Transcript: Leon Panetta on "Face the Nation," Aug. 13, 2017

Tension between the U.S. and North Korea is higher than it has been in years, with President Donald Trump and the isolated, nuclear-armed regime of Kim Jong Un trading threats to annihilate each other's countries if the other provokes a response.

On the heals of two recent intercontinental ballistic missile tests, Kim's military has now threatened to fire a salvo of four missiles over Japan, aimed to land within 25 miles of the U.S. Pacific island territory of Guam. 

Former CIA Director and Secretary of Defense Leon Panetta sat down on Sunday with CBS News in Washington to discuss the threat, and the rhetoric. 

A transcript of the interview, which aired Sunday, Aug. 13, 2017, on "Face the Nation," is below. 

JOHN DICKERSON: Welcome back to Face The Nation. Joining us now is Leon Panetta, who served as President Obama's Secretary of Defense and C.I.A. director and was also chief of staff to President Clinton. He joins us from his home in Monterey, California. Mr. Secretary, I want to start with these two challenges for President Trump. On the one hand, increasing the rhetoric on North Korea, and now the sort of blander rhetoric with respect to Charlottesville has got him on the defensive. If you were chief of staff, what's your guidance? How would you handle these two issues?

LEON PANETTA: Well, this is a very important moment in time for his administration. And I think the entire country is looking to see whether or not this president has the capability to provide strong leadership for our country at a moment of crisis. And strong leadership demands not only that he act with- with consideration, with responsibility, with an understanding of what our country is all about and what it stands for, and with a recognition of course of protecting our security.

Those are all responsibilities of the president. And the president's biggest role is the ability to use the bully pulpit to speak, not only to the country but to the world. And very frankly, his use of rhetoric, particularly with regards to North Korea, "fire and fury" and "lock and load," I think has frankly created even greater tensions in that part of the world. And his-his failure to address what really happened in Charlottesville and the role of white supremacists I think also sends a message that he is not recognizing the real causes of crisis even within our own country.

JOHN DICKERSON: On the question of North Korea and the president's rhetoric, as you heard the C.I.A. director said, "That tough rhetoric is snapping North Korea into shape." They realize now that they've got somebody they can't push around. What's the- what's wrong with that argument?

LEON PANETTA: Well, I-I've never felt, in the period of time that we've been dealing with North Korea going back 60 years, that you can out-bully a bully by trying to threaten that individual with words. The reality is, what speaks the loudest for the United States of America is the fact that we're the most powerful country on the face of the Earth.

And we have the military capability to wipe that regime off the face of the Earth. That's the reality. And that frankly is what has been part of our strategy of containment and deterrence. The fact that we are strong, the fact that we have allies in the region in South Korea and Japan, the fact that we have always spoken clearly about our approach to dealing with the-the aggressiveness of North Korea.

All of that is what determines whether or not the United States and our allies can try to ensure that we do not engage in a nuclear war there. So it just seems to me that the important thing right now is to have a president who is steady, who is calm, who's responsible, and who recognizes that the most important thing right now is to find a way to ensure that we do not get into a war.

JOHN DICKERSON: Do you see the North Koreans providing any exit ramps in the way they've behaved? And part of this issue is how the U.S. intelligence and policy makers assess the strategic thinking of the North Korean leader. How do you see it? And-and-and what should the next actions be to find a way to get off this escalation?

LEON PANETTA: We've had a history here of 60 years of provocation and accommodation by the North Koreans, regardless of who the leader was. There's a period of time where there is provocation, and we appear to be at the point of some kind of warfare. And then there's a period of accommodation. We've been through that cycle.

We're now in a period of obviously provocation. I think the North Koreans understand that if they take the wrong step, it's the end of the regime. Period. And for that reason, I think it's clear that they're going to-they are going to allow themselves some off-ramps here, so that their regime does not come to an end.

But, in saying that, I think that what the United States needs to do is to have a clear strategy here. Not-not operate on a haphazard basis, but have a clear strategy of both containment and deterrence. That means strengthening our military presence. It means strengthening our support for South Korea and for Japan. It means having in place a very strong covert and overt missile defense capability. And it means employing strong diplomacy with our allies, increasing sanctions to send a clear message that, if there's any provocation from North Korea, it will spell the end of their regime. Period.

JOHN DICKERSON: And finally, in 30 seconds Mr. Secretary, what's your assessment of the speed? Is the director of the C.I.A. right, that the speed of North Korean development here has been known, and it's not a surprise to anyone?

LEON PANETTA: Well, my sense is that they've been moving pretty quickly in these last few years, to the point that they now have an I.C.B.M. and they're close to developing a miniaturized nuclear weapon. I think we've been following the fact that they're, you know- they-they've been doing this. But I think the-the rapid nature of how they've been able to come to that capability is something frankly that has surprised both the United States and the world.

JOHN DICKERSON: All right, Mr. Secretary, thanks so much for being with us.