This is a partial transcript from Your World with Neil Cavuto, October 1, 2003, that was edited for clarity.

Watch Your World w/Cavuto weekdays at 4 p.m. and 1 a.m. ET.

NEIL CAVUTO, HOST: Now to a congressman who is all for spending our money, but it better benefit first our companies. And he’s not so sure that is the case right now.

With us now, House Armed Services Committee (search) chairman, Duncan Hunter.

Chairman, thanks for coming.

REP. DUNCAN HUNTER, R-CALIF., ARMED SERVICES COMMITTEE CHAIRMAN: Good to be with you.

CAVUTO: You have been urging the Defense Department to buy American, to focus on American-made weaponry and products that help that weaponry. But you’ve kind of gotten a lukewarm response from the powers that be, certainly in the administration and outside the administration.

Why is that? What are you hearing?

HUNTER: Well, Neil, we have a problem today. And if you look across the defense industrial base -- and I think this is absolutely appropriate to be talking about this in the context of the operation in Iraq -- the U.S. taxpayer is paying for the defense of the free world.

The interesting thing is that we have lost the capability in the United States to do many of these, what I call, critical and essential weapons systems. For example, we only have one machine tool company left in this country that can do the high-end work on our most sophisticated systems. We only have three titanium makers who can make that the most important military metal in terms of national security, only three left in the United States.

We only have one American-owned tire company left that is capable of making tires for aircraft and ground systems.

CAVUTO: Well, haven’t you answered your own concerns, sir, that if we have only a few possible candidates to do this kind of work, it behooves the Defense Department not necessarily to be held hostage to concerns that could very well go out of business?

HUNTER: Well, where you only have a couple of them, one part of the bill that we submitted this year provides for an office that would, instead of going for -- and that is, saying, OK, we can’t make it, so we have to go to Russia or we have to go to China to develop that system, that capability within the United States. If we consider it to be truly a critical, truly a unique system or something that is essential to the industrial base.

Machine tools are a good example. What we have in this bill right now, in the package that we have been negotiating with DOD, is that if you use an American machine tool maker, if you are a Boeing or a Lockheed or some other company, you get a slight advantage in a contract, in a competition.

You don’t have to do it. It is voluntary. There is not a subsidy. But if you do it, you get a slight advantage.

And that added incentive poured into the industrial base hopefully will help to build a healthier base that we can build defense systems on. Right now, we are having to rely heavily on Russia for titanium, the French for our aircraft tires, for example, and Germany for machine tools. I don’t think that is a position that we want to be in.

CAVUTO: But the fact that you are not getting much support from administration officials, or even your counterpart in the Senate, Senator Warner, indicates that they’ve thought this through and don’t think it is doable.

HUNTER: Well, actually, we’ve worked out a good agreement, I believe, with Secretary Wolfowitz, which I think has accommodated a number of their concerns in this area. And I’ve got every confidence.

I’ve worked through problems in the past with Senator Warner, with my colleagues in the Senate on the Armed Services Committee. I think there is a good middle ground here that we can arrive at before we finish this defense conference.

But, right now, interestingly, the average American taxpayer is paying about $1,000 a year for defense, for this function we are talking about. I think most Americans believe that if they’re going to have to make the defense for the free world or if they’re going to have to pay for it, they should be allowed to make the majority of it.

CAVUTO: All right. Chairman, thank you very much. We’ll see where this goes, Congressman Duncan Hunter, in Washington.

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