Interview with Steve Holland of Reuters

HOLLAND: The immigration debate started today. What do you -- Newt Gingrich was out there this weekend saying that it's a sell out to the conservatives. How are you going to navigate between these competing

THE PRESIDENT: There's no question this is an emotional debate. But people have to realize that in order to have border security, you must have a comprehensive approach to immigration reform.

What's interesting about this approach, that we worked with both Republicans and Democrats on, is that it takes the view that there has to be certain triggers before the reforms kick in; certain things have to happen along the border before reforms kick in. This is one of the lessons learned from the 1986 bill.

Secondly, that it is a realistic approach, and basically says there are people doing jobs here that Americans aren't doing, and we ought to give them a chance to do so in a verifiable way.

Thirdly, it recognizes that there must be a rational path forward for those who have been here illegally And if people would study the bill they would find that there are consequences for people having been here illegally, and, at the same time, there is a way for them to get at the back of the citizenship line.

And so this is a way to approach this issue, without amnesty, but also treats people with respect. And there's no doubt that this is a very emotional issue for people. But what the White House needs to do is to work with both Republicans and Democrats and move the bill forward, and ask people to actually look at it before they opine; study the bill.

HOLLAND: Is it the kind of bill that you can have major changes to either way, or --

THE PRESIDENT: I think that which was crafted, it was a very serious effort to bridge a wide gulf that had existed in the Senate. And, therefore, our position is, is that this bill ought to -- the bill that comes out of the Senate ought to track very closely the agreement made between Democrats and Republicans.

HOLLAND: The Iraq funding bill seems to have been stymied a bit on Friday. What happens now?

THE PRESIDENT: Well, we just need to watch and see. There is a way forward, there's a compromise to be had. My hope is that the Democrat leader sees it. I don't support timetables, artificial timetables. But I do support benchmarks with consequences. And Josh is going to work very closely with the leadership to see if we can't reach an agreement.

HOLLAND: What kind of --

THE PRESIDENT: We hope that the Democrat leaders would seize it. I would hope that they work not only with the White House, but with the Republican members of the Congress.

HOLLAND: What kind of consequences are acceptable?

THE PRESIDENT: Well, that's what Josh will be negotiating with the members.

HOLLAND: And no dates for certain progress to be met?

THE PRESIDENT: Well, my main concerns has been the excessive spending and the artificial timetables that were drawn.

HOLLAND: Now, General Petraeus is supposed to make an assessment at the end of the summer. Many Republicans are saying that's -- you have to have some progress by September, or they're going to withdraw support.

THE PRESIDENT: Well, why don't we wait and see what General Petraeus says. His plan is almost fully in place. There has been some violence -- on the other hand, there's been some progress. And let's just see what he has to say.

HOLLAND: But do you see September as a make-or-break period?

THE PRESIDENT: I see it as an important moment, because David Petraeus says that's when he'll have a pretty good assessment as to what the effects of the surge has been.

HOLLAND: But the voices on the Hill who are talking about September, do you hear them, or are they --

THE PRESIDENT: Oh, yes, they think it's an important moment; they're looking forward to what he has to say. They recognize that David has -- they just recognize the reality of what he said: I'll report back and let you know the extent of the progress.

HOLLAND: The Republicans came and you had a private meeting with them a week or two ago. Has that been portrayed accurately in the media, that they complained about the policy and something had to be done?

THE PRESIDENT: I'm not going to talk about what any specific member said. But it was a very good session because it was a very frank discussion about my views and the importance of the decision I made, as far as achieving success, and their views and their hopes that we can succeed. Very few people come to the White House and say, gosh, I hope we fail. Most people are saying, well, I hope this works, and I am concerned about the situation there.

The other thing is most people fully understand the consequences of failure -- and this is what has been absent in much of the debate. You know, what happens if this potential ally fails? Into a vacuum will flow radicalism and extremism funded by different elements from around the Middle East. Iran will be emboldened.

And al Qaeda, in particular, will be emboldened. I'm giving a speech on Wednesday reminding people al Qaeda is public enemy number one in Iraq and is public enemy number one for America.

The hard part about this debate has been -- you know, the enemy has done an excellent job of preying upon the conscience of the American people. They blow up innocent people. And it's discouraging to many Americans. On the other hand, my job is to make sure they understand that this is a part of an overall strategy, that al Qaeda has got plans and designs -- all of which, by the way, is to drive America out of different parts of the world, find safe haven and to attack again.

HOLLAND: Out on the campaign trail -- and I know you don't want to talk about specific candidates -- but there are some candidates who are doubting, they're trying to convince people that there really isn't a war on terrorism, that it's pockets of problems. What do you --

THE PRESIDENT: If that person -- if the people who say we're not having any war on terror ever gets elected, they'll sit in the office, the Oval Office, and realize we are in a war on terror. They'll realize there are people that are out plotting and planning. They'll see the complexities of taking on this enemy.

HOLLAND: So you think it's just a campaign ploy right now?

THE PRESIDENT: I can't ascribe any motivation to it, other than the realities of sitting in the Oval Office are different from the realities of the campaign, of being on the campaign trail. This is a very tough world with an enemy that's determined to hit us. And a President who listens to the intelligence being gathered will realize that the main job for the President here in this part of the 21st century is to defeat the enemy by staying on the offense and, therefore, securing America.

HOLLAND: So what do you think the next President will face in terms of -- is it just the same as it is now, or --

THE PRESIDENT: I think that we're in for a long ideological struggle. I think this is -- and I think Presidents are going to have to keep the pressure on al Qaeda by using good intel and finding him and pressuring him. At the same time, Presidents are going to have to promote alternative forms of -- an alternative ideology to that espoused by these extremists and radicals, and that happens to be one based on liberty.

HOLLAND: You mentioned that a failed state in Iraq could embolden Iran. There's a meeting, I think in a week, between the United States and Iran. What is going to be the U.S. message going into that meeting?

THE PRESIDENT: The message is to the Iranians that we would expect them to help this government in Iraq succeed, and that we will -- we don't like it when they're shipping weapons in to kill our soldiers and innocent civilians -- and we will continue to keep the pressure on those inside the country that are making these decisions. The Iranians have publicly stated they would hope that Iraq would succeed. So now is the time to figure out whether they're serious or not.

The other message will be, this meeting has nothing to do with your weapons program.

HOLLAND: There was fighting in Lebanon today between the Lebanese army and an Islamic group. Have you spoken out about that or talked to anybody about it?

THE PRESIDENT: I talked to Condi about it.

HOLLAND: Do you suspect Syrian involvement?

THE PRESIDENT: I rely upon the -- look, first of all, extremists that are trying to topple that young democracy need to be reined in. Secondly, we abhor the violence where innocents die. It's a sad state of affairs where you've got this young democracy in Lebanon being pressured by outside forces.

HOLLAND: What about Syria? Is that one of the outside forces?

THE PRESIDENT: Definitely Syria. I don't know about this particular incident. I'll be guarded on making accusations until I get better information. But I will tell you there's no doubt that Syria has been involved in -- Syria was deeply involved in Lebanon, until the United States and France passed a resolution that got them to leave. No question they're still involved in Lebanon. I think one of the things that's going to be very important is for this Hariri trial to go forward, and show the world how active Syria has been or not been in Lebanon, particularly with this case.

HOLLAND: You're going to be picking a new president of the World Bank pretty soon. What are you looking for, in terms of the next president? Does it have to be an American?

THE PRESIDENT: We'd very much like it be an American And Henry Paulson, Secretary Paulson, Hank Paulson, is in charge of the process And he will, of course, bring to me the characteristics of the people he's interviewing and why he thinks they would be good for the World Bank I'm looking forward to that meeting.

HOLLAND: There's been some chatter about Tony Blair being a candidate Does that --

THE PRESIDENT: I haven't talked to Tony Blair about it, but I do think it would be good to have an American run the Bank.

HOLLAND: You met with the NATO Secretary General today, and the missile defense system came up. Are you worried about the tensions with Russia right now? Putin very recently came close to comparing the United States to the Third Reich.

THE PRESIDENT: As I understood, they stepped back from those remarks there. In other words, in Condi's trip, if I'm not mistaken -- you'd better check to make sure -- I believe that's what happened We can get her in here, and she can verify that.

Look, I think -- I sent Bob Gates to Russia to talk about missile defense, all aiming at saying to the Russians, we're not you're enemy, and what we're doing is to help a lot of people become protected from a potential missile launch by a rogue regime. And therefore it's in your interest that you participate in the system. And we'll be transparent.

People in his government harbor suspicions about our intention. And I was trying to allay those suspicions But there is a lot of tension with Russia, particularly in Europe now, as Russia is using her energy and using some -- denying market access to different countries, for example, Polish meat. Our message to Vladimir Putin is, there's a better way forward; your interests lie in the West, and we ought to be working together in a collaborative way, and we are, in some areas, like on the Iranian issue. It's a very complex relationship.

HOLLAND: Are you disappointed in Putin at this point? You started out with him with such high hopes, and things haven't --

THE PRESIDENT: I'm still close to him, personally. The reason why is because I want to be in a position to share with him concerns and/or opportunities. He thinks that they've got a democracy emerging there in Russia. Obviously, there's a lot of suspicion about that, and I look forward to continuing to talk to him as to why he thinks his country is on the path to democracy. It looks like at times it's not, to me.

HOLLAND: I'm sorry?

THE PRESIDENT: It looks like some of the decisions he has made aren't leading the country to democracy. He, on the other hand, says it's a special kind of democracy that we in the West don't understand, and therefore I'd be willing to listen more about why he thinks that what he's doing is democratic in nature. But, yes, it's -- there's some positives and some negatives. Some positives in Russia is there's a middle class beginning to develop that is gaining purchasing power, which will help their economy.

Obviously, some of the negatives are the different changes of rule of law, the diminution of a free press; just some of the decisions he's made have sent mixed signals to the West and mixed signals to me.

HOLLAND: Are you going to see him at the G8 summit?

THE PRESIDENT: Yes, he'll be there.

HOLLAND: One of the issues that will come up is the climate change, at the G8. Will you be willing to accept any agreement that doesn't include China and India?

THE PRESIDENT: No, I think you can't have an effective agreement without China and India. The key point I want to make on this is that we want to work with -- I want to work with Europeans, as well as the Chinese and the Indians to come up with a way forward that achieves a series of objectives one, a reduction of greenhouse gasses -- without endangering economic vitality and growth, and at the same time helps move the technologies that will enable us to, here in America at least, become more energy independent, and at the same time better stewards of the environment.

HOLLAND: Do you expect some sort of agreement to come out of the summit?

THE PRESIDENT: To early to tell right now. I would hope so. I hope we can reach an agreement on some basic principles that we can -- I think we can reach agreement on principles.

HOLLAND: I'll wrap up in just a second, but presidencies always start out with a clean slate. What did you expect when you first started?

THE PRESIDENT: One of the things that I've learned is to be prepared for the unexpected.

Q: I remember when -- August of 2001, we were all desperate to find out your stem cell policy, and that was the driving issue.

THE PRESIDENT: Well, that, plus, remember, the issue with China, the EP-3. And then the attacks. I have been a President during a war.

HOLLAND: What do you think your legacy is going to be?

THE PRESIDENT: Whatever it is, I'm not going to be around to see it. I hope it is that George Bush fought the war, he laid out a strategy for America and her allies to ultimately defeat these ideologues; he recognized the nature of the enemy, he spoke clearly about the nature of the enemy; he went on the offense in order to protect his own country; he put in place a variety of measures to help deal with this threat, and he had great faith in the capacity of liberty to ultimately conquer this ideology.

HOLLAND: You've read a lot of histories about other Presidents Do you see yourself -- any particular President that you can identify with?

THE PRESIDENT: The lesson you learn with the presidency is that it takes a long time -- if you're doing big things, it takes a while for history to be able to fully analyze your presidency. There's no such thing as accurate short-term history of a President.

HOLLAND: What would you say would be your top successes and top things that you wish had gone better?

THE PRESIDENT: Well, we haven't -- I mean, I'm not through being President yet. This is almost like "the last day of the presidency." (Laughter.)

So give me a chance to finish the last 20 months. We've had a very -- 20 months is a long time during this presidency.

But there have been some notable achievements -- No Child Left Behind, Medicare prescription drugs, trade agreements, big tax cuts to help stimulate the economy, economic vitality in a time of war, liberation of 50 million people, very constructive relations in the Far East, between -- where U.S. relations with Japan, South Korea and China are in really good shape. New relations with Brazil in our own neighborhood, still a collaborative relation with Mexico.

There's a lot of -- my biggest regret thus far is the loss of life, for U.S. casualties. It's the hardest thing for a President when you commit our troops into harm's way, is to know that they have died as a result of your decision.