• This is a rush transcript from "Your World With Neil Cavuto," July 16, 2009. This copy may not be in its final form and may be updated.

    (BEGIN VIDEO CLIP)

    REP. NANCY PELOSI (D-CA), SPEAKER OF THE HOUSE: I believe that all the cost of the health care reform bill can come from squeezing more savings.

    (END VIDEO CLIP)

    NEIL CAVUTO, HOST: Well, if we can squeeze savings to pay for health care, then why the tax hikes for health care?

    (BEGIN VIDEO CLIP)

    PELOSI: We have to have a revenue stream to ensure that the bill will be paid for. If we don't need that money, we can use it to reduce the deficit.

    (END VIDEO CLIP)

    CAVUTO: Today, a blow-by-blow description of who is really getting squeezed.

    Welcome, everybody. I'm Neil Cavuto.

    And I'm also a little confused. The speaker says we really do not need taxes to pay for health care, but we are going to tax rich people anyway, and then use the money to close the deficit. Now, what does have to do with health care? And what happened to that proverbial lockbox?

    We are all over with it with Senator John McCain, who is dead set against this, and House Majority Leader Steny Hoyer, who is fine with us.

    Video: Watch Cavuto's interview with Senator John McCain

    We begin with the former presidential candidate himself, Senator John McCain.

    Senator, good to have you.

    What — what do you make of that?

    SEN. JOHN MCCAIN (R), ARIZONA: I — well, Neil, I — you know, I know it is a very liberal philosophy, but I don't think the American people want to be told that we're going to raise your taxes, and maybe we won't use them, but we're going to raise them anyway.

    The most important event today, Neil, was that Mr. Elmendorf, who is the head of the Congressional Budget Office, made a very strong statement today I think that's going to affect this debate.

    And I would just like to quote it. He said that the — the legislation doesn't have the sort of fundamental changes that would be necessary to reduce the trajectory of federal health spending by a significant amount. And then he goes on to say, on the contrary, the legislation significantly expands the federal responsibility for health care costs.

    Now, that is the objective assessment by the Congressional Budget Office. And it contradicts all of the things that Democrats have been saying. The fact is, there is no cost-saving measures in this bill.

    CAVUTO: All right. So, if the CBO is right — and the CBO also recently said some of these outer costs are more like $1.5 trillion to $2 trillion. I think they stuck with the $1.5 trillion, but it could conceivably get to $2 trillion — so that this is...

    MCCAIN: And it also...

    CAVUTO: Go ahead.

    MCCAIN: And it also — and it also leaves 33 million Americans uninsured, according to CBO. And, again, there's no cost-savings measures.

    CAVUTO: So, where is this going to, then, Senator? Where do you think right now this stands?

    MCCAIN: I — I am not sure, because they have 60 votes here in the Senate, I would guess, certainly depending on the health of a couple of the members. They have an overwhelming majority in the House of Representatives. So, I don't know.

    The president has reiterated time and again his commitment to getting through before the recess. Look, this thing is like a fish in the sun. If you leave it out there very long, it's going to begin to smell very, very badly to the American people. That is why they are in such a rush to fundamentally affect one-sixth of our gross national product.

    CAVUTO: Let me ask you, though. When — when — when Nancy Pelosi indicated that, yes, we might be able with to realize these savings enough to compensate for the tax hikes we're proposing up front to pay for all of this, and just channeling that money into deficit relief, that is not how this game started.

    So, obviously, someone has changed the lockbox...

    (CROSSTALK)

    CAVUTO: ... or just taken the key. We have played this game before, haven't we?

    MCCAIN: You — look, you can't make it up.

    We always have a $1.1 trillion deficit. We will have a $1.8 trillion deficit, the largest in peacetime history, staring us in the face, and then this is well over a trillion dollars. And some say it is as high as $2 trillion or $3 trillion.

    But, you know, we just passed a measure that was called something like the community — I have not got the exact name for it — which basically characterized to improve the nation's health infrastructure, playgrounds, bike paths, et cetera.

    And somebody is going to say that is an exaggeration, but Senator Kennedy — this is $80 billion, by the way — Senator Kennedy's spokesperson said, these are not public grants; they are community transformation grants.

    And he says, if improving the lighting in a playground, or clearing a walking path or a bike path, or restoring a park are determined as needed by a community to create more opportunities for physical activity, we should not prohibit this from happening.

    What happened to the $780 billion stimulus bill?

    CAVUTO: Well, are they nice bike paths?

    MCCAIN: I'm sure they're nice.

    CAVUTO: All right.