This is a rush transcript from "Your World," August 27, 2013. This copy may not be in its final form and may be updated.
NEIL CAVUTO, HOST: All right, to John McCain on what is next.
The senator joins us out of Washington.
Senator, what do you make of this and whether the markets are overreacting to this? What do you think?
SEN. JOHN MCCAIN, R-ARIZ.: Neil, I'm not sure.
I know that markets are very volatile in times of crisis. I know that the likelihood of any Egyptian government shutting off the Suez Canal are remote. I went through the Suez Canal on the USS Forrestal when Nasser was running Egypt, so -- but I can't -- honestly, I can't predict the markets.
I do know that this is extreme volatility throughout the Middle East, but it's not short-term. It's long-term. The conflict in Syria is spreading. Obviously, the unrest in Egypt is serious. But Lebanon is destabilized. Iraq is unraveling. They have had more bombings and killings in the last month than they had since 2008.
The whole region is in a state of unrest, and that's because there is no policy and no strategy there in the Middle East.
CAVUTO: What do you think happens if we get involved in Syria, even through missile strikes? And China and Russia have already said, bad idea. Does this escalate?
MCCAIN: I don't think so, because I don't think Russia or China will act in any way any more than they are. They're vetoing resolutions in the U.N., but most importantly the Russians are pouring weapons into Syria for Bashar Assad to massacre people.
Look, I think it's obvious now -- it's media reports, not any briefing that I got, but media reports that on Thursday, they're going to launch attacks and they're going to last for three days. That's what is being reported in the media.
The question is, will those attacks just be a retaliation and Bashar basically goes on as normal, or will those attacks degrade his capabilities, particularly his air capabilities, which you could do easily with standoff weaponry, and start getting weapons that people need, General Idris and his people need, in order to reverse the momentum on the battlefield?
If it's not that, that it simply -- frankly, it will lead to a reduction in the United States' credibility in the region. But if we do it right, and reverse the momentum here, I think that it could really have an effect in the eventual overthrow of a person who is clearly now a war criminal by using these weapons of mass destruction.
And, finally, we should note have been surprised. He has used them before and he will use them again if he thinks it's necessary to remain in power.
CAVUTO: So, I take it, Senator, you dismiss Assad's claims that these are the rebels behind this to tempt us in to topple him?
MCCAIN: The rebels never had any of these weapons.
And, of course, they're not using them. This was an area that the rebels were gaining some traction in, and Bashar Assad -- it's a very strategic area.
MCCAIN: And Bashar al-Assad had to -- felt he had to use these chemical weapons.
But he had used them before, and the president said it was a red line, and he interpreted it as a green light. Now we will see what kind of action we take, and if it's simply that we launch some cruise missiles and do that for three days, and not have a significant effect on the momentum on the battlefield, it will have a -- an unhelpful effect.
But if we do it right and we get the momentum back on to -- shifted to our freedom fighters -- and, by the way, I know who they are. I have met with them. I have been in Syria with them. And anybody who tells you that they're taken over by extremists, they are not. There are plenty of extremists in the area, but we would know who to get these weapons to.
CAVUTO: Are you sure of that, Senator?
MCCAIN: I am absolutely...
CAVUTO: Because there are these fears that, after Libya, after Egypt, we have been hoodwinked, you know?
MCCAIN: OK. In Libya -- in Libya, Moammar Gadhafi is gone. They're having problems and struggles, but they're far better off.
In Egypt, obviously, there's been a coup, and we haven't recognized this as such, another blow to our credibility, because it's the law. But I know for a fact that there are the right people we could get the right weapons to, and to say that we don't is not telling the truth. And for us to let the situation continue to evolve into a regional conflict -- look at what is happening in Lebanon, look at what is happening in Jordan.
We now have a situation in Jordan which is very unstable. Look at Iraq and Syria are becoming havens for Al Qaeda moving back and forth. So, it's not that it's just about Syria. It's about the outbreak of a conflict in the region, and the United States has passively observed it.
CAVUTO: Senator, maybe it's old news, but when Secretary of State and your friend John Kerry has said -- and the administration echoed this by varying personnel -- that it's past the time that U.N. inspectors could do any good, they had quite the opposite tack and position when -- with getting into Iraq and then things quickly went bad and then said that we didn't give those inspectors enough time.
Anything odd about that to you?
MCCAIN: I think that there's a tremendous blow to American credibility when our secretary of state went to the United Nations Security Council and alleged that there are weapons of mass destruction that Saddam Hussein had.
I don't think there's any doubt about that. That's history, and obviously that created a credibility gap, not only in the region, but amongst the American people. But, in this case, it is without a doubt that these chemical weapons have been used. You have seen these horrifying pictures.
CAVUTO: No, no, I have, Senator. By that, I meant to say it was no doubt in the past that Saddam Hussein had certainly used chemical weapons on his own people.
MCCAIN: Yes. Yes.
CAVUTO: There's no doubt now that certainly chemical weapons are being used, you know, on the Syrian people. But I guess what I'm just noticing is the different way it's being treated now vs. then.
MCCAIN: Well, one of the major differences is that the president of the United States, Barack Obama, said that if they use these weapons, it would quote "cross a red line" and we would be compelled to act.
Now, when a president of the United States makes that statement, then obviously there can't be any avenue except one, to take action. And my concern is...
CAVUTO: But what is your definition of action, Senator?