Fiorina: Trump is a Clinton Christmas gift, I'm the lump of coal; US doing enough to defeat ISIS?

This is a rush transcript from "Fox News Sunday," December 20, 2015. This copy may not be in its final form and may be updated.

CHRIS WALLACE, HOST: I'm Chris Wallace.

The Democrats hold another debate. Today, Republican candidate Carly Fiorina responds to front-runner Hillary Clinton.


HILLARY CLINTON, D-PRESIDENTIAL CANDIDATE: We now finally are where we need to be. We have a strategy and a commitment to go after ISIS.

CARLY FIORINA, R-PRESIDENTIAL CANDIDATE: Hillary Clinton has gotten every foreign policy challenge wrong.

WALLACE: Carly Fiorina on Clinton and how she will try to build momentum in the six weeks before the voting starts. It's a "Fox News Sunday" exclusive.

Then, President Obama fenced off criticism he's not doing enough to defeat ISIS and protect the homeland.

PRESIDENT BARACK OBAMA: As we keep up the pressure, our air campaign will continue to hit ISIL harder than ever.

WALLACE: Congressman Adam Schiff, a top Democrat who's been critical of the president's strategy, weighs in.

Plus, two Republicans jockeying to become the Donald Trump alternative battle over immigration.

SEN. MARCO RUBIO, R-FLA., PRESIDENTIAL CANDIDATE: Ted, you support legalizing people who are in this country illegally.

SEN. TED CRUZ, R-TEXAS, PRESIDENTIAL CANDIDATE: It is not accurate what he just said. Indeed, I led the fight against his legalization and amnesty bill.

WALLACE: We'll ask our Sunday group where the GOP race stands going into the holidays.

All right now on "Fox News Sunday."


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

The Democrats held their final debate of the year last night. We'll get reaction from Republican presidential candidate Carly Fiorina, who is a Clinton critic in a moment.

But, first, let's bring in Ed Henry who has the debate highlights live from Manchester, New Hampshire -- Ed.

ED HENRY, FOX NEWS CHIEF WHITE HOUSE CORRESPONDENT: Well, Chris, it's unlikely very many people were watching, in a move that critics say coddles Hillary Clinton, the front-runner, the Democratic Party yet again scheduled the big Democratic debate late on a Saturday night, this time before Christmas. So, when Clinton said that the rising cost of ObamaCare is simply just because of glitches, she's unlikely to take a lot of heat. And on the key issue of battling ISIS and terror, that clip you just played where she said, we are where we need to be in terms of a strategy, her staff quickly clarified that she meant the U.N. resolution to get a political solution in Syria.

But there could be damage from that in the general election, and it was interesting that all three of the Democratic candidates slammed the Republican frontrunner Donald Trump, a sign that he's dominating the debate on both sides.


CLINTON: Mr. Trump has a great capacity to use bluster and bigotry to inflame people.

He is becoming ISIS's best recruiter.

SEN. BERNIE SANDERS, D-VT., PRESIDENTIAL CANDIDATE: Secretary Clinton is too much into regime change and a little bit too aggressive without knowing what the unintended consequences might be. Yes, we could get rid of Assad tomorrow, but that would create another political vacuum that would benefit ISIS.

MARTIN O'MALLEY, D-PRESIDENTIAL CANDIDATE: We need to focus on destroying ISIL, but we shouldn't be the ones declaring that Assad must go.


HENRY: Now, on that fiery issue that popped up about 24 hours before this debate, but aides to Bernie Sanders peeking into a Democratic voter database and trying to get access, and apparently getting some access to the Clinton playbook, Sanders apologized and quickly moved on, even though there had been all this hype that he might take the gloves off that there'd be a big fight about it. It was a reminder very similar to the first Democratic debate in Las Vegas where Clinton said he didn't care about -- where Sanders said he didn't care about the Clinton e-mails, even though they're under FBI criminal investigation.

The bottom line is the latest FOX poll shows Clinton beating Sanders by 22 points nationally. But let's not forget at this same point in 2007, a "Washington Post"/ABC News poll found Clinton was winning by 29 points over a young senator named Barack Obama -- Chris.

WALLACE: Ed Henry reporting from Manchester -- Ed, thanks for that.

Joining us now here in Washington, Republican presidential candidate Carly Fiorina.

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

FIORINA: Thank you for having me.

WALLACE: I want to pick up on exactly that comment that we have referenced a couple times, Hillary Clinton in the debate saying we are now where we need to be in fighting ISIS. Your reaction?

FIORINA: Incredible, honestly. Somehow a U.N. resolution about Syria puts us where we need to be? I think it is a reflection of Hillary Clinton and Barack Obama's beliefs that our foreign policy gets set by others. This is what leading from behind means, I guess.

She failed to mention in last night's debate that her agreement with a precipitous withdrawal and declaration of victory in 2011 helped left swaths of territory and weaponry from ISIS. She failed to mention that she described Bashar al-Assad as a positive reformer and opened an American embassy. She failed to mention a complete failure strategy in Libya, which now is enabling ISIS to move into Libya.

She's gotten every single foreign policy challenge wrong. And no, Mrs. Clinton, we are not where we need to be in the fight against ISIS.

WALLACE: Clinton also focused repeatedly, as Ed mentioned, excuse me, on Donald Trump -- almost acting as if he was the only Republican candidate running against her. What do you make of that?

FIORINA: Well, Donald Trump is a big Christmas gift wrapped under the tree for Hillary Clinton. She desperately hopes she runs against Donald Trump. I, however, am the lump of coal in Mrs. Clinton's stocking, and she desperately hopes she does not run against me.

WALLACE: And why do you that this that she would like to run against Trump, and not like to run against you?

FIORINA: Well, because she can beat Donald Trump. Donald Trump can't beat Hillary Clinton, I think it's very clear, and she doesn't want to run against me, because I can beat her, because I will fight her and force her to fight on ground that she will lose on.

I will force her to fight on the ground of her foreign policy mistakes. I will force her to fight on the grounds of her lies and lack of trustworthiness, whether that's about e-mails, and servers and Benghazi. I will reveal to the American people over and over and over again the Clinton way, say what you have to say to get elected, lie as long as you can get away with it.

She wants to run on the historic nature of her candidacy. I will force her to run on accountability for the Clinton way.

WALLACE: Let's turn to the -- your debate, the Republican debate this week, in which you talk about how you would fight ISIS. Here's a clip.


FIORINA: Bring back the warrior class: Petraeus, McChrystal, Mattis, Keane, Flynn. Every single one of these generals I know. Every one was retired early because they told President Obama things that he didn't want to hear.


WALLACE: Now, it is true that some of those generals did leave over policy differences.

FIORINA: Four out of five. Keane had already left.

WALLACE: Well, three out of five. Petraeus really left because of scandal, an extramarital affair, also the mishandling of classified information.

FIORINA: Yes. And, by the way, Mrs. Clinton still hasn't been indicted over the same things. So perhaps, Petraeus' dismissal was convenient. I don't know. I would say that Petraeus and Clinton are being handled very difficultly by this administration over arguably exactly the same issue, which was the handling of classified information over a personal email.

WALLACE: OK. But then there's Keane who never served in the Obama administration.

FIORINA: That's true.

WALLACE: Says he never spoken to Barack Obama. Weren't you just flat wrong about that?

FIORINA: Well, I was wrong about Keane, yes. He is the exception that proves the rule. I was certainly right about the fact that he is a member of the warrior class. I was naming the five warriors of our generation who have experience, four out of five I would argue were retired early out of the Obama administration because they said things the Obama administration didn't particularly want to hear.

But all five of these generals have real experience. And all five of them have been highly critical of both Mrs. Clinton and Barack Obama, and all five of them have said that we are not doing what is necessary to lead and to defeat ISIS.

WALLACE: One of the other points you made in the debate is that as president, you would work more closely with the tech world, as you say you did as the head of Hewlett-Packard after 9/11. Here's what you said in the debate.


FIORINA: The private sector will help, just as I helped after 9/11, but they must be engaged and they must be asked. I will ask them. I know them.


WALLACE: But in that case after 9/11, you were turning over equipment as the head of HP to the government. And what's happening now, we're talking about whether or not to turn over user information, whether or not to unlock encryption. That's a very different ask to be making of these high tech companies, and they don't want to do it.

FIORINA: Actually, we're talking about other things, Chris. And this is why it's helpful that I understand technology.

Hillary Clinton tried to issue the same line last night, by the way, and then quickly had to say, I don't really understand much about technology, because she doesn't.

Let me give you an example of what I'm talking about. When we miss with all the metadata collection we've had, the San Bernardino couple and the Tsarnaev brothers, what that suggests to me is that we are using the wrong algorithms to search through all this data.

Algorithms have come a long way since 2011 or 2006, or 2007. In fact, the private sector is improving their algorithmic ability to search through big data month after month after month. And, of course, a big government bureaucracy isn't keeping up.

It's not that people are bad in government bureaucracies. It's that government bureaucracies crush innovation. We are falling further and further behind in our government. And, meanwhile, the terrorists are keeping up. We have been through four and five generations of technology since the PATRIOT Act.

So, while lawyers are arguing about the PATRIOT Act or the America Freedom Act, the point is, the terrorists have moved on, the technologists have moved on, and we, the United States of America, are not taking advantage of the latest and greatest in technology the terrorists are. We need to get smart about it.

WALLACE: But -- you clearly know (ph), have forgotten more about high tech than I ever have known, but having --

FIORINA: Or any of my opponents in this race have known either.

WALLACE: I suspect that's true. But having said, it is the case that the government has talked to some of these companies, we're not talking about telecommunication companies, we're talking about companies like Google and Apple about user information, about giving the key to unlock encryption, and they have refused to do so.

FIORINA: I'm not saying that that isn't true. What I'm saying is the private sector has not been engaged. That's how we can spend billions of dollars --


WALLACE: And Tim Cook, for instance, the head of Apple, has repeatedly refused to give that up.

FIORINA: Tim Cook has been asked a very specific question, in public by the way, and Tim Cook has refused in public. I don't blame him for that. I will guarantee you that there are all kinds of things that the private sector can be doing to be helpful, and they have not been engaged.

Let me give you an analogy, Chris. In World War II, and we're at war now. It's not a world war yet, but we're at war, because ISIS has declared war on us.

In World War II, the government went to the private sector. The government asked the private sector for help in doing things that the government could not do. The private sector complied. That is what I am suggesting.

Trust me, there are -- for example, there's a whole company called Palantir that does nothing but derive and create algorithms riches to search through big data. We're not using their capabilities. For heaven's sake, some of this is just ineptitude. I mean, I go to social media, check out my granddaughter's new boyfriend, but the Department of Homeland Security can't figure out they need to be tracking they jihadi web sites?

Some of this is a failure to keep up with technology. Some of this is bureaucratic ineptitude and a great deal of this is an administration that doesn't understand the urgency of the situation, and therefore this administration has not reached out actively to the private sector and said, we need help.

WALLACE: The main super PAC supporting you in this campaign, super PAC, so it's separate, is now running an ad which links you pretty directly to Margaret Thatcher. Here's a clip.


FIORINA: Margaret Thatcher once said she was not content to manage the decline of a great nation. Neither am I.


WALLACE: Ms. Fiorina, respectfully, isn't that a little over the top?

FIORINA: Well, first of all, it's not my ad.

WALLACE: No, I understand.

FIORINA: It's the super PAC's ad.

Secondly, many people have commented on the comparison. I'm flattered by it, frankly. Margaret Thatcher was a great leader for her nation at a pivotal and a perilous time. So, I find the comparison flattering, but that's up to others to say whether that comparison is justified.

WALLACE: But I mean, they have a quote from you in the speech where you're talking about Margaret Thatcher --

FIORINA: I'm quoting Margaret Thatcher. I quote her frequently.

WALLACE: I understand, but then sort of comparing her hard-line view and your own -- you talked and this is on your Web site repeatedly, tested conservative leader. Margaret Thatcher won the Falklands War, Margaret Thatcher helped win the Cold War, Margaret Thatcher stood with George H.W. Bush, Bush 41, in kicking Saddam Hussein out of Kuwait.

Again, respectfully, how have you been tested as a conservative leader?

FIORINA: Well, first of all, Margaret Thatcher did none of those things you mentioned until she had been elected prime minister of her nation. So, by that definition she wasn't tested, either.

WALLACE: I understand. But she wasn't called it either until she had been elected.

FIORINA: I have been tested in many ways, personally, I have beaten breast cancer, I buried a child to addiction. Professionally, you cannot go from being a secretary of nine-person real estate firm to the chief executive of the largest technology company in the world without having been tested over and over and over. I'm being tested in this campaign as well.

So, nobody needs to worry about my toughness. Nobody needs to worry whether or not I've been tested.

And I think more to the point, Chris, these pivotal times means something other than a politician. I understand the economy. I understand the world. I have a lot of foreign policy experience. I understand bureaucracies. I understand technology, and I understand leadership.

I've made tough calls and tough times and been held accountability. I think that is the kind of leadership that the American people need now to produce results.

WALLACE: Finally, when I told people I was going to be talking to you, a lot of them raise this point, which is there was a point in which you were really high in the polls, and you have slipped considerably from that point.

Let's put some numbers. In Iowa -- I know you don't like national polls, so we're going to look at early state polls. In Iowa, the Real Clear Politics average shows you in seventh place, down from third at 10 percent back in early October. In New Hampshire, you're now running eighth with 4.7 percent, down from second, with more than 14 percent.

You're a numbers person. What happened? Why haven't been able to hold on to and build what a couple months ago was a really strong position?

FIORINA: You know, it's interesting, if you look at the polling, there are kind of four people up at the top, Trump, Rubio, Cruz, Carson, and then there's me and about three governors. I'm perfectly happy with that position right now, honestly, because when I started this race, I was 17 out of 16. The pollsters didn't even ask my name, because so few people knew me.

And, frankly, all the pundits and D.C. insiders thought I'd never be standing on the main stage. I am and I'm going to stay there.

I know what I see out there in Iowa and I see building crowds. And, you know, I just came from Iowa yesterday. You know what I heard over and over and over again? Now, I'm really paying attention. People make up their minds late. And if the polls at this stage in earlier races were true, we would have had President Howard Dean, President Rudy Giuliani, and, by the way, we would have already had President Hillary Clinton.

WALLACE: Ms. Fiorina, thank you.

FIORINA: Thanks, Chris.

WALLACE: Thanks for coming in. Merry Christmas, safe travels on the campaign trail.

FIORINA: Merry Christmas to you, and I met your adorable grandchildren. You are a lucky man.

WALLACE: Yes, we should say the Wallace grandkids -- this is a deep tease -- will be on the program.

FIORINA: You're in for a treat, folks, they're really cute.


WALLACE: Yes, they all take after other people, not me.

Up next, our Sunday group weighs in on the state of the Republican race, and the Cruz/Rubio fight over illegal immigration.

Plus, what do you think? Who were the winners and losers of this week's two debates? Let me know on Facebook or Twitter @FoxNewsSunday and use the #fns.



JEB BUSH, R-PRESIDENTIAL CANDIDATE: You're never going to be president of the United States by insulting your way to the presidency.

DONALD TRUMP, R-PRESIDENTIAL CANDIDATE: Well, let's see. I'm at 42, and you're at 3. So, so far, I'm doing better.

BUSH: Doesn't matter. Doesn't matter.

TRUMP: So far, I'm doing better. You know, you started off over here, Jeb. You're moving over further and further. Pretty soon you're going to be off the end.


WALLACE: Well, Jeb Bush trying to jump-start his campaign and Donald Trump trying to shut him down at this week's Republican debate.

And it's time now for our Sunday group: Fox News senior political analyst Brit Hume, Julie Pace who covers the White House for The Associated Press, syndicated columnist George Will, and political analyst Juan Williams.

Well, let's start talking about the Republican race in the debate with the latest Fox News national poll. You can see it right there. It shows Trump is now at 39 percent. That's up 11 points from last month and he's 21 points ahead of Senator Ted Cruz. Senator Marco Rubio is the only other Republican in double digits.

Brit, I think it's fair to say you had doubts early on about the viability of Donald Trump. Fair to say now that you believe he can actually win this nomination?

BRIT HUME, FOX NEWS SENIOR POLITICAL ANALYST: I remember saying I thought it would be with us a while, but I didn't know the while would be this long as it tuned out to be.

WALLACE: Or this much with us.

HUME: Exactly right, this much with us, that's right. Yes, I think it's distinctly possible.

Now, it should be noted that we've now reached the stage in this race where national polls matter less than they have, because it's now a series of state by state contests. And the picture may be somewhat different.

Iowa is up first. Ted Cruz is doing very well out there. It's certainly possible he could win the state and the question then becomes would that puncture this invincibility aura that Donald Trump has had about him since he's done so well for so long, is now higher in the national polls than he's ever been. I don't think we know the answer to that, but it could happen.

WALLACE: Julie, I think it's clear from listening to the year end news conference and from other comments he's made that President Obama has -- I don't think it's overstating to say -- open contempt for Donald Trump and for the things that Trump says. But as they read these polls, and I know they do, did they begin to think -- maybe they were slow to recognize something that's going on in this country, that they hadn't fully appreciated?

JULIE PACE, THE ASSOCIATED PRESS: I think they're surprised by how well Trump's message is connecting with the public, because you'll often here the president talk about things that are said among Republican candidates or things that are said on cable news perhaps, and so, you know, the American don't really feel that way. And now, you're seeing that a lot of Americans do connect with a lot of the things that Trump is saying.

I also think, though, that the White House and Clinton campaign think they very easily beat Donald Trump in general election, and even if he's not the nominee, that they could use what he's saying now to cast all of the Republicans in the same light.

WALLACE: Then, there was the face-off, fascinating face-off during the debate between Marco Rubio and Ted Cruz over the question of immigration reform. Here is just a taste of that.


RUBIO: Does Ted Cruz rule out ever legalizing people that are in this country illegally now?

CRUZ: I had never supported legalization and I do not intend to support legalization.


WALLACE: But it's more complicated than that because it now turns out that back in 2013 when the Senate was debating comprehensive immigration reform, Cruz offered an amendment which would have allowed the 11 million people in this country illegally to hold on or actually to gain legal status.

Here is what Cruz says, here is what he was forced to say this week.


CRUZ: They would still be eligible for legal status, and indeed under the terms of the bill, they would be eligible for LPR status as well so that they are out of the shadows.

I oppose amnesty, I oppose citizenship, I oppose legalization for illegal aliens. I always have and I always will.


WALLACE: George, how much trouble is Cruz in on now to the immigration issue? To what degree has Rubio at least succeed in kinds of muddying up the differences between them?


GEORGE WILL, SYNDICATED COLUMNIST: It's certainly a muddy situation. This, by the way, is what we're talking about. That is the Senate immigration bill.

WALLACE: You have to pick that up -- here it is. What is that?

WILL: One thousand one hundred and ninety-seven pages of comprehensive immigration reform. This is the bill they're talking about.

WALLACE: Back in 2013?

WILL: Exactly. You want to know the average annual wage of an immigrant animal sorter in 2016 should be? It's $9.84. By the way, it's all in here. The senators know everything. That's why it had to be that big.

The question is, was Ted Cruz trying to kill a bill with an amendment that said here's legalization but that's the end of the line, it would forever preclude a path to citizenship?

WALLACE: Which we should point out is what the Democrats like Chuck Schumer were demanding as part -- their part of the deal.

WILL: Precisely. So, Ted Cruz was being disingenuous when he said, "I offer you this," knowing it would drive away Democratic support and kill the bill.

If you're submitting an amendment that's a poison pill, something designed to kill the bill, you have to deny that you're doing what you are manifestly doing.

Now, he has in his defense, he can say, look, Jeff Sessions understood, he supported me.

WALLACE: Jeff Sessions, the senator from Alabama, who is a fierce critic of legally -- legalizing illegal immigrants.

WILL: And Chuck Schumer recognized what I was doing so, and said so at the time. So, it was transparent. It's disingenuous. The question you asked is, will it hurt him?

I suspect not. A, because it's a very complicated situation. We're talking about Senate procedures and all the rest.

Except that in this case, Ted Cruz looked like what he really is, which is a very bright, talented lawyer, he clerked for Chief Justice Rehnquist, and the solicitor general of Texas, and all the rest. Therefore, to the extent he looked to be finally parsing difficult words, he looked lawyerly, and that's never a good thing.

WALLACE: Juan, I'm going to give you a choice, you can weigh in on that or you can talk about the Democratic debate.

JUAN WILLIAMS, FOX NEWS POLITICAL ANALYST: Well, let me quickly say, I understood it differently, George. He may have been disingenuous and lawyerly, but I think it was pretty clear that he said at the time, I think he went on the record and said that it was not a poison pill, that he was not trying to kill the bill, and that would have allowed it to go forward.

So, now for him to go back and say he wasn't forward, it seems to be expedient and politically in touch with the idea that he wants to put Rubio on the defensive because Rubio can't get away from his support for the immigration reform bill, which is for him politically very difficult with the Republican base.

I will say this about last night with Mrs. Clinton -- you opened up with Carly Fiorina about Mrs. Clinton saying, we finally got the right strategy post-Paris with now --

WALLACE: We're finally where we need to be.

WILLIAMS: Right, with the U.N. and Obama administration now looking at taking a more aggressive stance and some of the Arab countries coming together.

But clearly, the polls suggest that most Americans think we still don't have a strategy sufficient to give them some sense of confidence or assurance about ISIS-type attacks or even lone wolf attacks.

WALLACE: You got to know, Brit, the Republicans are going to jump all over that and say we got ISIS where we want them? Really?

HUME: Yes. I mean, if you come out and say, we are now where we want to be regard to a strategy against ISIS, I think the American people as a whole and certainly the Republican candidates are going to have a field for that, because I don't think anybody thinks that perhaps President Obama. I can't believe she thinks that.

WILLIAMS: Well, the Democrats -- it's interesting, last night, the Democrats thought she portrayed her as the hawk on the stage, that she is too aggressive and too much into regime change. That gives you a sense, though, that the Democratic base doesn't have a problem with it.

HUME: I understand that but the Democratic base isn't going to have a problem with her, they like her. She's fine, as far as they're concerned, and that's why she's leading so much in the polls.

The question for her is, can she expand on that to be a majority. And, you know, she faces a problem that Barack Obama did so brilliantly well among minority groups, African-Americans in particular, with Hispanics as well. Can she match that?

And when she's running around saying we're doing fine against ISIS, I'm not sure that helps her.

WALLACE: All right, panel. We have to take a break here, but we'll see you a little later.

Up next, we'll talk with Congressman Adam Schiff, the top Democrat on the House Intelligence Committee about the latest developing in San Bernardino, including the arrest of the attacker's neighbor, who now faces terror charges.


WALLACE: President Obama is in Hawaii for Christmas vacation. But on the way, he stopped to meet with families of those killed in San Bernardino.


OBAMA: Despite the pain, they could not have been more inspiring.


WALLACE: We'll discuss the president's plan to keep the homeland safe with Congressman Adam Schiff of California, next.


WALLACE: Well, there's no snow, but it's still beginning to look a lot like Christmas at the White House, on 56 snowmen outside the East Colonnade there. Each representing a U.S. state or territory. President Obama has been busy these last two weeks defending his strategy to defeat ISIS and protect the homeland. Joining us now Congressman Adam Schiff, the top Democrat on the House Intelligence Committee. Congressman, welcome back to "Fox News Sunday." There's been some breaking news I want to ask you about at Air France jetliner from Paris to Mauritius was diverted and had to land in Kenya. You can see it right there. They found something suspicious in the lavatory, and were investigating to see whether or not it was a bomb. So far no sign that it was, but your reaction to that and other bomb threats?

REP. ADAM SCHIFF, D-CALIF., RANKING MEMBER, INTEL CMTE.: This is really one of the most, foremost threats we face, and one we're deeply concerned about, and that is, American airplanes, this was not in this case, but American airplanes originating in foreign airports. That bomb that took down that Russian airliner may have been the size of a soda can. And that bomb killed more people than all the Paris attackers combined. So this is still a grave threat. That is too ready access to foreign airports, where American planes may be. We still have a problem here in this country of access to airports and airplanes.

WALLACE: You're talking about the back door where airport workers ...

SCHIFF: Absolutely. It looks like that's what was involved in the downing of that Russian plane in Egypt, in Sharm el-Sheikh. So this is of grave concern, and clearly, Air France took the right precaution that plane to rest and examine the contents.

WALLACE: I also want to ask you about the comment we've been discussing this morning, Hillary Clinton in last night's debate saying we are now where we need to be in the fight again ISIS.

SCHIFF: Well, this was in the context of do we go after Assad or do we after ISIS, can we do both? And her answer is basically we need to do both, and now for the first time we have a political process at the United Nations that -- bring about an end to both. And I think she's right. I think it isn't enough to leave Assad in place, because as long as he is there, there is going to be a recruiting magnet for ISIS.

WALLACE: But there's no agreement. I mean, yes, we are there talking about we are going to have thoughts, but the Russians have not backed off Assad and the Iranians have not backed off Assad.

SCHIFF: No, you're absolutely right. But the first step has got to be sitting around the table and agreeing to a process to get to the end result. The Russians are going to come to that conclusion, Chris. I think they're coming to that conclusion as we speak, because the facts on the ground are not improving at the pace they thought they would. Not withstanding all of their indiscriminate bombing, not withstanding all of their negotiations with Iranians, they are making very little progress on the ground. So that conflict now, I think is posing a real problem and the Albatross for Putin. So he is going to be looking for a resolution, the Iranians are the tough ones to persuade. But at the end of the day, unless Iran and Russia want to have a rump Allawite state and a rump Sunni state, and a Kurdish state, then they're going to have to come to the table and bring about an end to this regime.

WALLACE: You criticized President Obama after his Oval Office address a couple of weeks ago, saying if you're going to speak to the nation, you have to bring something new. Here's what President Obama said this week.


OBAMA: We are hitting ISIL harder than ever. Coalition aircraft, our fighters, bombers, and drones have been increasing the pace of the airstrikes.


WALLACE: Question, are you satisfied with the pace of progress? Are you satisfied that President Obama is doing everything he should to fight ISIS?

SCHIFF: I think the president has the overall right strategy and he's been right to resist bringing in massive numbers of American troops. The Iraqis would love to have Americans die for Iraq and the Syrians would love to have Americans die for Syria. And the Gulf states are happy for us to fight and die. That's good for everybody, but the Americans fighting and dying. At the same time, while the broad outlines of what the president wants to do, I think the right ones, it's not going fast enough. The pace is not going fast enough. I think we have to look for something to change the dynamic on the ground. And for me, that would be in the form of the safe zone, or a buffer zone, or no fly zone. Something that can end the refugee flows, something that can give space and time to train up forces, to take on ISIS. But I'm just concerned that as long as this caliphate exists, it provides this magnet for radicalization, and we're likely to see more attacks like we have seen in San Bernardino, Chattanooga and elsewhere, and that's the concern I have over pace.

WALLACE: Well, I want to pick up on that. Because you say, as you just said here, the president should set up a safe zone, a no-fly zone in Syria. The president rejects that. This week Defense Secretary Ash Carter said that he's at least raised the idea of apache attack helicopters, and sending in Special Ops ground forces into the front lines to aid the Arabs who are fighting in Iraq. The president rejects that as well. He's not picking up the pace.

SCHIFF: Well, the Iraqis have rejected that. The Iraqis I think are too ...

WALLACE: So has the president.

SCHIFF: Too much under the thumb of the Iranians. Well, the president is not willing to send in apaches and spotters if the Iraqis say they don't want them and if it means that these Shia mobilization forces are going to be going after and trying to kill Americans. I don't think that makes sense, but I do think administration ought to reexamine the idea of establishing safe zones. I think they ought to put that front and center in this U.N. negotiation, because I think it does have the potential of really changing the battlefield conditions, and they've been stalemated for too long. Now, we've been hearing about the retake of Ramadi for a long time. I hope it happens, I hope it's imminent, but if the past is precedent, then that's still going to take a very long time. And I'm concerned the clock is ticking, and the danger to the American people is still very present.

WALLACE: Well, let's talk about American people and let's talk specifically about that couple that launched the terror attack in San Bernardino that killed 14 Americans. As you look back now, and as the top Democrat on the House Intelligence Committee, was there an intelligence failure? Or at least were there things that we should have been able to pick up before the attack that we failed to pick up?

SCHIFF: Chris, that is exactly the question that we're studying. And that is, what can we learn from this? What did we do wrong? What did we miss? And I have to tell you, at this point we don't have the answer. I wish I could say, you know, if only we had done this, we could have stopped the attack, but the takeaway from San Bernardino at the end of the day, may be that there are people out there in the country right now, we have investigations in all 50 states, who are at a similar stage of radicalization, and there are family members who know it, there are friends who know it, and unless they step forward and say something, it may be impossible to prevent another attack like this, so we really can't rely solely on law enforcement or on the intelligence community. There aren't always going to be signs that they see.

WALLACE: I want to pick up on that. Because one of the things that we learnt, which I have to say was a tremendous surprise to me and I think a lot of people, is that the government does not routinely search the social media histories of people who want to come into this country, fiancee visas, any other kind of visas, refugees. Now, it turns out it was misreported and that Tashfeen Malik, the woman in this case, whatever she said, she did it privately, not on public social media, but we don't even search the public media. And one of the reasons is the Department of Homeland Security reportedly doesn't do it is that they reportedly are concerned about civil liberties, which raises the question, if a foreigner wants to come into this country, should be worried about their privacy or what -- should we be worried about protecting the homeland?

SCHIFF: We should be worried about protecting the homeland. I think that policy is changing, should change and will change.

WALLACE: But did you know that that was the case?

SCHIFF: I did not know that that was the case, and I think this is going to have to change. If someone is brought in for an interview, for example, and is asked about their views on things, but has posted things that are completely contrary to the interview, frankly I have much more faith in what they posted than what they say during the course of an interview. So we should be looking at that. I think we are going to be looking at that.

WALLACE: Is there a way we can -- you know, because we're making a big point well, she didn't do it publicly, but she did it in private messages? Is there a way that we could look at the private messages and shouldn't we do that?

SCHIFF: Well, there may be ways that we can look at the private messages. That depends on our technological capabilities and what platform they are using. And this will get into the whole issue of encryption. If they are using encrypted platforms and the answer is probably no, we are not in the position to look for them. But, of course, you have to know what to look for, what platforms they may be using. And this is always going to be imperfect and there is always going to be a risk. But we have to do what we can to narrow those risks, so we ought to be looking at that media.

WALLACE: Finally, we also found out this week that thousands of people who come into this country overstay their visas, and we don't know where they are now. That seems, Congressman, like a huge security gap.

SCHIFF: It's a huge gap in security, it's a huge problem we've had with our immigration system for many years. And that is, a tremendous number of people come to the country legally, but overstay their visas. And there has to be a far stronger mechanism for being able to track down people, have overstayed their visas, to have a responsibility for who they're coming to visit or stay with. So that there is some accountability. We have a lot of work to do on that, Chris.

WALLACE: Congress Schiff, thank you, thanks for your time. Happy holidays, sir.

SCHIFF: To you, too.

WALLACE: When we come back we'll ask our Sunday group about President Obama's effort to reassure Americans who are worried about another terrorist attack. Plus, what would you like to ask the panel about whether the president is doing enough to defeat ISIS? Just go to Facebook or Twitter at "Fox News Sunday." And we may use your question on the air.



OBAMA: The point is ISIL leaders cannot hide. And our next message to them is simple -- you are next.


WALLACE: President Obama talking tough this week, as he tries to reassure Americans he's doing everything he can to protect them. And we're back now with the panel. Well, first we have some breaking news. We were just talking in the previous segment with Adam Schiff about that flight that was diverted to Kenya, because they found a suspicious-looking device in the lavatory. The CEO of Air France says now that they have inspected it and that it presented no danger to that flight or to the passengers on it. So, that's some good news. We asked you for questions for the panel, and we got a bunch expressing serious doubt about the president's war on ISIS. David Hutchinson sent this on Facebook. "If Raqqa is the de facto capital of ISIS, why is it not being leveled?" And Andy Rutigliano tweeted this, "If we are not at war with radical Islamic terrorist, then what does the "I" in ISIS-ISIL stand for?"

Julie, do they realize at the White House how fed up a lot of people are with the Obama strategy on ISIS?

PACE: They're starting to. And that's why I think you've seen the president over the last week or so, come out and talk about the strategy against ISIS, the terror campaign more broadly over and over and over again. I think you'll see him do that again in his State of the Union, and through next year. What you are not seeing happen, though, is any real shift in the strategy. And I also don't think you'll see much of that next year. The president really feels like this is the strategy that will work overtime, it won't work in a quick manner, and in a manner that will be sufficient for a lot of people, but he believes in this, he is very resistant to calls for not only ground troops, but something like a no-fly zone, which Hillary Clinton supports. So, I think you're going to see this dual track. One talking tough, but two, not really changing the approach.

WALLACE: The president met with columnists this week. And there was a basic comment, not a quote, but a paraphrase of what he said that was first in and then very oddly was taken out of a "New York Times" story. We're going to put it up on the screen. "Mr. Obama indicated he did not see enough cable television to fully appreciate the anxiety after the attacks in Paris and San Bernardino." Brit, what do you make of that?

HUME: I think it was snark against cable TV and it fits in with what I think is the unmistakable subtext of what the president has been saying on this issue. And indeed on what he said this week. He conveys to me a clear impression that this ISIS threat is really overblown, yes, Paris was terrible, and San Bernardino was awful, but if you look at it in the larger scheme of things, which is how he professed (ph) to think of the world, ISIS is really too minor a threat (INAUDIBLE) and more that much about, and much too minor a threat for us to go all out and mount a major ground war the way we did to run Saddam Hussein's army out of Kuwait and later to invade Iraq or any of that. We don't want to do any of that. That would -- that's what he says ISIS wants. I can't believe ISIS wants that. But because -- they (INAUDIBLE) wiped out if we did that. But that's the impression he creates, that you have got to go with me and my more patient strategy, and I have my eye on the larger picture and really serious threats like climate change, and the rest of it. And that's -- and I think he's a little impatient with the American people for being so easily excited by cable news about these occasional attacks.


WALLACE: Okay. Juan, your thoughts about that? I mean it was astonishing for him to say -- I mean you didn't have to watch cable news to see one of the great Western capitals be paralyzed, to see 14 Americans killed and 21 others severely wounded in -- you know, not New York City, not London, but in San Bernardino to understand that people would be scared out of their minds.

WILLIAMS: Well, I don't think that people are going to be scared out of their minds. Let's not -- let's not go to hyperbole here. I think that you have a situation where one political party, in specific, if you watched the Republican debate, it's all about terrorism. It's as if the world is coming to an end, you know, it's Chicken Little, the sky is falling -- and I think there is some people ...

WALLACE: You talk about terrorism ...


WALLACE: Democratic has a result.

WILLIAMS: It has spiked in terms of priorities, in terms of what Americans are talking about, and it comes to our concerns. There is no question about that. But to say that it is-- to the extent from the president's perspective worth putting ground troops on the ground, tens of thousands of American troops getting injured or hurt, the kind of commitment.

WALLACE: Is that the only alternative?

WILLIAMS: That's what he sees, that's the way he thinks about is what we are talking about here. The guy who says ...

WALLACE: What about the no-fly zone that Hillary Clinton wants? What about the Pentagon talking about sending Apache helicopters and forward observers ...

WILLIAMS: If you have a safe zone, you have to defend it. And if you have a no-fly zone, again we saw what happened with the Russians and the Turks, so you have all sorts of contingencies then that would draw you in where you would need to ...

WALLACE: So, just let those 250,000 Syrians get killed?

WILLIAMS: No, to the contrary. I think the president's position has been very clear on this. He wants more aggressive, he's put the Special Ops on the ground, in fact one of the Republican criticisms is he's got thousands of Americans there. We just don't call them troops on the ground, we don't admit to it. But they are there. And secondly, that if you get the Arab countries to take some action, we've seen some progress there. If you get the U.N. to say we're going to solve the Syrian problem, if you get the Russians involved in a productive posture, you are making progress, but the Republican core says no strategy or failed strategy.

WALLACE: George?

WILL: Well, it does seem to me, when you get down to making presidential decision about Apache helicopters or not Apache helicopters, and they can be vetoed by the Iraqi government, which seems to be somewhat under the thumb of the Iranian government, not only do you see the complete folly of our last 15 years of foreign policy over there, but you have to sympathize with the president. How do we treat the Iraqi government? Do we treat it as a friend or a foe at this point?

WILLIAMS: That's frustrating.

WILL: It's more than frustrating. It's paralyzing.

WILLIAMS: Right. And the thing is for all the Republican criticisms, Chris, you say well, exactly what would you do so differently, Republicans? And you watch the debate, and I don't see it.

WALLACE: Do you agree with that?

HUME: Well, the willingness of the American people to commit ground troops to the fight against ISIS is growing. You can see it in the polling. It doesn't mean that we ought to do it or have to do it yet, but I think that's the direction in which people are moving. And I think the president and by extension his Democratic colleagues and those running for president are in a bit of a trap here, because this strategy that he has, this patient low-temperature warfare is probably not going to get the job done, and military experts say you know, you have got to have a ground force of some substance to occupy territory, take it back from ISIS and the rest of it. Now, whether some foreign army composed of Muslims largely can be mounded to do this, is very much in doubt. Which, I think, is a flaw in the strategy. The efforts they have made so far have utterly failed. So, that's where we are. The question is, is this a job that has to be done one way or the other? Or as the president thinks, I think, I believe he thinks that this is really not that important.

WALLACE: Julie, and we've only got a little bit of time left, but why no fly zone? Why in effect let Baghdad hold us hostage? For instance, there's a big strong fighting for us up north in the Kurdish area. Why not give them weapons and let them go at it?

PACE: I think on a no fly zone, part of it is Juan's point that there's a lot of players flying around in this area, and he worries about an American plane getting shot down. Also he points out that ISIS doesn't have an air force, so you're not really having to worry about that.

WALLACE: And very quickly about not giving weapons directly to the Kurds?

PACE: Right now what the U.S. is doing, is giving weapons to the Kurds, but through the government in Baghdad. That's to George's point on how do we deal with the government in Iraq.

WALLACE: Thank you, panel. See you next Sunday. Up next, our "Power Player of the Week." Honoring America's veterans this Christmas season. Plus, a holiday visit from the Wallace grandkids.


WALLACE: It's a Christmas tradition here, to share the story of how one family has found a way to express the meaning of the holiday season. It's a moving example of love for our country and personal generosity. Once again, here is our "Power Player of the Week."


here is our power players of the week.


MORRILL WORCESTER, FOUNDER, WREATHS ACROSS AMERICA: We wouldn't have the opportunities if it wasn't for the people that fought for us and gave their lives for us.

WALLACE: It's that plain-spoken wisdom that has driven Morrill Worcester for years, on a mission that has touched America's heart. Each December, Worcester places wreaths at Arlington National Cemetery, and thousands of volunteers are there to help him.

WORCESTER: I think a lot of people think like I do. They just want, they appreciate the veterans, and they want to show it.

WALLACE: This story begins back in 1962, when Worcester, then a 12-year-old paperboy from Maine won a trip to Washington. What impressed him most was Arlington, its beauty and dignity, and those rows and rows of graves.

WORCESTER: Every one represent a life, and a family and a story. They're not just tombstones. These are all people.

WALLACE: 30 years later in 1992, Worcester was running his own wreath company in Harrington, Maine. But as Christmas approached, he had a bunch left over.

WORCESTER: These were real fresh, and great, just made, and I just didn't want to throw them away.

WALLACE: He thought of Arlington and all those graves. When the cemetery approved, he and a dozen volunteers drove the wreaths down and laid them on the headstones. And so it continued for years until a few Christmases back when an Air Force sergeant took this picture, which ended up on the Internet.

WORCESTER: It kind of struck a nerve, and people e-mailed it to each other, and it really went around the world.

WALLACE: We were there the next year as he and his workers at the Worcester Wreath Company loaded up 5,265 wreaths. Then they embarked on what Worcester calls the world's longest veterans parade, a 750-mile journey that at some points attracted more than 100 vehicles. And when they got to Arlington, so many people wanted to participate.

UNIDENTIFIED MALE: This ceremony you're about to witness is an Army replaying ceremony, to be conducted for the Worcester Wreath Company.

WALLACE: For years Worcester paid for all of this out of his own pocket, and he started Wreaths Across America, sending hundreds to cemeteries and war memorials around the country. But he will need help to reach his new goal.

WORCESTER: I think around 2.7 million graves. That's a tall order to decorate 2.7 million graves.

WALLACE: But you'd like to do it, wouldn't you?

WORCESTER: I really would. Yes. Sometime, I don't know how, but -- hey, you know.

WALLACE: How long are you going to keep doing this?

WORCESTER: I'm going to keep doing it for as long as I work, and then I know my family is going to continue. So it will be here for a long time.


WALLACE: This is the 24th year Morrill Worcester has taken on his Christmas wreath project, at Arlington and other veterans cemeteries in all 50 states and overseas. This year over 70,000 volunteers helped place more than 900,000 wreaths on veterans' graves.

And now another Christmas tradition. Here's a look from last year at all five of the Wallace grandkids. And now see how big they have all gotten. A big year for Libby (ph). She learned how to walk. Sabine, Caroline, James, William. From our family to yours, have a very Merry Christmas, and we'll see you.

UNIDENTIFIED MALE: Next "Fox News Sunday."

WALLACE: Very well done. All right, guys, 3, 2, 1 -- Merry Christmas!

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