Cnn Late Edition - Transcript

BLITZER: Thank you, Carol. And let's get our guests take, now, on the best way forward in Iraq.

Joining us, two key members of the Senate Armed Services Committee: In Dallas, Republican Senator John Cornyn of Texas; here in Washington, Democratic Senator Jack Reed of Rhode Island.

Senators, good to have both of you here on "Late Edition." Senator Cornyn, I'll start with you, and this headline in the New York Times this morning that the insurgents, basically, are now self- sustaining financially. They're raising anywhere from $50 million, $80 million a year to $200 million a year from their own various means, including extortion and blackmail, to sustain themselves.

And also, this ominous report, coming out of this story in the New York Times, which quotes a classified U.S. intelligence report: "In fact, if recent revenue and expense estimates are correct, terrorists and insurgent groups in Iraq may have surplus funds with which to support other terrorist organizations outside of Iraq."

This is extremely disturbing, as you can imagine.

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BLITZER: All right, let me bring Senator Reed in. What do you think -- another 20,000 to 50,000 U.S. troops to deploy, to deal with the current crisis?

SEN. JACK REED (D), RHODE ISLAND: Well, I think 20,000 extra troops would probably not be decisive in terms of changing the political dynamic and the security dynamic in Iraq.

And indeed, we'd have a very difficult time sustaining an additional 20,000 troops over, say, a year or more. A third of our brigades in the United States are reporting nondeployable because of personnel and equipment shortages.

So the prospect of a magic bullet with just more troops, I don't think is there. In fact, General Abizaid indicated in his testimony that he would not recommend additional troops.

This is a political crisis. I think Maliki said it today. This is a political crisis. And what we have to do is engage this government, the Maliki government and make tough political decisions, that they'll go after the militias, that they'll start providing adequate security for the people, that they'll deliver services.

This week, or a few days ago, the health ministry was attacked by Sunni insurgents. One reason is that the health minister is part of the Mahdi army and that he refuses to deliver any materials to hospitals in Sunni areas. So this is a political issue.

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BLITZER: Well, we'll see what the recommendations are. In addition to the New York Times story suggesting that this insurgency is now financially, Senator Reed, self-sustaining, the national security adviser of Iraq, Mowaffak al-Rubaie, was here on "Late Edition" in the last hour.

He also said there was another huge problem, sustaining the insurgency, the sectarian violence. Listen to this clip.

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AL-RUBAIE: The countries are afraid of our democracy. And I'm not saying that these are the governments of these countries, but they are the businessmen; they are the Islamic movements in these countries, helping the insurgency to bring down the democracy in Iraq.

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BLITZER: He didn't mention names, but he said several Arab countries, neighbors of Iraq, are sustaining the insurgency for various reasons.

Is that what you're hearing as well?

REED: When I was over there in October, there was clear indications that the Iranians, particularly in the South, were supporting the efforts of some of these sectarian groups.

BLITZER: He didn't say Iranians. He said Arabs. Iranians are Persian.

REED: I know they're Persian.

BLITZER: He was specifically avoiding any allegation against Iran, given the relationship between Prime Minister Nouri al-Maliki, himself an Iraqi Shia, and the Iranian government. He was avoiding any aspersions on Iran deliberately?

REED: Well, he was deliberately doing that. But they in fact have a presence there.

Also the presence, in Al Anbar province, of funds coming from Sunnis, some, as he pointed out, individual bankers, business people, et cetera. That also contributes to the sustainability of this insurgency.

BLITZER: Do you agree, Senator Reed, with Senator Cornyn and Senator McCain and others that Muqtada al-Sadr, the radical young Shiite cleric who runs this Mahdi army, this militia in Iraq, that he should be arrested?

REED: I think he should be marginalized, either by arrest...

BLITZER: What does that mean, marginalized?

REED: Well, if you can arrest him, you can arrest him. If you can somehow put him out of the political spectrum without arresting him. But he's not a positive force in the government.

And I think that has to be done. That's one of the key political decisions that Maliki has to make. And one of the problems is Sadr controls about 30 or more seats in the parliament. And he also has control of several ministries. And he is a key power base for Maliki.

That's where this government has to make a tough choice. And I don't think they can make it alone. I think it's about time for the president to step up and send some of their high-ranking -- maybe the secretary of state -- and get in a room with these people and iron out, as best we can, some tough decisions...

BLITZER: The president's going to be meeting with Nouri al- Maliki in Jordan this week.

REED: What I'm afraid of -- it's going to a photo session. They'll talk; they'll leave; and nothing will be done, consistently. We've got to follow up on the meeting. And let me commend the president for meeting with him. I think that is an important step. But just to have a photo opportunity and walk away is not going to get these political decisions made by the Maliki government.

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BLITZER: Senator Reed, kill him if necessary?

REED: I think what you -- that's a decision I think that the Iraqi government would make. But I think if he's -- an arrest warrant is authorized and they go after him, he resists, he becomes a combatant. I would hope we could get him off the scene without making him a martyr.

BLITZER: All right. Gentlemen, stand by. We're going to take a quick break.

Lots more to talk about, including the draft. Will it be revived? We'll also talk about Afghanistan. Has that become the forgotten war? Then, another anti-Syrian political figure in Lebanon assassinated. Is Syria behind the killing? We'll talk with a Lebanese parliament member, Saad Hariri. His own father, the former prime minister, was killed last year.

Plus, what moves will the new Democratic-controlled Congress make to change the U.S. course in Iraq? We'll get insight from a prominent Republican, Michael Steele, and a prominent Democrat, Donna Brazile. We'll be right back.

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BLITZER: Welcome back to "Late Edition." We're talking with two leading members of the United States Senate Armed Services Committee, Senator John Cornyn, Republican of Texas, Senator Jack Reed, Democrat of Rhode Island.

Here's what Chuck Hagel, a Republican from Nebraska, as you well know, Senator Reed, said in an op-ed piece published in The Washington Post today: "We've been funding this war dishonestly, mainly through supplemental appropriations, which minimizes responsible Congressional oversight and allows the administration to duck tough questions in defending its policies. Congress has abdicated its oversight responsibility in the past four years."

That comes from a Republican, Senator, someone you know quite well. You're about to be the majority on the Senate Armed Services Committee. What are you going to do differently as far as funding the war in Iraq is concerned?

REED: Well, we have to make some real positive steps to make sure the funding is not, as Chuck described, just supplementals that come up. In fact, there's an indication that the administration is going to send up $120-plus billion supplemental, a huge supplemental.

First, what we have to do is put the increased size of the army in the regular budget. That's being funded by a supplemental. The army, the size of the army should be in the permanent budget.

And then we have to look for way to increase the overall size of the army, particularly, and the Marine Corps in a way that's included within the budget. Those are the first two steps.

But this is a huge challenge. I mean, this Congress, this Republican Congress is leaving without passing the appropriation bills. It's just a CR. It's kicking it over to us next year. So we've got some very difficult challenges. I should also point out that...

BLITZER: CR is a continuing resolution, a stopgap measure.

REED: I should also point out that Chuck Hagel called for the phased redeployment of forces, which is similar to what Senator Levin and I have been calling for, for months now.

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BLITZER: You're old enough to remember, Senator Reed, when there was a draft, you went to West Point. You weren't drafted.

REED: I commanded draftees.

BLITZER: You volunteered for military service when you were in the U.S. Army. But as Charlie -- does Charlie Rangel have a point?

REED: I think the point he made is the general point about the sense of service, the sense of sacrifice which is not being felt by all Americans. Our Army, Marine Corps, their families are sacrificing, serving tremendously. They need relief. They need help. I don't think the draft is the right way to do that.

In fact, one of the ironies in this operation is that many of the shortages are not military personnel. They're diplomats, agricultural specialists, federal employees who should, in fact, be summoned and not ordered to go over, but encouraged to go over.

As we traveled around Iraq, we saw lots of incidents where the military were asking not for more troops, but for more specialists in agriculture, more specialists in finance, et cetera.

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BLITZER: All right. Senator Reed?

REED: Well, I agree with John. We have to go after this drug trade. But the other thing we have to do is get much more cooperation with Pakistan. A lot of the areas in which the Taliban and some al Qaida elements are organizing and taking refuge are in Pakistan.

The Pakistanis have to be much more aggressive and diligent. They're trying. But they have to do more.

BLITZER: We've got to leave it there. Senator Reed, Senator Cornyn, thanks to both of you very much for coming into "Late Edition."

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