Exclusive Interview With Sen. Hillary Clinton

May 4, 2008 — -- "This Week With George Stephanopoulos" aired live from Indianapolis Sunday morning, with an exclusive conversation with Sen. Hillary Rodham Clinton, D-N.Y., in preparation for the primary election showdown taking place Tuesday in Indiana and North Carolina between Clinton and Sen. Barack Obama, D-Ill. Live audiences were on hand from both Indiana and North Carolina.

STEPHANOPOULOS: Good morning and welcome to Indianapolis. We are here in the Conrad Hotel with about 200 voters, armed with questions for Sen. Clinton. It is a diverse group. We pulled it together with the helpof local colleges, civic and political organizations. It's a mix of Obama supporters, Clinton supporters and undecided voters, including independents and Republicans. We're also joined by a similar, somewhat smaller group in North Carolina, who have gathered at ABC's affiliate in Raleigh, Durham, WTVD.

We asked everyone to bring a question. I've gone through all of the questions. I have a lot of questions of my own as well. And for any who don't know, I worked for President [Bill] Clinton, from 1991 to 1996.

And with that, let me welcome Sen. Clinton.

CLINTON: How are you, George?

STEPHANOPOULOS: I am doing well. Thanks for being here.

CLINTON: Welcome to Indianapolis.

STEPHANOPOULOS: Good to be here.

Gas tax has become the defining issue in this primary and in North Carolina. You and Sen. John McCain called for suspending the 18.4 cent federal gas tax. Sen. [Barack] Obama calls it a gimmick. He says it's pandering. He says it won't really bring any help to consumers, and he also said this. ... What's your response? He says you're not being truthful.

CLINTON: Well, No. 1, my proposal is very different from Sen. McCain. Sen. McCain has said take off the gas tax, don't pay for it, throw us further into deficit and debt. That is not what I've proposed. What I've proposed is that the oil companies pay the gas tax instead of consumers and drivers this summer.

Now, why am I proposing this? Well, No. 1, I am absolutely convinced that these record profits of the oil companies are a result of a number of factors beyond supply and demand. I think there has been market manipulation. In fact, Exxon Mobil official testifying under oath before the House of Representatives committee said that if it were just market factors, then the price of oil would be like $50 or $55 a barrel.

We know that there's market manipulation going on. So I would launch an investigation if I were president right now by the Department of Justice and the Federal Trade Commission. I would also quit buying oil for the Strategic Petroleum Reserve. We're 97 percent full. We don't need to keep buying it at these prices, and I would release some.

I would begin to go directly at OPEC. I think it's been 25 years where we've, you know, largely just been at the mercy of the OPEC countries.

But this gas tax issue to me is very real, because I am meeting people across Indiana and North Carolina who drive for a living, who commute long distances, who would save money if the oil companies paid this $8 billion this summer, instead of it coming out of the pockets of consumers.

STEPHANOPOULOS: Economists say that's not going to happen. They say this is going to go straight into the profits of the oil companies. They're not going to actually lower their prices. And the two top leaders in the House are against it. Nearly every editorial board and economist in the country has come out against it. Even a supporter of yours, Paul Krugman of The New York Times, calls it pointless and disappointing.

Can you name one economist, a credible economist who supports the suspension?

CLINTON: Well, you know, George, I think we've been for the lastseven years seeing a tremendous amount of government power and elite opinion basically behind policies that haven't worked well for the middle class and hard-working Americans. From the moment I started this campaign, I've said that I am absolutely determined that we're going to reverse the trends that have been going on in our government and in our political system, because what I have seen is that the rich have gotten richer. A vast majority -- I think something like 90 percent -- of the wealth gains over the last seven years have gone to the top 10 percent of wage earners in America.

STEPHANOPOULOS: But can you name an economist who thinks thismakes sense?

CLINTON: Well, I'll tell you what, I'm not going to put my lotin with economists, because I know if we get it right, if we actuallydid it right, if we had a president who used all the tools of thepresidency, we would design it in such a way that it would beimplemented effectively.

Now, look, I have long-term plans too. I mean, it's a misnomer to say this is all that I'm doing. It's not. I have a comprehensive long-term energy plan that would go right at dependence on foreign oil. We've got to undermine this incredible addiction that we have. We use more foreign oil today than we did on 9/11. That is a disaster for America.

Also that we've got to move toward more alternative and renewable fuels, and get out gas mileage up. You know, increase those standards.

STEPHANOPOULOS: But that's one of the problems here. You've already spent, according to our research, the windfall profits tax on this strategic energy fund for renewable energies and alternative energies.

CLINTON: No, the tax subsidies -- the tax subsidies will goright into that.

I'm talking about something temporary this summer. My longer-term plan is, yes, to put an excess profits tax on the oil companies above a certain level of profit that would go in to help us make the transition.

But let's step back here a minute, George. You know, it's really odd to me that arguing to give relief to the vast majority of Americans creates this incredible pushback. When the federal government, through the Fed and the Treasury, gave $30 billion in a bailout to Bear Stearns, I didn't hear anybody jump up and say, "that's not going according to the market. That's rewarding irresponsible behavior."

We've got to get out of this mindset where somehow elite opinion is always on the side of doing things that really disadvantage the vast majority of Americans, and get back at looking hard at what we're going to do to stop the housing crisis.

You know, for months now, I've been saying we need a moratorium on home foreclosures and we need to freeze interest rates. I think that would help us stem what's happening in not just the housing market, but the general decline in the economy. Well, we can't get that through the Congress either. And on health care, on so many of these issues where costs have gone up, where people are really feeling squeezed, there just doesn't seem to be an understanding about what people are going through.

STEPHANOPOULOS: Let me go to one of the voters who's feeling squeezed. Kara Glennan [phonetic spelling] is here. Kara is a Democrat. She's supporting Obama. I think you've contributed $25 to him. What's your question on the gas tax?

VOTER QUESTION: I have -- Sen. Clinton, I actually make less than $25,000 a year, so talking about gas prices is not academic for me. I really do feel pain at the pump.

However, I do feel pandered to when you talk about suspending the gas tax. I don't think that it's really a reasonable plan, and call me crazy, but I actually listen to economists, because I think that they know what they studied.

You say that you have both a short- and a long-term plan for our energy consumption. However, since the suspension of the gas tax would encourage continued overconsumption, which could possibly cancel out any price savings and also undermine our efforts to curb global warming, and your long-term plan includes trying to, say, curb global warming, don't you feel that these two plans are in conflict?

CLINTON: No. And let me stand up, because I can see you betterfrom this angle.

You know, actually, I'm glad you asked this question, because I want to make it very clear that we're talking about short-term relief and a long-term plan. And I have a very comprehensive, long-term plan to reduce our dependence on foreign oil, increase the mileage of our automobiles, and to do it in a way that will push us forward as a leader in the world again, which we have not been, on the issue of global warming. And I invite everyone to go to my Web site, HillaryClinton.com, and read about it.

But if you are driving on average in America this summer, you'll save -- according to Department of Energy figures -- about $70. If you are a long-distance commuter, and a lot of people in Indiana and North Carolina are, if you are a truck driver who depends upon your truck for your living, you're going to save a lot more. In fact, truckers will save about $2 billion in fuel costs.

You see, I really believe we've got to start right now demonstrating a willingness to take on these oil companies. I voted against the big oil giveaway in the 2005 energy bill. My opponent voted for it. I'm on record as taking on the oil companies. And I think having a good debate, like we're having right now in this campaign, helps to lay the groundwork for what we're going to need to do.

STEPHANOPOULOS: Sen. Clinton, let me bring this back to Sen. Obama and what he said there. He said you weren't being truthful. And that seems to be going straight at the Achilles heel of your campaign. Our recent poll showed six out of 10 voters think you're dishonest. That's a heavy burden to carry into the general election. What do you say to Democrats who are worried about that?

CLINTON: Well, obviously, it's troubling that people would have that opinion, because I think most of the people who have voted for me and support me in New York -- and I was reelected with 67 percent of the vote -- believe they can count on me. And they have good reason to count on me, because I've gotten up year after year, going back many years, to stand up for controversial issues, like health care for every American, something that I feel passionately about.

So have I drawn a lot of fire from people who have come right at me and, frankly, you know, done a lot of attacking of me? Sure. But I think that goes with being a leader.

You see, I just have a fundamental disagreement about how you get change in America. I wish that we could all just get together and decide we're going to make change. I wish that were the case. But maybe I know enough about human nature and about our political system to understand, you really have to take these interests on. They do not go gently into the night.

STEPHANOPOULOS: But don't voters have to trust you as you're taking these interests on?

CLINTON: Well, the voters of New York have trusted me twice, and I think that people throughout this campaign, as I have campaigned across Texas, Ohio, Pennsylvania, Indiana, North Carolina, have seen me in person, as opposed to what they hear about me. And I know you hear a lot about me. There is a lot out there that, you know, I have no control over.

But if you really look at what I've done and where I stand, I have a consistent record of standing up for people and fighting for people and getting results for people, and that's what I would do as your president.

STEPHANOPOULOS: Indiana manufacturing has been hit very hard.45,000 jobs lost to China. We have another question from Charles Herman -- Headman [phonetic spelling], excuse me. Charles, are you out there?

VOTER: Yes.

STEPHANOPOULOS: Charles Headman is actually a supporter of yours. He's a lawyer who just passed the bar exam. What's your question?

CLINTON: Oh, congratulations.

VOTER: Thank you. Thank you.

Hillary, Alexander Hamilton said that the key to U.S. supremacy in the world is the manufacturing sector. Sens. Obama and McCain have stated that these manufacturing jobs that we've lost cannot be brought back to Indiana or United States. What is your position? Do you agree with Sens. Obama and McCain? And if you do not, what is your plan to stimulate sector in general?

CLINTON: Well, I believe very firmly that if you don't make things in an economy, you will not have a strong economy over the long run. I just believe that our declining manufacturing base is a threat to the overall economy. It's not isolated to one part of what we do in this country.

So what I have said is that we may not be able to bring back a lot of the jobs we've lost, but number one, we've got to stop losing jobs. And Indiana has lost 45,000 jobs under President Bush in manufacturing alone.

So here is what I would do. We've talked about this, we've never gotten it done -- certainly under the Republicans, they were not about to -- we need to change the tax code to take out any single benefit from your tax dollars that goes to any business that exports a job out of Indiana to any foreign country. It's outrageous. It's unpatriotic that is still going on. And you look at the tax code -- it makes sense. We are, you know, a free country. If people want to start jobs somewhere else, we're not going to stop them. But why should we help them? Why should we tell them, if you move those jobs and you make profits over there, you don't have to pay taxes on them, unless you bring the money back home? Well, hey, why would you ever bring the money back home?

No. 2, we need trade agreements that recognize the 21st-century economy is not the 20th or the 19th century. We've got to be much more vigorous in having a trade policy that really does enforce strong labor and environmental standards. Otherwise, we will never be competitive, because the fact is that we tried to do right for our workers and our consumers in America. You know, if you go to work in Indiana, there are certain rules that the employers have to follow to protect your safety and your health, and there are certain consumer rules.

But look what's happening with China. You know, we get lead-laced toys and contaminated pet food and polluted pharmaceuticals, sent back into our market; they get our jobs.

Thirdly, if we're going to have a half-a-trillion-dollar defense budget, then I want to see American workers do what is necessary to produce the defense materials and goods for our country.

STEPHANOPOULOS: You've been running an ad here in Indiana about that. MagnaQuench, a company here in Indiana, closed down, 200 jobsgoing to China. You said that President Bush could have stopped it. Yet your critics say, wait a second. This original sale to the Chinese was approved in 1995, under the Clinton administration. How do you respond?

CLINTON: Well, let me tell you the facts, because I think that's a fair question. Yes, the sale was approved, with the condition that the jobs stay in Indiana.

STEPHANOPOULOS: For 10 years, though.

CLINTON: No, it was supposed to be revisited, but the plan wasthat those jobs would always stay in Indiana, because those magnetswere part of our precision-guided missiles.

So in 2003, when the company wanted to move the jobs to China, Senator Evan Bayh, who is my friend and my great supporter, went to the White House, went to the administration, and said you have the power -- which the president did -- to stop these jobs from leaving.

STEPHANOPOULOS: But he also ...

CLINTON: And the president ...

STEPHANOPOULOS: ... laid blame on that original sale.

CLINTON: Well, look, we've now learned a lot more than we knewthen. And what we have learned is that we cannot afford even withconditions under the circumstances that we find ourselves to doanything that opens the door to losing those jobs.

STEPHANOPOULOS: Given what we've learned, do you think now,looking back on the 1990s, that the Clinton administration -- and you've come out against free trade agreements now -- but that the Clinton administration didn't do enough to address the downside of globalization, and therefore failed the workers of Indiana, the workers of the Midwest?

CLINTON: Well, what I believe, George, is that in the 1990s, we had a booming economy that created nearly 23 million new jobs. More people were lifted out of poverty than in any time in our recent history. It was an economy that worked for everyone, not just for the rich, the wealthy, and the wealth-connected. But there were underlying issues that we didn't understand fully.

Now, you remember this, because George did work in that '92 campaign, and George and I actually were against NAFTA. I'm talking about him in his previous life, before he was an objective journalist and didn't have opinions about such matters.

(LAUGHTER)

STEPHANOPOULOS: [inaudible] opinion.

CLINTON: Yes, but we were in meetings together where we said, look, we think there's going to be a lot of downsides, and we're not really thinking through that.

But in the 20th century and until relatively late in the 20th century, we dominated the world economy. And we had an ...

STEPHANOPOULOS: Senator, what...

CLINTON: ... opportunity to really see our jobs grow here bybeing smart about how we traded.

STEPHANOPOULOS: But Senator...

CLINTON: But then we've got to make changes.

STEPHANOPOULOS: ... you really have it both ways there. You talked about being against NAFTA in 1992, 1993. Yet President Clinton has said time and time again, NAFTA and free trade agreements were part of the economic success in the 1990s. How can you claim credit for the good things but not take blame for the bad?

CLINTON: Well, I have said very clearly that I am going to renegotiate NAFTA and I will fix NAFTA. But I think it's also fair to say, George, that, you know, when the Congress turned Republican in 1995, they had a different set of priorities than the Clinton administration did. Because if you look at some of the factors that have led to job loss and increasing costs, clearly our failure to havea universal health care system puts us at a competitive disadvantage, because businesses bear the cost, or they just don't help their employees. So we are essentially competing against companies and countries that handle health care differently. They either spread the cost among everybody, or they don't pay for anything. We try to keep the costs localized on local businesses.

So if you look at the number of cost drivers that exist in our economy, we have failed to address a lot of them. And now, we can keep talking about what we should have done or could have done, or we can elect a president who will do it. And that's what I intend to be, because we've learned a lot and we understand what we're going to have to do in order to have a globally competitive economy that creates a lot of good jobs again in America.

STEPHANOPOULOS: There is still some suspicion of you, though, onfree trade, in part because President Clinton continues to advocate free trade. He's taken, since leaving the White House, more than $1 million in speaking fees from interests representing China and others. And also contributions to the library.

Because of that, why shouldn't his library release all the contributors so people can decide whether there is a conflict?

CLINTON: Well, first, let me say that I don't know any marriedcouple that agrees on everything, and we have a disagreement on someof our positions and...

STEPHANOPOULOS: But shouldn't voters have the right to decide?

CLINTON: Well, absolutely. Now, with respect to his foundation,which is doing wonderful work around the world on HIV/AIDS and climatechange and poverty alleviation, he has said -- and I am 100 percent inagreement -- that if I am so fortunate as to be elected president, allof that will be released. But...

STEPHANOPOULOS: Wait, why shouldn't voters have a chance todecide?

CLINTON: George, it's a national foundation, and like most national foundations, the rules were set up. People contributed under those rules. So going forward, if I'm president, we'll change the rules.

STEPHANOPOULOS: Yet the foundation sold the donor list, 38,000names.

CLINTON: Well, that, I don't know anything about that. You'dhave to ask the foundation.

STEPHANOPOULOS: But you're saying now it will not come out during the campaign.

CLINTON: No.

STEPHANOPOULOS: Let's go to another question from North Carolina. Let me pick up my cards here, see what we have. Where isNorth Carolina there? Let's get them up on the card there.

CLINTON: It's a state over on...

STEPHANOPOULOS: It's a state, I'm sorry.

(LAUGHTER)

STEPHANOPOULOS: And we have Renee Pervis [phonetic spelling]. She's a Democrat. She supports you, Sen. Clinton. She's from Williamstown, N.C.

VOTER: Hi, Sen. Clinton, my question is actually a follow-up to something you said at the State of the Black Union. You said that "America will never be strong until the State of the Black Union is strong."

Can you please share with me your accomplishments, and also what your plans are to address the plight of black Americans?

CLINTON: Thank you, Renee. And I was honored to attend theState of the Black Union in New Orleans and to speak about what I would do, as your president.

You know, I feel very strongly about this. It has been one of the central missions of my adult life. I went to work for the Children's Defense Fund right out of law school, working for Marian Wright Edelman, and have been committed to improving the lives of all Americans, but particularly those who have been marginalized or sidelined, and particularly for children.

So I'm very grateful that I've played a small role, over the years, in helping to open up our public schools to children with disabilities, to reform education, education in Arkansas, to try to make it more equal, so that, no matter where you lived or where you were from, you would have that same opportunity, and to expand health care.

And we continued that because, of course, my husband shares my passion for equality of opportunity in our country. And during the White House years, we saw the strongest economy. The people who benefited even more were people -- African-American, Hispanic, poor people who finally had a chance to lift themselves up and, you know, buy that first home, send that child to college, you know, put, on a typical basis, for a family, about $7,000 more income into their pockets.

We've got a lot of unfinished business. And my whole agenda is aimed at really making our country the land of opportunity, truly, again. You know, it hasn't been that for the last seven years. So I've put forth a youth opportunity agenda that will go to help our young people, particularly in urban areas and rural areas, where they often feel left behind, to have that universal health care systemwhich will help all Americans but particularly those without insurance, or who face disparities in health care, as so many African-Americans do.

I want to make sure that we have an economy that really works. That means focusing on education, starting with pre-school education.

And in North Carolina, your governor, Governor Easley, has made pre-school education for 4-year-olds a big priority. And the reason that's important is we know a good pre-school program will close the achievement gap between black and white youngsters by 50 percent.

So I could go on and on. I have lots that I want to do to make this happen.

STEPHANOPOULOS: Despite this record, Sen. Obama is getting more than 90 percent of the African-American vote. Perhaps that's to be expected. It's virtually impossible for you to overtake him now in the pledged delegates.

And a lot of people in the African-American community, including the third-highest ranking member of the House, Jim Clyburn, say that, if you overturn the will of the pledged delegates, it is going to cause an irreparable breach with the African-American community.

Isn't that a problem?

CLINTON: Well, first of all, I think both Sen. Obama and I have made it very clear that we will have a unified Democratic Party, going into the fall elections. I have said that I will work my heart out for him...

STEPHANOPOULOS: How is that possible...

CLINTON: Well, but...

STEPHANOPOULOS: ... if you overturn the will of the pledgeddelegates?

CLINTON: But George, I've said that I would work my heart outfor him. He has said he would do the same for me. So we will unify.

There are a number of factors that people look at. We have delegates selected by millions of people in primaries and delegates selected by a few thousand people in caucuses. I'm ahead in the popular vote, if you include Florida and Michigan.

STEPHANOPOULOS: He wasn't on the ballot in Michigan.

CLINTON: Well, that was his choice. And his campaign and theother campaigns...

STEPHANOPOULOS: It was the rules of the DNC, though.

CLINTON: Well, but the rules said we shouldn't campaign. But there was nothing saying take your name off the ballot, and there was nothing saying that, eventually, we wouldn't give the voters, 2.3 million of them, in Florida and Michigan, 2.3 million of them, a chance to participate in the process.

The so-called automatic delegates -- they have to make up their minds based on who they think would be the best president and the best candidate to go up against John McCain. That is the process.

So we're going to go through the next contest. And obviously, we're looking forward to Indiana and North Carolina. And then, when the process finishes in early June, people can look at all of the various factors and decide who would be the strongest candidate.

But I think there will be no doubt that, however this turns out, we're going to have a very strong campaign in the fall.

And I've often said that people who support me -- and they support me passionately -- and people who support Sen. Obama and support him passionately -- they have much more in common than they do with Sen/ McCain and the Republicans.

STEPHANOPOULOS: We're going to take...

CLINTON: And that is something we want to drive home to everysingle person who cares about really taking our country back.

STEPHANOPOULOS: We're going to take a quick break. We'll be right back with more with Sen. Hillary Clinton here in Indianapolis.

CLINTON: I think that since we now know Sen. McCain will be the nominee for the Republican Party, national security will be front and center in this election. We all know that. And i think it's imperative that each of us be able to demonstrate we can cross the commander in chief threshold. And I believe that I've done that. Certainly Sen. McCain has done that, and you'll have to ask Sen. Obama with respect to his candidacy.

(break)

STEPHANOPOULOS: We are back with Sen. Clinton. And Senator, a lot of Democrats hear that and think all you're doing is helping John McCain in November.

CLINTON: Well, there is no doubt in my mind that we're going to be able to go toe to toe with Sen. McCain, on not only national security, but on the economy. But what I've been offering is my experience, and having served on the Senate Armed Services Committee for five years, I feel very comfortable taking him on. And I think that is a factor for voters to consider.

STEPHANOPOULOS: But if you concede that Sen. McCain is qualified and you're qualified...

CLINTON: Once we get into...

STEPHANOPOULOS: : ... why can't you say the same about Sen. Obama?

CLINTON: No, I didn't -- that's not what I said. What I said was that he would offer his experience, and we know that he will offer his experience.

STEPHANOPOULOS: But you said he's crossed the bar, though.

CLINTON: Well, people will assume that, because he's served in the military, he's served with distinction, he was a POW. He will offer that experience. And I think that we have to have a Democratic nominee who can stand on that debate stage and go toe to toe with Sen. McCain on national security. There is no doubt in my mind that he is going to run primarily a national-security campaign again.

STEPHANOPOULOS: Is Sen. Obama qualified to be commander inchief?

CLINTON: Of course. I've said that he's qualified to be president on numerous occasions. The question is, how are voters going to determine who they vote for? You know, because that's going to be the real issue in the fall. And this is not in any way a comment about him. It's a comment about me. I feel like I am going to be able to stand up to Sen. McCain, and I know him well, and you know, standing up to him is challenging. And I think we're going to be able to do that.

STEPHANOPOULOS: Let's go to another voter question. Sharon Mahalick [phonetic spelling] is here. She is an independent and she's undecided. Your question on national security.

VOTER: Good morning.

CLINTON: Good morning.

VOTER: Sen. Clinton, as president, your plan is to remove the troops from Iraq fairly quickly. If Iran then invades Iraq, what would your plan of action be?

CLINTON: Well, let me answer that, because I think that this whole question about what we're going to do with Iraq will be in the centerpiece of the campaign in the fall, because Sen. McCain, as you know, has said that it would be fine with him to leave troops there for up to 100 years. And he feels very strongly about that position, which he will convey with great passion and conviction.

I feel equally strongly that our troops have done everything they were asked to do. They got rid of Saddam Hussein. They gave the Iraqis free and fair elections, and they gave the Iraqi government the opportunity to do what it had to do to make the tough decisions about a responsible future going forward.

There is no military solution to our troops staying in Iraq. They could be there for years if the Iraqis do not decide that they must take responsibility.

So, when I am president, I will ask the secretary of defense and the joint chiefs of staff and my security advisers to draw up a plan that I can use to begin to withdraw our troops within 60 days. I know how difficult and dangerous this will be. I have no illusions about that. But if we stay there and the Iraqis think they still have a blank check from us, they will never resolve their unfinished problems. They can't even decide how to allocate the oil revenues, which they've been saying they'll do for five years. So we will begin and we will go forward to withdraw our troops.

I've been endorsed by 35 retired generals and admirals, including the former adjutant general of the Indiana National Guard, who's here today, Gen. George Buskirk.

CLINTON: And when I was endorsed by Gen. Hugh Shelton -- andGen. Buskirk was with me -- who was a former chairman of the Joint Chiefs of Staff, he said that he was endorsing me because he trusted me to end the war in Iraq with honor.

What will Iran do? I don't think any of us can predict what Iran will do. But here's what I believe. I believe that if the Iraqis have to make their own decisions, that the Iraqis will be much more nationalistic in defending their own country against Iran, which has a different social makeup...

STEPHANOPOULOS: But what would you do?

CLINTON: ... a different kind of culture. And I think that will give the Iraqis an organizing focus that they currently don't have.

STEPHANOPOULOS: But what would you do -- I think that's what thequestion was -- if Iran went into Iraq?

CLINTON: You know, I do not believe Iran will go into Iraq. If Iran were to go into Iraq, there would have to be a determination made at that time. But it is something that I am not anticipating, and we are not going to have permanent bases and permanently occupy Iraq because of some contingent that may or may not happen.

Because it's not only what is not occurring in Iraq that bothers me, it is our failure to deal with all of our other problems. You know, Afghanistan is on the brink of basically being taken back over in large measure by the Taliban and Al Qaida. That's what our attention should be focused on.

And with respect to Iran, I have advocated vigorous diplomatic engagement. You see, we don't even really understand exactly how decisions are made in Iran, because we have been so isolated from Iran. They have an elected leadership with Ahmadinejad, who's all over the TV, but I believe most decisions are made by the clerical leadership, the Supreme Leader, that actually is responsible for the Revolutionary Guard.

And we need to have a very intense diplomatic engagement with Iran, and I've advocated that for several years, in order for us to try to manage whatever they might do.

STEPHANOPOULOS: But a lot of our experts look at Iran and they say there is a mass of Iranian people who want to be allied with the United States, want a democracy, and when they heard you say that if Iran attacked Israel with nuclear weapons, we would obliterate Iran, they say that undermines -- experts say that undermines exactly the kind of people we want to be encouraging in Iran.

CLINTON: Well, the experts I consult with don't say that, George. Because here's what we're trying to convey. No. 1, we have to do everything possible to prevent Iran from getting a nuclear weapon. And I will do that. It would be destabilizing and dangerous for the world if Iran were nuclear weaponized.

No. 2, because of this split leadership and because of discontent among the people, we want to create some upward pressure that sends a very clear signal to the Supreme Leader and to Ahmadinejad and others, that going forward on nuclear weapons is not a free choice for Iran. And the very idea that they would translate into action some of the most outlandish comments that have been made by some of the Iranian leaders, and even contemplate wiping Israel off the face of the world, means that we've got to make it clear to them that will not go without massive retaliation.

STEPHANOPOULOS: You've also said we should extend our nucleardeterrent, including that threat of massive retaliation, to other countries in the region -- to Saudi Arabia, to Kuwait, to the UAE. And wouldn't that end up requiring a permanent U.S. presence in the Middle East that is even more extensive, would rival what we now have in Iraq?

CLINTON: But George, we have a permanent set of bases. We arein Kuwait, we're in Bahrain. We have our troops on the ground in other countries. Turkey is a NATO ally. We have a presence that predates our involvement in Iraq. And the reason we've been there all these years is to serve as a buffer, to serve as a check and balance on the originally designs of Saddam Hussein and on the potential threats from Iran.

But what I have said...

No, but what I've said is that if Iran continues to try to pursue a nuclear weapon, if you're sitting in one of the other capitals in the Gulf region and in the wider Middle East, you're not going to let Iran get that nuclear weapon. You're going to have your own nuclear weapons race.

STEPHANOPOULOS: But the implications of that policy, as it was during the Cold War, when we said an attack on Paris is like an attackon New York, is that an attack on Riyadh is the same as an attack on Indianapolis? Is that wise policy?

CLINTON: Well, George, you know, I go back and look at what we did during the Cold War. I remember it very well, because I'm old enough to have been told to get under my desk in case we were attacked by the Soviet Union. I never understood what that was about, but we all did it, remember? And we had a Cold War where each of us, the Soviet Union and the United States, had missiles on hair trigger alert, aimed at the cities in our respective countries. And we deterred the nuclear conflagration that could have occurred by having tough diplomacy, by having presidents who really stood their ground, who said, "don't you dare think about this," and we will...

(CROSSTALK)

STEPHANOPOULOS: But that was based on the idea that they wererational.

STEPHANOPOULOS: Do you believe President Ahmadinejad in Iran isrational?

CLINTON: Well, that's why they need to know -- see that's the whole point of my argument, here, George. You really helped me out by making it even clearer.

(LAUGHTER)

CLINTON: We don't know exactly who makes the decisions in Iran. That's why we need this intense diplomatic effort to try to figure out who actually is, you know, saying what Iran will do.

But there are the vast majority of Iranians who are rational, who get up every day; they go to work; they go to school; they love their families. We have to empower them, both in a positive way, but also with a very clear message, that their leaders need to be very careful about any kind of decision that they would contemplate.

STEPHANOPOULOS: So who would be eligible to come under the U.S.nuclear umbrella?

And what would they have to do to get that protection?

CLINTON: The theory that I'm putting forth is, we have to prevent Iran from getting a nuclear weapon. We have to prevent the proliferation of nuclear weapons throughout the region, because I'm not so concerned about them falling into the hands of states, which is bad enough, as I am about falling into the hands of terrorists.

Because what you just said about Iran -- Iran is a state. It's an institutional being. That's why it is deferrable. Al Qaida is not. So we cannot permit there to be proliferation of nuclear weapons.

So, instead of having Saudi Arabia saying, well, you know, Iran and we are, you know, not on the same page here; we've got to have our own weapons, what we want to work toward is some kind of security agreement to prevent that proliferation.

And we're talking about the potential deterrable effect of our being able to say, don't even think about it, Iran; I don't care who's making the decisions; come join the rest of the world community; be part of the world economy; be part of us trying to have a more peaceful and prosperous future.

STEPHANOPOULOS: Let's go back to North Carolina for anotherquestion. Larry Wooten [phonetic spelling] is there. He's the president of the North Carolina Farm Bureau. And he has some important questions on food prices and energy.

VOTER: Sen. Clinton, as you know, agriculture is importantboth in North Carolina and in Indiana.

And a lot of recent media reports have focused on the high cost of food and fuel and the impact that price increases are having on family budgets and on global demand for food.

And some of these reports have even claimed that ethanol and biofuels are the reasons for these problems.

America's farmers want to be a part of the solution to our nation's energy concerns, and we take great pride in providing Americans and the people of the world with food and fiber.

What future role do you see, Senator, for farmers, in our nation's efforts to reduce our dependence on foreign energy sources?

And how would you work, as president, to ensure that agriculture remains a vital part and a vibrant part of our state and nation's economy?

CLINTON: Well, that's a great question, and it's rarely asked onnational television.

You know, we don't have enough conversation about agriculture and the importance of it. And it's one of these issues that I am trying to raise to higher visibility because, number one, we have a food crisis, right now, around the world. People are rioting because they are hungry in places like Haiti. It is projected that people will be starving if we don't figure out how we're going to get food to those who are in need.

And the United States has to play a leadership role in this. And I would urge the president to do whatever we can to help the U.N. food program be able to deliver more food.

And here in our own hemisphere, we should try to help Haiti, which is, you know, really just in such desperate straits when it comes to food.

But what Larry does is raise the larger question. Number one, we've got to support agriculture, here at home and around the world. I believe we've got to put more emphasis on our food supply and its security in a very unstable world.

We also have to move toward biofuels. But we've got to do it in a way that doesn't contribute to boosting the prices at the grocery store.

STEPHANOPOULOS: Isn't that the problem?

CLINTON: Well, it's part of the problem. It's not the only problem. You know, with corn-based ethanol and, to a lesser extent, soybean-based biodiesel, there has been a real pressure on cost. Because we've taken large parts of our agricultural productive land out of producing food to produce fuel.

What we need to do is accelerate the research into farm waste and into other cellulosic plant materials. Because, I think, instead of using the corn, let's figure out if we can use the corn cob. Let's figure out if we can use the corn stalk. Let's figure out what other kind of food, you know, waste we can use.

CLINTON: In the short run, we've got to work with our farmers and with like-minded people around the world to figure out how this increasing use in biofuels, which is part of our answer to our dependence on foreign oil, does not undermine food production and really accelerate the prices.

And again, if you go to my website, Larry, I lay out some plans and ideas about how to do that. But I want to be a good partner for agriculture, because if we don't have strong family farms and good agricultural production here at home, we can't deal with either the fuel or the food crisis around the world.

STEPHANOPOULOS: We're going to have to take another quick break.We'll be right back with more with Senator Clinton.

(COMMERCIAL BREAK)

STEPHANOPOULOS: And we are back with Senator Hillary Clinton. I want to get right to another voter question. Michelle Skinner [phonetic spelling], are you there? Michelle attends Butler University. She's a Republican, who's voting in the Democratic primary and is supporting Barack Obama.

VOTER: That's right.

Sen. Clinton, my question is do you think that the discourse that's going on, the controversy with Reverend Wright, do you think this is relevant to Obama and his policy? Do you think this has accomplished anything? Or should we just -- should we drop it, should we move on?

CLINTON: Well, we should definitely move on. And we should moveon because there's so many important issues facing our country that wehave to attend to.

And you know, I have been very really energized by my travels around Indiana. People want to talk to me about gas prices and grocery prices and health care and the economy and everything that's on their minds as they sit around the kitchen table talking to their families.

And we're electing a president to provide solutions to these problems. And that's why I've been very specific in talking about what I would exactly do.

Because I want you to hold me accountable. I want you to say, OK, she said she would do this; she said she would take on the oil companies; she said she would try to get us universal health care. Because we need to rebuild that accountability between our people and our president.

STEPHANOPOULOS: So this shouldn't be part of the argument tosuperdelegates anymore? The campaign should stop that?

CLINTON: Well, people talk about it. There's no doubt they talk about it. But what people I think are more interested in is what we would do and what kind of president we would be. Because you know, we are competing for the toughest job in the world. And everybody understands it's going to be especially hard after George Bush and Dick Cheney. And I'm so glad to see a Republican coming over to our side. That's excellent.

STEPHANOPOULOS: Rush Limbaugh is asking Republicans to come out and vote for you in order to divide the party.

CLINTON: He's always had a crush on me.

(LAUGHTER)

STEPHANOPOULOS: Let me -- while we've been on the air here,Sen. Obama is giving an interview on another network, and he...

CLINTON: That shall remain nameless.

STEPHANOPOULOS: That shall remain nameless. And he took issuewith your language on Iran, which you were talking about a few minutes ago. He said your language about obliterate, he said, "It's not the language we need right now, and I think it's reflective of George W. Bush."

CLINTON: Well, the question originally, as some may remember, was what would we do if Iran got a nuclear weapon and attacked Israel. And I think we have to be very clear about what we would do. I don't think it's time to equivocate about what we would do. They have to know that they would face massive retaliation. That is the only way to rein them in.

STEPHANOPOULOS: So no regrets?

CLINTON: No, why would I have any regrets? I'm asked a question about what I would do if Iran attacked our ally, a country that many of us have a great deal of, you know, connection with and feeling for, for all kinds of reasons. And, yes, we would have massive retaliation against Iran.

I don't think they will do that, but I sure want to make it abundantly clear to them that they would face a tremendous cost if they did such a thing.

STEPHANOPOULOS: We have time for, I think, one more question from someone here. Steven Bane [phonetic spelling], he's a Democrat. He's also undecided. And what is your final question for Sen. Clinton?

VOTER: Hi, Sen. Clinton. You were talking about how you would strongly support Obama and that he is very qualified for the position of president of the United States. Would you consider being his vice president, or would you take him as yours?

CLINTON: Well, I think both of us have been asked that question. And we have both said we think it's presumptuous and premature for us to answer it, because obviously neither of us has the nomination. But I am committed to doing whatever is necessary on my part to work hard, to speak out, to advocate if Sen. Obama is the nominee, and he has said he will do the same for me.

Whoever is the nominee will then have a chance to figure out who is the best running mate, because we have to win.

I just want to bring this back to the fundamental point. And as I've traveled across Indiana and even North Carolina, I've had so many Republicans come up and say they've changed their registration to be able to vote in our primary. Many of them saying that they'll vote for me. Others saying that, you know, they're undecided. And I know some, like what we just heard, will vote for Sen. Obama.

Because no matter whether you're a Democrat or Republican, the last seven years have been really hard on America. I mean, if you're wealthy, if you're well connected, you've been taken care of. But that is not what's happening across our country. And when I go and sit in a living room, like I did in Hobart, and have a young man and his family tell me what they have gone through with his losing his job and losing their health care, I think it's time we had a president who is going to be a champion for the American people. And that's what I intend to do. STEPHANOPOULOS: And that is all we have time for today. Sen. Clinton, thank you very much for your time this morning.

CLINTON: Thank you, George.

STEPHANOPOULOS: We'll be right back.

(COMMERCIAL BREAK)

STEPHANOPOULOS: That is our show for today. You should knowthat we've invited both Sen. McCain and Sen. Obama to participate in forums like this. We hope they're going to take us up on it soon. Until then, thanks for sharing part of your Sunday with us. We'll see you next week.