This is a partial transcript from "The O'Reilly Factor," May 30, 2007, that has been edited for clarity.
BILL O'REILLY, HOST: "Unresolved problem" segment tonight, the proposed immigration bill has divided Americans and caused great anger, as you know. And one of those getting pounded is Senator John McCain, a sponsor of the bill and a presidential candidate.
The senator entered the no spin zone yesterday. And here's what happened.
O'REILLY: Senator, what I want to do is raise objections to the immigration bill by both sides, the right and the left, and have you reply very specifically to those objections.
Now the first one is we're rewarding bad behavior, illegal behavior. We're giving 12 million people who broke our laws the ultimate prize, American citizenship. Why should we do that?
SEN. JOHN MCCAIN (R), ARIZONA: Well, right now, it's de facto amnesty because we have 12 million people who are here illegally. It is a national security issue. Three of the people who wanted to attack Fort Dix were people who came across our southern border.
We are doing everything short of deportation. We're talking about a 13-year period. We're talking about fines. We're talking about learning English. We're doing literally everything that I can think of to make sure that illegal behavior is punished.
O'REILLY: It's an unfair situation. You've got other people in other countries playing by the rules. And then these people come in illegally. They break the law, and they get the prize of American citizenship.
MCCAIN: Actually, they get in line behind everybody else who has been outside of the country legally and applying for green card/citizen status. We put them at the end of the line behind them after they have gone through numerous hoops, including a touch back to the country of origin.
You've got two choices here, Bill. You either round up and deport 12 million people, and I know of no one who thinks that's a good idea nor practicable. Or you make sure that you do everything possible to make sure that they pay a very heavy price for having acted illegally and breaking our laws.
O'REILLY: All right, now some conservatives don't trust the government to secure the southern border. They say that under President Reagan, Bush the elder, President Clinton, President Bush the younger, all four presidents could have secured the border. Did not. Caved in to special interests like big business and the Hispanic lobby. And why should we believe that the federal government now will secure the border?
MCCAIN: Well, they have every reason to be legitimately skeptical and in fact angry, because we did promise them that we would secure the borders and we didn't.
One, we learned that lesson. Two, the status quo is totally unacceptable. It is a national security issue. Nothing will happen, nothing, until the Department of Homeland Security certifies that we've taken the necessary action to secure our southern border.
O'REILLY: Are you going to guarantee me that border is going to be secured, locked down so these people can't come across? Are you going to guarantee it, put your good name on it?
O'REILLY: Will there be stepped-up punishment for people who try to cross in after this bill is signed?
MCCAIN: We passed an amendment that it's automatic jail if they cross our borders illegally.
O'REILLY: Automatic jail?
MCCAIN: For this proposal. Automatic jail and no more catch and release.
O'REILLY: Do you think there's a racism thing involved in this? Linda Chaves, one of our contributors who you know very well…
O'REILLY: ...wrote a column on townhall.com and said, you know, there's a number of Americans who just don't like Latinos. And that's what the opposition is all about there. Do you believe that?
MCCAIN: I do know this, that there's genuine fear out there, Bill. And you know it, too, because our borders are broken. People are in our country illegally. As I mentioned, there's clearly people who want to do bad things to get across our border. And I understand that legitimate fear.
O'REILLY: Now on the left. The objection is there's not enough illegal aliens in here. The New York Times wants open borders. They want all the 12 million legal people who will be legalized to bring in their extended families. Not just wives and children, but moms and dads, brothers and sisters.
This would lead to in my calculation 40 and 50 foreign nationals being absorbed into the United States in the next 12, 13 years. That would sink the Republican Party, I believe, because we'd have a one-party system. And change, pardon the pun, the whole complexion of America. Am I wrong?
MCCAIN: No, you're right. The second thing that are on the left they're against is the temporary worker, as you know. We say two years go back for a year, two years, go back for a year. They don't want that. They don't want them to have to go back.
O'REILLY: But the strategy is…
MCCAIN: People can come and work.
O'REILLY: Do you understand — and I'm not saying this in a condescending way, you're smarter than I am.
O'REILLY: But do you understand…
O'REILLY: …what The New York Times wants and the far-left want? They want to breakdown the white Christian male power structure of which you are a part, and so am I. And they want to bring in millions of foreign nationals to basically breakdown the structure that we have. In that regard, Pat Buchanan is right. So I say that you've got to cap it with a number.
MCCAIN: In America today, we have a very strong economy, low unemployment. So we need additional farm workers, including by the way, agriculture. But there may come a time where we have an economic downturn and we don't need so many.
O'REILLY: OK, but in this.
MCCAIN: So I think it has to vary.
O'REILLY: In this bill, you guys got to cap it.
O'REILLY: Because you're estimated there's 12 million. There may be 20.
O'REILLY: You don't know. I don't know. You got to cap it.
MCCAIN: We do. I agree with you. But I also would remind you, again, that they have to get behind everybody else who tried to apply legally. They have to pay the fines. They have to go back to the country of origin.
O'REILLY: I got all of that.
MCCAIN: They have to take a minimum of 13 years, as you know. So to call that amnesty, in my view, is a stretch.
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