Transcript: Sens. Graham, Reed on 'FOX News Sunday'

The following is a partial transcript of the March 30, 2008, edition of "FOX News Sunday With Chris Wallace":

"FOX NEWS SUNDAY" HOST CHRIS WALLACE: And hello again from Fox News in Washington. Well, the violence in Iraq has increased dramatically in recent days, with Iraqi forces cracking down on Shiite militias. Here's the latest.

Shiite cleric Muqtada Al-Sadr and his forces have offered to stop fighting in return for amnesty and an end to the crackdown.

The U.S. confirms American Special Forces are fighting alongside the Iraqis in Basra. And the conflict has spread to other towns across southern Iraq.

For more on what happens next, we turn to a pair of senators who have each made 11 trips to Iraq — Republican Lindsey Graham, who comes to us from South Carolina, and Democrat Jack Reed of Rhode Island, who joins us here.

And, Senators, welcome back to "FOX News Sunday."

SEN. JACK REED, D-R.I. Thanks, Chris.

SEN. LINDSEY GRAHAM, R-S.C.: Thank you.

WALLACE: This week President Bush called the fighting in Iraq a defining moment for the country.

Senator Graham, does it show that the central government in Baghdad is finally ready to stand up for itself, or does it show just how fragile the gains from the troop surge really are?

GRAHAM: Well, I don't know. It may show, actually, two things. Number one, everybody has been telling Maliki for a couple years, "You can't have a stable functioning government unless you deal with the Shia militias."

The critics of our presence in Iraq have said that the Maliki government's sectarian. They'll only deal with the Kurds and the Sunnis. They won't take on the Shia militias in the south.

Well, they're finally taking on the Shia militias in the south. This was an Iraqi planned operation. They really didn't consult us. I hope they win.

But we'll see. We'll see if a cease-fire results, if a political settlement is the outcome. We'll see how well the Iraqi army fought. We'll see how well it was planned and executed.

And we may find that the Iraqi army did not do a very good job of planning and executing this effort.

WALLACE: Senator Reed, do you see the government offensive against the Shiite militias in Basra — and now it's spreading throughout the southern part of the country — as a sign of progress or just the opposite?

REED: It's a sign of the political in-fighting that's taking place in Baghdad. This is a struggle between the Shia community. Who will lead? Will it be Hakim and his Islamic Supreme Council of Iraq? Or will it be Sadr and his Mahdi army?

This is a struggle that illustrates, I think, the fragility of the system there, the politics of it. And it also, I think, indicates that what is really key to Iraq is not our military presence as much as the political forces within Iraq, and we have to — they have to do much more politically to stabilize their country.

WALLACE: As we just reported, the Shiite cleric Muqtada Al-Sadr has just made a new offer today to pull his militia off the street in return for an end to the crackdown and full amnesty. Is that a good thing, a bad thing?

Senator Reed, why don't you start?

REED: I think it represents the political posturing that's going on. Each side is trying to play to the audience of the larger Shia community.

Each side is trying to suggest that they're the legitimate — that the other force is outside the bounds of appropriate behavior.

And I think this is going to be one of the constant back and forth between both sides saying, you know, "If you'll just be — we're reasonable. You have to be reasonable."

I think in the long run this struggle is going to go on. In fact, the problem is it could really spin out of control, and that you could have widespread and increased fighting and violence over many months.

And it could even pull in the other sectarian communities as they try to exploit this fission between the — or fissure between the Shia communities.

WALLACE: Senator Graham — and this is a breaking news story, so we're getting information while we're on the air that the Iraqi government has just said that they welcome Al-Sadr's offer.

But speak to the point that Senator Reed just brought up. Does this indicate or does this show that, in effect, there are all kinds of political issues going on amongst various factions in Iraq, and there's no way that we can really not only control events, but really stabilize events there?

GRAHAM: Well, I would argue we have stabilized events in Iraq dramatically by having better security.

There are really three fights going on. The fight against Al Qaeda in Anbar has turned our way dramatically because the Anbar province is now liberated from Al Qaeda because Sunni Arab Iraqis aligned with us to fight Al Qaeda, and that's been a great success story, the surge.

The Kurdish separatists in the north have been contained — military operations by Turkey but, more importantly, by Iraqi Kurdish politicians trying to control the separatist movement.

Now the fight's moved to the south. Iran is backing the Shia militias. I don't know how much power Al-Sadr has. If he said stop fighting tomorrow, I don't know if people would listen.

Part of the problem has been that the cease-fire was never fully embraced by the Shia militias — the Mahdi army in the south. So at the end of the day, Sadr is a minority within the parliament. Politically, he's a minority.

The other Shia parties have rallied around Maliki. So have the Sunnis. If he comes out of this thing stronger politically and militarily, and his desire is to align with Iran, it's a bad thing.

If he comes to the table and will become a more productive partner in uniting Iraq, it would be a good thing. I think the jury's still out.

WALLACE: But let me just ask you both briefly, I mean, because you can get — and both of you, as I say, have taken almost a dozen trips to Iraq.

To the average American, I think they had the feeling over the course of the last few months with the surge, you know, things are getting under control in Iraq.

Now we look at all this fighting going on, and people are beginning to say, "Well, gee, really, are things under control?"

Briefly — and let me start with you, Senator Reed, how would you answer that?

REED: I don't think they're under control in the sense that fundamental political issues have not been resolved. And I think every day you're going to see an increase in the violence.

And if you step back, as we must, the strategy must, for the United States, remain a careful, deliberate disengagement of our forces, shifting the burden to the Iraqis. And that's something we have to do.

And the American people are quite right to begin to question whether or not this low level of violence of the last few weeks and — few months, rather, has been the product of our military presence or just some favorable political forces that are changing.

WALLACE: Senator Graham?

GRAHAM: I think if we'd adopted the strategy pursued by Senator Levin, Reed, Obama and Clinton we would have never — we'd have chaos in Iraq right now. We don't have chaos in Iraq.

What we have is political reconciliation going on in Baghdad; a defeat, diminishment in great measure, of Al Qaeda; economic progress we haven't seen before.

American casualties are down by 70 percent. Sectarian killings between Sunni and Shias are down by 90 percent. Now we have a battle with militias who are operating outside the government, unlawful in nature, and the central government is taking them on.

We must win this fight. The militias that we're fighting are backed by Iran, so this is an effort by Iran to destabilize Iraq. I hope we can find a political compromise.

But the American military power we put in in the last year has enormously turned things around politically, economically and militarily. The fight in the south needs to come. It is now upon us, and I hope it can be resolved in a way to stabilize Iraq.

WALLACE: Now, let me move this forward. This fighting comes as the commanding U.S. general in Iraq, General David Petraeus, prepares to return to the United States to report to the president, to report to Congress.

Senator Graham, could the new violence mean that the U.S. will have to suspend the announced drawdown of three more brigades by July?

GRAHAM: I'll leave that up to General Petraeus, but we have military operations going on in Mosul. The remnants of Al Qaeda that were in Anbar have moved to Mosul. You have two Iraqi divisions with support by us fighting Al Qaeda in Mosul.

I don't know what militarily this will mean, but politically and militarily it is important that these Iranian militias be defeated. And if it takes keeping the troops there in larger numbers over time, it is in our national interest to do so.

I applaud the Maliki government for taking on Iranian-backed militia. I hope we can reach a political compromise. I hope the military force will change Sadr's behavior.

And whatever General Petraeus says about defeating Iranian-backed militias in terms of troop levels I will support, because it's good for us. It's good for Iraq to defeat these militias.

WALLACE: Senator Reed, if the president were — and this is just speculative — to suspend his announced troop withdrawals that are — three more brigades by July — or, which is probably more likely, that he announces a prolonged pause after these three brigades are out in July, is there anything that congressional Democrats can or will do about it?

REED: Well, I think we have to continue to insist upon a deliberate and careful withdrawal of our forces.

An indefinite, open-ended commitment will not prompt the Iraqi political leaders to take important steps politically which they must take.

And this course of action is grounding — grinding down our military forces, our land forces. Readiness is down. Our troops are seeing a treadmill in and out of Iraq. We have to change that.

And in response to the suggestion that this is a fight against Iranian-backed militias, the Iranians have close associations with all of the Shia communities, not only Sadr, but also with Hakim.

In fact, just a few weeks ago, Ahmadinejad made a very significant visit and was greeted warmly by Prime Minister Maliki. So the notion that this is a fight by American allies against Iranian- inspired elements is not accurate. The Iranians have a presence there. They're a reality there.

But we've got to begin to withdraw our forces. Our army can't stand continued open-ended commitment, and it's not in the best interest, I think, ultimately, of Iraq.

WALLACE: Gentlemen, let me turn, because it's inextricably linked, to the presidential campaign, to the politics of Iraq.

Senator Graham, you may be John McCain's strongest supporter in the Senate. Last month, he said that if he can't convince the Americans that we are gaining in Iraq, then — I'm quoting him — "I lose." He later tried to soften that.

But if the current violence spreads, doesn't that do considerable damage to John McCain's statements that his policy of the surge, that he supported even before the president, is working? And doesn't it do damage to his campaign?

GRAHAM: I think John McCain will be very successful in explaining to the American people that we must win in Iraq, and it's not about the next election in terms of our national security.

Senator McCain advocated more troops when every Democrat and a handful of Republicans were saying leave and leave now. If we had done what our Democratic friends had said — Harry Reid said the war was lost in April — we would never have driven Al Qaeda out of Anbar.

We've had major political reconciliation. A budget's been passed where everybody shares in the revenue. We have an amnesty law where Sunnis are going to be allowed to get out of jail, go back home, build a new Iraq. We're going to have elections in October where Sunnis this time will participate.

So I am very confident that Senator McCain will be able to explain to the American people this is an ideological struggle in Iraq that we can and must win.

And the fight going on now, to my dear friend Jack Reed — the Iranians are killing Americans. They've aligned themselves with the Shia Mahdi army. The Badr brigade is not the problem. The Fadila group in the south is not the program.

The weapons we're fighting against are coming from Iran. Sadr is trying to undermine political progress in Baghdad.

WALLACE: Senator Graham?

GRAHAM: He's aligned himself with Iran.

WALLACE: Let me bring Senator Reed in here.

And let me bring you back to the politics of it. Will Democrats pin any setbacks or any continued fighting in Iraq on John McCain?

REED: Well, I think the American people are listening to the rhetoric of the campaign. They've heard just a few weeks ago that the surge succeeded because violence was down.

Now they're hearing from some people the surge has succeeded because the government of Iraq can increase the level of violence all through the southern part of Iraq.

You've got rockets slamming into the Green Zone. You've got a curfew in Baghdad. You've got inconclusive fighting in Basra. You've got violence spreading around.

So I think they will be — there will be attempt of that, and I think they'll begin to recognize that the fundamental issues here are political. We have to begin to withdraw our forces.

And I think they will be wondering, quite clearly, many of the statements that Senator McCain has made.

WALLACE: Let me ask you — and we've got less than a minute left. McCain also said that U.S. troops will be in Iraq or could be in Iraq for 100 years. Democrats pounced on that.

Republicans say that he's — that they are distorting what McCain said. So let me give you each 30 seconds to straighten this out.

Senator Reed, is it fair to say that he wants U.S. troops there for 100 years?

REED: He has suggested and implied and stated he wants an open-ended commitment. I think that's the wrong strategy. I think that's the wrong strategy not only in terms of Iraq, but in terms of Afghanistan, which is under-resourced in terms of threats that are emerging in Pakistan.

So I think strategically he has been in error since he strongly endorsed this unilateral attack on Iraq, and he continued to do so.

WALLACE: Senator Graham, you get the final word.

GRAHAM: If we take the Democratic position and leave Iraq, every force that we're trying to fight will come back. Al Qaeda will re- emerge. They will try to reoccupy areas that we've driven out of. They will kill the people who've helped us.

The central government is fighting Iranian-backed militias. This is good news. You cannot run a country where you have militias taking the place of lawful authority.

I am confident that we can win in Iraq because it's in our national interest to do so. History will judge us, my friend, not when we left Iraq but by what we left behind. And John McCain understands you cannot leave a country in chaos behind.

Stability can be had and is being had if we will support this effort at moderation over extremism. I'm confident in the Iraqi people.

WALLACE: Senator?

GRAHAM: I'm confident in the American people. They will get it.

WALLACE: Senator Graham, Senator Reed, we want to thank you both so much for coming in today. Please come back, both of you.

GRAHAM: Thank you.

REED: Thank you very much.