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Possible Presidential Candidates Kerry, Brownback Talk With CNBC’s Larry Kudlow

Two senators, two parties, two men mulling White House bids. Possible presidential candidates John Kerry and Sam Brownback sat down with CNBC's Larry Kudlow on “Kudlow & Company,” to talk about the findings of the Iraq Study Group, the economy, and other issues they could face on the campaign trail.

Senator Kerry said he does favor a timetable to get U.S. troops out of Iraq, wavering only from the deadlines in extreme circumstances. "I favor a hard line because it's the only way the Iraqis are really going to shift,” the Massachusetts senator said. “The absence of it allows them simply to continue to procrastinate, which they've proven they're pretty good at."

Kudlow asked Kerry about the argument of Republican Senator John McCain of Arizona, another likely 2008 candidate, that a timetable to remove U.S. troops from Iraq would fuel insurgents there.

"I think he's dead wrong,” Kerry said of McCain. “I think he is just absolutely wrong and

applying the wrong lessons here. We've seen what happens when you add the number of troops. They put an additional 15,000 troops into Baghdad and what happened? The violence went up."

Kerry also addressed the impact of the Iraq war on U.S. relations with the rest of the region and the world, and the effect the war has had on American trade and economy.

"I think the key is for us to begin next year to move us towards a stronger position in the Middle East," Kerry said. "We need to deal with the Israel-Palestine issue. I think there are things that we can do to encourage a genuine partner for Israel to be able to negotiate with. We need to deal with the problem of Iran and Syria and try to wean Syria away from Iran and deal with Lebanon. I think the Middle East is ripe actually, for some realignment and for some diplomacy to work. But the administration's gotta commit to do that."

With that diplomacy in action and the current economic climate, Kerry told CNBC, "I don't see any reason for the (U.S.) stock market not to get stronger," especially if his Democratic colleagues, now holding a majority in both houses of Congress can move an agenda of responsible fiscal policy and make progress on energy policy.

That Democratic majority means Kerry will assume the role of chairman of the Senate Small Business Committee when the 110th Congress convenes next month. Because of the financial impact the legislation has imposed on small businesses, Kerry said that he would be in favor of easing some of the regulations put in place by Sarbanes-Oxley in 2002. "We want compliance," the 2004 Democratic presidential nominee said. "We obviously want accountability and transparency, but I think we have to do it smart.”

Kerry also addressed the exploding hedge fund industry. Hedge fund assets have topped $1.2 trillion worldwide this year, an increase of 21 percent over last year. The senator credited the fast-growing industry with creating jobs and buoying the stock market, and on the question of possible federal regulation added, "I haven't seen anything compelling to say to me that we ought to step in congressionally."

Kerry has not yet decided whether he will run for the White House again in 2008. Despite his tenure in the Senate and his party's nomination just 2 years ago, he faces an uphill climb made steeper by a widely publicized speaking gaffe in October. One week before the midterm congressional elections, on the road to help his fellow Dems, Kerry instead drew bipartisan fire for what he called a "botched joke" about President Bush and the Iraq War. The Democratic sweep of Congress took much of the attention off of Kerry, but left a potential presidential run under more serious scrutiny.

Kerry could also find himself in a field of extremely charismatic challengers, including first-term Illinois Senator Barack Obama, 2004 vice presidential nominee John Edwards, and New Mexico Governor Bill Richardson. A recent Quinnpiac University poll of 20 candidates’ “likeability” found Kerry at the bottom of the list, which also included Republican McCain and presumed Democratic frontrunner Sen. Hillary Clinton of New York.

Republican Sam Brownback of Kansas isn’t a household name like Kerry, McCain, or Clinton, but he’s hoping to use his Midwestern roots to appeal to voters in the first crucial caucus state of Iowa. “I want to save lives, rebuild the country,” Brownback told CNBC’s Kudlow.

Billing himself a "full-scale conservative," Brownback is most notably known in the Senate for his opposition to gay marriage, abortion and embryonic stem cell research. He moved up from the U.S. House in 1996 when Bob Dole ran for the White House.

Brownback filed the paperwork to launch an exploratory committee on Monday. The filing opens the door for the Kansas senator to travel the country and raise money for a potential presidential bid. Brownback visited Iowa as part of a 10-state tour earlier this week.

Brownback emphasized that he’s not just a conservative when it comes to social issues, but fiscally as well. He urged his Capitol Hill colleagues, especially his fellow GOP members, to make a change to the way the government’s money is doled out. "People thought we were the party of fiscal restraint," Brownback told CNBC regarding congressional earmarks. "Don't cheat the system. The place is built to spend and it rewards spending. We've gotta turn that around."

With over a year to go before the nation’s first primary contests, Brownback must weigh several factors when deciding whether to make a real run, including the obstacle of name recognition. Additionally, the political climate during the recent midterm elections favored more moderate candidates within both parties. Others expected to make a run for the Republican nomination include former New York City mayor Rudy Giuliani and outgoing Massachusetts’s governor Mitt Romney, who have more moderate positions than Brownback on some social and fiscal issues.