CNNFN In the Money Transcript

CNNFN

SHOW: IN THE MONEY

HEADLINE: IN THE MONEY, CNNfn

GUESTS: Judith Yaphe, Senator Jack Reed, Cora Daniels, Eric Schloseer, Justin Lahart

BYLINE: Jack Cafferty, Andy Serwer, Shawn Tully, Harris Whitbeck

CAFFERTY: Judith Yaphe, senior research fellow, National Defense University, joining us from Washington, D. C.

Meanwhile, this ongoing effort to bring stability and security to Iraq is already straining the U. S. Military, which kind of makes you hope that things don't get out of hand in place like, say, North Korea. To some, the solution is to have simply a bigger fighting force. But how do you do that? Can we afford it? Yada yada yada.

For one view on this subject, we are joined from Washington by a man who has taken a close look at it, Democratic Senator Jack Reed of Rhode Island. Senator Reed, it is nice to have you with us.

Whether you agree we need more military or not, I think we can all agree that the military we have is stretched extremely thin at this point with potential problems in place like North Korea. What do we do about it, short of, you know, going back to the draft or finding the money to expand the Military? Is there a solution other than that?

SENATOR JACK REED (D), RHODE ISLAND: Well, the Army has created a rotation plan that will provide some sort-term relief, but it's contingent upon getting a contribution in Iraq of international troops, international division, and that is yet to be determined. The administration has to be much more effective, and, in fact, much more willing to ask countries like France and Germany, NATO, to provide troops.

If not, then certainly by next Spring, we are going to face an extreme crisis in manning our commitments across the globe, and as you point out, it's not just a question of Korea, it's also—excuse me, of Iraq—it's also Afghanistan and Korea. So, this is a crisis that is beginning to become much more felt in the Capitol.

SERWER: Senator, are we headed towards a situation like Vietnam? I man, we all remember that. The Democrats are against it, they want to reduce the force. The Pentagon says the solution is to send more troops in. We acknowledged it's a guerrilla war, all right. What's your take on that point?

REED: Well, the situations between Vietnam and Iraq are quite different. Vietnam was an insurgency supported that was supported by adjacent countries, North Vietnam and also internationally by the Soviet Union.

That's not the case today. But we have a real problem here. There is an active insurgency. It is being fought by die-hard elements of the Saddam Hussein regime, by criminals, and some Muslim fundamentalists. The problem we have is that at some point, if the Iraqi people decide we have not delivered on the promises and the expectations of a better life and a better economy, they could see these insurgents as representing them, and at that point, we have a serious, serious crisis, and that is a possibility.

So, our efforts have to be in the short run to route out these insurgents, while simultaneously reconstructing and reinvigorating the Iraqi economy.

TULLY: Senator Reed, in your recent speech after your trip to Iraq, you essentially are charging the administration with not being up front with the American people in the defense appropriations billing, just not addressing the need for far more troops. The fact that the troops are stretched so thin—we only have 36,000, or 40,000 troops in South Korea currently. These in Afghanistan and other parts of the world, do you think that the administration should have been much more up front in, instead of coming back after a later date, after spending the money and wanting to be reimbursed for it, laying out the real policy decisions, the tough choices that have to be made?

REED: Oh, absolutely. I think we understand that, regardless of how one thought about the military operation, the inception of that operation, we are committed in Iraq today. And we have to be honest with the American people. We have to tell them we are going to be there for an extended period of time. It's going to be extremely expensive, about $4 billion a month, plus another $1 billion in Afghanistan, and that we're going to have to up front recognize these costs, tell the American people about it, and be honest enough to put it in our budget. Not after the fact, but while we are developing our budgets.

So, I just think the administration thought they could get away, frankly, by low-balling the numbers, hoping for the best, hoping that the situation would resolve itself without this type of conflict we are seeing today. But those hopes had been overtaken by reality. Now we have to tell the American people.

CAFFERTY: I've got 20 seconds left. You mentioned troops from other countries helping. Nobody is holding their breath for France or Germany to come rushing to our aid, at least not now. The United Nations hasn't indicated a willingness to jump on this issue either, Kofi Annan saying, yes, at some point, they might take it up, but he doesn't know when.

If you buy the idea we are all in this alone, what can we, the United States, do to protect our future interests right now without having to depend on someone else? Is there anything?

REED: Well, frankly, I think the administration is coming to the conclusion that even though their instincts are unilateral, to operate effectively in the world today, you have to be multinational, and they are the ones who are actually saying that the solution to our dilemma in Iraq is engaging these international forces. It's a change of tune, certainly, since the last few months, before the military operation in Iraq.

I think we should be multinational. I think the administration has to make a much more fervent, sincere effort to enlist other nations—France, Germany, perhaps, they are talking with Turkey. That might be a possibility, but that introduces other problems in terms of politics for an area. But if we don't have assistance, this will be a very lonely, expensive burden which will stress us immensely.

CAFFERTY: All right. Senator Jack Reed of Rhode Island, thank you very much for joining us.

REED: Thank you.