops.

WALLACE: Speaker Gingrich, some people compare this to the showdown that you had with President Clinton back in 1995 over the budget in which the government was shut down for 27 days.

Now, I think even you would admit that, at least politically, President Clinton whipped you in that confrontation.

The question I have is what are the dangers here, both for the president on the one hand and the new Democratic majority in Congress on the other?

GINGRICH: Well, Chris, I don't want to disappoint you, but first of all, we were the first re-elected Republican majority since 1928. I think we proved we were serious about balancing the budget, and I think that had a huge impact on spending.

But second, nobody was dying. There's a huge difference between a domestic fight over appropriations and a war in which young men and women are risking their lives.

Here we are on Easter Sunday with young men and women risking their lives for America, and it's interesting. You know, Abraham Lincoln opposed the Mexican War but voted for the money, made a very clear distinction in his speeches — I disagree with the policy; I am going to make sure we have the money. And so he really distinguished it.

What I'm concerned about, and I'd be curious to get Senator Schumer's reaction, is what Senator Schumer just described was dramatically more reasonable than what Majority Leader Senator Reid said.

Reid said if the president vetoes this, he's going to bring up a bill to cut off all funding and require the troops to come home — Senator Feingold's bill.

That would be a total disaster, and I would hope that Senator Schumer and others would convince him not to do that.

WALLACE: Senator Schumer?

SCHUMER: Well, I think you have to read the Reid-Feingold bill. First, it doesn't call for the pullout of all the troops.

It calls for continued funding even after March of 2008, which is a year from now, for three missions: Counterterrorism, which is what the original mission was to always be, protecting our forces, and retraining Iraqis.

And second, we are not going to leave the troops high and dry, plain and simple. Senator Reid has said that. I've said that. Every leader of the Democratic Party has said that.

But we are not going to abandon our quest to force the president basically to change his strategy. We should not be policing a civil war. We should be fighting counterterrorism.

If Al Qaida is setting up camps in Iraq, we're the first to say we should go take out those camps so what happened with Al Qaida camps in Afghanistan can't be repeated in Iraq.

That does not mean, however, that when the Sunnis and Shiites are busy fighting with each other that we should be policing it. And face the music. And everyone should. Let me make this point.

WALLACE: But we've got to bring in Speaker Gingrich here.

GINGRICH: I mean, I think the — where we disagree — and I think you have every right to disagree over strategy. I think that's part of our American process.

SCHUMER: Thank you.

GINGRICH: If you go to General Petraeus or you go to General Abizaid, you go to General Mattis, you go to any of the senior military who have been very effective and understand this problem, what they'll say to you is that to do what you just described, they have to have the resources and they have to have the freedom to shift around and pursue.

Chasing down Al Qaida training camps requires intelligence. Intelligence requires the ability to protect people who give you information. Protecting people who give you information requires having a network across the country.

WALLACE: All right. Let's let Senator Schumer respond to that.

SCHUMER: Well, the bottom line is yes, we do need intelligence, and we have pretty good intelligence in Iraq. That does not take soldiers on Haifa Street basically as Sunnis and Shiites fight with one another.

And that's going to — you know, whether we stay with more troops three months or three years, as soon as we leave, the Sunnis and Shiites are going to be fighting with one another.

And, Newt, you and I agree. I mean, your book and my book are similar on that strong need to fight terrorism. But that doesn't mean we go police every single civil war that's going on in the world. We don't have the resources and it's not our job to do that.

That's what we're doing in Iraq. The mission has changed without a broad discussion of policy for six years. We're doing that now in the Congress, and we're going to continue to do it.

WALLACE: Let's turn, if we can, to Speaker Pelosi's controversial trip to Syria this week.

Senator Schumer, it wasn't just Republicans who went after her. So did the mainstream media. Take a look at this, if you will. The Washington Post: Pratfall in Damascus. "Ms. Pelosi's attempt to establish a shadow presidency is not only counterproductive, it is foolish." USA Today, "Pelosi steps out of bounds on ill-conceived trip to Syria."

Senator Schumer, was Speaker Pelosi's trip a mistake?

SCHUMER: Well, let me say this. I mean, you have to make a decision when you want to talk to people you vehemently disagree with.

Let's look at North Korea for a minute as a prelude. Bill Clinton was talking to North Korea. They didn't have nuclear weapons. Colin Powell recommended that policy continue but was overruled by the president, the vice president and others.

We stopped talking to them. They now have nuclear weapons. And all of a sudden we are talking to them again and maybe talking them out of the nuclear weapons. The administration itself admitted not talking to North Korea was a mistake.

Now, Syria is in a unique position. It's a Sunni country, isolated, allied with Iran and they're in a very difficult position. It may — I'm not saying it will, but it may be possible to wean them away from the Iranians and try and bring them back.

Now, to change your principles — don't. Don't say, "Oh, it's OK for Syria to arm Hezbollah." I hate that they do that. Don't say that it's okay for Syria to let foreign fighters infiltrate across its border into Iraq.

But to simply talk to them — I don't think that that necessarily causes a problem. And in some cases, it causes something good.

WALLACE: Let me bring in Speaker Gingrich.

Speaker, in fairness, when you were speaker, you made a number of foreign trips. You expressed opinions when you were overseas. So have other speakers. Is the outrage here basically political?

GINGRICH: Look, there's a huge difference, and I think Senator Schumer would agree. Every legislator should be encouraged to travel. Every legislator should go on fact-finding. Every legislator should learn about the world.

What I found amazing about Speaker Pelosi's visit to Damascus was, first of all, the exact opposite of what's happening with Governor Richardson.

Governor Richardson has been encouraged to go to North Korea by the Bush administration. Speaker Pelosi was publicly asked not to go to Damascus and rejected it.

Second, she claimed to be carrying a diplomatic message from the Israeli prime minister which the Israeli prime minister promptly disowned and said she got it wrong.

We do not want 535 secretaries of state running around the planet confusing dictators by letting them think that there are two or three or four or five Americas. I think it was a major mistake.

I wish she would just relax, say in the future she's going to go on trips in coordination with the executive branch. I think it's very important not to have two foreign policies. And I think it's very dangerous for America to do what Speaker Pelosi did.

WALLACE: Mr. Speaker, we looked at your record. And let's put up some of the instances.

During a trip to China in 1997, you told leaders there, "We will defend Taiwan, period," when U.S. policy on defending Taiwan was much vaguer than that.

Just before a trip to Israel in 1998, you said, "I think it's wrong for the American secretary of state," Madeleine Albright, "to become the agent for the Palestinians."

In fact, weren't you far more provocative than Speaker Pelosi?

GINGRICH: Look, Speaker Pelosi can be very provocative in the U.S. What I said in China, by the way, was U.S. policy.

WALLACE: Well, not according to the Clinton administration, it wasn't.

GINGRICH: Well, President Clinton had just put U.S. aircraft carriers in the Straits of Taiwan. I mean, the American position has always been we do not recognize Taiwan as an independent country. We would protect Taiwan if there was a Chinese — if the People's Republic invaded Taiwan.

And I think it was very important for the Chinese to understand that there was a unified agreement. They were being very aggressive at that time.

WALLACE: And what about saying that Madeleine Albright was an agent for the Palestinians?

GINGRICH: I think at the time she was taking steps that were very, very pro-Palestinian.

WALLACE: But you understand my point that it looks like there are two foreign policies.

GINGRICH: The one time that I said something that was too strong when I was outside the U.S. — I didn't say anything in the U.S. That's part of the American political system.

The one time I said there was something wrong, I said publicly I'd made a mistake and I pulled back, because I do believe that you have to coordinate.

And I think that both Sandy Berger and President Clinton would tell you that we talked constantly about foreign policy and tried to work together on a whole range of issues on foreign policy.

WALLACE: Let's end this segment talking about Iran. Iran took 15 British naval personnel for two weeks, released them, paid no price for it. The U.N. Security Council did nothing. The European Union did nothing.

Senator Schumer, is there anything that the U.S. should do now, or should we just be happy that the sailors and marines were released?

SCHUMER: Well, of course we should be happy they were released, but, no, I think we should be ratcheting up the pressure on Iran economically. It's beginning to work.

We don't have the full cooperation of either the Russians or the Chinese. But I've always felt that Iran, which is a renegade nation — we should tighten the economic noose on them. And we've done it to some extent, and it's working. It requires cooperation.

The U.S. alone — we can't do it alone because Iran — if they can trade with everybody else in the world, they'll get everything they need.

But by working in a more multilateral way, by trying to bring not only the Europeans, who I think are now on our side on this, but the Russians and the Chinese, you can squeeze Iran.

And according to the reports I've read, Chris, even though this economic boycott is not complete, it's having an effect.

WALLACE: But let me just bring in, because we are running out of time in this segment, Speaker Gingrich.

You know, you could argue that our allies, British allies, in this particular case were utterly feckless in this operation.

GINGRICH: Look, the West was humiliated. The British were humiliated. The Europeans were humiliated. The United Nations was humiliated.

You have an outlaw regime which began its career with the American hostage crisis in 1979. It has yet to learn that breaking the law — and clearly, they broke international law in how they treated the British hostages, and they treated them illegally.

We should be actively seeking to replace that government by bringing every kind of non-military pressure to bear we can, to destabilize that government and help the people of Iran replace it with a moderate government.

WALLACE: Gentlemen, we have to take a break here. But when we come back, we'll turn to domestic issues, the battle over those fired U.S. attorneys, and will Congress and the president actually do some governing? Back in a moment.


WALLACE: And we're back now with Senator Charles Schumer and former House Speaker Newt Gingrich.

Let's pick up with the controversy over the firing of those eight U.S. attorneys. Three top aides to Attorney General Gonzales have now resigned. Three top officials in the U.S. Attorney's Office in Minneapolis have demoted themselves rather than work with the federal prosecutor there.

Speaker Gingrich, are you concerned about disarray in the Justice Department, and should the attorney general resign?

GINGRICH: You know, one of the weaknesses of this administration is that when it has a clear performance failure — FEMA in New Orleans would be an example — that it is not aggressive enough and direct enough with holding people accountable.

Let me draw this into two boxes. The president has every right to have the U.S. attorneys he wants. It is not a prerogative of the Senate or anyone else to question if he says he no longer pleases me, they're supposed to resign, period.

This is the most mishandled, artificial, self-created mess that I can remember in the years I've been active in public life. And it has to — you know, the buck has to stop somewhere, and I'm assuming it's the attorney general and his immediate team.

And I think it is amazing that there's any doubt about the fact that they have totally mishandled this.

WALLACE: Now, you called this a performance failure.

GINGRICH: Absolutely.

WALLACE: By the attorney general?

GINGRICH: He's in charge of the department. I mean, whether it — you know, how could you have so totally mishandled what was a slam dunk? All they had to say was the president has concluded he wants new people.

President Clinton replaced 93 U.S. attorneys in one decisive moment. Nobody jumped up and said he doesn't have the right to do it. They said it wasn't good policy, but nobody said, "Oh, this is a procedural problem." He replaced every single one. He reappointed only one of them.

WALLACE: All right. The obvious question: Should the attorney general step down?

GINGRICH: I cannot imagine how he is going to be effective for the rest of this administration. And they're now going to be involved — thanks to our good friends in the Senate side, they're going to be involved in endless hearings, which is going to take up an immense amount of time and effort.

I think the country, in fact, would be much better served to have a new team at the Justice Department, across the board.

WALLACE: The attorney general would do a favor to the Justice Department and the president...

GINGRICH: Well, and his top assistant, who was the one who first totally misspoke, in fact, in a Senate testimony.

WALLACE: I don't know that I have anything to ask you, Senator Schumer, but let me...

SCHUMER: I think we should leave it at that.

WALLACE: But let me ask you, given the fact that the next big event is the attorney general's testimony on April 17th, is there anything he can do to save his job?

SCHUMER: Well, to my way of thinking, no. I mean, there are two separate issues here, Chris. One is whether the attorney general is capable of running this department. I've concluded he isn't. I've called for him to step down.

The recent revelations about Bernie Kerik — and he was in charge of that vetting process — is another reason that this attorney general should go.

And Newt has pointed it out both in his book and here — you need competence in government. And the fact that the attorney general is the president's friend and was the president's counsel for years doesn't alone make him qualified to be attorney general.

And on issue after issue after issue he has bungled it. He has botched it. The U.S. attorneys is just the most recent example. But fundamentally, he's not up to the job and he should step down.

WALLACE: Senator Schumer, here on "FOX News Sunday" a couple of weeks ago, the top Republican on the Senate Judiciary Committee, Arlen Specter, accused you of a conflict of interest in all of this. Let's take a look.


SEN. ARLEN SPECTER, R-PA.: Senator Schumer is leading the inquiry, and the day after we have testimony about Senator Domenici, he puts his name up on the Democratic Senatorial Campaign Committee.


WALLACE: Senator, to avoid even the appearance of a conflict of interest, why not either step down from the investigation in the Senate or step down as chair of the campaign committee?

SCHUMER: Well, you know, this is the kind of diversion that the administration and its allies always throw up when they come up with bad news, when they've made mistakes and when they've bungled it.

Our investigation — and by the way, Senator Leahy is leading it. I'm head of the subcommittee that's involved, and certainly I've been a large part of it. But our investigation is focused alone on the executive branch, on the Justice Department, maybe the White House, if they were involved in these firings.

It is not involved with any legislator. That's up to the Ethics Committee. So there's no conflict whatsoever. And I will tell you something. If you attack the messenger, go shoot, you know, the person who's bringing the bad news, don't answer the questions — that's what's gotten the administration in trouble over these last six years.

WALLACE: But, Senator, let me — this is a fundraising e-mail that your Democratic Senatorial Campaign Committee sent out. And let's put it up on the screen.

It says that Senator Domenici "has been less than forthcoming and has given his constituents every reason to question his honesty and his fitness to be a United States senator."

If I may just ask the question, sir, should you be investigating this case and then using it for political advantage?

SCHUMER: Well, let me say this. The DSCC has Web sites and puts out information — it's not all positive — about all 21 Republican senators who are up for re-election, just as the Republican Senate Campaign Committee puts it out against all 12 Democrats who are up for re-election.

There is no conflict whatsoever. We're not going to be diverted. We're not going to be deterred. And in fact, the gravity of this situation is shown by the fact that several Republicans have called for the attorney general to resign, that at our hearing last week with Kyle Sampson, such stalwart defenders of the administration like John Kyl and Jeff Sessions had real questions and trouble.

This isn't across the front pages of America because somebody concocted it. It's very real stuff, and we're going to get to the bottom of it.

WALLACE: Senator Schumer, let me raise another issue with you. Democrats in the House made a big deal when they came into power about passing their agenda, what they called Six for '06, in the first 100 hours of their legislative session.

This week marks the first 100 days of the Democratic control of Congress and yet, largely because of inaction in the Senate, the Democratic Congress has failed to pass any of those measures and send them on to the president.

And that includes raising the minimum wage, negotiating lower drug prices, extending embryonic stem cell research.

Now that you've made your point, should Democrats stop passing resolution after resolution on Iraq and instead actually govern, one could argue, by passing your domestic agenda?

SCHUMER: Well, we're going to do both. Look, the number one...

WALLACE: But you haven't so far, sir.

SCHUMER: Well, in the next three weeks, we will be doing minimum wage, stem cell research, and drug prices. The Senate works more slowly. That's how the founding fathers set it up. We're supposed to be the so-called cooling saucer.

But you will see by the time we have the July 4th recess that the items you mentioned will be on the president's desk. I don't know if he'll veto them or not, but we will have them there. We can do both.

It is our job and mission to talk about Iraq...

WALLACE: Let me bring in...

SCHUMER: ... and change the mission, but it is also our job to pass legislation. We're doing both.

WALLACE: Speaker Gingrich?

GINGRICH: Let me put in a good word for the Senate stopping things. The Democrats have passed the largest tax increase in history in their budget resolution.

The Democrats in the House have stripped workers of the right to vote in a secret ballot before being forced to join a union.

The Democrats in the House have given Samoa, with 53,000 people, the same vote in the community as a whole as the average American district with 700,000.

I would much rather have the Senate doing nothing than passing the kind of left-wing big government legislation that Speaker Pelosiis ramming through the House right now.

WALLACE: That may be the best backhanded compliment I've ever heard, Speaker Gingrich.

SCHUMER: Yes, exactly. I don't agree with his premise, but maybe I agree with his conclusion.

WALLACE: Mr. Speaker, let me conclude this with you. You caused something of a flap this week when you said that we should replace bilingual education with immersion intense courses in English — and let's put it up, your words — "so people can learn the common language of prosperity, not the language of living in the ghetto."

After a number of Latino groups criticized this as racist, you put up an apology on You Tube. Let's watch.


GINGRICH: (Speaks in Spanish)


WALLACE: I have to say it was interesting to watch. But in any case, why, if you want people to speak English, do you put your own biography in Spanish on your Web site?

GINGRICH: Let me be clear what I said. We have many, many languages in America. We have over 200 languages spoken in this country.

What I said was it's very important that people have intensive English education. It is very important that English be the official language of government.

And it's important that every person who comes to America have an opportunity to learn English as rapidly as possible, because English is the language of prosperity, and you have a much better chance of pursuing happiness if you learn English.

WALLACE: But the language of the ghetto?

GINGRICH: That was a reference, as a European historian, to people being trapped, and Clarence Page has a column about this this morning in the Chicago Tribune pointing out that it applies to many different groups.

I never referenced any single group. What I said was if you are trapped in an area and you cannot speak the common language of the whole country, you have a lesser life with a lower income. That's just factually true.

And I did the — I have been studying Spanish, and I did that particular video to make sure that we weren't talking about fights between groups. We were talking about how do you bring people together to assimilate them into a common American citizenship.

WALLACE: So no apologies?

GINGRICH: I said I used the wrong word, but I wasn't attacking any group. I am specifically saying — I think, by the way, most Latino parents and most Vietnamese parents, most Chinese-American parents — people who come to America want their children to learn English because they want their children to some day own the company, not just work for the company.

WALLACE: I understand. But a lot of those Latino groups were very offended by what you said, sir.

GINGRICH: But if you look at their reactions both when I was on Univision and when we talked with them in a variety of other circumstances, I think people have accepted what I said, and people have said, "Now we're having a debate over do you learn English intensively or do you go through a system where you're still speaking your native tongue."

And I think in the long run, people will agree learning English intensively is the most effective future.

WALLACE: We have to leave it there.

Speaker Gingrich, Senator Schumer, thank you both for coming in and talking with us today.