Interview of the Vice President by Martha Raddatz, ABC News

Shangri-La's Barr Al Jissah Resort & Spa

Muscat, Oman

10:20 A.M. (Local)

Q: Mr. Vice President, I want to start with a speech Barack Obama gave. I doubt you've seen the entire speech, but he denounced comments by Reverend Wright, but he didn't distance himself completely. Do you think he did the right thing?

THE VICE PRESIDENT: Martha, one of the things I've avoided so far is getting in the middle of the Democratic presidential primary process. And I think I'll stay there.

Q: But it was an important speech.

THE VICE PRESIDENT: It was an important speech, but I will let the Democrats wrestle with their own issues and problems.

Q: Do you have any problems with what Reverend Wright said, particularly about 9/11?

THE VICE PRESIDENT: I do. I think -- I obviously don't agree with him.

Q: Would you denounce him completely?

THE VICE PRESIDENT: I'm not going to get into speculating on it. Again, I'll leave it to the Democrats.

Q: Well, let's talk about this: You're supporting John McCain.

THE VICE PRESIDENT: Correct.

Q: Would you campaign for John McCain?

THE VICE PRESIDENT: John will be, I think, the nominee of our party, and I'll do everything I can to help him.

Q: Do you think he'll want your help?

THE VICE PRESIDENT: I don't have any idea at this stage.

Q: And since you're supporting a candidate, you can't talk at all about the Democratic race? Think it's too negative? Think it helps John McCain?

THE VICE PRESIDENT: I will restrain my enthusiasm for the fray.

Q: Let's go to the economy. Alan Greenspan described it this way: "The current financial crisis in the U.S. is likely to be judged in retrospect as the most wrenching since the end of the Second World War. Correct?

THE VICE PRESIDENT: I haven't seen the context in which Alan made his comments. I think we're a long way from being able to conclude that that's the case. We're clearly going through a rough patch here, there's no question about it. But we've had, prior to that, 52 months of uninterrupted economic growth and job creation, every single month for 52 months. Now, of course, we've got problems in the housing industry and the mortgage backed securities, and so forth, that have created problems that we're having to deal with. But I notice the stock market was up over 400 points yesterday in response to the actions that the Fed has been taking. And we've acted at -- in the executive branch and with the legislative, came together on a bipartisan basis and passed a stimulus package that will kick in here shortly, and provide a boost to the economy, we believe.

So I think we're a long way from the point where I would agree with Alan's assessment. I remember periods of time when we had interest rates around 12 percent, 14 percent; inflation close to 20 percent; unemployment much, much higher than it is now. And that's happened on a number of occasions -- that's happened on a number of occasions since World War II. So your specific question, is this the worst since World War II, I don't believe so.

Q: You talk about it as a "rough patch." Those are the exact words the President used the other day. That seems like an understatement.

THE VICE PRESIDENT: Well, we've still got unemployment under 5 percent. We've had steady economic growth. We have not yet had a negative quarter, in terms of negative real growth on GDP. Now before you have a recession, you've got to have two negative quarters back to back. We may be there, but we haven't seen it yet.

Q: Many and most economists say it's a recession.

THE VICE PRESIDENT: We haven't seen that yet, Martha, but to say that it's the worst since World War II, I just, I disagree. I don't think that's accurate.

Q: Well, let's talk about recession. I know the administration has avoided using that word; I assume you don't want to announce this morning that it's a recession.

THE VICE PRESIDENT: There's a very technical term by which we define a recession: when you get two quarters of negative growth back to back, that's a recession. We haven't gotten it yet.

Q: Do you avoid -- is it dangerous to use that word now? Does that shake confidence further? Is there a reason you're avoiding it besides the technical issue?

THE VICE PRESIDENT: I think we've got to be accurate. And the accurate statement is that we've not yet had two negative quarters back to back. Now it may be that we'll see that when we get the first quarter results in -- that will come in at the end of March, we'll get the preliminaries. I can't say we're not yet there, but I come back again with a proposition to say what we've got to date is the worst economic recession since World War II simply doesn't fit with what I remember as some very, very difficult times in the past.

Q: How much blame should the administration take for the current down turn, rough patch, recession, whatever you want to call it?

THE VICE PRESIDENT: Well, I think the first thing to recognize is that there are cycles in the economy. And from time to time, we do have recessions. We've had a very long stretch without a recession, because the policies I think we've put in place with respect to taxes back in 2001 and 2003, when we cut the rate on capital gains and dividends, lowered the rates across the board, reduced taxes on the broad bulk of Americans -- I think all of that helped create and sustain the conditions that produced over four years of sustained economic growth.

Now we're into a period where, obviously, where it looks like we're going to go through a rough patch. Now, is it a recession yet? We don't know yet. But where we will eliminate or work off, if you will, some of the excesses that have developed in the economy in recent years, and lay the foundation for the next expansion -- that's the normal cycle in a private sector economy, an economy such as we have. We do those things that we can. You can't manage it perfectly, but we do those things we can in order to try to minimize the impact, and to try to accelerate the point where we can get good growth again.

Q: You talk about cycles --

THE VICE PRESIDENT: As I say, with respect to hard times economically is when you have a high rate of unemployment, a lot of people out of work; we don't have that. It's when you have a very high rate of inflation -- we don't have that. It's when you get a long period of time when the economy is contracting instead of expanding -- we don't have that.

Now we do have the kinds off issues with respect to housing and in the financial markets that require action, a lot of it that can be taken by the Fed, a lot of it can be taken by us, and that's what we're doing.

Q: I think there was a poll that showed 76 percent of Americans believed there's a recession. So you can name all those figures about why there isn't one, and we can argue definitions, but Americans look at this as a crisis. They see gas prices, they see the falling dollar overseas; to them it's a crisis. So how do you regain their confidence, and does the administration take any blame for what's happening now?

THE VICE PRESIDENT: What specific policy would you suggest caused all that?

Q: Oh, I'm not suggesting a policy. Is it 9/11? What happened to cause this?

THE VICE PRESIDENT: Well, I think it's a normal part of the cycle. Maybe we had a housing bubble. Some people argue that the interest rate policies, followed by the Fed in earlier years, when we got down to 1 percent interest rates for a long period of time, stimulated the housing bubble; or the development of the sub-prime mortgage market, where a lot of people bought into mortgages expecting they'd be able to pay that low rate of interest for a long period of time, when in fact it provided for the rates of interest to go up, and then they weren't able to pay those rates once those adjustments had been made.

A lot of it, though, goes back to the basic way the economy functions, and to say that there's a lot of blame to be assessed here, I don't think that's the case. I do think that we are going through a rough patch, and that's the way I would describe it until we have more data available that lets us make a judgment about whether or not there has been or is a recession.

Q: Let's go to Iraq. We've been there the last couple of days. I know the President is giving a major speech today about the progress in Iraq. You spoke to many Iraqi leaders. There are also political problems: The major significant political benchmarks have not been met, still need the hydrocarbon law, provincial elections. Tell me what you said to the Iraqi leadership, and how far you're willing to push them?

THE VICE PRESIDENT: Well, we talked a lot about the -- both the security situation, as well as the political situation. On the security front, I think there's a general consensus that we've made major progress; that the surge has worked; that the addition of additional troops -- General Petraeus and the counterinsurgency strategy that was adopted a year ago has resulted in a dramatic reduction in the number of incidents -- attacks, if you will -- and the casualty rate both among civilians and military personnel, including ours, as well. That's been a major success. The development of the sons of Iraq -- these concerned local citizens groups, for example, that have come together and in effect taken on al Qaeda, so that places like Anbar Province, that was really under the control of al Qaeda for a considerable period of time, has now been pretty well cleansed, and al Qaeda has been driven out. We've had a range of successes like that that you can point to on the security front.

On the political front, I think we have bought the time for the Iraqis to come together, in terms of dealing with some of these issues. They've made some progress, not as much as we would like. Hydrocarbons law, as you mentioned, is one that needs to be addressed. They've got a lot of work to do on that. That's an issue I discussed with virtually all of the Iraqis that I talked to, in terms of the importance of getting that done. The provincial powers legislation that has passed at one point, was vetoed by Vice President Adel Mehdi, I talked with him about that, and a number of others. They expect they'll have that resolved shortly. This is, again, an important piece of legislation. Continuing requirements that are needed with respect to reconciliation.

On the other hand, they passed a de-Baathification law, they passed pensions reform, they've got a budget that they've adopted. They've made significant progress, but we'd like to see them make more.

Q: Did you use any different language this time? Are you -- it seems like administration officials come over, military officials, Ryan Crocker, they all tell the Iraqis how important this is. What's different? What did you say that's different? What will make the difference with the Iraqis to move forward? I stood there with the President, as well, when he talked to Maliki, and said the time for action is now, and this is clearly the most significant political process they have to undertake. What did you say that was different?

THE VICE PRESIDENT: Well, I think -- I don't know that it was different, other than in my ability to reinforce it in person, and in private, as well as in larger settings. I talked to most of the leaders in one-on-one sessions. And I find that the best way to be effective there is to keep it private, so that they feel they can confide in me, and I can confide in them, and we can have a conversation, and neither one of us goes out and talks about it in public.

There aren't really any surprises there, it's just a matter of reemphasizing and reiterating how important it is, and they take advantage of it.

Q: And how long do you do that? There are no consequences.

THE VICE PRESIDENT: You do it as long as you have to until you get it right. You don't quit because it's hard.

Q: So there are no consequences, it just goes on until -- as long as it lasts? You let the Iraqis go and go and go, even --

THE VICE PRESIDENT: What if we quit two years ago or three years ago?

Q: So it could be 10 years?

THE VICE PRESIDENT: I don't know how long it's going to take. I do know we have to get it done. And if it takes a long time, that doesn't make it any less worthwhile. This has been a hard-fought, difficult, challenging thing for us to do, when you think about what we've done here. We've gone in and toppled one of the world's worst dictators, liberated 25 million people, helped them hold three national elections and write a constitution. They've been through some very difficult times themselves, but we kept at it, because it's the right thing to do. And when we needed to make a major decision, as the President did a year ago January, he made that decision and committed more troops. When we needed to modify our strategy to win on the ground from a security standpoint, we did it. And General Petraeus, his forces performed magnificently with a new counterinsurgency doctrine. He could have quit two years ago, and today Iraq would be chaos; al Qaeda would control large swaths of the country; it probably would be a safe haven for terrorists; certainly it would have been a much worse situation from the standpoint of the Iraqi people.

It's hard to go into a country that has never experienced democracy and expect to be able to flip a switch and have it turn overnight. But it is turning. They do have a democracy today. They have basic --

Q: Two-thirds of Americans say it was not worth fighting.

THE VICE PRESIDENT: They ought to go spend time, like you and I have, Martha. You know what's been happening in Iraq. You've been there as much as anybody. There has, in fact, been fundamental change and transformation, and improvement for the better. I think even you would admit that.

Q: Let me go back to the Americans. Two-thirds of Americans say it's not worth fighting, and they're looking at the value gain versus the cost in American lives, certainly, and Iraqi lives.

THE VICE PRESIDENT: So?

Q: So -- you don't care what the American people think?

THE VICE PRESIDENT: No, I think you cannot be blown off course by the fluctuations in the public opinion polls. Think about what would have happened if Abraham Lincoln had paid attention to polls, if they had had polls during the Civil War. He never would have succeeded if he hadn't had a clear objective, a vision for where he wanted to go, and he was willing to withstand the slings and arrows of the political wars in order to get there. And this President has been very courageous, very consistent, very determined to continue down the course we were on and to achieve our objective. And that's victory in Iraq, that's the establishment of a democracy where there's never been a democracy, it's the establishment of a regime that respects the rights and liberties of their people, as an ally for the United States in the war against terror, and as a positive force for change in the Middle East. That's a huge accomplishment.

Q: Are you certain of victory?

THE VICE PRESIDENT: You can't, say -- get up some morning and say, gee, the polls are critical of what we're doing, and quit. It doesn't work that way.

Q: Are you certain of victory?

THE VICE PRESIDENT: I am.

Q: And what makes you so certain?

THE VICE PRESIDENT: I am confident because I've worked over the years with both the Iraqi people that are involved, as well as the Americans that are involved; because I know the effort and the sacrifice that have been made by the men and women of the United States military; because I know and have watched people commit their lives in Iraq to this enterprise who have lost family members or been seriously threatened themselves by virtue of the fact they've been willing to sign on with Americans and be part of the enterprise.

There are millions of people all over the Middle East that have bet on America; that have been willing, for example, in Afghanistan, to participate in elections, to serve in their parliament, to get elected President, to sign up for the Afghan security forces. Same thing in Iraq. These are people that put their lives on the line every single day, and they're there because the United States is there, because we've made the commitment, because we've chipped in and sent our own forces to participate in this enterprise. And all of that goes up in a puff of smoke when the United States quits; when we decide all of a sudden, well, it's too tough; we're going to pack our bags and go home. That's not the way you achieve the change we're trying to achieve here.

It is hard. It has been difficult. No question it's been costly, in terms of treasure and life, but it's worth it. And we are going to get it right. As I watch events unfold, both in Iraq and Afghanistan, I am convinced that we are changing the course of history, and it was absolutely the right thing to do.

Q: One of the things that troops have said to me, and their families, in talking to a lot of them, is that they are the only ones sacrificing. They look at the rest of the country, and say, no sacrifice was really made. Was it a mistake not to involve the country to a greater degree?

THE VICE PRESIDENT: Well, I think -- I'm not sure how you would have involved them to a greater degree. We've made this probably the most important priority of our administration. We talk about it all the time.

Q: What sacrifice have most Americans made?

THE VICE PRESIDENT: Well, I think they've been asked to support the effort and the enterprise. But it's not the kind of thing, for example, where you would have wanted to institute a draft. We've got an all-volunteer force; it's one of our great assets, one of our great national assets. I suppose you could have created a sense of sacrifice if you'd gone back to the draft, but that would have, in my opinion, done serious damage to the state of our military. We built a volunteer force because that was a decision we made 30 years ago, and it's been a very good -- a good decision.

I think in terms of sacrifice, obviously we've expended considerable public funds on this enterprise, and those are funds that could have been used for some other purpose. But we think this is the most important use that we could put them to. The country has, in fact, supported financially the endeavors we've been involved in.

Q: What about something, when you look back, about shutting down a production line for two weeks and getting those armored vehicles more quickly -- that type of sacrifice, putting the country behind it, and saying, look, we've got to get armored vehicles, and we've got to get them over there fast. I mean, we were building, what, a ship a day in World War II, and yet it took so long for armored vehicles?

THE VICE PRESIDENT: I'm not familiar with the details of the armored vehicle process. We've only got so many companies that can build that sort of thing. And I think they moved rapidly to develop them once they decided that's what they needed.

Q: Tell me whether you imagined at this point five years later whether there would be 4,000 lives lost; whether it would last this long?

THE VICE PRESIDENT: I didn't have any way five years ago -- we didn't have any way five years ago to estimate what the final cost would be. We knew it would be difficult. I think it's gone on -- insurgency lasted longer than I would have anticipated.

Q: And certainly you predicted.

THE VICE PRESIDENT: Anyone predicted. I think that's true of most of our people who looked at it. One of the areas that I think where we underestimated the difficulty was the extent to which the Iraqi population had been hammered by Saddam Hussein, and by the aftermath of the Gulf War in '91. He came back in and reasserted control, especially over the Shia areas. I think he ruled with such a heavy hand that it's taken the Iraqis themselves longer to recover from that experience. Everybody who had been willing to stand up and be counted had seen their lives put at risk in earlier times, and recovering from that period of intense and brutal rule I think has taken longer, in terms of getting the political system up and running and functional.

So there are things like that. That's always true, though, in any major enterprise or conflict like this; once it starts, you cannot predict with precision exactly what course it's going to follow. You can talk about the end objective, and have a high degree of confidence you're going to get there.

Q: Do you think we could have predicted a little better?

THE VICE PRESIDENT: I'm not sure how. I think, certainly there were intelligence problems. Look at the WMD report out of the intelligence community on weapons of mass destruction.

Q: We'd better switch to Iran then, quickly. You're in the region. Iran is a major focus. I want to first ask you about Admiral Fallon resigning. Did he still have the President's confidence when he resigned?

THE VICE PRESIDENT: He made the decision to resign, and he's explained it, as has Bob Gates.

Q: He said, I believe, that it wasn't helpful in facing Iran to have comments about military action. You've certainly ratcheted up the rhetoric about Iran.

THE VICE PRESIDENT: I've been pretty consistent over time about Iran. I don't think I've ratcheted up the rhetoric. I felt strongly for a long time, and a lot of us have, that Iran should not be allowed to develop nuclear weapons.

Q: Were Admiral Fallon's comments helpful or hurtful?

THE VICE PRESIDENT: I'm not going to get into it. The Admiral had many years of distinguished service in the United States Navy, a number of American commands at very important posts around the world. I think he deserves our thanks for his service, and our best wishes now that he moves on to private life.

Q: Can you foresee any point where military action would be taken? I ask you this because when you come over here, people in the region start thinking you're over here to plan some sort of military action.

THE VICE PRESIDENT: Well, I suppose that's because of my past history.

Q: Yes, it is. So what would you like to say about that, and Iran?

THE VICE PRESIDENT: Well, I think the important thing to keep in mind is the objective that we share with many of our friends in the region, and that is that a nuclear-armed Iran would be very destabilizing for the entire area.

Q: Do you believe the National Intelligence Estimate, that says they shut down their nuclear program or intentions five years ago?

THE VICE PRESIDENT: I think it's been -- it's important if you're going to look at the National International Estimate that we be precise in terms of what it says. And what it says is that they have definitely had in the past a program to develop a nuclear warhead; that it would appear that they stopped that weaponization process in 2003. We don't know whether or not they've restarted.

What we do know is that they had then, and have now, a process by which they're trying to enrich uranium, which is the key obstacle they've got to overcome in order to have a nuclear weapon. They've been working at it for years. They've now got a large number of centrifuges operating. We know this from the work of the International Atomic Energy Agency.

Q: But do you have high confidence they halted their nuclear weapons program in 2003?

THE VICE PRESIDENT: I have high confidence they have an ongoing enrichment program.

Q: But not high confidence they halted it?

THE VICE PRESIDENT: The enrichment program? They've never halted enrichment --

Q: The nuclear weapons program.

THE VICE PRESIDENT: Well, just go back and look at the National Intelligence Estimate.

Q: It says high confidence they halted their nuclear weapons program in 2003.

THE VICE PRESIDENT: And high confidence that they had a nuclear weapons program.

Q: Right. But I'm specifically asking if you have high confidence, yourself, when you read that intelligence that that in fact happened in 2003?

THE VICE PRESIDENT: I think it's important, again, to be precise, in terms of what we're talking about.

Q: I'm trying to be precise.

THE VICE PRESIDENT: A nuclear weapons program involves really two categories of activity. One is developing fissile material, something that will blow up and give a nuclear yield. That process was ongoing before the NIE, it's been ongoing since the NIE, it's ongoing today. They are today running centrifuges to enrich uranium to produce a weapon.

The second piece of it, then, is the actual design of the warhead itself, and the way in which you would detonate it, set it off. And they had a program dealing with that issue through 2003. That's what the NIE says, and that they apparently stopped it in 2003. The NIE does not address the issue, can't, in terms of whether or not that's ever been restarted. We do know the enrichment program continues, and that has been the focus of our diplomatic efforts; that's what the United Nations Security Council is focused on; that's what most of the nations in the region are concerned about, because it's the hardest thing to do, is to create fissile material. So we'd like to see them stop that. We suggested they should, the international community has. There have been three U.N. Security Council resolutions that have made it very clear that they should stop it. Sanctions have been applied. The President has made it clear that our objective is to make certain they do not acquire the capacity to produce nuclear weapons.

Q: Can I do one more quick question that I forgot? Yesterday great reception with the troops. I know you talked to several of the troops there. We followed you in that rope line, and just asked people who they were supporting for President. Several said Barack Obama. I said, but he wants to get out of Iraq right away. And they said, that's okay with me. These are the troops that you addressed yesterday themselves.

THE VICE PRESIDENT: What's the question?

Q: Any reaction to that?

THE VICE PRESIDENT: No.

Q: It doesn't bother you that some of the troops themselves want to get out of there?

THE VICE PRESIDENT: They're a broad cross section of America. I think they've overwhelmingly supported the mission. Every single one of them is a volunteer.

Q: And you had a good chat with them yesterday, right?

THE VICE PRESIDENT: I did. I had a great time with the troops you saw, as well as the others that I met with.

Q: Okay, I can see we're done.

THE VICE PRESIDENT: Okay.

Q: Thank you, sir.

END 10:47 A.M. (Local)