Senator John McCain Is Dead Set Against Hiking Taxes to Pay for Health Care

This is a rush transcript from "Your World With Neil Cavuto," July 16, 2009. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D-CA), SPEAKER OF THE HOUSE: I believe that all the cost of the health care reform bill can come from squeezing more savings.

(END VIDEO CLIP)

NEIL CAVUTO, HOST: Well, if we can squeeze savings to pay for health care, then why the tax hikes for health care?

(BEGIN VIDEO CLIP)

PELOSI: We have to have a revenue stream to ensure that the bill will be paid for. If we don't need that money, we can use it to reduce the deficit.

(END VIDEO CLIP)

CAVUTO: Today, a blow-by-blow description of who is really getting squeezed.

Welcome, everybody. I'm Neil Cavuto.

And I'm also a little confused. The speaker says we really do not need taxes to pay for health care, but we are going to tax rich people anyway, and then use the money to close the deficit. Now, what does have to do with health care? And what happened to that proverbial lockbox?

We are all over with it with Senator John McCain, who is dead set against this, and House Majority Leader Steny Hoyer, who is fine with us.

• Video: Watch Cavuto's interview with Senator John McCain

We begin with the former presidential candidate himself, Senator John McCain.

Senator, good to have you.

What — what do you make of that?

SEN. JOHN MCCAIN (R), ARIZONA: I — well, Neil, I — you know, I know it is a very liberal philosophy, but I don't think the American people want to be told that we're going to raise your taxes, and maybe we won't use them, but we're going to raise them anyway.

The most important event today, Neil, was that Mr. Elmendorf, who is the head of the Congressional Budget Office, made a very strong statement today I think that's going to affect this debate.

And I would just like to quote it. He said that the — the legislation doesn't have the sort of fundamental changes that would be necessary to reduce the trajectory of federal health spending by a significant amount. And then he goes on to say, on the contrary, the legislation significantly expands the federal responsibility for health care costs.

Now, that is the objective assessment by the Congressional Budget Office. And it contradicts all of the things that Democrats have been saying. The fact is, there is no cost-saving measures in this bill.

CAVUTO: All right. So, if the CBO is right — and the CBO also recently said some of these outer costs are more like $1.5 trillion to $2 trillion. I think they stuck with the $1.5 trillion, but it could conceivably get to $2 trillion — so that this is...

MCCAIN: And it also...

CAVUTO: Go ahead.

MCCAIN: And it also — and it also leaves 33 million Americans uninsured, according to CBO. And, again, there's no cost-savings measures.

CAVUTO: So, where is this going to, then, Senator? Where do you think right now this stands?

MCCAIN: I — I am not sure, because they have 60 votes here in the Senate, I would guess, certainly depending on the health of a couple of the members. They have an overwhelming majority in the House of Representatives. So, I don't know.

The president has reiterated time and again his commitment to getting through before the recess. Look, this thing is like a fish in the sun. If you leave it out there very long, it's going to begin to smell very, very badly to the American people. That is why they are in such a rush to fundamentally affect one-sixth of our gross national product.

CAVUTO: Let me ask you, though. When — when — when Nancy Pelosi indicated that, yes, we might be able with to realize these savings enough to compensate for the tax hikes we're proposing up front to pay for all of this, and just channeling that money into deficit relief, that is not how this game started.

So, obviously, someone has changed the lockbox...

(CROSSTALK)

CAVUTO: ... or just taken the key. We have played this game before, haven't we?

MCCAIN: You — look, you can't make it up.

We always have a $1.1 trillion deficit. We will have a $1.8 trillion deficit, the largest in peacetime history, staring us in the face, and then this is well over a trillion dollars. And some say it is as high as $2 trillion or $3 trillion.

But, you know, we just passed a measure that was called something like the community — I have not got the exact name for it — which basically characterized to improve the nation's health infrastructure, playgrounds, bike paths, et cetera.

And somebody is going to say that is an exaggeration, but Senator Kennedy — this is $80 billion, by the way — Senator Kennedy's spokesperson said, these are not public grants; they are community transformation grants.

And he says, if improving the lighting in a playground, or clearing a walking path or a bike path, or restoring a park are determined as needed by a community to create more opportunities for physical activity, we should not prohibit this from happening.

What happened to the $780 billion stimulus bill?

CAVUTO: Well, are they nice bike paths?

MCCAIN: I'm sure they're nice.

CAVUTO: All right.

MCCAIN: And so now, and they — it will be a huge earmark pork barrel program, $80 billion.

CAVUTO: But all of — you're right. They are in the majority, though. They are probably going to be able to get their way. And we have right now the president in New Jersey with Jon Corzine, who is in a heap of political trouble here, very much down in the polls, and he's trying to shore up support for him, because New Jersey, if you think about it, Senator, will be the first big post-presidential-vote test for this young president.

MCCAIN: New Jersey and Virginia, yes.

CAVUTO: So — yes, absolutely.

(CROSSTALK)

CAVUTO: So, let me ask you, he is trying to sell in New Jersey a health care reform package that's going to tax a lot of New Jersey residents. Many fit into that so-called upper-income zone.

How do you think that message is going to go down?

MCCAIN: Again, I think if the American people figure it out — and they're beginning to, according to the polls — exactly what is going on here, they're going to overwhelmingly reject it.

The impact on small business of the — what is being considered in the Finance Committee now is — is horrendous. Small business, the generator of jobs in America, and there is no cost savings.

Look, what we have lost sight of, Neil, is the highest-quality health care in the world is in the United States of America. The problem is the cost, the affordability. And, in this measure, there's no reining in of the costs.

CAVUTO: Yes.

MCCAIN: And that's — that is the contradiction here.

CAVUTO: All right, well, sometimes, a lot of folks look at you, Senator, and say, well, you know, the contradiction of Senator McCain is he doesn't always jump ugly on the president.

One area where you agree with him is on this funding or continued funding for the F-22. You think, as the president does, apparently, that they should go back and look at this, because it looks wasteful. Could you explain that?

MCCAIN: Well, the F-22, we have 187 of them. We need the Joint Strike Fighter.

The proposal that was passed that we're trying to kill off extended the life of the F-22 and took money from the Joint Strike Fighter, which is also very badly needed. The F-22 has reached the end of its requirements, in the view of the secretary of defense, a man I admire enormously.

Take the money, put it into the Joint Strike Fighter, so that we have a weapons system that will meet the challenges of the 21st century.

Look, this is about jobs. And I understand that. It's going to hurt jobs, but we should not use weapons systems as job creations. We should use weapons systems to defend this nation. And that is what this is about.

CAVUTO: Senator, while I have got you here, have you talked to Sarah Palin since she announced she's going to be...

(CROSSTALK)

MCCAIN: Yes. Yes.

(CROSSTALK)

CAVUTO: What was that conversation like?

MCCAIN: Very pleasant. I have the highest — we're very close friends. And Todd is — a wonderful family.

I wished her well. I knew that she was going to continue to play a major role in the American political scene and in the Republican Party. I am grateful to have known her. I am proud of her.

And the fact is, Neil — people can say otherwise — she ignited our party. I'm so proud of the job that she did. And I have never seen personal attacks made on anyone's family and themselves in the way that they have been leveled against Sarah and her family.

CAVUTO: She polls very well for 2012. Do you think she should run?

MCCAIN: If she wants to, I think she should run. It is very early in the scenario. But, if that's her motivation, I think she should run.

I think that for me to endorse would be a mistake. I don't even know if she's running or not. But the fact is, I know she will make an enormous contribution to this country and Alaska in the future.

CAVUTO: Senator, a pleasure. Thank you very much.

MCCAIN: Thanks, Neil.

CAVUTO: Senator John McCain.

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