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updated 10/12/2007 9:56:27 PM ET 2007-10-13T01:56:27

National Journal's Linda Douglass sat down with Sen. John McCain for the third edition of "National Journal On Air." This is a transcript of their conversation.

Douglass: So, Senator John McCain, welcome to the program, thank you so much for joining us and first I want to ask you about the health care plan that you have rolled out this week , a very interesting plan not like the plans that we've heard from either Republicans or Democrats, is it your view that controlling cost, the cost of health care, is more important than providing access to the uninsured?

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McCain: Well, Linda, I think we know what the problem is, we have the best health care in the world, in America the problem is the cost dramatically escalates, so that nobody can afford it. There was a front page story in USA Today about three days ago that said that the inflation of Medicaid was over ten percent — yet that's not sustainable, plus Medicare and Medicaid are going broke, so we have to take steps in order to allow people to get access and availability to health care but we have to keep the costs of health care down. By a number of innovative steps — that's for our proposal.

Douglass: How would you expand, though, coverage of the uninsured, which does many say drive up the cost for all of us because those are people who eventually wind up in the emergency room? How would this plan cover the uninsured?

McCain: Well one, is we give every American a $2,500 tax credit, $5,000 per family. We would allow these so called walk-in clinics, where you call your doctor, and he can't see you for a week, you can just go to one of these clinics and get low cost care. If people have $2500 or $5000 with which to purchase a health insurance policy we will allow them to shop all over America and not just within the state in which they reside — So we will have medical malpractice reform and transparency. for those people. I think you're referring to have chronic illnesses that cost so much then we're going to have to set up some kind of a fund — so that we can give these people sufficient amount of money in order to purchase health insurance policy. So it's a lot of steps that need to be taken, but it really is aimed at reducing the cost of health care.

Douglass: Well let's talk a little bit about the campaign in general. You were on the stage last night, earlier this week with your fellow Republicans. There was a lot of back and forth of course as we know between Mitt Romney and Rudy Giuliani over a couple of things. First of all, which one of them has cut more taxes and more spending. Which one of them would you say has cut more taxes and spending?

McCain: Neither one, in fact, they've both, if you want to call them fees, or you want to call them a banana, the fact is a tax increase. All of them have increased taxes, increased quote fees or whatever it is, their budgets grew and fees or taxes on both the people of Massachusetts and people of New York City increased. I mean it's just, as Ronald Reagan used to say, facts are stubborn things.

Douglass: So you're saying that they are both tax raisers not tax cutters.

McCain: Oh sure, I mean, that's the record, the people that they represented experienced an increase in their payments to their government.

Douglass: There was also some controversy around Governor Romney's answer that if he felt it was necessary to engage in a military strike on Iran, and he was asked then would he feel it necessary to consult the Congress, he said he would first consult lawyers. Now he was attacked by Giuliani for that, some people say it would be a legal question. What is your thought on that?

McCain: Well, he said, now is the time to call in lawyers. That's not the time to call in lawyers, when you have a national security crisis. Look, it just showed the inexperience that Governor Romney has on national security issues. And frankly, Mayor Giuliani the same thing. At a time like that, you either act immediately because the situation warrants it when you have to uphold your oath to protect the people of this nation, or you call in members of Congress if you have time to do so. And start working with, get in cooperation with Congress. It's certainly long past the time your working out the legalism of it.

By the way, it was very interesting last night, getting back to the taxes thing, Mayor Giuliani bragged about how he had fought and defeated the line item veto. I was one of the prime sponsors of line item veto. It still is constitutional if it's written right, it was written wrong. Forty-three governors out of 50 in America have the line item veto. If you're ever gonna reduce spending in America in the Congress, pork barrel and earmark spending, you need a line item veto for the president. So there's a very sharp difference of view between, I think, economic conservatives in our base of the party that feel the line item veto is vital if we're ever going to exercise fiscal discipline.

Douglass: But are you also saying, back to the national security issue, that Mayor Giuliani is also inexperienced in that area?

McCain: Well he's been mayor of New York City, and I think he did a great job uniting the nation after 9/11. Mayor Giuliani was part of the Iraq Study Group and had to leave because he didn't attend. So I respect him, I admire both he and Governor Romney, but I'll match my qualifications up to almost anyone's.

Douglass: Now, why do you think that all of the Republican candidates, and maybe you fall into this category, seem to be so eager to take on Hillary Clinton?

McCain: The only times I have said anything critical of Senator Clinton, who is probably going to be the nominee in the view of most people, is when I have had a policy disagreement. I am respectful of her, we have a working relationship on the Senate Armed Services Committee, and we have a cordial relationship, it's just that she's a liberal Democrat and I'm a conservative Republican. But when she says she's against free trade, I have to say I disagree and I'm for free trade. These are legitimate policy differences.

Douglass: You heard the Christian conservatives complaining about the field of Republicans from which they have to choose, and some even talking about breaking off and forming a third party. How important do you think the issues that matter so much to them, abortion and same sex marriage, are going to be in this campaign of 2008?

McCain: You know Linda, I don't know the answer to that, because you know I don't have any ideas as to what is going on there, but I know that one of the fundamental principles of the Republican Party is to protect the rights of the unborn. But I don't know and I will say I intend to respect the process, whoever the nominee of the party is. That's the process we go through, and I'm a loyal Republican.

Douglass: Well what do you say about the idea that the Christian conservatives might actually break off and try to find another candidate in another party? Is that damaging to the Republican Party? What's your reaction to that?

McCain: Well they are an important part of the Republican Party, but I don't tell anybody what they should do with their political allegiances and I'm not going to tell them. I can only speak for myself and that is we'll have given the voters of our party a very good opportunity to examine the candidates and I respect the process.

Douglass: Your campaign has been strapped for money although you are doing better in every measure according to all the reporting that's being done about your campaign, better in the polls, feeling a little bit more loose and liberated on the stump from what we see and hear. But again, there is the money question. Are you going to accept federal matching funds in the primary?

McCain: We don't have to at this time, Linda, the money seems to be coming in OK, we'll make that decision within the next month or two months or whenever it may be necessary, but right now our campaign is sufficiently funded to get out the message that we wanted to.

Douglass: I was on the Straight Talk Express with you, as you may well remember, seven years ago. How is it different now for you?

McCain: The only difference really is that the world has changed. When you and I were riding around on that bus, and having a great time, we were talking about mainly domestic issues, because the world was in relative peace. Since then, we had 9/11 and now this struggle against radical Islamic extremism, which has shifted our priorities to the war in Afghanistan and the war in Iraq, young Americans in harm's way. So if probably that hadn't happened we would be spending our conversation on probably tax cuts, health care and other issues. Instead the dominant issue, as it should be, is Iraq, which has a subtext of a struggle against radical Islamic extremism.

Douglass: Now Senator, just one final question here, you do have a tendency to take positions that aren't necessarily popular with the public at large, certainly your advocacy of a strong position in the Iraq war, you've talked about fuel economy standards to the automakers, you've said some things about immigration reform that have made some Republicans angry. And yet, you hang in there. How is it that you think you will pull this off, that is winning the nomination, and what is it about yourself that you think could make that happen?

McCain: Well first of all, I think as you well know from spending time with me, we can out-campaign just about anybody. The town hall meetings, the encounters with the voters, I enjoy it more than anything else. The second thing is you've got to do what you think is right, and I think at the end of the day, if we get the message out right, people will disagree with me on issues but trust me to lead the country. The biggest problem in Washington is that nobody has the trust or confidence in the government and the Congress or the executive branch, because of Katrina and Iraq, and I would hope at the end of the day, I could appeal to their belief that I'll restore trust and confidence, and I have the qualifications to lead.

Copyright 2012 by National Journal Group Inc.

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