• With: Sen. John McCain, R-Ariz.

    MCCAIN: Well, I think everybody gets to, one, be nominated, and, two, go through the hearings and go through the debate and discussion, but right now I would be very hard-pressed.

    CAVUTO: If it were John Kerry, would you support him?

    MCCAIN: Again, let's go through the process. John Kerry came within a whisker of being president of the United States. I think works in his favor. But I would love to hear him make the case.

    But I don't have anything in his background like this tragedy in Benghazi that would make me really want to carefully examine the whole situation.

    CAVUTO: By the way, you know him pretty well. There was talk that he wanted you to be on his ticket in 2004.

    But do you know if he is frustrated that he could be passed up for the secretary of state position twice?

    MCCAIN: No, I think John has been very careful about his views on this situation, and appropriately so. I have not heard him express any view.

    CAVUTO: If I could move on to Grover Norquist, a lot more of your colleagues are taking a different step on this pledge thing and that they can't agree to that anymore, a half-dozen by last count, you among them. What do you think of him?

    MCCAIN: Oh, I admire Grover Norquist. I think he has stood for the things that he believes in. And he has a role to play in the scenario of the Republican Party. Look, I have always been against ethanol subsidies, sugar subsidies, all of those things that I thought were wasteful and unnecessary and frankly the result of special interests.

    And I still am opposed to rate increases, as I told you. But all of my career, I have gone to the floor and fought against the unwarranted subsidies that were directly the result of lobbying rather than the national good.

    CAVUTO: So, you disagree when he says getting rid of those credits, allowances, breaks, whatever you want to call it, Senator, without corresponding spending cuts breaks the pledge?

    MCCAIN: I don't know if it breaks the pledge or not, but I have said that am opposed to the tax rate increase because I think it hurts the economy and I think most economists that I respect believe that

    But throughout my career, I have gone to the floor time after time on these appropriations bills and these farm bills that have these pork -- earmarks, these terrible and egregious subsidies, which I have opposed all along, and I am sure Grover has been very well aware of that.

    CAVUTO: He has, actually. In conversations mentioning you, he has said that.

    The one thing that does concern him though is that Republicans seem to be running around with their tail between their legs after the election and acquiescing on revenues and letting the Democrats steamroll them. And he says they will pay for that two years from now. Do you feel threatened?

    MCCAIN: Well, first of all, I think Republicans have to be for some things. And we need to be for things and we need to be for spending cuts. We need to be for entitlement reform.

    That has got to be done on -- if we are ever going to be serious about these debt issues. I don't think we should disrespect Grover Norquist any more than I believe that we should disrespect the Heritage Foundation or any other -- or the American -- AEI, or these others. I respect them. We just don't always agree.

    (CROSSTALK)

    CAVUTO: What he is saying, I think, Senator -- I'm sorry, sir. I didn't make myself clear.

    MCCAIN: Yes. Sure. Go ahead.

    CAVUTO: But he says that there is much more propensity to come up with creative ways to raise revenue than to cut spending and that it is disproportionately so and that Republicans are going along with this like idiots. What do you say?

    MCCAIN: Well, I think, first of all, the negotiations have not seriously begun and people have staked out various positions, so I think we would have to look at the product of any of these negotiations before we...

    CAVUTO: Well, do you think we will avoid a calamity at the end of the year?

    MCCAIN: I'm not sure. I don't think we will because I think the markets will start to tell us that we have got to do something because of the devastating impact of not achieving something.

    But I can tell you one possible scenario, and I don't like it, and that is we just kick the can down the road, sort of suspend everything for X-number of weeks or months. Another area that concerns me, if we don't put entitlement reform on the table, then we are not very serious. We know that Medicare and Social Security are going broke.

    CAVUTO: Senator, thank you very much.

    Normally, Senator, as you know, with every prominent guest I have on my show, I write them a thank-you note because I really do admire that. And you just let me know prior -- I don't think I'm talking out of school here -- you don't like it.

    (CROSSTALK)

    MCCAIN: No, it is not that at all. It's just that I don't want you to take your time that you have to devote to studying the issues and talking to Grover Norquist and all those other things.

    CAVUTO: OK.

    MCCAIN: That is all. But I do appreciate the opportunity of being on your show. And I think you do a great job and you are a fun guy.

    CAVUTO: All right. Well, the next one is going to be cut-out magazine letters, Senator.

    (LAUGHTER)

    MCCAIN: OK.

    CAVUTO: So, always a pleasure, sir, John McCain, senator, former presidential candidate.

    Thank you.

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