Government surveillance unconstitutional? Reaction from Sens. Rand Paul, Ron Johnson and Gen. Michael Hayden

The following is a rush transcript of the June 9, 2013, edition of "Fox News Sunday With Chris Wallace." This copy may not be in its final form and may be updated.

CHRIS WALLACE, HOST: I'm Chris Wallace.

Today, are we getting closer to Big Brother?


UNIDENTIFIED MALE: This is a big deal -- a really big deal.

WALLACE: Critics call the secret collection of millions of Americans' phone records government overreach, but others on both sides of the aisle say it's keeping us safe.

PRESIDENT BARACK OBAMA: You can't have 100 percent security and then also have 100 percent privacy and zero inconvenience.

REP. MIKE ROGERS, R-MICH.: It is legal. It's been authorized by Congress.

WALLACE: We'll talk with Senator Rand Paul who sees a pattern in the surveillance programs and the administration's scandals -- an assault on the Constitution.

And, then, we'll get an inside look at how government is looking over our shoulders from General Michael Hayden, former head of the NSA and CIA, and Senator Ron Johnson of the Homeland Security Committee.

Plus, President Obama shakes up his national security team.

OBAMA: I am extraordinarily proud to announce my new national security adviser, Susan Rice.

UNIDENTIFIED MALE: The president intentionally did not put her up for secretary of state because he did not want her facing Senate confirmation.

WALLACE: We'll ask our Sunday panel what it means for the president's second-term agenda.

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


WALLACE: And hello again from Fox News in Washington.

Revelations about the government's monitoring, phone records and emails have renewed questions about the balance between privacy and security. Combine that with the scandals involving the IRS targeting conservatives groups and the Department of Justice snooping on reporters, and critics say you have a government that's too big and too intrusive.

One of those critics is Senator Rand Paul and he joins us now from Bowling Green, Kentucky.

Senator, welcome back to "Fox News Sunday."

SEN. RAND PAUL, R-KY.: Good morning.

WALLACE: Senator, you call these government surveillance programs an astounding assault on the Constitution. President Obama calls them modest encroachments on privacy.

Take a look.


OBAMA: In the abstract, you can complain about big brother and how this is a potential program run amok. But when you actually look at the details, then I think we've struck the right balance.


WALLACE: Senator, in fact, all three branches of government -- the Congress, the president and the courts have all approved these surveillance programs.

How are they then unconstitutional?

PAUL: Well, you know, they're looking at a billion phone calls a day is what I read in the press and that doesn't sound to me like a modest invasion of privacy. It sounds like an extraordinary invasion of privacy. The Fourth Amendment says you can look at and ask for a warrant specific to a person, place and the items.

This is a general warrant. This is what we objected to and what our Founding Fathers partly fought the revolution over is they did not want generalized warrants where you could go from house to house with soldiers looking for things or now from computer to computer, to phone to phone, without specifying who you're targeting.

WALLACE: Let's look at the effects of the Internet surveillance program as opposed to the phone surveillance program. In 2009, we were able, the NSA was able to intercept emails between an al Qaeda bomb maker in Pakistan, Rashid Rauf, and a man in Denver, Najibullah Zazi. As a result, they were able to stop Zazi from putting backups with bombs on the New York City subway system. The program, according to the government, targets foreigners on foreign soil.

You would stop that?

PAUL: My suspicion is -- and a lot of this is classified so another side gets to promote their case and we don't get the information -- but my suspicion is that this gentleman was targeted because they suspected him for being a terrorist. I have no problem if you have probable cause and you target people who are terrorists and you go after them and people that they're communicating with, you get another warrant.

But we're talking about trolling through billions of phone records. We're not talking about going after a terrorist. I'm all for that. Get a warrant and go after a terrorist, or a murderer or a rapist.   But don't troll through a billion phone records every day. That is unconstitutional, it invades our privacy and I'm going to be seeing if I can challenge this at the Supreme Court level. I'm going to be asking all the Internet providers and all of the phone companies, ask your customers to join me in a class action lawsuit. If we get 10 million Americans saying we don't want our phone records looked at then somebody will wake up and say things will change in Washington.

WALLACE: I'm going to talk about legislation in a second, but let's talk about the practical effects of this because defenders of the program say, if you want to find the needle in the haystack, you have to have the haystack first. And here's what your fellow Senator Lindsey Graham had to say about you on this issue: "In Rand Paul's world, you have almost no defenses against terrorists."

PAUL: I would say that's an unfair characterization. I want to go after terrorists as much as anyone. For example, we are looking through so much data that I think it makes our fight against terrorism worse. The Tsarnaev boy, one of the Boston marathon bombers, we didn't know that he went back to Chechnya because we're not doing enough targeted analysis. We have millions of phone calls and we can't even possibly look at all the data.

You know, we have millions of audiotape hours of people and we can't go through it. They haven't gone back through 25 percent of the audio they have. They're overwhelmed in data. So, I think it's just bad police work.

Why didn't we know the Tsarnaev boy had gone back to Chechnya? Because we're not going good police work because we're busy looking at the records of regular Americans who haven't committed any crime.

WALLACE: All right. Let's talk about your suggested remedy. You talk on the one hand about a Supreme Court challenge, but you also say that you're going to introduce something called the "Fourth Amendment Restoration Act". Now, of course, the Fourth Amendment to the Bill of Rights protects us against unreasonable searches and seizures.

So, try to get a little specific here. I know it's hard. How much would you restrict government surveillance as it now exists? And as a practical matter, do you have any reason to believe that Congress is going to go along with you on this?

PAUL: I think the American people are with me, and I think if you talk to young people who use computers on a daily basis, they're absolutely with me.

They think that your third party record -- so, for example, what I spend on my Visa each month, that's my business and where I spend it and whether I read conservative magazines, whether I subscribe to FOX News, or whether I subscribe to Yahoo or Google.

What I do in my private life is my private life. If you suspect me of a crime, have probable cause.

Over the last 30 or 40 years, we've said, once you give your records to your bank or your Visa company, that they're no longer private. I disagree vehemently with that. That is, of course, we have to reverse because so much of our life now is digitalized that we have to protect it from a snooping government.

And we've now got a government that appears to target people based on our political beliefs. So, I don't want my records given to an administration that I can't trust.

WALLACE: All of this -- well, let's pick up on that, because all of this comes at a time when President Obama is involved in scandals or his administration is, the IRS targeting conservatives, the Department of Justice snooping on reporters.

Do you see a pattern? Do you see a connection between the scandals and these government surveillance programs?

PAUL: Yes, because I think it really makes people distrust their government even more, when they're seeing the IRS being used after political opponent. But this much power is too much power to give any government. I don't care if it's a Republican government or Democratic government, I don't want that much power given to a president and I think it's very worrisome.

And I think if the young people in this country wake up and say, "Enough's enough and we don't want them looking at our phone records," I think we could reverse this. When we went after the SOPA and PIPA legislation that we thought was going to invade the due process of the Internet, people by the millions came out.

If we can have that again -- people by the millions coming out and saying, "Look, I want to be part of a class action suit that says to the government, let's hear this at the Supreme Court level. Are you allowed to look at phone records even though there's no probable cause that I'm related to a crime?" -- I think we'll put an end to this.

WALLACE: I want to turn to foreign policy. This week, the president named Susan Rice, the former U.N. ambassador to be the new national security adviser to the president in the White House. You say, instead of being promoted, he should have fired her from misleading the country on Benghazi. The problem, of course, from your point of view is, she's not subject to Senate confirmation.

But, as a member of the Senate Foreign Relations Committee, will you use two others -- former State Department spokeswoman Victoria Nuland and Samantha Power who has been named as U.N. ambassador -- will you use their nominations and the committee to demand answers on Benghazi?

PAUL: I think both Ms. Nuland, as well as Ambassador Rice, were intimately involved with a misleading campaign or a misdirection campaign after Benghazi. And I think really you shouldn't promote someone who has been misleading -- purposely misleading the American public.

No, I think it's appalling. And so, I think neither one should be to their position. I don't have the possibility of stopping Ambassador Rice. Ms. Nuland, we're going to look at because she was Hillary Clinton's spokesman who says she had nothing to talking points, even though her spokesman was rewriting them all night long to try to get out any references to terrorism.

I still don't think we've gotten to the bottom of why they had this elaborate misdirection campaign when obviously everybody thought it was a terrorist attack from the beginning.

So, it really wasn't designed to work unless, really, the misdirection campaign was to get us away from the fact that the CIA annex there was dealing in arms to Syria through Turkey, which was illegal at the time.

WALLACE: So, just to follow up, are you going demand answers in Benghazi in the Nuland confirmation hearing? And would you, conceivably, as part of that, put a hold on her nomination?

PAUL: I haven't made a decision on the Nuland nomination yet. But we are going look very carefully and I will be asking probing questions because I still want to know why we were misdirected, why was Ms. Nuland involved? And did she talk to Hillary Clinton that night.

I would never have my press spokesman making statements for me throughout the night on an international crisis without talking to me. So, Hillary Clinton says, "Oh, I had nothing to do with the talking points." Well, her spokesman all night long was rewriting the talking points -- I just find it beyond credulity.

WALLACE: Let me turn to another subject. On Friday, the Senate began debate on comprehensive immigration reform. You say you support that idea in concept.

On the other hand, you now have come out against a new path to citizenship and you say that before any reform that the border has to be secured first.

Senator, as a practical matter, isn't that going to prevent any kind of comprehensive reform?

PAUL: No. I still think we can have immigration reform. I think we need to fix the system. The reason why we have 11 million undocumented people here is because we have a broken visa system. About half of them came here to work legally, but then they found a better-paying job and we prevent them from being -- going from a farm job to a construction job.

Guess what? This bill does the same thing.

So, if you don't fix that problem, you don't fix why we have illegal immigration. You need to expand the numbers of workers that are allowed to come to this country. That means I'm all for immigration, but this bill actually puts new caps on immigrants coming out here to pick crops.

So, it does some of the wrong things, and then it doesn't secure the border. It says to the administration -- hey, guys why don't you have a plan to build a fence that we authorized 10 years ago?

I think that's absurd and that's like Obamacare, oh, here, you, the administration, you guys do it. Instead of Congress doing their job and just writing the bill saying, my amendment will say you have to build 100 miles of fence each year and Congress votes on whether or not the border is secure.


PAUL: I think that's the only way to guarantee they're secure.

WALLACE: But just briefly, Senator, you know, you got to tradeoff here. You've got Democrats who want to get citizenship for the 11 million illegals who are here. You've got Republicans who want tougher border enforcement. If you're not willing to compromise on those, you don't get comprehensive reform.

PAUL: I am willing to compromise.

For example, I would let you, if you have a work visa also stand in the citizenship line, but not a new citizenship line. There current exist a line that if you're in Mexico City right now and you want to come and be a citizen in our country, you get in that line. I would let workers who are here on work visa get in the same line, but I wouldn't create a new pathway or a new line.

What happens is, is right now, it's illegal to stand in both lines. If you're here on a work visa, you're not allowed to stand in line to come into the country permanently. I would let you stand in both lines which would be a legal change, but I wouldn't create a new pathway.

The whole point is, there needs to be a conduit. I am the conduit between conservatives in the House who don't want these things and more moderate people in the Senate who do want these things. I want to make the bill work, but see, the thing is, is what they have in the Senate has zero chance of passing in the House. So, why not come to a conservative like myself and say, he's willing to work with you, why not work with me to make the bill closer to what would be acceptable in the House?

So, I'm really trying to make immigration work. But they're going to have to come to me and they're going have to work with me to make the bill stronger if they want me to vote for it.

WALLACE: We're going to stay on top of it. Senator Paul, thank you so much for coming in today, sir.

PAUL: Thank you.

WALLACE: Up next, the president pushes back over accusations his administration is spying on Americans.


OBAMA: Nobody's listening to the content of people's phone calls.


WALLACE: We'll continue our discussion of government surveillance with a man who used to do it for a living.


WALLACE: Senator Paul has painted a picture of unconstitutional government overreach.

We want to hear now from fellow Republican, Senator Ron Johnson, who joins us from Green Bay, Wisconsin.

And here in Washington, General Michael Hayden, former head of the NSA and the CIA, who used to run the government surveillance programs. He's now a global security consultant.

Senator Johnson, you just heard Rand Paul. Do you think that we need more restriction on these government surveillance programs?

SEN. RON JOHNSON, R-WIS.: Good morning, Chris.

Listen, I'm every bit as concerned about civil liberties as Senator Paul and quite honestly -- quite honestly, as most persons are, and that's a good thing. You know, this is not a partisan issue. Across the political spectrum, people are concerned about preserving our liberties and maintaining our civil liberties.

But, at the same time, you know, we have -- we face a very real, asymmetric threat in international terrorism, and our greatest line of defense against that terrorism is intelligence-gathering capabilities.

And so, we have to maintain that and it is a very delicate balance and that balance shifts based on circumstances, and based on the time. But, you know, we do need congressional oversight on this. It's a good thing that these laws come up for reauthorization.

So, I'm every bit as concerned with civil liberties and then we're going to be conducting robots to oversight on these -- on these programs.

WALLACE: General Hayden, let's talk first of all about the general reaction you have to Senator Paul. I'm going to get into specific issues with you. As a man who used to run these programs, how important and how effective have they been in keeping us safe and how do you feel when you hear Senator Paul talk about class action lawsuits to the Supreme Court, new congressional restrictions?

GEN. MICHAEL HAYDEN, FORMER HEAD OF NSA AND CIA: Well, first of all, Chris, with regard to how effective they are, I think they're very effective. We had two presidents doing the same thing with regard to electronic surveillance. Now, that seems to me to suggest that these things do work.

Now, with regard to what the senator said -- if I believed NSA was doing some of the things the senator fears they're doing, I would have been backstopping him during your first segment. He said we're trolling through millions of records. That's just simply not true.

The government acquires records as business records from the telecom providers, but then doesn't go into that database without an arguable reason connected to terrorism to ask that database a question. If you don't have any link to that original predicate, terrorism, your phone records are never touched.

WALLACE: Well, let's get into that and let's talk a little bit -- and I know we're getting into kind of a sensitive area here about the tradecraft that you were involved with -- as especially the head of the NSA, but also the CIA.

According to one estimate, the NSA is getting the phone records of 3 billion of our phone calls every day -- 3 billion phone calls every day.

Two questions: one, how can you possibly process 3 billion records a day? And, secondly, why not just target, from the very beginning, the bad guys?

HAYDEN: Well -- well, first of all, you have to identify who are the bad guys. So, let's begin the acquisition. Three billions is a big number.

Keep in mind, Chris, that our telecommunications providers do that every day on their own. So, it's not impossible to do. Now you've got the data stored.

Here's the important part and this is the part that protects civil liberties and balances, which Senator Johnson wants to balance -- security and our freedom.

You ask the database a question, but the question has to be related to terrorism. I'll give you a concrete example so this is very clear. So, you roll up something in Waziristan. You get a cell phone. It's the first time you've ever had that cell phone number. You know it's related to terrorism because of the pocket litter you've gotten in that operation.

Here's how it works: you simply ask that database, hey, any of you phone numbers in there ever talked to this phone number in Waziristan? I mean, you're already going into the database with the predicate, with a probable cause, with an arguable reason why you're asking for the data.

WALLACE: I've been talking -- obviously, this has been the subject in Washington and across the country this week. People are concerned about this mountain of data that you have.

OK. I mean, what you say sounds perfectly sensible. You know that there's a guy in Waziristan. You want to know who he's talking to in the United States.

One, what do you do with all the records, the billions of records that you have on all of us law-abiding citizens and what's the potential for abuse with the fact that you have all of that stored in computers somewhere?

HAYDEN: First, to answer your question, what do we do with all of the other records? Nothing. All right?

WALLACE: You keep it, though.

HAYDEN: Of course, because -- I mean, you get the cell phone with that number six months from now you want to know the history of that number. When does the value of that information begin to age off?

So, you do retain the information so that you can ask questions of it in the future. With regard to abuse, there are no records of abuse under President Bush, under President Obama.

Now, I was criticized because I theoretically didn't have enough oversight mechanisms, but no one accused us of abuse. President Obama has in some ways added incredible oversight mechanisms to this. Again, no abuse under either president.

WALLACE: Let me ask you about Obama and I promise, Senator Johnson, I'm going to bring you back in after this final question. Back in 2006, Senator Obama voted against your nomination to be CIA director because of your involvement in government programs,

From what you know and I understand you've been on the outside, how much has he changed? He expanded, restricted these government surveillance programs that he inherited.

HAYDEN: In terms of surveillance?


HAYDEN: Expanded in volume, changed the legal grounding for them a little bit, put it more under congressional authorization rather than the president's Article II powers and added a bit more oversight.

But in terms of what NSA is doing, there is incredible continuity between the two presidents.

WALLACE: How do you mean he's expanded in volume?

HAYDEN: Well, it may just because we've gotten more of these records over time and with the amendment to the FISA Act in 2008, which Senator Obama finally voted for, NSA is actually empowered to do more things than I was empowered to do under President Bush's special authorization.

WALLACE: Let's turn to foreign policy. Senator Johnson, as we discussed with Senator Paul, the president named a new national security adviser this week, Susan Rice, the former U.N. ambassador who infamously went out on the Sunday talk shows.

One, what do you think of that? And two, I'm going to ask you the same question I asked of Senator Paul. You are also a member of the Senate Foreign Relations. What do you think about the nominations of Victoria Nuland, who was Hillary Clinton's spokeswoman during Benghazi, as an assistant secretary of state, and Samantha power as U.N. ambassador? And will you use their nominations to try to get answers on Benghazi?

JOHNSON: Well, first of all, Chris, it's not surprising that President Obama appointed Secretary Rice. But it's disappointing that he's chosen this moment when -- let's face it -- his administration is going through a crisis of credibility.

The reason this NSA thing has blown up is because the American people have lost their faith in President Obama and his administration. I mean, I'm not the only one saying that. "The New York Times" is saying this administration has lost all credibility.

And so, Susan Rice was the person at the center of misleading America on Benghazi and so it's incredibly disappointing. And what we need to do on Benghazi, the next step is we need to get the names of the survivors and we need to get those folks up in front of Congress and to tell us exactly what happened and what assets might have been in place.

So, if we have to utilize some of these nominations to get that information I think that might be an appropriate course of action.

WALLACE: Would you --

JOHNSON: But Americans are just losing faith in this administration and that's not a good thing.

WALLACE: Would you consider putting a hold on either the Nuland or Power nominations to -- as leverage to get this information?

JOHNSON: I think that's a possibility.

You know, when Secretary Clinton came before our committee in response to my questioning her, she asked her own question, what difference does it make? We're starting to see the difference it makes when the American people lose faith in this administration.

But, you know, I think a healthy mistrust of government is a good thing, but what I look to do is make sure the Americans start taking a look at the awesome power of government in other areas, you know, the ability to take 45 percent of your income, 40 percent of your estate, tell you what doctor to utilize, you know, what type of health treatments are going to be made available to you.

So, this is about limiting our government and Americans do need to be very skeptical of an ever-expanding, ever-more-powerful government.

WALLACE: General Hayden, I want on to ask you about another aspect of the Benghazi attack because you would have a first hand from your experience and that's the talking point and the whole process involving the talking points.

I want to put up on the screen, the first draft you see on the left those were the first talking points drafted by the CIA. They talked about links to al Qaeda, about months of attacks against Western interest in Benghazi before the fatal attack on the U.S. consulate. All of that was taken out of the much smaller talking points you see there on the right that Susan Rice used on the Sunday talk shows.

This, obviously, is much more publicized than usually it is. From what you've read, is it -- is there anything unusual about the editing process in this case?

HAYDEN: Oh, the most unusual, Chris, is that CIA was writing the talking points.

Look, on a good Sunday morning on the talk shows, you get policy talk. On most Sunday mornings you get political talk. Neither of those are intelligence talk. So, why is the intelligence organization writing when the page is blank?

The way this should happen, Chris, is it's a policy guise. Right now, what it is they want to reveal to the American people and they send it up river for the CIA -- not to be flip here -- to check the spelling and the facts.

Look, al Qaeda, terrorist, extremist -- those are all words that we use to accurately describe what happened there. But each one of them is freighted with political cargo. Why do you put the intelligence organization in the role of deciding which of those words to use?

WALLACE: As it turned out, they didn't decide. It was decided by the policy and political people.

How do you explain what was left out?

HAYDEN: I explained it through a very bad process that began bad by having the intelligence guys draw up the first points.

WALLACE: Finally, Senator Johnson --

JOHNSON: Chris, can I just quick --

WALLACE: Yes, sure. Go ahead.

JOHNSON: OK. I think what this administration was trying to really cover up was really their gross negligence, really, the fact that they did not -- not only provide the security that was necessary in Benghazi, but they actually denied -- they actually rammed down the security, basically made the American people believe that all was well in Benghazi, all was well with their policies leading from behind, and that's the real story behind Benghazi and that's where we need to get the bottom of.    WALLACE: I've got less than a minute left. Senator Johnson, very generally and briefly, on immigration -- which is now on the Senator floor, the big issue on the senate floor. What changes do you need to see in the legislation for you to support it?

JOHNSON: Well, I want to see an immigration bill passed because we have to fix this system. It's not good for anybody. We definitely need to make sure that the borders are going to be secure, and we also need to make sure that, you know, basically, benefits don't flow to people that are here illegally.

And so, really, I'm very hopeful that we can pass a bill. But I agree with Senator Paul, the challenge is getting it to the House. So we're going to have to strengthen those provisions in the Senate, so we have a bill that passes the House. It doesn't do anybody any good just to pass in the Senate.

WALLACE: Senator Johnson, General Hayden, I want to talk you both for coming in today.

HAYDEN: Thank you.

WALLACE: Pleasure to talk with you as always.

JOHNSON: Have a great day.

WALLACE: Is the government's monitoring of phone calls and the Internet over the line or the new normal? Our Sunday panel joins the debate, next.



OBAMA: As for our common defense, we reject as false the choice between our safety and our ideals.

We're going to have to make some choices.


WALLACE: President Obama's message on privacy versus security seems to have changed since his first inauguration in 2009. Time now to bring in our Sunday group: Bill Kristol of The Weekly Standard; Mara Liasson from National Public Radio; Republican strategist Mary Matalin and Peter Baker of The New York Times.

Well, Bill, as someone who I suspect thinks that these surveillance programs are a necessary part of the war on terror, do you worry that all the leaks, all the disclosures this week are going to create some sort of backlash?

BILL KRISTOL, THE WEEKLY STANDARD: I do, particularly because they're coming into context of genuine abuses of government power, especially by the IRS.

I think the big thing to remember is national security is different from internal management of the government. We're dealing with foreign terrorist threats here.

And, secondly, apparently this program really does require court orders to go target particular individuals or groups. You can't just then migrate through the whole database and data mine and say this looks suspicious.

You need to say this is a group in Waziristan. Let's see who they're talking to. And if they're talking to me, you then have to go back to the court and get an order for me.

That is not what the IRS did, obviously. Lois Lerner on her own decided let's target people who have Tea Party in there --


WALLACE: But you would agree that when Rand Paul says what he says about, you know, let's have specific targeting and let's not just Hoover off, vacuum up all of this information on law-abiding citizens, that certainly has at least a political appeal.

KRISTOL: Maybe. But honestly, I think the concern is Republicans are making a huge mistake. A, I think it's mischaracterizing what's happening. They're getting a lot of data because they don't want to have to go to Verizon and AT&T and everyone else each time they get a phone number.

But they're not allowed to go into that data until they have a particular warrant signed off on by a judge, with some cause to suspect a foreigner of terrorism -- that is totally different from the IRS abuses, which I think are very serious. And I think it's very important for conservatives and Republicans to make that distinction.

WALLACE: Mara, the president said on Friday he welcomes a public debate over these, but the fact is, this only came out because of these completely unauthorized leaks. He wasn't about to tell us about these programs.

MARA LIASSON, NPR: No, he wasn't. He says he wants a public debate over liberty versus security, what we're willing to give up. He says you can't be 100 percent secure, 100 percent private and 100 percent convenient. But in order for the public to have that debate, they've got to know what this is.

So I do think that, ironically, the DNI moved to declassify some of these programs so they could defend it. And that actually, I think, is healthy and good. And now the public should know what's happening and they can decide if it's worth it.

I mean, we want to know -- we want the government to know everything about the Tsarnaev brothers in advance, but we don't want anybody to look at our phone records. I don't know if those two things can exist at the same time.   But we are going to have a debate now.

WALLACE: Mary, it was interesting; the president on Friday was at pains to say that he was skeptical of this program when he came into office, but that he scrubbed it and he added all kinds of safeguards to it.

Do you think that gets him over the charge that flipped on surveillance once he became commander in chief?

MARY MATALIN, REPUBLICAN STRATEGIST: Well, he flips on everything. It is political for him. It's -- when Bush is a policy, it's a false choice. When it's his policy, it's trading. It's tradeoffs. What the policy is, as General Hayden pointed out, is much stronger under this president.

And the technology has forced us into following the phones rather than the -- and the emails rather than following the people in the -- as the old system used to be.

What's -- but you cannot -- the (inaudible) of the problem here is it is the right thing to do; it is how we connect the dots. But just because it's the right thing to do does not mean it will be done right.

And what people can't see is this: what they can't see is it's conflation with the IRS, horrible, horrible abuse of private liberties and privacy.

So you can't take these things in a vacuum. And this ObamaCare and all of the rest are not just scandals, but the intrusiveness and the overreach of the government, people, of course, the public rightly attaches it to this kind of intelligence gathering.

WALLACE: You know, this is interesting, Peter, and frankly to watch what happened here in the panel because there's obviously a difference between government surveillance programs, which have been approved by Congress, that there is court buy-in on, and these scandals of the president says that he's outraged by, the IRS snooping on reporters.

You've heard our two Republican members here try to conflate the two.

Does the White House worry that the public is going to conflate the two and say well, you know, these surveillance programs and this scandal, it's all part of big government overreach?

PETER BAKER, THE NEW YORK TIMES: I think it's is a concern. This is an administration for four and a half years that has stood for the idea of an activist government, whether it be ObamaCare or tighter regulation of Wall Street.

And then you add these layers of additional policies and/or scandals, and it creates a -- it detaches that broader concern that people have had about President Obama's administration from the start.    What he's trying to do is distinguish between the two and, as you say, it's not easy. (Inaudible). This is something that is outrageous. This is something you should feel comfortable with and here are the reasons why. Not an easy task for any president but he's going to, I think, get out there and try to do that more.

WALLACE: Do you -- ?

KRISTOL: I'm against conflating the two, just to be clear. I am against the IRS targeting citizens exercising their utterly legitimate and important rights to associate, to advance a cause they believe in. I'm against the IRS.

I am for the National Security Agency targeting foreign terrorists. You could be for targeting foreign terrorists and against -- for -- to stop terrorism and against targeting U.S. citizens exercising their constitutional rights.


WALLACE: All right, Mary. Are you for conflating --


KRISTOL: They're never going to be conflated. I think it's serious political party must now conflate them.

MATALIN: (Inaudible) to leave you with that impression.

We're in vigorous agreement. But the consistent and cumulative dismembering of the Bill of Rights from our religious liberty, our privacy, our right to bear arms, free speech, free press, all of it, Fast and Furious, you've -- I'm not conflating them substantively.

But this is government, this administration has shown a propensity, a consistent propensity to dismember our Bill of Rights.

WALLACE: But on the surveillance side of it, that's -- he's simply continued. And you could argue, well, he's been hypocritical to do it. He is simply continuing programs he's inherited from George W. Bush.

MATALIN: That's -- we are once again in vigorous agreement. We have to have these programs to connect the dots. We have to follow people. We do not need to target American citizens unless there's some evidence of proximity to foreign terrorists. And it is a good program; it's a necessary program.

But it cannot be -- let me just quote Rush Limbaugh, my beloved. It's not like Colonel Sanders is collecting this information, OK? That's what -- you can't -- you cannot separate the politics from the policy. At least the Democrats never did when George Bush was making the policy.


LIASSON: That's why the government does this at its peril, if there was any instance of abuse where this information on an American wasn't connected to terrorism, was used in some way or disseminated in some way.

That's where the potential for abuse is. And that's why maybe the PATRIOT Act does need to be toughened to make sure that there - if there's accidental incidental information on Americans collected, it's somehow protected.

WALLACE: Let me just add -- get into one more issue with you, Peter.

All of this comes just a week after the president made his big speech, when he talked about the war on terror winding down, eventually repealing the authorization of the use of military force.

Isn't it going to be harder, just as a political matter, as a practical matter, to justify his sweeping government surveillance when you say, well, we've reached a crossroads and the threat isn't as urgent as it used to be?

BAKER: Yes, he even said specifically, we've returned to a period like the '90s, where terrorism was a regular but not existential kind of threat.

We had terrorism in the past prior to 9/11, but we've returned to that kind of era.

Well, we are not going to return to that kind of era when it comes to these sort of programs, surveillance and otherwise. And I think there's -- it reflects a certain ambivalence within the president. He's very uncomfortable with this idea of a global war or terror. He doesn't like that term that he inherited from President Bush, would like to begin to wind it down in various ways.

And yet parts of it are clearly going to continue. He's been an advocate and a protector of some of these programs.

WALLACE: All right. We have to take a break here.

When we come back, the president announces a major shake-up of his national security team. We'll look at what it means for Mr. Obama's foreign policy.



SUSAN RICE, NATIONAL SECURITY ADVISER-DESIGNATE: I'm deeply honored and humbled to serve our country as your national security adviser.



REP. TREY GOWDY, R-S.C.: She was either used via the talking points or she was complicit in the drafting of the talking points, and I don't think it's asking too much that she answer those questions before she offer herself for a promotion to something as important as national security adviser.


WALLACE: Susan Rice accepts a big new job, but Republican critics continue to see her as the public face of the Benghazi scandal.

And we are back now with the panel.

Well, Peter, in your story in The New York Times on Rice this week, you talked about the president's, quote -- your words -- "defiant selection."

How much was this Mr. Obama telling Republicans you're not going push me around?

BAKER: I think it is. Look, you know, he's had a much more assertive approach to nominations and appointments since he passed over a possible Cabinet nominee named Susan Rice, right? He didn't give her secretary of state; gave it to John Kerry instead in the midst of this big furor over Benghazi.

But since then, he said, OK. I'm going to put up Chuck Hagel. I know you don't like him. I'm going to put up Victoria Nuland, even though you're upset about Benghazi. I'm going to put up people like Tom Perez (ph) and Gina McCarthy (ph), other people.

He says, you know, they decided they don't think they can work with Republicans on the Hill, so he's going to sort of, say, dare them, in effect, to reject people he thinks are qualified.

WALLACE: Mary, I think -- and from long experience, you would agree that sometimes presidents need stand up to their opponents.

Was this the right time, place and person to do it with?

MATALIN: Transcended political defiance, this is a face-slapping, eye-gouging, patently political counterproductive move. And now he's settled with three negatives at a -- really bad policy consequences.

He has an inept and undistinguished national security adviser in the White House, who has shown her toughness only insofar as her proximity to her president. She's a presidential pet. Pit her against John Kerry, who is a serious guy, even though I don't disagree (ph) with him.

And it's elevated Samantha Power, who is the -- a world-renowned persecution or anti-genocide crusader. She puts her considerable prowess and access to persecution of Christians, the slaughter, the rape, the torture of Christians throughout the Middle East. That, which she is perfectly capable of doing and that's why she's in government. She's not a careerist. That's going to cause problems for this president's policy.

WALLACE: Well, let's talk about that, Mara, because, obviously, the real question is will these new people mean new policies? And both Samantha Power and Susan Rice are seen as being more interventionists than some of the people in the old team.

Do you expect the president to actually change his foreign policy?

LIASSON: No, I don't.

I think this was a swap, not a shakeup. I really don't. This is a very White House-centric foreign policy. I think it's going to continue to be so.

It's true that Susan Rice pushed for intervention in Libya and she certainly talked about her -- the searing lessons she learned from being in the Clinton administration about Rwanda.

And Samantha Power's a human rights, anti-genocide activist.

But neither have been advocating for intervention in Syria. They seem to agree with the president on that.

I don't think that -- it's possible that human rights might get a higher profile. Both of these women are less risk-averse than Tom Donilon. And, I mean, they're going to be higher profile people, just because of who they are.

But I don't see the foreign policy of the administration changing at all. I don't think means that we're going to be more inclined to get involved in Syria, for instance.

WALLACE: Well, they both were pushing, as was Hillary Clinton, for getting involved in Libya. And there were some people in the administration who were not for that. And they supposedly pressured the president on that. I don't know how much pressure he needed.

But Mara's right; at least from what we hear, they're not for getting involved more deeply or more aggressively in Syria.    What do you think? Is this just a change in faces? Or do you see a change in policy with Susan Rice and Samantha Power?

KRISTOL: I wish there were a change of policy. But I don't think there will be one.

Anne Marie Slaughter who was the director of Policy Planning for a couple of years in the first Obama tour with the State Department, so she certainly saw all these people close up, was quoted in the newspaper this week, saying, "The question isn't these officials nor the advisers. The problem is not the advice the president has been getting so much as his own presidential priorities."

Now it's pretty amazing that Anne Marie Slaughter talked about the problem and she is for intervention in Syria because she's a serious liberal internationalist and interventionist.

I think Samantha Power, if left to her devices, would be for intervention in Syria, but the idea that either of these two is going to change or turn around a president, who is committed to withdrawal -- he's proud, as he said again this last weekend, of getting out of Iraq, even though Iraq is now degenerating into the kind of situation it was in in 2006 before the surge.

He is proud of us getting out of Afghanistan on our own timetable regardless of the fact it's on the ground. He is pleased with not having intervened in Syria, apparently, even though it's a bloodbath and a disaster with the fire now spreading across the Middle East.

So the problem is President Obama.

WALLACE: Peter, let me ask you, as somebody who covers the White House for The Times, do you see -- and what are they saying about the significance of these picks in terms of policy?

BAKER: Well, I think in terms of policy, look, you have got to balance them against John Kerry and Chuck Hagel, who in fact are light footprint advocates. Right? They're the ones who -- it was just a few months ago, we said, because of their appointment, that means that the president is doubling down on the notion of a more modest role around the world out of Iraq, out of Afghanistan.

They're going to advocate on the other side.

But in the end, I think it is the president. He's made his mind up on things like Syria. I don't think he has any intention of intervening in a more robust way that some people would like him to.

WALLACE: Let me get your insight on another issue, what we thought was going to be the big news this weekend, but with all the leaks isn't, is the presidential summit out in Palm Springs, California, with the Chinese president, President Xi.

At least the headlines on that are that they agree on North Korean nukes and greenhouse gases. They don't like it. They don't agree on cyber espionage. Peter, what's your takeaway about this summit?

BAKER: Yes, they wanted this to be a very important moment, eight hours' worth of meetings between these two presidents without their ties on, in a very relaxed setting.

You know, obviously we don't know exactly what happened inside those meetings, whether they formed a real bond or not.

But the revelation of these programs in the advance of the meeting, I think obviously flavored any ability about an American president to lecture a Chinese president about issues of cyber security and human rights; makes those more complicated because he has to defend his own programs.

WALLACE: Mary is somebody who's been with presidents and vice presidents.

Do we, from the outside, think more happens in these meetings than does?

Or are they -- can they be really important?

MATALIN: Well, I had the honor and privilege of sitting with the vice president when he visited with the former Chinese president when he was a vice president.

Taking off your tie is not going to change how the Chinese react versus us. They sit at a table, they're scripted. Nothing happens in those meetings. That was a great photo-op, but it's not -- it did not -- this cyber businesses really, really scary.

Did you read about, they tapped into McCain's campaign and everybody's campaign? Can you imagine if our campaign documents were cyber-stolen? I mean, I'm not trying to make light of it. They can hack into anything.

WALLACE: Let me ask you about the cyber, because with all of the scoops, Bill, it also came out that the president has issued a directive to his national security team to prepare for cyber warfare.

What does that mean?

KRISTOL: Cheered me up.


KRISTOL: At least he can understand that there are enemies out there and that we have to prepare to deal with them and it seems like a sensible directive to say that we have -- we will have enemies at some point. We have some enemies; we may be engaging those enemies at some point in the future.

Better to disable them through cyber warfare than put boots on the ground. So I have no problem at all on that -- with that.

WALLACE: Mara, your thoughts about cyber warfare?

LIASSON: Yes, look, it's a big deal. It sounds like they didn't get anywhere with the Chinese on that issue. What we don't know is what we're doing to them. We have to assume that we have got just as much capability to do cyber -- to do -- to hack into their computers as they do into ours, but they're pretty unrestrained.

WALLACE: All right. Thank you, panel. See you next week. I'm glad that Bill Kristol is in favor of cyber warfare.

Don't forget to check out "Panel Plus," where our group picks right up on the discussion on our website,

And make sure to follow us on Twitter @foxnewssunday.

Up next, a former Power Player of the Week takes on a new challenge.


WALLACE: It isn't often in Washington that people turn down big jobs to take a much smaller assignment, but we met a special woman who didn't want to tell others what to do. She wanted to be on the front lines herself.

Here is our Power Player of the Week.


PATTY STONESIFER, PRESIDENT/CEO, MARTHA'S TABLE: I wanted to be part of understanding what goes on in the day care day to day. I wanted to just literally make sure my hands and feet were applied directly to the problem every day.

WALLACE (voice-over): Patty Stonesifer is explaining her surprising decision in April to take over as head of Martha's Table, a D.C. non-profit that provides meals, infant care and afterschool programs to more than 1,000 homeless and low income people every day.

STONESIFER: They may need clothing; they may need nutritional support. They may need to learn about how to promote literacy at home.

WALLACE (voice-over): To understand what's surprising about Stonesifer's role, you have to know where she came from.

In the '80s she was the top woman at Microsoft, making tens of millions of dollars.

In 1997, Bill and Melinda Gates made her head of their foundation, running projects to fight malaria in Africa and AIDS around the world.

WALLACE: In your decade there, how much money did you give away?

STONESIFER: I gave away over $25 billion.

WALLACE (voice-over): We caught up with her four years ago, when she had taken over as chair of the Smithsonian Institution, the world's largest museum and research complex.

STONESIFER: I think all of this work comes back to the power of the individual to have a quality of life and an impact with their life.

WALLACE (voice-over): But last year when her term at the Smithsonian ended, the question was, what next?

Given her background, she got a lot of big offers.

WALLACE: President of a university?

STONESIFER: Absolutely.

WALLACE: Head of an international aid organization?

STONESIFER: Absolutely.

WALLACE: So why did you end up here?

STONESIFER: Very big organizations require leadership at a different scale. A lot of it is about leading other leaders, and I wanted to stand with the people changing their lives.

WALLACE (voice-over): So now Stonesifer spends time teaching kids how to read.

STONESIFER: Oh, Samantha, you like to turn the pages.

WALLACE (voice-over): Or in the food kitchen with some of the 10,000 volunteers who help prepare meals for the homeless.

STONESIFER: Ooh, that smells good. You have got lots of soy sauce.

WALLACE (voice-over): She has no regrets about going from the Gates Foundation with a staff of 500 and an endowment of $36 billion to Martha's Table with a staff of 85 and a budget of $4 million.

WALLACE: Is there ever any frustration, gosh, I wish I had the staff, I wish I had the money?

STONESIFER: Every day if you run a non-profit there's a -- I wish I had the money.

You always find me. You are such a (inaudible) --

UNIDENTIFIED FEMALE: (Inaudible) find you --

STONESIFER: You always --

WALLACE (voice-over): Stonesifer's stage may be a lot smaller, but her goals aren't.

WALLACE: You want to end hunger in Washington, D.C.?

STONESIFER: There are 30,000 children in D.C. We know where they are and where they live.

WALLACE (voice-over): As she was talking we noticed she began to tear up.

WALLACE: Your eyes got a little misty there.


STONESIFER: Well, I mean, it's touching. You know, if you have a chance to affect the life of one child, it's an honor.


Very good!




WALLACE: Martha's Table has been around for 33 years. Patty Stonesifer says one of the great joys is to see people who went there as children, who now have college degrees and are giving back.

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

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