The jokes write themselves

In response to Harry Reed calling them out yesterday, CNN states the Bush Administration's response:

White House disputes Iraq war is 'worst mistake'

Does this really mean?

"C'mon we've fucked up even bigger. 9/11 or Katrina for instance. For fuck's sake we outed a covert agent specializing in Iran and weapons of mass destruction. Hell we outed a whole damn clandestine company."

or are they saying?

"You think we've fucked up Iraq. Wait until you get a load of Iran!"

Or both?