• This is a rush transcript from "Your World With Neil Cavuto," March 3, 2009. This copy may not be in its final form and may be updated.

    NEIL CAVUTO, HOST: Mighty Mac taking a step back — Senator John McCain's attempt to kill more than 8,000 earmarks in that massive spending bill just getting shot down. The president says he will sign it, despite all that pork.

    Exclusive reaction from the former presidential candidate and Arizona senator right now.

    Senator McCain, good to have you.

    SEN. JOHN MCCAIN, R-ARIZ.: Thank you, Neil. Good to be with you.

    CAVUTO: Well, you tried. And the president is going to sign this thing anyway. What do you think?

    MCCAIN: Well, I think it is disgraceful that the president is going to sign it, since he committed, not only during the campaign, but in debates with me, that he would work to eliminate pork barrel spending. But I have also got to tell you, Neil, in full disclosure, 40 percent of those earmarks where Republican earmarks.

    Video: Watch Neil's exclusive interview

    CAVUTO: That's right. That's right.

    MCCAIN: So, it is a — it's a bipartisan disease. And we don't seem to get it.

    CAVUTO: All right.

    The president said that he would get rid of it, though, and would stop it, and would stop the Senate's fixation with it. Is he just going slow, because, because as his budget director said, this is last year's spending bill, and, from here out, we are going to get serious, or what? Is he just waiting and counting on these guys' votes for future things? What?

    MCCAIN: If it's last year's spending bill, I proposed an amendment that you just noted got beat that put the level at last year's spending.

    So, it's obvious that the — this is an 8 percent increase over last year's bill, Neil. When Americans are not being able to stay in their homes, losing their jobs, having to tighten their belts, what is it here in Washington? Business as usual.

    And the president should lead, and the president should veto this bill and say, send it back to me without a single pork barrel project on it.

    CAVUTO: This was shot down, largely, though not exclusively, along party lines, which tells me that, even for a lot of members in your own party, it's still near and dear.

    And I suspect it is going to be very tough to break this sort of nicotine spending habit. What happens?

    MCCAIN: Well, it is a habit. And it's become corruption.

    We have former members of Congress that are residing in federal prison. This is a gateway drug. We have a former high-ranking staffer on the Senate Appropriations Committee was just indicted last week.

    Look, this isn't just bad. This isn't just waste. This is corruption. And, so, we are going to have to break it by the people of this country saying, we are not going to stand for it any longer.

    And, by the way, I think we lost seven Republican votes on this. And — and...

    CAVUTO: You did, yes.

    MCCAIN: So, yes.

    CAVUTO: Let me ask you. This comes at a time when there are all sorts of rumors in Washington that you and the president, though you started hitting it off — he had this dinner for you, I think, the night before inauguration, and then he was talking about how crucial your support was on the troop drawdown in Iraq — and then it seemed like the wheels kind of came off the goodwill wagon.

    What has happened here?

    MCCAIN: Neil, I am the loyal opposition.

    I work with the president, as I did on the Iraq issue. I will work with him on other issues, health care reform and other — look, the country is in too bad a shape for us not to work together. I am committed to working with the president.

    It does not mean that on something like on a pork-laden bill that wastes billions of taxpayers' dollars, that I would go along with anybody, including members of my own party.

    CAVUTO: Democrats always counter, Senator, that there's only seven — I think $7 billion of it, only. That used to fund a lot more than just this in the past. Now I guess it's a rounding error.

    But, having said that, what do you think of that defense, that, in the scheme of things, it is chump change?

    MCCAIN: I say that, possibly, there is a tiny amount of plausibility associated with that argument when times were good.

    Times are terrible. What could we do with those billions of dollars? Could we put some people back to work? Could we get some people some health insurance? Could we help this economy get better?

    I mean, it is just so, so disappointing that, apparently, here, we don't get the message from the people in this country who say, stop doing this. Stop doing business as usual.

    They voted for change.

    (LAUGHTER)

    CAVUTO: All right, but they also seemingly endorse more spending vs. more tax-cutting to get us out of this funk. What do you think of that and that the president remains popular, some of his programs less so, but he remains popular.

    So, is that the American people's way of saying, we are OK with this?

    MCCAIN: We proposed $420 billion of spending that frankly had more money in it for things like shovel-ready construction than the president's bill did. We also had a provision that, when we — this economy recovers — and it will recover — we were going to have to — after two quarters of positive growth, we would have an automatic path to balance budgets.

    We are committing generational theft by accumulating this massive debt on our kids and grandkids.

    CAVUTO: The president lately and his folks have been saying, Senator, that they don't pay attention to Wall Street, which I would gather is probably a good thing, given the way Wall Street has been performing.