Today on “The Situation Room,” Wolf Blitzer interviewed Senator Chuck Schumer about Alberto Gonzales’ resignation, Iraq and Senator Craig. Transcript follows…

WOLF BLITZER, CNN ANCHOR: Now that Alberto Gonzales is stepping down, some of his fiercest critics in the U.S. Senate are warning that the next attorney general had better be more than just an old pal of the president.

(BEGIN VIDEOTAPE)

BLITZER: And joining us now from Rochester, New York, Democratic Senator Chuck Schumer, a member of the Judiciary Committee.

Senator, thanks very much for coming in.

SEN. CHARLES SCHUMER (D), NEW YORK: Good to be here, Wolf.

BLITZER: Now that Alberto Gonzales has decided to step down as the attorney general, are you still going to move full speed ahead with all these various investigations, or are you going to move on to some other issues?

SCHUMER: Well, it’s all going to be up to the — who the new attorney general is. It’s our hope that we can move forward with these investigations, but do it quickly and with dispatch.

If the new attorney general is one who is not prone to stonewalling and just not giving information, I think we can quickly figure out what happened with the U.S. attorneys, with the wiretapping, see what went wrong, fix it and move forward. Our goal is to look forward, not to point fingers or blame back. And as long as the new attorney general is one who puts rule of law first and doesn’t stonewall, we’ll be able to do that.

BLITZER: What about Michael Chertoff? His name has been floated, the secretary of Homeland Security, a former top official at the Justice Department. Is he someone that you think the Senate Judiciary Committee could confirm?

SCHUMER: Well, I think there are some major questions about Secretary Chertoff. His management of the Homeland Security Department has not been great. It’s not just Katrina, but so many other issues.

And second, when he was in law enforcement, was he the type who instinctively put rule of law ahead of politics? There’s some questions about that as well.

So, while I wouldn’t close the door on Chertoff, he is hardly a lay-up. And there are probably other names out there who, particularly on the second issue, would show more fidelity to rule of law. But, again, the jury would be out on Chertoff.

BLITZER: Yesterday, Ed Gillespie at the White House told us it’s probably going to be a matter of weeks before the president selects a name to send up for a nomination. Is there some, one or two people, that you think would effectively sail through your committee, someone with high regard?

SCHUMER: I think there are more than one or two. Many more than one or two who the president would find acceptable. They’d be ideologically conservative, but at the same time, who we would find acceptable, people who we believe would put the rule of law first and politics last. Sort of the inverse of what Attorney General Gonzales did.

BLITZER: You want to give us a few names?

SCHUMER: I have given some names actually to Fred Fielding, the White House counsel. He was reaching out to me yesterday, which I thought was a good sign. But I don’t think it would help the candidacy of any of those names that I gave him to put them forward publicly right now.

BLITZER: All right. Let’s move on and talk about the president’s address today on the Middle East, part two of his — of his buildup, if you will, to the General Petraeus report that’s due out by the middle of September.

I’m going to play a little clip for you on what he’s now saying about Iran, because he’s raising the ante as far as Iran is concerned, the fallout from what the U.S. is doing in Iraq. Listen to this.

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BUSH: Iran has arrested visiting American scholars who have committed no crimes and posed no threat to their regime. And Iran’s active pursuit of technology that could lead to nuclear weapons threatens to put a region already known for instability and violence under the shadow of a nuclear holocaust.

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BLITZER: I know, Senator, you’re no fan of Iran. But what do you think about this line he’s now saying about a nuclear holocaust that Iran could engage in?

SCHUMER: Well, the question is, how does the war in Iraq further going after and containing Iran? And this is what the president always does.

He doesn’t focus on the facts on the ground, what’s going on in the civil war in Iraq, can we ever get the Shiites and the Sunnis together, how are we going to create a government, even if the surge is temporarily successful. And its diversionary.

Yes, Iran is a serious problem. I’d like to see the president’s plan on what to do with Iran. He has not made any case at all that continuing to fight a civil war in Iraq helps with Iran.

BLITZER: But, you know, even some Democrats are now suggesting that maybe the military part of the — the troop buildup, the so-called surge, is making some progress.

I want you to listen to what your colleague, Hillary Clinton, said the other day.

Listen to this.

(BEGIN VIDEO CLIP)

SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE: We’ve begun to change tactics in Iraq and in some areas, particularly in Al Anbar province, it’s working.

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BLITZER: All right, so what about that? Why not give — why not give the military a chance to see if they can finish the job?

SCHUMER: Well, the second part of what Hillary said is it’s not going to make much of a difference if we don’t have a strong political government. And I think that’s where Democrats overwhelmingly are. When the president started this surge, it wasn’t an end in itself. It was a means to strengthening the Maliki government.

If anything, the Maliki government is weaker and in greater disrepute among the Iraqi people and among any observer here in America than it was before the surge started. We can’t keep all those troops there forever. And what is going to happen when the troops have to — have to leave because their tours of duty are gone?

If there’s no political strength in the government, and that government can hold together and is going to fall apart whether we stay there three months, three years or 20 years, and that’s what most people think, then what is the point of the surge? The president has never answered that question.

Again, he never focuses on the issue at hand. He’s always diversionary, either trying to scare people — nuclear holocaust in Iran, a real problem, but nothing to do — at least he’s not made any connection with the war in Iraq — or, now, well, the surge is working in Anbar province. How does that create a government that will last in Iraq after we’re gone?

BLITZER: We’re out of time, Senator, but your quick reaction to Republican Senator Larry Craig of Idaho pleading guilty to disorderly conduct at a public men’s room at the Minneapolis airport. Is this a subject the Senate Ethics Committee, your colleagues in the Senate, should now discuss, should review?

SCHUMER: Well, that will be up to them. They know their rules. I don’t know if there’s been a referral. I’m not going to comment on on this.

BLITZER: All right, Senator. Thanks very much.

Senator Chuck Schumer of New York joining us.

SCHUMER: Thanks, Wolf.