This is a partial transcript from "The O'Reilly Factor," July 26, 2005, that has been edited for clarity.

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BILL O'REILLY, HOST: Thanks for staying with us. I'm Bill O'Reilly.

In the "Unresolved Problem" segment tonight, what should be done to secure the borders? Should there be an official policy to interrogate captured suspected terrorists? And who should be the Republican nominee for president in 2008?

Perhaps Senator John McCain can answer those questions. He joins us now from Washington.

All right. I want to walk through this border thing first. This is very important to you, because you have just introduced a bill, along with Senator Kennedy, to try to get this illegal immigration thing under control.

Would you agree with me that no policy concerning illegal aliens is going to work unless we stop the hoards from coming across the southern border? Would you agree with that?

SEN. JOHN MCCAIN (R), ARIZONA: I would agree with that. I would say it's our first priority.

O'REILLY: But in your bill, there is not a specific way to do that.

In the Kyl-Cornyn (search) bill, which is a competing bill to yours, Senator Kyl, your fellow senator from Arizona, they say they will fund 10,000 border patrol agents immediately, and an additional 10,000 to crack down on businesses which hire illegal aliens. You don't have anything specific in your bill to secure the border.

MCCAIN: Well, we have provisions for dramatically increasing border enforcement.

And by the way, you couldn't train 10,000 border patrol agents. And we also place a lot of emphasis on high tech, such as UAV's and lasers and others.

Look, Bill, there's no argument whatsoever nor difference between me and Senator Kennedy and Senator Cornyn and Senator Kyl on the need to enforce our border.

What we do also need — and they have sort of agreed and the White House has agreed, the president agrees, we need a guest worker program to go along with it to relieve some of the pressures that are coming across with illegal alien — immigration so that we can arrest and take care of possible terrorists and drug dealers.

O'REILLY: Well, I agree with — I want a guest worker program that runs efficiently for the good of the country, and I don't think — very few people would object to that.

But I'd also like a solution to border security, not only to stem the millions that are coming in here illegally but to protect my family and your family from somebody who is going to come in here and try to hurt us. Now...

MCCAIN: I couldn't agree with you more. The devastation in Arizona is...

O'REILLY: OK. Then why — it's unbelievable. It's unbelievable.

MCCAIN: I'm all for it. I just tried an amendment on the Homeland Security Appropriations Bill (search) to increase the number of beds and to increase the number of agents that would be hired this year.

O'REILLY: And what happened to it?

MCCAIN: It went down because...

O'REILLY: It went down.

MCCAIN: Yes, it went down, because somehow it was — well, you'll have to ask the opponents of it. But you know one of the big problems right now is if you're not from Mexico, they call OTM, and now they come across the border and look for a border patrol agent, because he gives you a, quote, "permissio." You're supposed to show up in court, and you're on your way. Because we don't have enough beds to detain these people.

O'REILLY: And some of them even give you a bus ticket in Texas. They even give them bus tickets up north.

MCCAIN: That's exactly right.

O'REILLY: Here's the deal, though. You guys could stop this immediately if you put the National Guard (search) on the border to back up the border patrol. It would stop it cold. It would also stop the narcotics trafficking. And the Guard is certainly capable of doing that on a temporary basis while you did train 10,000 or however many border patrol agents you need to control the situation.

Look, we're all for high tech. That's good. We want to spend the money. We're all for guest worker program in an orderly manner. But the federal government seems paralyzed, and it's the most powerful nation in the history of mankind.

You're telling me you can't move National Guard units down there to back the border patrol up and I don't believe you.

MCCAIN: No, I think you should do some, but I would remind you that our Guard is very much under stress because of the commitments in Iraq and Afghanistan, as you know, also, Bill.

O'REILLY: There are people available. You know in your state there are Guard available to do that. If there were a riot in Phoenix tonight, the governor would call out the Guard and the Guard would secure the city.

MCCAIN: Yes. But also, I'd like to remind you of two things. One of them is the temperature on the Arizona-Mexico border probably today is around 120-something degrees. It's awfully tough living.

And the reason why I emphasize high tech is UAV's work. They work in Afghanistan. They work on our border. Lasers on level ground works. We — I don't believe you could mobilize enough of the National Guard to completely seal off our border just in the Arizona-Mexico border. But I would — I would not...

O'REILLY: If you just did Bisby, Douglas, and Tucson, you're knocking out 80 percent of the problem. New Mexico doesn't have a problem, except in El Paso. And Texas has got four choke points. California is a different story. Go ahead.

MCCAIN: Nothing. But look, I think we're arguing a little bit over nuances. If you look at the Mexico side of the border of Arizona, there's a paved road. There's a paved road that goes along the border, and these people, these coyotes drive along that border.

O'REILLY: And they've got the cops and the — they've got the cops and the Army helping them. But until...

MCCAIN: Yes, they do.

O'REILLY: Until you sanction Vicente Fox (search), that's going to continue. All right.

MCCAIN: Well, we've got to get Mexican cooperation. There's no doubt about it.

O'REILLY: Yes, you're not — unless you threaten them, you're not going to get their cooperation. There's too much money they make by this trade. You know that. They send the dollars back. You know what it's all about.

MCCAIN: There's a guy that running for governor of Texas named Kinky Friedman (search). He says, "You give the Mexican generals $1 million and for every illegal that gets across, you take away $10,000." Maybe we should try that.

O'REILLY: Yes, maybe. You know...

MCCAIN: Seriously, seriously. We need high tech. Go ahead.

O'REILLY: You met with Vice President Cheney. Cheney doesn't want any restrictions on the detainee interrogations. OK? And he's adamant about it.

MCCAIN: I don't think he does. I think he sincerely believes that they're being treated in a humane fashion. I don't think that the president wants to do anything that would be in violation of a number of international agreements.

O'REILLY: But didn't he try to convince you, according to all the papers, he tried to convince you and some other Republican Senators not to put these things down in writing in the Army manual to give the president the flexibility to interrogate as he sees fit?

MCCAIN: I think that he felt — and he'd have to speak for himself, but I think he felt that it was not necessary for the Congress to act. And obviously, that happens a lot of times in tensions between the executive and legislative branch.

O'REILLY: But do you want Congress to actually tell the president of the United States what he can do as far as interrogating terror suspects?

MCCAIN: I want us to abide by the international agreements we've made in concerning human rights and against torture. And I also want to codify what has been used in the past wars, and that is the Army field manual, which sets out specifics as far as interrogation tactics.

O'REILLY: But isn't this a different situation? I mean, what if somebody had knowledge of a nuclear device going off? I mean, I think you'd have to do anything you can, right?

MCCAIN: Then — absolutely. And then the president of the United States should make the decision that we could no longer adhere to the international agreements that we are signatories to.

Don't think that you get anything out of torture, Bill, because you don't. And I know that for a fact. And the other thing is that when people see pictures of Abu Ghraib around the world and in Arab countries, that it hurts us enormously.

O'REILLY: Terrible. Absolutely. I agree with you.

MCCAIN: And one of the reasons why those people in that prison acted the way they did, they did not have specific guidelines as to how to act. That was one of the problems.

O'REILLY: I'll agree with you. I'll agree with you there. But I think that coerced interrogation, the Bagram guys tell me it works. It's just a matter of degree.

I've got to ask you one more question before I let you go.

MCCAIN: Sure.

O'REILLY: Hillary, you know — are you going to run against Hillary? Hillary has got — you know, you're going to be 72 years old. Are you going to make a break for it? Are you going to do it?

MCCAIN: No, I'm going to decide in a couple of years, but I obviously am not considering it now, because I want to work on things like we just discussed.

And by the way, we are not that far different on this issue of border security. It is a matter of national security.

O'REILLY: You bet it is. And we just want the federal government to take very aggressive action in solving this problem, because it's been going on for so long.

MCCAIN: I was at a briefing at the White House today. I think you're going to see some pretty strong proposals coming out of the president.

O'REILLY: All right, Senator. You are welcome any time on this program. We appreciate you taking the time tonight. Thank you.

MCCAIN: Thank you.

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