ED SHULTZ: Joining me now is Senator Evan Bayh of Indiana. He’s a member of the Senate Intelligence and Armed Services Committee.

Senator, do you agree with me on this, or do you think the president should inject himself more in this process [the disputed Iranian election]?

SENATOR EVAN BAYH: Ed, I think president has been the right combination of both tough and smart on this issue. He’s put us squarely on the side of the forces of reform with Iran unequivocally, he’s condemned the violence, but he’s done it in a smart way.

The people who would be most elated about us overtly meddling in the internal affairs of Iran would be the reactionaries, the mullahs. They would use it as an excuse, Ed, to change the narrative away from their oppression and the fraudulent election toward imperialism, western influence, and that kind of thing.

And so right now, they are losing with their own people. They’re losing with world opinion. Let’s not let them change the subject.

SCHULTZ: Senator, do you think that the Republicans are saber-rattling right now? Do you think John McCain and Lindsey Graham have gone too far? I mean, we’re in the infancy of this crisis right now in Iran, and here they are playing politics trying to blame the president for not being aggressive enough.

Are they saber-rattling?

BAYH: I think it’s largely semantic differences. I would love to know from my two friends, what are the magic words?

I mean, the president has unequivocally endorsed the Democratic movement in Iran, he’s condemned the violence, he’ said that people have a right to assemble, to speak. That should be honored. So you’ve got to be a little careful. When you go too far out rhetorically, you can run into a situation as happened in Iraq in the early `90s when we encourage encouraged the Shia there to rise up, then did nothing for them when Saddam Hussein brutally oppressed them and killed thousands of them.

So we’re for the people there, but let’s not give the regime an excuse for more bloodletting.

SCHULTZ: Well, you just said something interesting. You said you’d like to know what the magic words are. So you like the way the president is playing this right now by not overplaying his hand.

What about the Iranian people who want a dialogue with the West? Do you think that they feel that we are doing enough? Do you think that President Obama is doing enough?

BAYH: What I hear—and we get some reports in the Intelligence Committee—Ed, is that is even the reformers in Iran don’t want us to be overtly meddling in their affairs because they know that would give the regime a pretext for their crackdowns. And look, there’s a long history there of foreign intervention, and there’s a deep wellspring of national pride in that country.

So, we run the risk, Ed, of harming the very people we hope to help if we overplay our hand. This is a complex, rapidly evolving situation. We need to speak unequivocally to our values and put ourselves on the right side of freedom and history in that country, but do it in a smart way, not just lashing out in a way that actually undercuts the cause that we hope to advance. I think the president has struck the right balance in a pretty delicate situation.

SCHULTZ: OK. He struck the right balance in this situation right now. But if this violence continues, and if this unrest continues, and there are more lives lost—there’s 17 to count right now—should the president become more aggressive? Should we do more or should this be our tone throughout this entire crisis?

What do you think?

BAYH: Well, you’ve got to react to events. And clearly if the bloodshed continues, you’ve got to go even further by condemning that.

I’ve been advocating something for some time, Ed, with regard to their nuclear program. We need to impose really tough economic sanctions when it comes to their imports of gasoline. That could really damage the Iranian economy at a time when they’re already vulnerable.

And you know what, Ed? With the regime being as reactionary as it’s been, it has rallied world opinion against them and could strengthen our call for that kind of tough financial and economic action. So I would encourage the president to consider that with regard to their nuclear program.

SCHULTZ: Senator Bayh, good to have you with us tonight on The Ed Show. Thanks so much.

BAYH: Always a pleasure.