Sen. McCain on gov't surveillance, Al Qaeda threat, Russia; political strategists talk 2014 and 2016

This is a rush transcript from "Fox News Sunday," August 11, 2013. This copy may not be in its final form and may be updated.

CHRIS WALLACE, HOST: I'm Chris Wallace.

President Obama faces new questions about how he's waging the war on terror.


WALLACE: In a pre-vacation news conference, the president discusses government surveillance.

PRESIDENT BARACK OBAMA: I want to make clear, once again, that America is not interested in spying on ordinary people.

WALLACE: The threats facing Americans overseas.

OBAMA: We are not going to completely eliminate terrorism. What we can do is to weaken it.

WALLACE: The state of relations with Russia and the battle over ObamaCare.

OBAMA: The one unifying principle in the Republican Party at the moment is making sure that 30 million people don't have health care.

WALLACE: We'll get reaction to all of it from Senator John McCain, just back from the Middle East.

Plus, uproar over planned projects by CNN and NBC on the life and career of Hillary Clinton.

The GOP now threatening to block both networks from hosting primary debates.

REINCE PRIEBUS, RNC CHAIRMAN: The parent companies are choosing to promote Hillary Clinton when they know darn well that she's getting ready to run for president.

WALLACE: We'll ask two key political strategists Joe Trippi and Chip Saltsman if the race for 2016 already on.

And our power player of the week --

MIKE TYSON, FORMER BOXING CHAMP: I'm living life in my terms.

WALLACE: Still the baddest man on the planet, Mike Tyson.

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


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

President Obama has left the capital for his summer is vacation. He arrived in Martha's Vineyard after his full -- first full press conference in more than three months. And he made news on the government surveillance program, relations with Russia, and our war against al Qaeda.

Senator John McCain, a Republican leader on national "Fox News Sunday."

SEN. JOHN MCCAIN, R-ARIZ.: Thank you, Chris.

WALLACE: President Obama said Friday that he wants to reform the government surveillance program, he wants to add some more safeguard and make it more transparent. Republican Congressman Pete King, a member of the House Intelligence Committee, said this, that he called it "a monumental failure" of war time leadership.

Senator McCain, who's right?

MCCAIN: Well, I think it's pretty clear that there's been failures throughout that has led to Mr. Snowden now being granted asylum in Russia. There is now a large percentage of Americans, particularly young Americans who view Mr. Snowden as some kind of a whistle-blower when we know that he betrayed his oath of office. There's a young generation that believe that he's some kind of Jason Bourne and there has gotten to more transparency.

We need to ask questions, like, why did Mr. Snowden have access to the information he had to? It couldn't have been part of his job. What about congressional oversight, have we had a failure there? And, clearly, Mr. Snowden's being granted asylum in Russia is a signal of incredibly bad relations between the United States and Russia and Mr. Putin putting his thumb right in America's eye.

WALLACE: Let's talk though about some of the specific reforms that President Obama proposed in his news conference. Let's put them up on the screen.

Have a privacy advocate argue against the government, on the other side in a surveillance court. Tighten the mass collection of phone records. Be more transparent when you can about surveillance.

Do you think those are good ideas or do you think there's a possibility they could impede our ability to stop a terrorist who's -- means to do us harm?

MCCAIN: Well, there's a careful balance here between preserving our assets and capabilities and making sure the American people are aware -- are convinced that their privacy is not being violated. And it is a careful balance. Right now as I mentioned, there's kind of a generational change here. Young Americans do not trust this government. Without trust in government, you can't do a lot of things.

So I don't disagree with any of those proposals of the president's. But I also would ask how in the world do we have all these thousands of contractors and people like Snowden who may have access to information that there is no reason for them to have? We used to have a thing called "need to know." Clearly, Mr. Snowden did not have a "need to know" the information that he is now revealing.

It's also very revealing about the state of our relations with Russia and Mr. Putin.

WALLACE: I'm going to get to Russia in a minute. But let me ask you about some breaking news and that's the fact that today the state department has reopened 18 of the 19 missions and consulate diplomatic posts across the Middle East, North Africa, near Asia.

Did the administration do the right thing in closing those embassies to respond to the terror threat or are some of the foreign partners say -- did it seem to be an act on retreat of the part of this country against its threats in the Middle East?

MCCAIN: I'm not sure it was a matter of retreat, but it authenticates the incredible threat that Al Qaeda poses to the United States of America and our personnel and embassies and consulates throughout North America. You can't say you have destroyed, quote, "core Al Qaeda" -- by the way, that's semantic gymnastics, which is remarkable. You can't say that and at the same time have to close embassies and consulates all over the United States.

Look, Al Qaeda is on the rise, they have continued to penetrate. They have now a free zone in the Iraq/Syria areas -- the border. Iraq is -- excuse me, Al Qaeda is strengthening every day in every way because of a lack of American leadership and policy.

The only American policy that I can think of that President Obama is practicing, one, he's not Bush, and second, that the United States is withdrawing. We are withdrawing.

And when you do that, and when you say that, then things get a lot worse than they are and they continue to get worse and without that policy, without a strong policy, we are in trouble.

Just give you the best example. The president of the United States said that if this -- Bashar Assad used chemical weapons, it would be cross a red line. It would be a game changer.

We now know for sure that Bashar Assad has used chemical weapons. What has the United States done? They have decided, maybe, you know, in certain ways, to provide light weapons to the resistance, which is obviously not doing anything that of benefit and Bashar Assad is succeeding.

WALLACE: I want to may some of what President Obama has had to say about the state of Al Qaeda over the last year. Take a look.


OBAMA: Today, Al Qaeda is on the run and Osama bin Laden is dead.

Core Al Qaeda is a shell of its former self. Groups like AQAP must be dealt with.

The United States is never going to retreat from the world. We don't get terrorized.


WALLACE: Senator, a moment ago you said that Al Qaeda is on the rise. I mean, you're not suggesting that Al Qaeda is stronger than it was pre-9/11?

MCCAIN: I'm saying they have metastasized in a way they may pose great threats throughout the Middle East, that they can destabilize nations, that they can commit acts of terror literally anywhere. And there's the perception throughout the Middle East that there's no American leadership, that's no policy, and then the various actors in the region are accommodating to that reality.

And when they believe that, then you are going to see extremist elements on the rise and clearly, they are throughout the Middle East. The action of closing these embassies shows that they're able to mount threats everywhere in the Middle East against the United States of America and they are playing in ways that can -- that is going to pose challenges to the United States for years to come.

WALLACE: You talked earlier about Russia. I want to get back to that. Of course, President Obama canceled his summit with Russian President Putin this week. But while taking a couple of personal shots at him in his Friday news conference, he also made it clear he wants to continue to do business with Russia.

Take a look at what the president said.


OBAMA: I know that the press likes to focus on body language and he's got that kind of slouch, looking like the bored kid in the back of the classroom. But the truth is, is that when we're in conversations together, oftentimes it's very productive.


WALLACE: Senator, is the relationship productive? Is canceling the summit enough, or should we get even tougher with Putin and Russia?

MCCAIN: Well, the president comparing him to a kid in the back of the classroom I think is very indicative of the president's lack of appreciation of who Vladimir Putin is. He's an old KGB colonel that has no illusions about our relationship, does not care about a relationship with the United States, continues to oppress his people, continues to oppress the media and continues to act in an autocratic and unhelpful fashion -- by continuing, for example, to veto resolutions in the United Nations Security Council concerning Bashir Assad's atrocities in Syria.

Look, what -- and the fact that he canceled the meeting, that's fine, it's symbolic. We need to expand the Magnitsky Act. That is holding people accountable who commit human rights violations within Russia. We need to move to bring Georgia into NATO. We need to continue and restore our efforts for defensive missile systems in Europe, which we had basically drawn back.   We need to emphasize human rights and we also need very badly to understand that Mr. Putin does not have the United States/Russia relationships in any -- in any priority and treat him in a realistic fashion. That's the way to treat Mr. Putin, not just canceling a meeting.

WALLACE: You had a busy week this week. Earlier in the week, you were in Egypt. You went there to try to persuade the military and the civilian government that they're backing to begin to release political prisoners and also to reach out to the demonstrators of the Muslim Brotherhood who are in the street and try to persuade them to go back to the democratic system.

The generals not only rebuffed you, but they made it clear they're going to track down on the protesters if they don't clear the streets pretty quickly.

Question: what do you think should happen if the generals go ahead with their threat and violently crack down on the Muslim Brotherhood protesters? Should we cut off aid to Egypt and what would that mean in terms of that country devolving into a civil war?

MCCAIN: I'm very concerned about increased violence in the coming weeks. They -- when the United States of America refuses to call a military takeover of a government as a -- refuses to call that a coup, then obviously it's hard for us to urge them to observe the rule of law in a Constitution.

But there's no doubt that Morsi abused his power as president. There's no doubt that there's a popular uprising against Morsi. But the fact is that it was a coup and now we have -- they have jailed leaders of the Muslim Brotherhood and the previous government, and that is not the way to bring about reconciliation. They are charging Mr. Morsi and others with crimes, for example, in his case before he ran for president.

And we urged the release of some of the political prisoners. The answer is it was a judicial matter. It's not a judicial matter. It's the orders of the new government and the military.

I worry a great deal. There's still around 30 percent of the people that support the Muslim Brotherhood. We could see an eruption of bloodshed that would be horrendous.


WALLACE: Let me just quickly ask you -- we're beginning to run out of time.


WALLACE: If they go ahead and crack down in a violent way, are you going to call for a cutoff of aid to Egypt?

MCCAIN: I'm afraid that the Congress of the United States would have to consider carefully the elimination of aid. By the way, we know that the Gulf countries are giving them as much as $14 billion.

It's not just money and aid. It's economy. It's tourism. It's our relationship. It's their legitimacy in the world and a lot of other things.

And I'm afraid they're not appreciative of it, while they're demonizing the United States of America in the streets. It's a sad thing to see.

WALLACE: Senator, we have less than a minute left. I want to ask you one final question.

You have been spending a lot of time with President Obama recently. You've been talking about foreign policy. You've been pushing comprehensive immigration reform. You helped work out a deal for the Senate to stop filibustering some of his nominees.

And Jay Leno asked the president about it this week. Take a look.


JAY LENO, HOST "THE TONIGHT SHOW": I remember you had the lover's quarrel for a while, and now you're -- well, you're best friends.

OBAMA: You know, that's how --

LENO: What happened?

OBAMA: That's how a classic romantic comedy goes.


WALLACE: I was going to ask you, are you going soft on Obama? But I've got to say, from some of your answers today, it's clear you're not. So, is it a romantic comedy or a tragedy?

MCCAIN: I think it's a situation where I will work with the president and the American people want us to. Look at the approval ratings of Congress to work with the president where I can.

But in places like Syria where a massacre of 100,000 people, torture, rape, murder, mayhem is taking place with the increasing influence of the Muslim extremists. That is something I have to fight against. We need a coherent national foreign policy, particularly in the Middle East but in the world, and we don't have that right now. I intend to do what I can to restore America's prestige and influence which is on the wane.

WALLACE: Senator McCain, so much for the romantic comedy -- thank you. Thanks for sharing your Sunday with us. Always good to talk with you, sir.

MCCAIN: Thank you, Chris.

WALLACE: Hillary Clinton and Chris Christie run strong in early polls. Let the talk of 2016 begin. Two veterans of presidential campaigns join us next.



REINCE PRIEBUS, RNC CHAIRMAN: We've got a big problem if CNN and NBC think that they're going to put together a promotional movies and mini-series promoting Hillary Clinton and that the Republican Party is going to go along and get along.


WALLACE: Republican chairman Reince Priebus threatening two networks will be locked out of GOP presidential debates if they go ahead with film projects about Hillary Clinton.

Joining us now to discuss the political situation for 2014 and '16 are two veterans of presidential politics. Chip Saltsman, who managed Mike Huckabee's run for the White House and Joe Trippi who worked on the campaigns of Ted Kennedy, Walter Mondale and Howard Dean.

Gentlemen, welcome.



WALLACE: Chip, the Republican National Committee meets this week, on Wednesday. Should they go ahead and act on the threat from chairman Priebus if ABC -- rather, NBC and CNN don't back down? And we should also point out that there's talk that Fox television may also become involved in this project in some way.

But should they go ahead and act on this?

SALTSMAN: Well, from the members of the committee I've talked, they're very excited that the chairman is doing this. They think it's the right thing to do. This is one of those things where the chairman has kind of laid down the gauntlet.

Do I think there's going to be a lot of effect? Do I think NBC is all of a sudden going to pull their Hillary Clinton miniseries? No. I actually think it's good fund raising on both sides too.


WALLACE: Yes. Let me ask you about that, Joe. Does the Republican Party look strong or silly making this threat? And in a practical sense, would a Diane Lane miniseries, because she's apparently signed up for the NBC miniseries, to play Hillary Clinton. Would that bolster the Clinton campaign in 2016?

TRIPPI: Well, first of all, I agree with chip, it's great fundraising strategy from the RNC. But no, I don't think -- the reason that the networks are doing this is because of how formidable, a big (ph) candidacy of Clinton's campaign would be. I mean, she's so formidable. There's a story there, they think.

But also, look, the Democratic Party they did this with Fox, protested, did a boycott. It doesn't work. I mean, last time I checked, Fox is doing pretty well with its viewers. I don't think this is going to work.

I think it is -- it's good for the base. It jams them up. It raises money, but that's all -- the only impact it's going to have, Chris.

WALLACE: All right. Meanwhile, there's a new poll out of New Hampshire that shows a couple of interesting things. Let's put that up on the screen.

New Jersey Governor Chris (ph) Christie has the lead. This is a poll in New Jersey, at 21 percent. Senator Marco Rubio is back in fifth place at six percent. Back in April, Rubio was tied with Christie for the lead at 15 percent.

Chip, couple of questions. One, why is Christie is so strong, not only in that poll but a bunch of national Republican polls? And, secondly, has Rubio been hurt that badly, as he seems in that poll, by his support of comprehensive immigration reform?

SALTSMAN: Yes, I don't think there's any question Marco has been hurt. I mean, you can see it from the conversation we've had in Ohio to South Carolina, to really all over the country. I mean, this is the issue that everybody -- they thought Senator Rubio was going to be some kind of new Republican that was going to lead us to the White House in 2016.

They get up there and start trying to make deals, and this is a problem that we've all got. You go up there and you try to be a deal maker, trying to make it hurts you in national polls pretty quickly.

WALLACE: And what about Chris Christie?

SALTSMAN: Well, I mean, he's the hot hand right now, at the national level. But if you take it down to the microcosm of the primary states -- not so much. So, he's doing really well with the independents and kind of regular Republicans out there. But with the right wing of the party, he's not quite as popular.

WALLACE: All right. I want to ask you about the president's news conference and his reaction to the threat from some Republicans to shut down the government if ObamaCare is not defunded. Take a look.


OBAMA: The idea that you would shut down the government unless you prevent 30 million people from getting health care is a bad idea.


WALLACE: Joe, the president was all but taunting the Republicans, you know, saying -- go ahead, try to link a defunding of ObamaCare to shutting down the government, make my day. Do Democrats love the prospect of Republicans going down this road?

TRIPPI: They not only love it, but it's a good tactic again, because --

WALLACE: But tactic for whom?

TRIPPI: For the president. Look, what's going on here, people want, they want it repealed. They may want it changed, but they don't want the government shut down to happen, to force that to happen. So the president, daring them to do it. It's helpful for 2014.

Republicans are going to go on record. They're either going to force a shut down. We have been through this before. Didn't work too well with Newt Gingrich during -- and the Republicans during the last one. I think trying to push against Republicans and make sure that they do it, they know there's going to be a cost.

WALLACE: Chip, Republican leaders, the leaders in the House and the Senate hate this idea of linking ObamaCare defunding to whether or not the government gets funded. But I've got to say, I've talked to a lot of Tea Party Republican who say it's time to put up or shut up. If you really hate ObamaCare, the power of the purse is the way that you can stop it. You can't end it, but delay it for a year by defunding it.

I also want to put up a very interesting poll that's out this weekend. Gallup latest poll, Obama's approval rating is now down to 41 percent. It hasn't been lower than that in almost two years.

Chip, what are the political stakes here for the GOP? You've got a somewhat vulnerable president -- a lot of growing doubts about him on ObamaCare and a lot of other issues. On the other hand, do you really want to take the hostage and say, no funding ObamaCare?

SALTSMAN: Well, this is a complex issue. The president is doing a good job of driving his own approval ratings down. Obviously, the White House believes if they can get some fight on the government shutdown, let him be presidential again.

Look, there's no question the right wing of our party wants this vote. They want to defund ObamaCare and they are OK with shutting down the government, and you've got literally control of the United States Senate hanging in this balance I think on this issue.

As the party goes over to the next six months, we're going to decide whether we're going to get control based in the United States Senate based on whether we defund ObamaCare or not, because that's going to depend on who you like in the primary, who's going to be our general election candidate, can they bet Democrats all across the country?

WALLACE: Yes. But I guess I'm not quite understanding. Are you -- if they force a government shutdown of ObamaCare, is that going to help the Republicans in 2014 or hurt them?

SALTSMAN: I think it cuts both ways. I think it helps some of them running in the primaries in some of these Senate races, but I think hurts some of the candidates and maybe our strongest in the general.

TRIPPI: This is the entire problem they have had for the last -- for 2010 and 2012. The Republicans should have the U.S. Senate right now. They should have got it in 2010, and they should have doubled up on it in 2012.

But because they're having this fight and this vote on shutting down the government, could end up again nominating people like Sharron Angle and they nominated here in Nevada. That's the reason Harry Reid is still in the Senate. This could happen again.

That's why -- again we look at 2012. It looks like 2014 the Republicans should have a great shot at the Senate, but may not happen.

WALLACE: Let's talk about that. Let's look at the landscape for 2014. After a special election in New Jersey, which the Democrats are expected to win in October, there will likely be we'll assume 55 senators voting with the Democrats, 45 Republicans, which means the GOP will need a net pickup of six seats to take back the Senate.

But Republicans have one advantage. They are defending only 15 seats in 2014, while the Democrats are defending 20 seats that they now hold.

Chip, I know it's a little silly, but we like to play these games. Looking at it from the vantage point of the summer of 2013, how good are Republican prospects for November of 2014?

SALTSMAN: I'm going third time's a charm and we're going to win in 2014, and finally get control of the United States. Joe's right, we should have gotten it in 2012. I like where the seats are. I love Tom Cotton in Arkansas. I love going up against Kay Hagan in North Carolina.

WALLACE: And we should point out. Tom Cotton is a freshman Republican congressman who is going to be running against Mark Pryor in a red state, Arkansas.

SALTSMAN: A red state where President Obama has got a 28 percent approval rating and ObamaCare -- defunding ObamaCare may be an issue that will launch him through this primary process and get him elected in the general.

WALLACE: All right. Joe, let me ask you -- Republicans have another advantage. They have only two open seats.

Let's take a look at this. Two states where due to retirement they have seats open. There we go. While Democrats have five open seats, including in the red states of Montana, South Dakota and West Virginia that are now blue, but, you know, they have a good chance of typically red states.

How do you make 2014 the race for the Senate?

TRIPPI: Well, first off, chip is right. Like except for the third time's a charm thing. I think what's happening here is again we don't -- in these primaries, like you have Mitch McConnell in Kentucky, primaried by Mike Bevin of the Tea Party. He's going to be hit on the right and have a tough primary fight, and at the same time, has a real live challenger within the Democratic Party, Alison Lundergan Grimes who -- he's going to get pinched by both sides in this thing. They are on the verge, I think, of maybe blowing a third opportunity here because of the fights that they're having within the party.    Seniors for first time are starting to move away from Republicans in the polls and it looks like it's because they feel like the party has gone too extreme. So what you have is, yes, Democratic -- democracies will be carrying Barack Obama and his policies and Republicans like Cotton will be carrying this notion that the party has gone extreme again in Senate as it did in 2010 and 2012.

WALLACE: Chip, just briefly, because one of the few Republican seats they what be vulnerable and Joe mentioned it, is Kentucky. You've got the Senate Republican leader Mitch McConnell in a tough fight against Matt Bevin, first of all, in a primary. He's a Tea Party favorite.

And then supposing he survives that he'd go on against Alison Lundergan Grimes. The secretary of state in the final, in the general election.

McConnell in trouble?

SALTSMAN: I think that's going to be what the media is going to try and say, McConnell is in trouble. He loves the political fights in his life. He has been doing it for 30 years. He's got a great base in Kentucky and he relishes the opportunity to take his kind of record to Kentucky and fight every step of the way.

He'll be at every county. He's still a grassroots kind of politician that loves this stuff. I think you're going to see him on top in November.

WALLACE: And we should point out, if you think we're silly talking about all of this a year and a half ahead of time in that Kentucky race -- all three candidates, the two Republicans and one Democrat are all up with ads, all hammering each other already.

Chip and Joe, thank you both. Thanks for coming in today. We'll stay on top of all this.

Next up, we'll bring in our Sunday panel. We'll hear what they have to say about the president's plan to overhaul the government's surveillance program and where we stand on the war on terror.



OBAMA: Rather than have a trunk come out here and a leg come out there and a tail come out there, let's just put up the whole elephant out there. So people know exactly what they're looking at.


WALLACE: President Obama reacting to all the leaks from Edward Snowden and explaining why he thinks it's time for a more comprehensive review of the government's NSA surveillance programs. And it's time now for our Sunday group. Bill Kristol of The Weekly Standard, former Senator Joe Lieberman, Carly Fiorina, Republican adviser and former CEO of Hewlett-Packard and Julie Pace that covers the White House for the Associated Press. President Obama says he wants to strike the right balance between our freedoms and our security in proposing reforms to government surveillance. The ACLU immediately said that he doesn't gone nearly far enough, while some conservatives said he's jeopardizing our safety in an effort to satisfy groups like the ACLU. Bill, does that mean that he got the balance just right or that he totally messed it up?

BILL KRISTOL, THE WEEKLY STANDARD: Well, we don't know what he's proposed really. And it's -- it' so vague. So it's hard to know. He's been president for four and a half years, one would assume he would have been attending to these programs and making sure there was the right balance between security and privacy. I'd rather think there probably has been. So, if he wants to propose some tweaks he can do so, but I think the most important thing he has to do is reassure people that he did this some degree that he's paying attention and there's no rampant violation of privacy or individual liberties.

WALLACE: You know, it's interesting, Senator Lieberman, that president criticized NSA leaker Edward Snowden as no patriot, he and his administration have been much tougher, they charged him with violating espionage. But in effect he was saying that the Snowden leaks had raised legitimate concerns on the part of the American people about whether their privacy is being violated. Has that cast the whole Snowden case in a different light?

JOE LIEBERMAN, FORMER U.S. SENATOR (I-Conn.): Well, I hope not. Because I certainly believe that these programs are critically important to our security. There's been no evidence presented that the NSA surveillance programs have compromised anybody's civil liberties or privacy. This is all anxiety that's been aroused by the revelation. So I think that the president so far has stood by these programs and defended them. But obviously, Snowden who is a -- in my opinion, a criminal, is the reason why the president said what he did on Friday. And the president was interesting. He said in an indirect way. He continues to have confidence in the NSA surveillance program, but he wants to reassure the public to have similar confidence. I don't think he would have done that if Snowden hadn't violated the laws in the way he did.

WALLACE: Yeah, having said that, do you think he even needed to take these steps? For instance, to have an advocate who's going to oppose the government in the FISA court, various other measures, or should he have just stood firm?

LIEBERMAN: Well, I think the advocate is a good idea because it gives some due process. It will be an independent person there to represent the other side. In a close secret proceeding which has to remain -- frankly, we don't know what the president is proposing is, and I worry about it because, again, these are critically important programs to our national security. Incidentally, I wish that somebody, maybe my former colleagues in Congress, would also take a look at the other side of this from civil liberties and privacy and investigate how did Snowden break this system and compromise our security and incidentally, devalue the intelligence that the American taxpayer has spent billions of dollars to develop for our security?

WALLACE: Carly, I want to switch subjects with you and the State Department today is reopening 18 of the 19 diplomatic posts that it had closed across the Middle East and North Africa in the last week. Back in May, at the National Defense University, the president talked about how -- started laying the groundwork for eventually we're going to have to end this war on terror. Does the threat from Al Qaeda and the fairly strong response from the president show that he was premature to even be talking about that?

CARLY FIORINA, FORMER CEO, HEWLETT PACKARD: Of course, absolutely. I thought it was odd at the time. We're going to this war like all wars must come to an end. I think it denied the fact that Al Qaeda is at least partially in charge of when this war is over. And its affiliates. And clearly, Al Qaeda and their -- and this cast asides (ph) of affiliates have decided this war is going to go on for a very long time. I think Obama has looked unfortunately sort of consistently naive about this. I think he's been driven by political purposes, however, I think he is absolutely right to close those embassies and take very forthright action to protect American lives and perhaps Benghazi had something to do with that.

WALLACE: Well, that's what I was about to ask you, Julie. How big a factor, do you think, Benghazi was in the president's reaction. We're not going to be accused of under-reacting this time. And along those lines there was a very interesting point that hasn't, I think, gotten as much attention as it should have. The president talked about the sealed indictments. Sealed indictments are sealed for a reason. They're secret, they are not supposed to be talked about. But not only did the president talk about the sealed indictment of some of the alleged perpetrators of the Benghazi attack, but he in effect said, you know, we were the ones who leaked the story the previous day. How embarrassed is the White House about the fact that the president basically owned up to the fact that they are talking about the sealed indictment of some of the alleged perpetrators?

JULIE PACE, THE ASSOCIATED PRESS: Well, I don't think they're embarrassed by the fact that he was talking about this. And he goes very purposeful that he talked about it. As unusual as it is, again, you don't really hear presidents talking about the sealed indictments in such a public forum. But to go back to how impactful Benghazi has been on their policies and their reaction to this (inaudible) threat, hugely important. Even if you remember going back to when he first made his comments about the situation in Egypt, the very first thing he said was not about what was happening with the military or President Morsi, it was what the U.S. was going to do with its embassy in Cairo. That has really changed how the U.S. feels like it has to react publicly and on the ground in a lot of the countries. These embassies in a lot of cases are huge targets. It's the most visible U.S. presence in a lot of countries where a lot of people some pretty strong anti-American sentiment.

WALLACE: One last subject, one last question, Bill. What do you make of the personal shots when we played some of them for John McCain, the personal shots that the President Obama took at Putin, talking about him as the bored kid slouching in the back of the classroom, and just canceling the summit, but on the other hand, saying I want to continue to do business with Russia?

KRISTOL: I mean I think that is of a piece, you know, he was leaking the sealed indictment and leaking the fact that they overheard the conference call, which is a highly encrypted, I gather. It's a very sophisticated call among all the Al Qaeda affiliates and core Al Qaeda which shows they are not as dispersed and that things aren't disintegrating as the administration said. They leak all the stuff to defend their own actions or excuse their own failures. Previous presidents, Bush, Clinton, all of them -- would take the heat on a lot of this stuff. You know, people -- we shouldn't have closed the embassies. They wouldn't say, well, let's put out the fact that we intercepted a conference call. They would just this, they would say, you know what, we did the right thing for the country. And I really -- one of the most distressing things about the Obama administration, they get a little criticism, they leak something out. And some great, so now Al Qaeda knows that what they had thought to be a highly encrypted secret ability to communicate among each other, we had penetrated. What was the case for that? And Julie said, they are not embarrassed by putting out the fact that they criticized something (inaudible), so instead of keeping quiet and finding the people, they put out the fact that they have a sealed indictment. Politics really does trump, I'm afraid, national security in some of these interests.

WALLACE: All right. So we have -- we have to take a break here, but when we come back, President Obama dares Republicans to shut down the government over Obama care. Plus, a changing of the guard at one of the pillars of the news establishments.


WALLACE: The Washington Post is best known as the newspaper that brought down a president.

MARTIN BARON, EDITOR, THE WASHINGTON POST: In institution that has played a singular role in American politics, policy and American journalism.

WALLACE: This week it made headlines when the Graham family sold the post to Amazon founder and multibillionaire Jeff Bezos. What does the shakeup mean for the world of newspapers? We'll ask our panel next.



MIKE TYSON: However glamorous (inaudible)

WALLACE: Tyson is touring the country now in a one-man show, in which he tells his story, the good, the bad and the very ugly.

TYSON: I'm living life (inaudible)

WALLACE: Stay tuned. We'll be right back.



OBAMA: The really interesting question is why it is that my friends in the other party have made the idea of preventing these people from getting health care their holy grail.


WALLACE: President Obama on his way out the door for a vacation, delivers a parting shot at those Republicans who are threatening to defund ObamaCare even at the cost of a government shutdown. And we are back now with the panel. Well, Democrats clearly think, and you can see it there, that the Republicans would be making -- some Republicans would be making a grievous mistake were they to tie ObamaCare to funding the government. Carly, are the Democrats right, would it be a bad mistake?

FIORINA: I do think they're right, unfortunately. And I think the Republicans, honestly, have missed an opportunity here. I believe Obama care is an abomination. It will not work. 2,600 page bill that nobody understands. Put together under political heat is going to be a disaster and my fear is that we will end up so negatively impacting a sixth of our economy that it will be very hard to recover. So I understand the emotion behind this is our last shot. When I say I think the Republicans have missed an opportunity, I don't think the American people are particularly satisfied with an answer that says, let's repeal it, but we don't know what we're going to do instead. And so what I would have hoped is over the last four-plus years there would have been thoughtful people saying the original goal was right. Access to affordable health care. Here's what we should do instead. And there is no instead. And I think that's going to be a big problem. Unfortunately.

WALLACE: I want to pick up on that aspect of this whole debate, Senator Lieberman, because even the president at the news conference acknowledged that there are going to be bumps in the road of the implementation of ObamaCare starting in October, but really, through the rest of 2014. What do you think are the chances that the rollout of the program is going to end up being a burden for Democrats next year and in the November campaign rather than a plus?

LIEBERMAN: Well, the fact is that this is what the debate is all about. This is not -- this is all about politics. It's all a lot of (inaudible) and fury. It's not really about policy. Because ObamaCare is not going to be defunded because if it ever was defunded by the House it would not pass the Senate. If it ever passed the Senate, the president would veto it. ObamaCare is not going to be repealed certainly for next 3 1/2 years.

WALLACE: But I'm asking you a different question, which is in terms of policy is Obama care going to be good for the Democrats ...


WALLACE: As -- with people deal with it in 2014 or bad?

LIEBERMAN: Yes, so this is what -- this is about, I think the president was in a very strong position at the press conference and what he said. And I think it's a real -- not only a substantive challenge, in the way that Carly just talked about, the Republicans haven't come up with an alternative to ObamaCare. But it's a real political challenge, which is that all the Republicans are doing is saying no and people remember that before ObamaCare there was a problem which was 30-plus million people didn't have insurance. A lot of them were getting health care and we were paying for it. And the cost of insurance was going sky high. So the answer to it is how is it going to play out politically in 2014? I don't know. But I would say if you view the president's statement on Friday as an opening shot he and the Democrats have -- are heading toward the higher ground here. The better ground politically.


KRISTOL: I hate to say that Joe is wrong, but, you know, even homer nods occasionally in these cases. I agree with Carly, the Republicans should have been working on (inaudible) and study an alternative. They're working on that. They'll have one. I believe, that would be introduced in both bodies earlier the next year. There have been other alternatives, but anyway, they were too slow on that, there were too -- disagreements among the south (ph). It's a hard issue. Having said that, delaying the individual mandate, delaying the exchanges, insisting that Congress played by the same -- be covered by the same rules as the rest of the country, those are winners, not losers. And delaying the implementation of those parts of ObamaCare, at least, maybe not defunding the whole thing, delaying the implementation of those parts is a total winner and Republicans should make that case over the next two months and make it aggressively.   P

ACE: So part of the problem for Republicans is that their argument is being overtaken by people like Ted Cruz.

KRISTOL: Now, let's see -- let's see. I don't agree with that.

PACE: Shutting down the government.

KRISTOL: I don't agree with that.

PACE: For now ...

KRISTOL: No, he is not focusing on shutting down the government. Ted Cruz says, I want to pass a continuing resolution to keep open the rest of the government. I think it was a little unwise to make defunding ObamaCare the lead instead of delaying the key parts of it. But there's plenty of time for the two to come together here. And I think Republicans by Labor Day are going to be in good shape on this Obama care.

WALLACE: All right, that's what I want to get. I want to -- because I think in the end, the politics aren't going to be the politics, it's the policy that's going to be the politics. How does the White House -- you cover the White House every day for AP. How worried are they in the White House about the actual implementation of ObamaCare, how the healthcare exchanges are going to work, how many young people are going to sign up, what is it going to mean to the average person's coverage, what's going to mean for the average person's premiums, how worried about they -- are they about how ObamaCare is going to work in the next 12 to 15 months?

PACE: They are incredibly anxious. Particularly as it relates to who signs up for these exchanges. You know, the exchanges on their own will only work if you get very specific people to sign up.

WALLACE: Young people.

PACE: Young people. Healthy people who aren't going to, you know, be a drag on the system. And so you're going to see -- already starting to see it. You're going to see it ramp up, and particular, October First when the exchanges open. A campaign style efforts will resemble in a lot of ways the actual voter registration and get out the vote efforts at the Obama presidential campaigns. Because they know if they don't get these people to sign up, the exchange system won't work. And if the exchange system doesn't work, then it has a broad impact on the rest of the policies as well.

WALLACE: I want to switch subjects, if we can, on the time we have left. And that is, the news business made big news this week, because the Graham family, there you see Dan Graham and Katharine Graham and their executive editor, legendary editor Ben Bradley sold the Washington Post, the Graham family had owned it for 80 years, they sold it to Jeff Bezos, the founder of Amazon. The guy's worth about $25 billion. Carly, as a former mogul in Silicon Valley yourself, what are your thoughts about all this?

FIORINA: Well, first I think the personal relationship between Don Graham and Jeff Bezos was very important here, they have come to know each other, trust each other, like each other over many years and I think that's important when you're selling a family heirloom, so to speak. Secondly, I think it says the obvious things: the printed newspaper business as we have always known, is dying. Technology is the answer. And so in some ways, this was a very surprising announcement. In another way, it's a very logical extension.

Frankly, I was less surprised that Don Graham sold The Post and more surprised that Jeff Bezos bought The Post. But whenever you have to have a huge innovation, you need to have new people thinking about it. And I wonder whether trying to keep the traditional paper alive is actually going to slow down the thinking of what do we do with this great legacy item to keep it fresh and relevant?

WALLACE: Senator Lieberman, when you look at -- it's not just the Post. We have seen it with the Boston Globe, with the Los Angeles Times. When you look at these families who own these great newspapers for decades, now forced to sell, because quite frankly they can't figure out how to make money in the new Internet world, does it worry you?

LIEBERMAN: Yes, it worries me. There's an old Latin expression, which I'll do in English because I don't remember the Latin, all things change and we change with them. And, you know, the Internet has obviously affected the way people are getting news. Fewer people are buying newspapers and fewer people are reading newspapers.

There's hope in Bezos coming into the Post, and I'm sure Donald Graham has this hope, which is that the Post has an asset which good newspapers have, which is journalists. People still need the news, want the news. I would guess that he's going to do some creative things in using the talents of the journalists to give news in different formats.

But there's a loss here. And it's happening all over America. We're losing the local ownership of the Washington Post. The Graham family has always felt they were heading a great national newspaper, but they were Washingtonians. Don Graham would come up to the Hill to lobby for education aid for the Washington schools, for scholarships for kids from Washington. I mean, with all respect to Jeff Bezos, and he's for all I know, an admirable person, that local contact is going to be gone. And that's a loss. And that's not going to be replaced.

WALLACE: The fact is, before he became a newspaperman, to learn the city, he actually worked for a couple of years, Don Graham did, as a cop here, working the beat. So he really bled not only newspapers, but also this city.

LIEBERMAN: He did, and he saw the ownership of the newspaper as a public trust, which is not what the people coming into ownership of newspapers see the paper as. And that's a loss.

WALLACE: Thank you, panel. See you next week.

And remember, our discussion continues every Sunday on panel plus. You can find it on our website, And make sure to follow us on twitter @FoxNewsSunday.

Up next, our power player of the week, from the ring to the stage, a former champ reinvents himself.


WALLACE: When I heard Mike Tyson is going to be in town this spring, I immediately wanted to sit down with him. Some folks here weren't so sure, but as we showed you in May, he was funny and honest and surprisingly introspective. So once again, here's an unusual power player of the week.


TYSON: Couldn't be better. I'm talking about financially, I suck. But spiritually and emotionally, I'm just -- it couldn't be better. If I was to die today, I was overpaid in life.

WALLACE (voice-over): This is a story about survival. Mike Tyson, who came from nothing, was heavyweight champion at 20, was knocked out at 23, spent three years in prison for rape, and has lived to talk about it.

(on camera): You're a vegan.


WALLACE: You're off drugs.

TYSON: Thank God.

WALLACE: You're off alcohol.

TYSON: Oh, double thank God.

WALLACE: So have you cleaned up your act?

TYSON: I'm just -- I'm living life on life's terms. I was the champion of the nation, at 14 years old. I was well on my way.

WALLACE: For almost a year, Tyson toured the country in a one- man show, in which he told his story -- the good, the bad and the very ugly.

TYSON: After I left prison, I have to admit I was scared.

WALLACE: What's the difference between being on stage and being in the ring?

TYSON: You don't have to go to the hospital after the show.

WALLACE: How much money do you think you made in your career?

TYSON: Everyone tells me I made $300 or $400 million. I made a lot of money.

WALLACE: All right. How much of it is left?

TYSON: None. None.

WALLACE: How is that possible?

TYSON: I don't care how much money you have, if you don't -- this (inaudible) take care of money. If you don't do that, it just -- it means nothing.

WALLACE: Tyson says he's not getting rich off his show. Just enough to support his third wife and seven children, and pay the IRS a little of the millions he owes the government.

TYSON: I don't have a glamorous lifestyle or anything.

WALLACE: And do you miss that?

TYSON: No. I'm old, man.

WALLACE: Old, what are you?

TYSON: 46, yes.

WALLACE: What am I?

TYSON: A dinosaur.


WALLACE: He has some causes now. He started Mike Tyson Cares, which helps disadvantaged kids with food and shelter and support in school. And he's joined the campaign to get a presidential pardon for Jack Johnson, the first black heavyweight champion who was convicted of taking his white girlfriend across state lines.

TYSON: In 1910, black people were not even considered human beings. They're really almost still property. So he was -- he deserves a second chance posthumously.

WALLACE: A second chance, or perhaps in Tyson's case, a fourth or fifth chance. Looking back, he said the person he hurt worst was himself.

TYSON: Me. No, there's no doubt about that. No doubt about that at all.

WALLACE: Now, Evander Holyfield would say you hurt him too.

TYSON: Well, no, I'm sorry. I'm sorry. I did hurt him.

WALLACE: Why did you do that? why did you hurt yourself?

TYSON: I didn't understand it. I was a wild, crazy kid at the time. I'm not doing it now.

I think about my mortality a lot now. I'm 46 and I have got a 2- year-old. What am I thinking, I'm a former junkie, you know what I mean? I had a bunch of fights and got hit in the head, and what the hell am I thinking about? (inaudible).


WALLACE: Tyson's tour wrapped up this spring, but you'll get another chance to see it. HBO taped his one-man show to run later this year.

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

Content and Programming Copyright 2013 Fox News Network, LLC. ALL RIGHTS RESERVED. Copyright 2013 CQ-Roll Call, Inc. All materials herein are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of CQ-Roll Call. You may not alter or remove any trademark, copyright or other notice from copies of the content.