FOX "Fox News Sunday with Chris Wallace" - Transcript: Ukraine and Russia

Interview

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WALLACE: Senator Ayotte, as we say, Ukraine's parliament has voted President Yanukovych out of office, but he is calling it a coup and refusing to step down. What happens now?

SEN. KELLY AYOTTE, R-N.H.: I would say, Chris, that they need to focus on forming a unity government. Yanukovych needs to step aside, and I will say this. Now that the Olympics are over, we need to watch the behavior of the Russians.

And I believe the president needs to up his game and send a clear unequivocal public message to Putin not to interfere in what is happening in Ukraine to let the Ukrainian people determine their future, to ensure that there is no interference in their sovereignty, and I think this is an important time for him to do that.

WALLACE: Let me pick up on that because President Obama famously came into office saying that he intended to repair relations between the United States and Russia, which brought us to that famous moment involving then-Secretary of State Hillary Clinton and the Russian foreign minister. Take a look.

(BEGIN VIDEO CLIP)

HILLARY CLINTON, THEN-SECRETARY OF STATE: I wanted to present you with a little gift which represents what President Obama and Vice President Biden and I have been saying, and that is we want to reset our relationship.

UNIDENTIFIED MALE: Let's do it together.

CLINTON: We will do it together.

(END VIDEO CLIP)

WALLACE: But it turns that instead of reset in Russia the button said overcharge and that's where the problems began. Senator Ayotte, has President Obama's reset effort with Russia failed, and has it contributed to the problems that we have in Ukraine, in Syria, in Iran?

AYOTTE: Yes, it has, Chris, and I think that's why this is an opportunity for the president to really be unequivocal with Putin right now in the Ukraine, what happens in the Ukraine very much matters. They need to determine their future, not Russia. We have seen obviously behavior from Putin from harboring Snowden to the efforts to interfere in Syria and also with arming the Assad regime, in addition to that thinking about the reports of their violations of the IMF treaty, their reset policy has failed.

It's time to reset the reset, and I think Ukraine presents an opportunity for the president to do that with clear American leadership here for a good outcome.

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WALLACE: So, let me give you a chance to respond, Senator Ayotte. You never mentioned the idea of a force. I guess the question is, one, is this over? Have the rebels won? And, two, what do you think is the possibility of a counterstrike by -- whether it's political or economic, by the Russians, and even the possibility of splitting off the eastern half of the country which is very pro- Russian?

AYOTTE: Well, Chris, that's why I think the president needs to be clear public and unequivocal right now with a message to Putin, because the idea that they could actually interfere with the territorial sovereignty of the Ukraine -- I mean, look what happened with Georgia. I think that this is a very real possibility.

And so, we need to be very clear, work together, and I think there is economic pressure that we could provide, Senator Durbin mentioned. We could provide a leadership role in the IMF. We also, of course, in other instances have imposed sanctions, not only on the oligarchs which recently the administration moved to do, but also we think what we've done with Russia with the Magnitsky Act, and that could be expanded.

WALLACE: Let me turn briefly to Syria because we had this deal under which Assad, the president of Syria, was supposed to turn over his entire chemical weapons stockpile by early February. So far, it has turned over only 11 percent of that stockpile. In the meantime, Assad remains in power. He continues to slaughter his own people, and as we say he's holding on to his chemical weapons, most of his chemical weapons stockpile.

Senator Ayotte, who is winning in Syria right now, Putin or Obama?

AYOTTE: Unfortunately, it's Putin right now, and, again, Putin can play a role of putting pressure on Assad. They are not putting enough pressure on Assad.

Assad regime is slow, dragging its feet, slow rolling trying to comply with the chemical weapons agreement. And so, right now, Assad is winning, which is very unfortunate. And what I'm worried about also is the recent testimony of the Director of National Intelligence Clapper about how the al Qaeda extremists in Syria are now actually posing a threat to our homeland, so this is a real issue for us as well.

WALLACE: Senators, we have a couple of minutes left, and I want to get into one other issue, and that is the president's budget. We got some information about the budget that he will release a week from Tuesday. Let's put up the details on the screen.

He'll reportedly call for an end to the era of austerity and ask for $56 billion in new spending for job training, early childhood education and other initiatives, and he won't include a measure to slow cost of living increases in Social Security which was in his last budget.Senator Ayotte, the White House says this slowing in the cost of living adjustment, so-called chained CPI, was offered only as part of a grand bargain, and you Republicans rejected that.

Briefly, what do you think of the president's new budget from what you've heard so far?

AYOTTE: Well, this is news to me. The era of austerity since the president has been in office, we've added $6 trillion, excuse me, more to the debt. So we're over $17 trillion in debt.

There hasn't been an age of austerity and it's really disappointing that the president hasn't stepped up really to lead this effort of a grand deal, I think, that needs to be done for the nation, and it began when he didn't embrace obviously Simpson/Bowles, the presidential commission, and it's gone forward from there.

But to see this budget, it's really a political document. It's not what we need for America when we're $17 trillion in debt.

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