Updated

The following is a partial transcript from the Aug. 20, 2006, edition of "FOX News Sunday With Chris Wallace":

"FOX NEWS SUNDAY HOST" CHRIS WALLACE: Joining us now, Republican Senator Chuck Hagel, member of the Foreign Relations Committee and a frequent critic of administration policy.

Senator, welcome to "FOX News Sunday."

SEN. CHUCK HAGEL, R-NEB.: Chris, thank you.

WALLACE: A federal judge this week ruled that the NSA's warrantless wiretap program is unconstitutional, and the president very shortly thereafter responded that those who support the judge's decision do not understand the world we live in.

In this particular case, do you find yourself siding with the president or the judge?

HAGEL: Chris, I'm one of the senators who has authored legislation to address the balance, which is, I think, critical — has been for all the years that our country has been a thriving democracy, a balance between guaranteeing the rights of individuals enshrined in the Constitution and the security of our country.

We've done that very successfully. I think we will continue to do that successfully. On the court case itself, I'm not surprised that you had a judge challenge that. We have legislation now in the Senate, and I understand the chairman of the Senate Judiciary Committee, Senator Specter, will hold another hearing, maybe even a markup, on September 7.

Based on his compromise with the White House...

WALLACE: But basically, you think the president had overstepped his bounds.

HAGEL: I do. And I think that we need to find a new law. Of the law that we are operating with now was crafted in 1978. Technology has taken all of these issues far beyond that law, so we need a new law. And it needs a law — we need a law that is relevant to today's threats.

WALLACE: But, Senator, your party jumped on this decision. I want you to take a look at something that was issued by the Republican National Committee the day of the decision. Here's the title: Liberal Judge Backs Dem Agenda to Weaken National Security. And a Republican spokeswoman says that this shows the fundamental choice between Republicans and Democrats.

HAGEL: Excuse me. Well, Chris, I can't speak for the party. I don't speak for the party. I don't defend the party. They do a very adequate job of that themselves.

But I would say this. Both parties are at significant peril in the election this year if they continue to define down to the lowest political common denominator this issue of terrorism.

We have on the one side the Democrats running around saying well, the Republicans are warmongers, they want to take your rights away from you, you can't trust them. The Republicans, evidenced by that headline you threw up, are saying about the Democrats they're cut and run, you can't trust them.

What's going to happen here — not only is there going to be a response to this in the November 7th election, but if you continue to debase this issue, a very serious issue — terrorism is a serious issue. It is a threat. It's real.

If you continue to define it down to the lowest political common denominator for both parties, then what you're going to find is the American people not taking it seriously, that it's just another wedge issue. I've talked about that.

I don't think those kind of headlines do any good. I don't like it. I've said it, even though it's my own party. This is a real issue. This is consuming our country, this one issue. For the last five years, we have been consumed with terrorism. We've been consumed with the concern of our security.

We're engaged in two wars overseas right now, and so it's too serious to be left to headline seekers of politicians or political parties.

WALLACE: All right. Let's turn to one of those wars, Iraq. In an interview you gave to the Omaha World Herald a couple of weeks ago, you said — and let's put it up on the screen — "Conditions in Iraq are an absolute replay of Vietnam." You said, "U.S. soldiers are easy targets in a country that has fallen into absolute anarchy."

Question: Is the president's effort, policy, mission to create a unified democratic Iraq a lost cause?

HAGEL: Well, history will determine that. I can't determine that. You can't either. The fact...

WALLACE: Do you think it's going to happen?

HAGEL: The fact is we are where we are. We're not going to go back and replay or unwind the bad decisions, and I think we made them right from the beginning, beginning with the fact that we didn't have enough troops going in. But that's essentially irrelevant now.

It's how do we get out of this mess. We've got a very unstable Middle East, I think the most unstable Middle East we've seen since 1948. And you can measure that any way you want. The fact is the future of Iraq will be determined by the Iraqi people just like it was in Vietnam.

The answer, in my opinion, is not to just keep feeding more American troops into it. The Iraqi people have already made some decisions here. We, in fact, are in probably a low grade, maybe a very defined, civil war.

You've got corruption everywhere, as bad as it's ever been. You've got uncontrollables that we can't control, we can't deal with. Iran probably has more influence in Iraq than we do at this point.

So what do we do? We have to play the cards we have right now, and that is that we are going to have to do everything we can, as we have been doing, to assist Iraqis to start governing, to start defending themselves, start supporting themselves.

Now, we've made a big deal out of the fact that they have a functioning constitution — that's a significant achievement. An elected, fair free government, unity government — significant achievement. Now they must govern themselves. They must support themselves.

WALLACE: But you have said that you think that we should begin pulling troops out within six months.

HAGEL: I do.

WALLACE: How is that going to make things better?

HAGEL: Well, how is it going to make things better for us to continue to kill Americans and put Americans in the middle of a civil war that we have less and less control and influence over every day? How does that stabilize things?

This is going to play out, Chris, on its own. I'm not saying pull out of Iraq. That's not what I've said. I've said start withdrawing troops. We have to show the Iraqi people — and this obviously cuts right to the great anti-Americanism by any poll, by any measurements there — that we are not there to predetermine their outcome. We're not there to control or to govern. They are going to have to do that.

Now, the fact is — bottom line, Chris — there are very few options here. We don't have any good options. We've got a mess on our hands in the Middle East. We've got two wars. We just lost four Americans yesterday in Afghanistan. Things aren't going well there. We've got a peace in Lebanon that is barely holding.

So to continue to feed American troops into this I think takes away America's diplomatic options and military options because we're more and more bogged down.

WALLACE: After we announced your appearance this week, we got some e-mail from our conservative viewers saying, hey, this guy's really a Democrat. And I'm sure today, listening to this, some of them are saying that.

Let's go over some of your positions and put them up on the screen. You favor direct talks with Iran, Syria and Hamas. Three weeks ago you called for an immediate truce with Hezbollah, saying the Israeli offensive was hurting our standing in the Middle East.

You've been very critical, as we've just heard, of U.S. policy in Iraq. And you have problems with NSA wiretaps and parts of the Patriot Act. When it comes to national security, are you closer to John Kerry than you are to George W. Bush?

HAGEL: Chris, I'm going to go back to the comment I made earlier. When it comes to war, Americans dying in a war, national security, it should never be held captive to a political agenda. I think that's wrong. I've said it's wrong.

I don't base my analysis and judgment and votes on war, national security, on a party position. I don't think that's the right thing to do. I don't think Americans really want us to do that.

Now, if you look at my record, my voting record — I've been in the Senate 10 years. Do you have any idea what my voting record is in support of the Bush administration position the last six years, the Republican Party? It's about 95 percent over 10 years. My record is about as conservative as any conservative Republican in the United States Senate. It is constantly — the American Conservative Union constantly rates me as one of the highest.

So I don't apologize, Chris, to you or anyone else for my position. My conservative credentials are pretty clear.

When it comes to war, Democrats die in war just like Republicans, and we debase war and the responsibility we have when we try to make it captive to a political position or a political party. I won't do that.

WALLACE: All right. Let's talk some politics. I know you don't like politics and national security, but this is pure politics. Connecticut Senate race — Ned Lamont or Joe Lieberman?

HAGEL: That's up to the people of Connecticut.

WALLACE: Would you agree that Ned Lamont's positions on all these issues we've discussed today are closer to yours than Joe Lieberman's are?

HAGEL: No. That's — Ned Lamont's position on issues...

WALLACE: On Iraq, on...

HAGEL: ... all the issues...

WALLACE: ... on the Patriot Act, on NSA warrantless wiretaps?

HAGEL: Those are some issues. But when you're...

WALLACE: Pretty big issues.

HAGEL: But we also have a lot of other issues like pro-life, like tax policy, like spending policy. See, that's my point, too, Chris. Being a United States Senator is more than just talking about Iraq.

And no, I'm not very close to Lamont on the whole scope of issues. He's a liberal Democrat.

WALLACE: Let's talk — you gave an interview early this year about the prospects of the GOP in November, and you said there were storm clouds over this party, that they elected us as the majority to rule and if we don't, they're going to hold us to account.

That was in January. We're now in August. Do you think that the Republicans have lived up to that challenge?

HAGEL: Well, the facts of life are we are accountable. We are the majority party. We have been the governing party for 12 years. We had a little blip there in the Senate when Senator Jeffords left the Republican Party, but that's what life is about, Chris. It's about accountability.

And so you can't go out and read off talking points and then not have some connection to actually getting it done as the governing party.

WALLACE: How much trouble is your party in?

HAGEL: Well, we'll find out on November 7th. I don't think the answer is the alternative that the Democrats present because I don't know what that alternative is. What I think the answer is as a Republican — I've been a Republican all my life.

First time I voted was in 1968 on top of a tank in the Mekong Delta. I voted a straight Republican ticket. The reason I did is because I believe in the Republican philosophy of governance. It's not what it used to be. I don't think it's the same today.

Where is the fiscal responsibility of the party I joined in '68? Where is the international engagement of the party I joined, fair, free trade, individual responsibility, not building a bigger government, but building a smaller government?

I think we've lost our way. And I think the Republicans are going to be in some jeopardy for that and will be held accountable. Now, the people of each state and of this country will make their own decisions.

WALLACE: Finally, you've left open the possibility of running for president in 2008. In a new book about you, your wife, Lilibet, is quoted as being less than thrilled at the prospect of being first lady. Here's what she has to say, according to the book: Lilibet said having her husband in the White House wouldn't be number one on her list of desirable occupations.

Fair to say, Senator, that that's the first primary you're going to have to win?

HAGEL: Well, I am a long way from making a decision on what I'm going to do. I think it just shows the immense good judgment of my wife and how sane she is. I don't know of any spouse who would wish the job of president on their husband or wife. It's a big job. It's a tough job.

Obviously, it's a great privilege to serve this country in any job, and I'm very, very happy and proud that I have the opportunity and privilege to serve my country and my state in the United States Senate.

WALLACE: Senator Hagel, we're going to have to leave it there. Thank you so much for...

HAGEL: Thanks, Chris.

WALLACE: ... joining us, and please come back.

HAGEL: Thank you.