This is a rush transcript from "Your World With Neil Cavuto," May 6, 2009. This copy may not be in its final form and may be updated.

NEIL CAVUTO, HOST: Gitmo, here we go again. Forget if these Gitmo guys come here, are they going to get welfare benefits if and when they do? The president’s intelligence director says they deserve some assistance. Republicans today saying no way.

(BEGIN VIDEO CLIP)

REP. TODD TIAHRT (R), KANSAS: The plan is for the Obama administration to give them legal status. They will have legal status here which will qualify them for food stamps, for health care, for other employment benefits. And I think the question is, are these repentant sinners?

And the question is, no, they are not going to change in their lifestyle. These are people that have taken a vow to carry out violence.

(END VIDEO CLIP)

CAVUTO: All right. Exclusive reaction from, I think you know that fellow on the other side of me there, former Republican presidential candidate, war hero, John McCain.

Senator, good to have you. What do you make of this? If they are going to be here, take care of them?

SEN. JOHN MCCAIN (R), ARIZONA: Well, first of all, Neil, they should not be eligible for any benefits. That would be crazy. But the major point here is that President Obama, with great fanfare, announced the closure of Guantanamo Bay, the prison at Gitmo, as we know it, and then, nothing.

In other words, they did what, you know, that everybody would like to see done at least around the world, et cetera, but then no addressing of the fundamental issues associated with it.

What do you do with the detainees? What sort of system of trials do you have for them? Where do they go if you’ve got to keep them? Are you going to have some of them released and — around 10 percent of them if you know have gone back into the fight?

The number two Al Qaeda guy in southern Afghanistan is a former detainee, one of the high-ranking guys in Yemen, a former detainee. So we have to have a policy besides just announcing the quote "closure of Gitmo." You see my point?

CAVUTO: I do. And this is the first time I’ve heard the administration say — Senator, maybe you follow this a lot more closely than do I, but that it’s possible we are going to have some of these guys here who will never be tried and who could be just out on our streets.

And I guess the point of the security director’s view was, well, if they are, then we’ve got to do something for them. What do you make of that?

MCCAIN: I make of it that that is crazy. But I also make of it that there are going to be people who are enemy combatants that we can’t convict in a court of law, OK? And it seems to me there has got to be a review of their cases that would be carried out by special courts so that we would be able — they would be able to have some kind of review.

But to just release them, obviously — look, look, this is a very complex issue, and I do not want to get legalistic, but these are tough decisions that have to be made, including review of their cases, including what kind of trials, including the fact that they are enemy combatants, and our first and foremost priority is protection of the United States of America.

And we are still, even if you want to call it overseas contingency, we are still in a struggle against radical Islamic extremists. But they shouldn’t have welfare, any other benefits.

But first, we have got to address the fundamental issue. If you are closing Gitmo, then what are you going to do with them? Do you see my point?

CAVUTO: I do. Let me ask you, though, a lot of countries have offered, we are told, to take some of these detainees. I do not know if we have formally taken them on that offer. Should we call their bluff, if it is their bluff? What do we make of it?

MCCAIN: Well, first of all, I have not heard any real substantive offer. I heard that one country, and I forgot which one it is now, offered to take one. One, count ‘em, one.

These countries do not want them, Neil, otherwise they would have kept them themselves. They have had ample opportunity, very frankly. I don’t - - that is not the solution to it, because they are just not going to take them.

CAVUTO: All right. Let me — if you don’t mind, Senator, switching gears a little bit, we are all going to be hearing from the leaders of Afghanistan and Pakistan meeting with the president today. I think Hillary Clinton will be there, as well.

It comes at a touchy time here when the Taliban is within 60 miles of Islamabad. How dangerous is this right now, in your eyes?

MCCAIN: I think it is dangerous. General Petraeus said the next few weeks in Pakistan will have — will be very significant. I do not believe that the Taliban is going to take over Pakistan. I do believe that the government is in trouble. I believe their economy is in trouble. I believe that their military is still not condensed. That their greatest enemy is from within and not India. Most of their military still want to combat or be prepared for a war with India.

There is a lot of problems. I don’t believe that the Taliban is going to take over, but I do believe that we have to do everything in our power to make sure their nuclear inventory is secure and help them in any possible way.

I would give them some immediate direct aid. They have to be convinced we are there for the long term, not like before, when we left the whole area , as you know. And so there is a lot of work to be done.

But these are difficult times, but I don’t think that the government of Pakistan is on the verge of collapse, as some have said they are.

CAVUTO: Do you distinguish, as do many now in the foreign- policy community, Senator, between the Taliban and Al Qaeda? That just because the Taliban is encroaching does not mean Al Qaeda is? That the two are distinct and different?

MCCAIN: They worked hand in glove too often for me not to — for me to make a distinction without a difference. Al Qaeda and Taliban both are inimical to everything we stand for and believe in, whether it be rights of women, whether it be — all others, they are — they worked together in the past, and I am confident that if the Taliban succeeds, you would have a reemergence of Al Qaeda in Afghanistan, or wherever else they would succeed.

CAVUTO: So while lately we tried to build a distinction, I guess as we did shortly after with the PLO with the Palestinian Authority, do you make a similar distinction between the Taliban and Al Qaeda?

MCCAIN: No, I really don’t. They are a direct affront to everything we stand for and believe in. They have abused human rights. They want to impose their version of the Quran on people in Afghanistan, Pakistan, and around the world. I think they pose a direct threat to the security of the United States of America.

CAVUTO: While I’ve got you here, Senator, another bulletin came in. You are probably aware of it already. President Obama has urged to find another $17 billion in cuts in the budget right now.

It seems like a relative drop in the bucket given the substantial sums we’re talking about here, but what do you make of that?

MCCAIN: Well, it is better than $100 million.

(LAUGHTER)

MCCAIN: What I would say is, just say you are going to veto any bill with earmarks and pork barrel spending on it that comes across your desk. You will cut tens of billions that way. You will cut — it is amazing how much he — just say, no more earmarks, no more favors to constituents, no more...

CAVUTO: But they don’t call them earmarks any.

MCCAIN: . of the corruption that has been going on.

CAVUTO: They don’t call them earmarks anymore, right, Senator? I mean, maybe they’ve gotten rid of the problem they think by not calling them earmarks, isn’t that the problem?

MCCAIN: Well, they may put lipstick on the pig, but it is still a pig. And the fact is the earmarking goes on, the supplemental, the last C.R. had 9,000 earmarks on it. It is still out of control. It is still disgraceful. We read about its influence in the newspapers all over America.

CAVUTO: I do want to mention politics, if you don’t mind, Senator, I know you have got to get going soon, but Jeb Bush spoke a couple of days ago about the need for Republicans to move past Ronald Reagan, to get over this fixation with Ronald Reagan, though he was very respectful of Ronald Reagan.

But he said the party has to move forward. What did you make of that?

MCCAIN: Well, first of all, I think Jeb Bush is one of the great people I’ve known on education, he was a great governor in the state of Florida, and a great man.

I think what Jeb Bush was saying is we have to adhere to principles of our party, but we have to adjust to the new challenges of the 21st Century. Technologically speaking and many other challenges that this country faces that Ronald Reagan didn’t.

The Cold War scenario is different from the one today. Many of the economic challenges are different. But I don’t think he meant abandoning the principles of Ronald Reagan. I think he meant adjust to the new realities of the 21st Century.

I will give you a good example. I think, unfortunately, that the Obama campaign made a better use of modern technology and communicating than the McCain campaign did. Let’s catch up with that and let’s pass them up. Let’s make good use of these new methods of communicating, including Twittering, which I do all of the time.

(LAUGHTER)

CAVUTO: I can see you Twittering. Senator, thank you very much. Good to have you here.

MCCAIN: Thanks, Neil. Good to be with you.

CAVUTO: Senator John McCain.

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