Secretary Hillary Clinton, Gov. Rick Perry on 'Fox News Sunday'

The following is a rush transcript of the November 21, 2010, edition of "Fox News Sunday With Chris Wallace." This copy may not be in its final form and may be updated.

CHRIS WALLACE, ANCHOR: I'm Chris Wallace and this is "Fox News Sunday." Foreign policy on the front burner -- from the war in Afghanistan, to the push for a new arms treaty with Russia, to bringing terror suspects to justice, we'll discuss the president's diplomatic challenges with Secretary of State Hillary Clinton.

Then, Republican governors with more power than ever -- we'll sit down with the new RGA chairman, Texas governor Rick Perry, to talk about the Obama agenda and what role Perry will play in the 2012 presidential race.

Plus, with the holiday travel season about to start, airport security gets up close and personal. We'll ask our Sunday panel if new TSA procedures go too far.

And our Power Player of the Week -- a former graffiti artist now creates works of art you can eat, all right now on "Fox News Sunday."

And hello again from Fox News in Washington. President Obama and other NATO leaders agreed Saturday on an exit strategy for Afghanistan, turning over security to the Afghans by the end of 2014.

While NATO officials said they did not expect foreign combat forces to keep fighting the Taliban after that, U.S. officials said they will decide at the time.

Earlier, we spoke with Secretary of State Hillary Clinton from the NATO summit in Lisbon.


WALLACE: Secretary Clinton, welcome back to "Fox News Sunday."

SECRETARY OF STATE HILLARY CLINTON: Thank you so much, Chris. Good to talk could you.

WALLACE: NATO has now agreed to a goal of 2014 for turning over security responsibility to the Afghans. Does that mean that the U.S. will have combat troops there for the next four years and possibly beyond?

CLINTON: Well, Chris, I think what happened today was a real vote of confidence in the strategy that is being pursued by the NATO- ISAF coalition. We are following the lead of President Karzai and the Afghans who have set 2014 as the year during which security will be transitioned to the Afghans.

There was discussion today and an agreement by the NATO and ISAF partners that there will be a continuing effort to train and equip and support the Afghans. But the point of the declaration by the NATO- ISAF partners is that the transition to lead Afghan security will occur during 2014.

WALLACE: So that means U.S. combat troops will be there for four more years and, as I understand it, possibly beyond.

CLINTON: Well, I don't know quite what you mean by that, because, for example, if you're going to continue in a supportive role, whether it's American troops or one of our other contributing nations, you're not there for the primary duty of security or combat. You're there to support the Afghans.

But does that mean you're going to defend yourself? Does that mean you'll come to the aid of one of your Afghan colleagues in trouble? Of course. But that is not the primary goal. The goal is to transition the security to an Afghan lead.

And what we heard at the ISAF meeting was the contributions from contributing nations to increase the number of trainers and mentors so that we could accelerate the training of the Afghan security forces. So all around this was a great vote of confidence in President Obama's strategy for Afghanistan.

WALLACE: You met with Afghan president Karzai the other day. Last week he said that the U.S. must reduce its military operations, especially its night raids, which are the very tactics that seem to be working.

I know you met with him, as I say, a couple of days ago. Did you get him onboard the new aggressive U.S. battle plan?

CLINTON: Well, Chris, I think I just want to somewhat take issue with your characterization "new aggressive American battle plan." I think what you will hear from General Petraeus, President Obama, President Karzai and all of us is that we now have all of the components of the strategy that President Obama directed a year ago.

And we believe it's working. And not only do we in the American government believe it's working, what was particularly reassuring is that the expressions of support that came from the NATO-ISAF partner countries also recognized that we are making progress on the ground.

Now, when you are engaged in both trying to kill and capture the enemy and get support from the local population, you have to be always asking yourself, "Is what I'm doing keeping that balance?" General Petraeus understands that probably better than any one.

In my conversation with President Karzai in the meeting that I just came from that President Obama had with President Karzai, we were very clear in saying we have to continue to do what is working, but we cannot do it to the extent that it turns people against the very strategy that's working.

WALLACE: And did -- and did President...

CLINTON: This is a -- this is a constant...

WALLACE: If I may...

CLINTON: This is a constant evaluation. And I think it shows the level of real dialogue that's going on between us.

WALLACE: And did President Karzai agree to that?

CLINTON: Absolutely. He -- you know, he's expressing legitimate concerns that come to him from the Afghan people. I mean, if you have a night raid and you take out a Taliban leader, he's all for that. If you have a night raid and four or five other people who have nothing to do with the Taliban are collateral damage, that's a problem. Everybody understands that.

So what we're trying to do, and I think we are succeeding through a lot of hard work by our military and civilian leadership on the ground, is to constantly try to get that balance right.

WALLACE: The Obama administration is pushing for a vote this year on the new START treaty agreement with the Russians, but the lead Republican, Jon Kyl, says that there's not enough time in this session, this lame duck session, before the end of the year. And the fact is you only have one of the nine Republican votes you need.

Aren't you taking a big chance pushing for a vote this year and running the risk of suffering a major embarrassing defeat on the world stage?

CLINTON: Well, Chris, I have a great deal of respect for all of my colleagues, Democratic and Republican, in the Senate. And I think that everyone is trying to figure out how to do the right thing on this important treaty.

I would just make three quick points. One, this is in the national security interest of the United States. There's no doubt about it. In fact, what I was a heartened by and even a little surprised by at the NATO meeting was the number of people like Chancellor Merkel of Germany, like foreign ministers and prime ministers and presidents from the Baltic countries, from Central and Eastern Europe, like the editorial written by the foreign minister of Poland, people who on the ground in Europe, nearby Russia, many of whom were part of the former Soviet Union, who are saying, "Please ratify this treaty now, United States Senate."

Now, why are they saying that? Not because they have a dog in the hunt between Republicans and Democrats in our country. It's because they know that this would be an important treaty for the continuing cooperation between Russia and the United States.

Secondly, we do not have any inspectors verifying what Russia is doing with their nuclear stockpile or anything else that is going on in their sights. We lost that capacity.

If you talk to any of our intelligence experts like General Jim Clapper, the new director of the National Intelligence Agency, they will tell you we can cannot go much longer without that capacity restored.

And finally, this is in the tradition of not just bipartisan but nonpartisan action on behalf of arms control treaties, going back to President Reagan, who famously said, "Trust but verify." Well, right now we have no verification.

So what we are arguing is that we'll find the time in the lame duck. I understand the legitimate concern that there might not be enough time to debate, to make sure that everybody is well informed. But as Senator Lugar, who is one of the leading experts in the world on the dangers posed by nuclear weapons, on the necessity of having more insight into what Russia's doing -- he said we cannot wait. I agree with him.

And so we're continuing to work with all of our Democratic and Republican senators to try to get to a point where we can hold that vote this year.

WALLACE: We got a verdict this weekend, the first big civilian trial of a terror detainee who had been held in a CIA secret prison and then transferred to Guantanamo, Ahmed Ghailani, who was convicted on one count but acquitted on 284 other counts, all the other counts.

This is supposed to be the easiest trial to conduct. So the -- I guess the question is do you have any choice now except to hold all of these terror detainees at Gitmo and either give them military trials or just hold them indefinitely?

CLINTON: Well, Chris, I think the -- that -- the verdict needs to be put into a larger context. The sentence for what he was convicted of is 20 years to life. Now, that is a significant sentence.

Secondly, some of the challenges in the courtroom would be the very same challenges before a military commission, about whether or not certain evidence could be used.

Thirdly, we do believe that what are called Article III trials -- in other words, in our civilian courts -- are appropriate for the vast majority of detainees. There are some for whom it is not appropriate. You will get no argument from this administration on that point.

But when you look at the success record in civilian courts of convicting, sentencing, detaining in maximum security prisons by the civilian courts, it surpasses what yet has been accomplished in the military commissions.

So I'm well aware, as a former senator from New York on 9/11, how important it is to get this right. I want to see these guys behind prison or executed, whatever is appropriate in the individual cases.

Now, we are moving to try to do that in the way that maximizes the outcome that is in the best interest of the security of the American people. So I don't think you can, as a -- as a rule, say, "Oh, no more civilian trials," or "no more military commission."

President Obama's theory of this is that most should be in Article III courts. Some should be confined to military commissions. But as things stand right now, we have actually gotten more convictions and more people, more terrorists, are serving time in prison right now because of Article III courts than military commissions.

WALLACE: Secretary, one final question. You made some news recently in Australia when you ruled out running again for office in 2012 and 2016. Why?

CLINTON: Well, first of all, I love what I'm doing. I can't tell you what it's like, Chris, to every day get to represent the United States, and it's why I feel so strongly about every issue from, you know, START to Afghanistan.

WALLACE: But are you -- are you categorically saying that you are done with political office...

CLINTON: I -- I have said...

WALLACE: ... elected office?

CLINTON: I have said it over and over again, and I'm happy to say it on your show as well. I am committed to doing what I can to advance the security, the interests and the values of the United States of America.

I believe that what I'm doing right now is in furtherance of that, and I'm very proud and grateful to be doing it.

WALLACE: So you're done with elective office?

CLINTON: I am. I am very happy doing what I'm doing, and I am not in any way interested in or pursuing anything in elective office.

WALLACE: Secretary Clinton, we want to thank you so much. Thank you for talking with us, and safe travels home.

CLINTON: Thanks a lot, Chris. Good to talk to you.


WALLACE: Up next we talk policy and 2012 politics with Governor Rick Perry of Texas, the new chairman of the Republican Governors Association.


WALLACE: Joining us now from his home state of Texas is the new chairman of the Republican Governors Association, Rick Perry.

And, Governor, welcome back to "Fox News Sunday."

GOV. RICK PERRY, R-TEXAS: Chris, thank you. It's good to be with you this morning.

WALLACE: What role do you see the Republican governors playing in the debate over the next two years and also in the 2012 presidential campaign?

PERRY: Well, hopefully one of the most extensive roles that they've played, and I'm talking about even more than in '96 when Tommy Thompson and Governor Engler were very involved with the health care legislation, particularly back on health care with the Medicaid, and we'd like to see block grants back to the states.

So we're going to be very involved with working with our counterparts -- not necessarily our counterparts, but our colleagues and friends in Washington as they devolve power out of Washington, D.C. back to the states.

WALLACE: I'm going get into more specifics in a moment, but I also want to ask you -- this is an overview question. You've just written a new book called "Fed Up!" in which you say that the balance between the federal government and the states is out of whack and needs to be corrected. How far would you go?

PERRY: It has been for some time. Once you read the book "Fed Up!" you'll, I think, agree that the federal government has centralized so much power and it's taken away the incentive to compete from a lot of the states.

States should be the centers of innovation, the laboratories of innovation, where people try out different ideas, and health care is a great example. This federalized Washington health care now may not work. Matter of fact, we know it won't work well in Texas, and I got an idea that other states can come up with better ideas, and we'll pick and choose what works best to deliver health care for our citizens.

WALLACE: Well, let's pick up on health care. You want to repeal the Obama reform plan. But 25 percent of Texans currently don't have health insurance. That's the highest rate in the country. Would you just let them go...

PERRY: And one of the reasons...

WALLACE: Would you just let them go without, Governor?

PERRY: One of the -- one of the reasons, Chris, is because of the strings that are attached from the federal dollars that come down here in our Medicaid programs.

As a matter of fact, that is one of our strong points to block granting, is we can create a better and more expansive insurance coverage and, obviously, the delivery of health care to more people without all of those federal strings attached.

You make exactly the point that we will be making in Washington -- is listen, do the things that you're supposed to do like securing our border, like delivering the mail, preferably on time and on Saturdays, before you get involved in things that the Constitution doesn't say one word about, like health care.

WALLACE: So I want to make sure I understand. Are you basically saying that on things like Medicare, Medicaid, that those programs should be ended and federal money should just go to the states?

PERRY: What I'm saying is that between Social Security, Medicaid and Medicare, there's $106 trillion of unfunded liabilities and not one dime saved to pay for them.

My children who are in their 20s know that Social Security is a Ponzi scheme. Medicaid -- we think we can save substantial dollars for the federal government and for the states if they'll allow us to implement that program.

For instance, it's $30 billion a year between the state and the federal government for one year of Medicaid in the state of Texas. We think we can cut that substantially, help our colleagues in Washington, D.C. balance the budget up there, and substantially help with us our budgetary issues here if they'll just trust the states to do what the states that -- our founding fathers actually foresaw was letting the states being the laboratories of innovation.

WALLACE: Would you do the same with Social Security? Would you end Social Security as a federal program?

PERRY: Let us work on Medicaid first. And while we're doing that, they can have the discussion on how to put our Social Security program on better and more solid footing.

WALLACE: But you know, I mean, when you say a Ponzi scheme, I mean, the fact is it's just a demographic fact -- I mean, when Social Security started in the 1930s -- and I forget the exact numbers, but there was -- there were seven or eight workers for every one retiree.

It just so happens now, because of the baby boom, that there are...

PERRY: It's the other way around.

WALLACE: ... more retires and fewer workers out there. I mean, it's not a Ponzi scheme in the sense of Bernie Madoff.

PERRY: Well, it probably is a -- is a program that even makes Mr. Ponzi feel pretty bad if he were still alive. The fact is our children know that the money that they're putting into Medicaid they'll never see. And they need to fix it.

And it is a Ponzi scheme. I don't know how you would explain it any other way than what you just did. There are fewer people paying into it and our kids are never going to see any benefit from it. Fix it and fix it today.

WALLACE: Let's go back to the -- one of the other prime targets of yours, which is bailouts. I know that you're very unhappy with them, but the fact is that General Motors just had a big IPO this week which paid back the federal government $13.5 billion of the $50 billion investment, with more to come.

And even a conservative Republican senator like Bob Corker of Tennessee, who was originally against the bailout of General Motors, now says, "You know what? It worked."

PERRY: I don't think government should be getting involved in private -- I mean, just to say that it worked is not -- to back up, I don't know whether it worked or not. And frankly, at the end of the day, I don't think anyone can say definitively today that the government wasn't out any money, or what have you.

Here's what's more important. Sending the message there are people out there or there are entities out there that are too big to fail is just wrong. It is wrong philosophically. It is wrong for a fiscal conservative to say that. And I -- you know, I disagree with the senator.

I think Washington made a serious mistake. The reason we have bankruptcy laws is to restructure, to make businesses more efficient and effective. And government needs to stay out of those things.

WALLACE: But let's look at the real world effect of this, Governor. There was a study that was released this week that says that government aid to General Motors and Chrysler saved 1.1 million jobs last year and 314,000 jobs this year.

You would have just let those people fend for themselves?

PERRY: I don't -- I don't think -- I think your study is looking at one thing. The state of Texas, over the course of the decade of the -- of the 2000s -- 850,000 net new jobs created during that period of time.

We have low taxes, low regulatory climate, a legal system that doesn't allow for over-suing and continue to have a great skilled work force because we got accountable skills. And then we get out of the way. The federal government ought to try that.I guarantee you this country's economy would go roaring back to life if they saw a president of the United States and a Congress that understood how the free market actually works and not having government interfere with the free market.

Let it work, and I'll promise you jobs will be created and our economy -- fix the tax system -- all of those things together. Devolve all of that power in Washington, D.C. and let the states become the laboratories of innovation. That's what you're going to hear out of these governors.

And I got to think there are Democrat governors out there that don't want Washington down micro-managing the states.

WALLACE: OK. Let's talk about Texas, because you're quite right. I mean, I did some research. You have the lowest -- one of the lowest tax burdens in the U.S. and you have led the country in private sector growth over the past decade.

On the other hand, you're facing a state deficit of $25 billion over the next two years, and you're saying you're not going to raise any taxes. So how are you going to deal with that shortfall?

PERRY: Well, one thing I will take you to task on, Chris, you got a better crystal ball than anybody down here, unless you're just throwing numbers at the wall. And with all due respect, that number will not be known until January when our comptroller does make the official estimate. There's a lot of guesses.

But the fact is here's how we do it, just like we did in 2003. We faced a $10 billion shortfall. And we can't deficit spend in Texas. We got a constitutional amendment to our Texas constitution, something that the federal government should have in place as well.

But we will prioritize what's important -- keeping the economy, obviously our taxes, our regulatory climate, legal system, et cetera. We're considering the concept of loser pays here to make our legal system even better for the business men and women in the state of Texas.

But we'll prioritize what's important -- public safety in our -- in our education system -- and then we'll reduce spending, just like we did in 2003. We reduced our spending...


PERRY: ... filled a budget gap of $10 billion, and didn't raise taxes. We won't raise taxes this time in Texas.

WALLACE: But, Governor, let's take a look at the Texas budget. Education accounts for 55 percent of state spending. health care, 25 percent. Public safety -- you just mentioned -- 10 percent. That's 90 percent of the budget.

You're going to cut that by $25 billion? And that's the number that's out there, sir. PERRY: Here's one of the -- well -- and again, I disagree with that number, but that's beside the point. Here is what I would do for starters. Block granting the federal government's Medicaid dollars back to us, $30 billion, 18 out of the -- you cut that in half and we think that we can get pretty close to that. That's $9 billion of savings for the federal government, $6 billion worth of savings right there for the state of Texas.

Listen, we've done this before, Chris. I greatly respect your focus on our budget and what have you. We've done this before when we've had to make the tough decisions in the state of Texas. We're not going to raise taxes. We're going to reduce spending.

And I will tell you at the end of the day Texas will be better off, Texans will be better off, and we will continue to lead the nation in the creation of jobs and wealth, and this country will be better off from it.

WALLACE: We're running out of time, but there are a couple of other issues I want to talk with you about, so I'm going to ask you to do kind of a lightning round of quick questions, quick answers.

In your book...

PERRY: Great.

WALLACE: ... you criticize not only Democrats but also Republicans. And I want to put up what you say about former President Bush, your predecessor as governor. "The big government binge began under the administration of George W. Bush," and you say his "compassionate conservativism was a near-complete capitulation to the welfare state."

PERRY: Well, look. President Bush will go down as a great president because he kept us safe and took the fight to the Islamic terrorists, and for that we will be forever grateful. But the fact is when you look at the spending from the bailout, when you look at Medicare Part D, when you look at -- listen, I don't agree that Washington, D.C. should be the epicenter of things like health care or education. I think it needs to be devolved back to the states.

That's where in my book -- and I -- that's where the Tenth Amendment in the Constitution focuses. So we disagree on what Washington's role should be. I hope somebody will stand up and run for the presidency of the United States and say, "I want to make it as inconsequential in your life as I can." That, I think, is a winning strategy.

WALLACE: All right. You brought up running for the presidency. You have repeatedly that you are not going to run for president. Why not, sir?

PERRY: I think being the president -- or, excuse me, being the governor of a state like Texas or, for that matter, Oklahoma or New Mexico is a more pivotal job in the future. I do indeed hope there's someone that says, "I'm going to go to Washington, try to get back to our constitutional roots, devolve this centralization of government back to the states." So why would you want to be up there if the action is down here in the states?

WALLACE: And just one last question along those lines, and we're running out of time. When you took the job as head of the Republican Governors Association, did you have to make a commitment that you would not run for president?

PERRY: Oh, I've made that commitment every time I've been asked, and that commitment still stands. I don't want to be the president of the United States. I do want to work with these governors across the country to make the states more pivotal, more powerful, as they should be.

WALLACE: Well, my guess is your appearance today is going to only make you more attractive, Governor, not less attractive, to a lot of people looking for a potential GOP candidate.

PERRY: Well, I hope -- I hope I look attractive for Republican governors and Democrat governors who believe truly that the Tenth Amendment says what it says, that the states are where the power should be.

WALLACE: Governor Perry, we want to thank you so much for joining us, and please come back.

PERRY: Thank you, Chris. It's good to be with you this morning. Yes, sir.

WALLACE: Up next, our Sunday panel on the changing balance of power in Washington. Now, when the president invites Republican leaders to the White House, they see if they can fit it into their schedule.


MINORITY LEADER SEN. MITCH MCCONNELL, R-KY.: Instead of giving Americans what they want, Democratic leaders plan to use the last few days that lawmakers expect to spend in Washington this year focusing on everything except preventing this tax hike, which will cost us even more jobs.


WALLACE: Senate Republican leader Mitch McConnell warning Democrats about lame plans for the lame-duck session of Congress.

And it's time now for our Sunday group: Bill Kristol of The Weekly Standard, A.B. Stoddard of The Hill newspaper; Kevin Madden, a Republican strategist who was Mitt Romney's spokesman during his presidential campaign; and Fox News political analyst Juan Williams.

So something happened in Washington this week that I had never seen before. The president invited congressional leaders over to the White House for dinner and a talk about the next two years, and the GOP leaders said, you know, we really can't fit it into our schedule. And how about the week after Thanksgiving?

What's going on here, Bill?

BILL KRISTOL, THE WEEKLY STANDARD: I don't know. They honestly say that they weren't -- first, they heard about this was in the media, and that they had commitments with the new members who were in town this past week. And I think they'll show up the week after Thanksgiving.

And I think they're ready for a compromise on taxes and other matters. They would like to get the tax code set for the next two years.

But I'll tell you, I was with about 30 new House Republicans, newly elected House Republicans, yesterday at The Heritage Foundation. They would love for it to not get done in the lame-duck session. They would love their first vote to be to extend current tax rates, which will pass the House overwhelmingly, with a few Democrats supporting it.

I think it will then pass the Senate, it will end up on the president's desk. I think he'll sign it, and the House Republicans will say, hey, you put us in charge of the House, and we just reversed an increase in everyone's tax rates that will go into effect on January 1st. I personally think that they are crazy enough to do the tax deal in the lame duck, from the Democrats' point of view, from the Obama administration's point of view, but I'm struck at how it looks like it might not happen.


I want to pick up with that on you, A.B., because we're coming up against two deadlines. First of all, the Bush tax cuts have to be extended or they run out, and everybody is going to get a tax increase at the end of the year. And also, the budget. Our continuing resolution for spending runs out the first week of December, and if they don't pass that, there is no government.

So, it seems like both sides are playing a little bit of legislative chicken here.

A.B. STODDARD, THE HILL: It seems so, but, really, the Democrats are in charge, and they have been swallowed whole by their losses. They have spent all of their energy this week on the trial of Charlie Rangel, on their leadership fights, on recriminations and altercations about the campaign.

You look at that calendar, and November 30th is the day that the White House meeting is supposed to take place. November 30th is also the day that the unemployment insurance expires.

The following day, December 1, there's a report on "Don't Ask, Don't Tell" from the Pentagon. It is also the day that the fiscal commission will be releasing its report. And then on Friday, just days later, the same week, the government shuts down unless they renew the funding for operations of the government.

It's a lot to pack in a four-day period.

WALLACE: So why didn't they do more of it this week?

STODDARD: They're just paralyzed. The Democrats are paralyzed.

They're still running the legislative schedule and they're paralyzed. If they could have come to an agreement on tax cuts by now, they would have. They couldn't do it before the election, and they haven't done it yet.

WALLACE: Yes, I want to pick up on that with you, Kevin, because when we were sitting here a week ago, after I had talked to David Axelrod and Jim DeMint, I think we all thought, well, there's the deal on tax cuts, there's going to be a temporary increase of all the Bush tax cuts -- no increase in rates -- for two years or three years or four years, but that seems less likely rather than more likely this week.

KEVIN MADDEN, FMR. PRESS SECRETARY FOR MITT ROMNEY: Well, I think the interesting dynamic right now is just how opposed the Democratic leaders up on Capitol Hill seems to be towards this White House. I mean, I think the White House always had a problem with Capitol Hill before. They were liked, but they were never feared or respected. And I think that's probably gotten worse since we've seen the electoral judgment.

And I think the other thing has to do with the simple fact that Republicans up on the Hill are sowing their oats a little bit, and I think that they feel like they have all the leverage. And leverage right now is the most important thing that you can have in this lame duck. And John Boehner and Mitch McConnell are perfectly willing to work and wait until they have a clean slate come January.

WALLACE: Why do you think that they put off the meeting until November 30?

MADDEN: I honestly think that -- I'm taking everybody at their word that there were different -- probably scheduling issues that they had.

WALLACE: John Boehner was at a news conference at the time of the meeting.

MADDEN: But I do believe that -- and so there is a bit of a power play, because they do hold all the cards right now. The same Democrats up on Capitol Hill were pushing a message before the election about taxes. You know, they had an electoral judgment that wasn't rendered in their favor, yet they continue to elect the same leaders and they continue to push the same message.

So, they don't seem to get it. And I know that Republicans up on Capitol Hill feel that they have all the leverage.


JUAN WILLIAMS, FOX NEWS POLITICAL ANALYST: Well, I remember that the Democrats went up two days after the '06 midterm races and met with President Bush. I just thought it looked rude. So, even if it was a scheduling snafu caused by the White House and President Obama's assumption that, in conversations with Boehner and McConnell, that they agreed to meet then, I think it ended up making Republicans look as if they are still pursuing a policy of simply obstructing everything that Obama wants to do.

WALLACE: But what do you think about the balance of power in Washington right now, in this lame-duck session?

WILLIAMS: It's with Republicans. I think, as we've heard earlier from Bill, from Kevin, look, I mean, if all the Republicans have to do is wait, and they gain more votes in the House and the Senate, so they're in better position.

That then raises the question, are you sincere in saying you want to get something done for the American people? Or is this just about politics, and as McConnell unfortunately said, about defeating Obama in 2012?

WALLACE: Let's turn to the new START treaty which is a big issue. As I discussed with Secretary Clinton, Bill, Jon Kyl, who's sort of the lead dog on this for the Republicans, said there's just not enough time in the lame-duck session, let's wait until there is a new Congress with the new senators who have just been elected by the American people and consider it then.

The White House, though, seems to be upping the ante for a vote this year. The president keeps pushing it. He talked in Lisbon about the strategic importance about this.

He got a lot of NATO leaders to support it. He also got some Eastern European foreign ministers to support it.

So, they seem to really want to make this a big issue before the end of the year.

KRISTOL: They do. Vice President Biden had a bunch of us who write and talk about foreign policy into the White House Friday, spent an hour and a half trying to tell us how urgent it was that it happen in the lame duck.

I don't really see the strength of that argument, honestly. I think they may will get this treaty through.

I think you've got 10 new Republican senators who have written a letter saying, we just got elected, we'd like a chance to vote on it. The treaty was signed in April. If it were urgent, they had plenty of months to get it through.

They controlled the Senate. They had 59 senators, after all. They could have recorded (ph) it out of committee, they could have spent two weeks on the floor in September, they could have gotten it through.

Instead, they've been negotiating with Senator Kyl, who I think has raised legitimate questions and concerns. I think they would be better off.

And I thought Secretary Clinton sort of hinted at this today -- they're not going to try to go around Senator Kyl. They're not going to play hardball.

They understand that they can have a much better chance of getting this through if they go to Senator McConnell and say, OK, look, we will not necessarily try to push this through the lame duck. Give us a commitment that it will be brought up in February or March, and it will be brought up in regular order, and there'll be a date.

Incidentally, they can bring it up. Who controls the new Senate? Senator Reid. Senator Reid, any moment, in February or March or April, could bring it to the floor.

Republicans are not going to filibuster a treaty. And if they have 67 votes for it, they will have 67 votes for it.

So I really think the focus on the lame duck is self-defeating by the administration. I think Secretary Clinton signaled a backing off from the White House sort of attempt to bluster (ph) this past week.

WILLIAMS: But, Bill, if they lose, it's not good. You don't want to lose that vote.

KRISTOL: Well, they've got to convince 67 senators to be -- that it's a good treaty.

WILLIAMS: But, then, OK. Wait a second.

KRISTOL: They have to do that in the lame duck or in the regular session.

WILLIAMS: But why is it not a god treaty? Richard Lugar -- you saw that lineup of Republican --

WALLACE: Secretaries of state.

WILLIAMS: -- wise men who came into the White House -- Kissinger, Baker. I mean, everybody says this is a necessary deal, and it looks like Jon Kyl, at the last minute, is just saying, you know what? Let's get back to obstructing and taking away the key foreign policy achievement of this administration.

MADDEN: Well, I think one of the big problems is that they worked very hard to get support from folks like Scowcroft and James Baker. But they are not the ones that are voting up on Capitol Hill. I think one of the big problems that they have had is that they haven't done the work to --


WALLACE: Wait a minute. They've had a bunch of hearings. It got approved by the Foreign Relations Committee on a bipartisan vote.

MADDEN: And you have a key senator who has substantive concerns and doesn't believe that this ought to be rushed.

WILLIAMS: What's the senator's concerns?

MADDEN: He's got substantive concerns about the funding behind the modernization of the nuclear armament that we have. He has had assurances from the White House about spending, but he hasn't gotten --

WALLACE: You get the final word, A.B.

MADDEN: -- but he hasn't gotten enough of an assurance.

STODDARD: Jon Kyl himself this is not a complicated document, and that is true. They have had hearings. Chris is right, this has been vetted.

The White House has come pretty far in trying to assure Senator Kyl and to come up with funding for it. He can say that he needs more assurance.

But on the other side, I do agree with those who say that President Clinton (sic) is -- I mean, excuse me, Obama is rushing this because he will be looking for 14 Republicans versus nine come January.

Does this have to be passed? Yes. It is important, it is urgent. Maybe not today or next week, but it's urgent that it be passed in order to help reset our relations with Russia, and obviously as we try to seek the Russians' help to isolate Iran.

It is important. It doesn't have to be done by Christmas.

MADDEN: You're never far enough until you have all the votes. And they don't have all the votes.

WALLACE: Well, that's certainly true.

MADDEN: That's one easy lesson I learned when I worked on Capitol Hill.

WALLACE: Sixty-seven in this case.

All right. We have to take a break here. But when we come back, how close is too close? We'll debate the controversy over new airport security measures after the break.



UNIDENTIFIED MALE: Jay, what's up? What's all the extra security about tonight?

JAY LENO, "THE TONIGHT SHOW": We have President Bush on the program tonight, so everybody gets patted down.

UNIDENTIFIED MALE: Like, even you? I mean, this is your show.

LENO: It makes no sense at all.


Listen, go easy, grope master.


WALLACE: Jay Leno and former President Bush feeling the pain that many air passengers will go through during this busiest of travel seasons.

And we're back now with the panel.

So, it was three weeks ago, Kevin, that the Transportation Security Administration began this enhanced screening at airports, including full-body scans that are very revealing, and new pat-downs that are very thorough.

So, is this big brother run amuck, or is this a necessary response to a terror threat?

MADDEN: Well, look, I have my personal experience of having gone through the screenings, and I have flown twice in the last two weeks, and I haven't seen that much that I would find very objectionable. But I think then I look at how the public views what they see is the news cycle around this particular issue.

And I think what happens is you see a lot of experts after the Abdulmutallab incident. They said, well, we should have gotten smarter about how we go through screening our passengers.

And I think what the public views is that we've gotten dumber in a certain sense, that we've gotten less efficient and more obtuse in how we do this, and that we have a current system now that equates the 80-year-old grandmother from Omaha with a roundtrip ticket with a foreign national who bought a one-way ticket with cash, and that that becomes a problem. And, now, instead of having a very efficient system, that we have an inefficient system, and that is despite all the money and technology that we have.

WALLACE: You know, A.B., some passengers, it's not just that they're saying it's stupid. They're saying, some, that it amounts to sexual assault. And some are also saying that it's a violation of the Fourth Amendment to the Constitution's ban on unreasonable search and seizure.

Do you buy either of those?

STODDARD: Well, I mean, I haven't been groped at the airport yet, so I don't know --

WALLACE: I'm sorry for you.

STODDARD: -- what it's like. But obviously, they have the option of the full-body scanner. There's complaints, obviously, from the flying public about the choice between receiving radiation from the scanner and having an invasive pat-down.

The Homeland Security Department is maintaining that the level of radiation you are exposed to in the full-body scanner is quite low and it's comparable to the amount of radiation we're expressed to when we fly anyway.

WALLACE: Supposedly, I think in 10 minutes of flying, as opposed to a two-hour flight.

STODDARD: If that is the case, they need to start a good public awareness campaign, and they need to make clear that those scanners are safe, or safe enough.

But I think that as far as the pilots, you know, having to go -- undergo these as well, that was a huge mistake. They have now been given special rules, and they are going to be -- they're going to get a pass on these -- obviously, if they were terrorists, ,they could just fly a plane into any building, and so they should be treated differently. But I don't see a way around this. As soon as the terrorists were willing to kill themselves, we are at a game that we struggle to win.

WALLACE: Bill, as a true red conservative, are you offended by what the TSA is doing?

KRISTOL: Not really. I mean, it might be unwise, and there may be better ways to do it. Apparently, in Holland, they have some scanner that's somehow less revealing and works as well.

WALLACE: I've seen it on TV. It looks like sort of a cartoon character, as opposed to the very graphic scanner we have in this country.

KRISTOL: And supposedly it would show any explosives or anything like that, and particularly the secondary screening. And I think it's tough.

I've tried to actually think this through in the last couple of days, and it's not so easy. People say, well, do what Israel does. Well, Israel has one five-hundredth the air traffic we have.

WALLACE: It's actually one-sixtieth.

KRISTOL: One-sixtieth? OK.

WALLACE: Yes. They have 10 million air passengers a year. We have 600 million air passengers a year.

KRISTOL: And you can't have individual interviews with all these air passengers, which is what the Israelis do.

People say, well, let's do profiling. That's not so easy.

We do have secondary issues. The Nigerian who buys the one-way ticket and who has Yemeni or Pakistani stamps on his airport will get called aside for secondary screening now.

The real question is, if we are doing this to have this universal level of, let's say, strict screening for everyone, for the 80-year- old grandmothers, it seems a little crazy to do it that way. On the other hand, it's not so easy to think, apart from excluding the 80- year-old grandmothers, how you're going to give the TSA people guidance as to who they are supposed to just wave through and who they're supposed to insist on a kind of -- a pretty thorough scan of or --


WALLACE: So I'm putting you on the spot. Are you saying that there is an overreaction here?

KRISTOL: Well, I'm not sure there is an overreaction, because this has been ginned up, I think, by a few media outlets. Is there genuine populous outrage about this? That's unclear. That's unclear.

MADDEN: I mean, the percentage of people that actually travel and have undergone these, versus those that are watching it on TV and judging it.

KRISTOL: But I'm not sure on either case that people are outraged about it. I'm not so -- I'm not entirely convinced that this isn't ginned up by -- let's see. You know, I'd like to see some polls.

WALLACE: I was going to say, a lot more people are going to be flying this weekend.

Juan, you famously talked about your fears about who's getting on planes. Where do you weigh in on all this?

WILLIAMS: If it makes us safer, I'm all for it, because I get on planes a lot. And I have been patted down. I've been through the new scanner. I've been through the old scanner.

But, you know, if it makes us safer post-9/11, I'm very sympathetic to the government's position, especially -- and I asked Janet Napolitano and John Pistole about it this week. I said, "Would you have discovered the Christmas Day bomber who had this explosive material in his underwear with the new scanner?" And they said yes.

Now, not absolutely yes, when I went back and said, you know, well, exactly how is it going to detect it? But they said any kind of aberrant possession on your body -- liquid, whatever -- they think they have a better chance with this device than without it. So, I tend to be sympathetic to that position, because if something happens in this country, we're going to hold those elected and appointed officials responsible.

So their job is to prevent another terror incident, and that's what they have got to do. But I must say that when I see a little old lady patted down, I think, what's going on here?

And then, as I have famously said, I think that they have to engage in some form of criminal profiling. Now, imagine my position on racial profiling. But in terms of saying, you know what, there's a higher likelihood for a certain groups of people, I mean, that's obvious, isn't it?

MADDEN: I mean, just on the profiling issue, if I may, you know, maybe what we ought not be doing -- I think any time you profile somebody because of their race or their ethnicity, if you make it -- if you make one mistake you've had a big, big problem. Right?

WILLIAMS: Correct.

MADDEN: So why not start profiling actions and tactics? If somebody starts buying -- if you're buying a one-way ticket with cash and you don't have luggage, that person is somebody who out to get the level of scrutiny versus an 80-year-old --


WALLACE: One thing that worries me about the whole debate -- and it is being carried out on national television -- is we're saying, well, all right, so if a person has a one-way ticket, or, you know, if they show up at the airport with no luggage, isn't it almost giving a primer to possible terrorists about, well, OK, I'll get the round trip ticket? You know, it won't cost that much more.

MADDEN: And that is where I think the leading edge of --


WALLACE: Or saying we're not going to pat down kids, a kid could be used conceivably as a --

MADDEN: The leading edge of our defense on this has to be intelligence. And, you know, now you're seeing movements up on Capitol Hill to start targeting every single piece of cargo that comes into this country just because of the last scares that we had with ink carriers.

So, I think that has to be the focus, too. And we've put the technology in place. We've put the funding in place. Now let's start sharing the information back and forth so that we don't have to pat down 3-year-olds during these screenings while they are traveling for the holidays.

WALLACE: But once the word gets out, you know what, grandmas, A.B., aren't going to get patted down, there will be a terrorist grandma.

STODDARD: That's true. I think that if you are going to fly, given the danger that we are in, you have to accept that these are the requirements to keep us safe.

WILLIAMS: Yes, I think we're a nation at war. And we've got people fighting a war. We should understand that we have some responsibility here. I don't think there is any question about that.

And one last thing to say, there is a layer of security already in place checking out people before they get on flights.

WALLACE: All right.

Thank you, panel. See you next week. Travel safely, all of you.

And don't forget to check out "Panel Plus," where our group here picks right up with the discussion on our Web site, We promise we'll post the video before noon Eastern Time.

Up next, our "Power Player of the Week."


WALLACE: Thanksgiving is not only about family, but also about food. And not just turkey, but all those sweets, which got us to thinking about our "Power Player of the Week."


DUFF GOLDMAN, "ACE OF CAKES": It's that moment of disbelief and that moment of joy to say, "Wow."

WALLACE (voice-over): Duff Goldman is in the "wow" business. The star of The Food Network's "Ace of Cakes," he is world famous for making one-of-a-kind works of art you admire and then eat.

GOLDMAN: For me, it's all about the cake.

WALLACE: Ready to be wowed? How about a Marie Antoinette cake, or a hamburger chili dog and French fries cake? Or his favorite, And R2-D2 cake he made for George Lucas?

GOLDMAN: The head would go back and forth. It had these, like, blinking lights. You would hit the button and it would make the R2-D2 sound.

WALLACE (on camera): And it was cake.

GOLDMAN: It was cake.

WALLACE (voice-over): We went to Baltimore, to Charm City Cakes, to see Duff in action. It looks more like Santa's workshop than a bakery, filled with brilliant artists busy creating.

When Duff isn't cooking, he's back in the shop --

GOLDMAN: Safety first -- or second.

WALLACE: -- welding or drilling the structures that support his cakes.

He showed us one he is driving all the way to Arizona for a birthday party.

GOLDMAN: They wanted a life-sized baby elephant. They want it to feed 100 people.

Is this a cake?

WALLACE (on camera): It's cake and a work of art.

GOLDMAN: Awesome.

WALLACE (voice-over): They make only 15 cakes a week, and it is strictly first come, first serve. But it is expensive.

(on camera): How much can a cake cost?

GOLDMAN: A cake can cost a lot.

WALLACE: Five thousand dollars?


WALLACE: Ten thousand dollars?

GOLDMAN: Absolutely.



WALLACE (voice-over): One reason people will pay that --


WALLACE: -- his show now runs in 40 countries.

GOLDMAN: The show just got on the air in Kuwait.

Hi, Kuwait.

WALLACE (on camera): Really?

GOLDMAN: Random (ph). Yes. Hi, Kuwait.

WALLACE (voice-over): Duff Goldman's career started as a teenager when he would break into train yards and spray graffiti.

GOLDMAN: I was making art. I mean, you had this ugly, beat-up train, and I made it pretty.

WALLACE: In college, he studied metal sculpture. But it was in culinary school where he found his schooling.

GOLDMAN: I had been doing graffiti, and I had been doing metal sculpture. I had been sculpting. Those two things, when they came together in a food world, cakes happened.


WALLACE: "Ace of Cakes" is part cooking demonstration, part reality show, as Duff and his gang take on impossible projects with unreasonable deadlines and always seem to pull it off.

GOLDMAN: It's really exciting, but it's really, really stressful. We have a lot of work to do in a day and a half now.

WALLACE: But he keeps it all in perspective.

GOLDMAN: We're not saving anybody's life here. We're cake decorators. But making people smile is one of those things where you're like -- I mean, how many things do you see during a day that really do make you smile?


WALLACE: What a great character.

The Food Network announced Friday the new season of "Ace of Cakes," starting in January, will be its last. But the network says its viewers still love Duff, so they are developing another show for him.

And that's it for today. Have a great week and a Happy Thanksgiving.

And we'll see you next "Fox News Sunday."

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