This is a rush transcript from "On the Record," January 13, 2010. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: Senator McCain right here and right now. And on the table, health care. Senator, nice to see you, sir.

SEN. JOHN MCCAIN, R - ARIZ.: Thank you Greta, nice to be with you.

VAN SUSTEREN: Senator, before we get into the discussion about health care, which of course is dominating much of the national buzz and talk, I want to talk to you about Haiti. What do you recommend? What can we do to help the people of Haiti? It is absolutely catastrophic what has happened there.

MCCAIN: Our Navy is always good at this business as it was after the tsunami to get supplies to get people down there. And also we may have to have people on the ground also to help to keep things under control. As you know after these things, unfortunately, there's sometimes a lot of looting.

I think our Navy on the way and our Marine Corps and some of our air assets. But it is a terrible tragedy it is made more terrible because of the terrible conditions of poverty that had forced them to build structures that were so vulnerable to such a disaster as this.

VAN SUSTEREN: And of course it doesn't help that their government isn't particularly strong, and in addition to poverty there's been so many problems it only exacerbates it and makes it so much worse, doesn't it?

MCCAIN: That's a tragic history of that country. And, yes, they've had terrible rulers and governments, but there's been -- the kind of sad thing there's been significant improvement recently, but they certainly had a long, long way to go.

VAN SUSTEREN: Today in Washington at the White House there was a meeting, the president convened a meeting that closed a short time ago. Health care, is it going to pass? And what's your thought on transparency, because that is something that has obviously consumed many of us.

MCCAIN: I guess the C-Span cameras were in there so we were able to observe what happened.

Look, it's just Chicago-style, unsavory sausage-making process they're going through. We don't know what they decided. There will be leaks and counter-leaks. There will be arms twisted and then there will be more deals made once they do that.

People have rebelled against it. I'm back here in Arizona and just had a town hall meeting. People are not only angry, they are disgusted. They are disgusted at this process that they're basically left out of, done in a backroom, done in a totally partisan basis in direct contradiction of what the president promised.

He promised a change in Washington. It's a change. It's a change for the worst. It's the worst I've seen in the years that I've been in congress.

VAN SUSTEREN: Would you be willing, and this is maybe a given, but let me ask you anyway. Would you be willing to sit down with the president? Are Republicans willing to? Democrats say you Republicans are obstructionists, that you won't talk you and are just trying to abort the whole process. What are you willing to do?

MCCAIN: We are willing to sit down. He wanted to be in on the takeoff. If you want us in on the landing, let us in on the takeoff.

The fact is this process was partisan totally throughout. I've been a part of a number of compromises and agreements and legislation that has been bipartisan in the time that I've been in the Senate. It requires people sitting down together and making concessions, not being dictated to.

And, frankly, I've never been in a process where basically it was bribery. It was bribery to buy votes by extending the "Louisiana purchase," the "cornhusker kickback," the special deals for the other states at the expense of the average taxpayer.

VAN SUSTEREN: What about -- Governor Schwarzenegger raised that and some have seized upon it, and even I've seized upon it. The whole idea -- he said that in Sacramento, if you buy a vote that it's a crime.

Now with -- although there's very little transparency, what we see is this $300 million dollar Nebraska deal that they got. How do the members of the Senate justify that? Is it just that's the way business is always done?

MCCAIN: It certainly hasn't been the way that I've done business, and it isn't the way that we've done business when we've reached an agreement on other key pieces of legislation. And by the way, there's never been a major reform enacted by Congress unless it was bipartisan.

But this process has deteriorated into -- it isn't just the "cornhusker kickback," it is the "Louisiana purchase," it's the deal that the other Senator Nelson got for Florida on Medicare Advantage, to other states like Vermont.

I mean, it's all the most unsavory thing a process that I've observed since I've been there. And the American people have figured it out and they're mad.

VAN SUSTEREN: What's the difference? I guess, in order to solve the problem, I'm sort of curious. What is different? Why suddenly do you say that this is the worst? Is it the new people in power? The fact there is -- what is it?

MCCAIN: I don't know. I think part of it is the arrogance of power. I think it's that they went into the whole process with 60 votes, figuring that they didn't need to deal with Republicans.

And the negotiations that I've been involved in, and there have been many, you sit at the table and say, OK, what's your position, and what's the other party's position? And then you reach compromises. That's how Ronald Reagan and Tip O'Neill saved Social Security back in 1983.

It doesn't have anything to do with purchasing votes. It has to do with coming together for the good of the country. That's what the president promised that we would do when he was elected, and clearly, that has not happened, and the American people have figured it out.

VAN SUSTEREN: Now, the Massachusetts race for Senate that's next Tuesday, should the Republican win, and the polls now have them neck-and- neck, but people also say these polls are not trustworthy, but that would torpedo health care or runs the risk of it if he's seated and votes against it, should he win.

Do you expect him to win or not, the Republican?

MCCAIN: I don't know. I think he's coming on strong. I think he's a great guy. I've gotten to know him.

By the way, he was the only Republican in the Massachusetts legislature that supported me in 2008. I told him he was crazy. He's a member of the National Guard. He's really remarkable guy, and he's done so well in the debates.

I don't know if he can win or not. I know he's coming on strong. And I know if he wins, then, obviously, it will have a seismic effect on American politics.

VAN SUSTEREN: As one of the heads of the Republican Party, since you were the candidate, can you pick up the phone and call President Obama and say let's sit down and talk about this, because everyone has drawn lines in the sand and there seems to be no effort to work together? Would he take a call like that from you?

MCCAIN: Well, I think he would. And I would be glad to if I thought it would change the process.

I think we're too far down the line. I think we either defeat it or and start from the beginning all over again, or it's passed, and, frankly, I think it might even be repealed. We repealed the catastrophic health bill that was passed once by the Congress.

Listen, when you've got 60-40 majority of Americans that don't want a piece of legislation, at some point public opinion kicks in.

VAN SUSTEREN: Senator, if you would stand by, please, we have so much more with you coming up next.

MCCAIN: Sure.

VAN SUSTEREN: Coming up, Senator McCain gives you the inside story on his trip to the Middle East. Get this -- seven countries, seven days, you take the trip with Senator McCain. That's next.

And then Conan is talking, and NBC executives must have a massive headache. The inside story from Conan in minutes. NBC probably wishes this was not out there.

(COMMERCIAL BREAK)

(NEWS BREAK)

VAN SUSTEREN: Seven countries, seven days -- Senator John McCain just got back from a trip to Iraq, Afghanistan, Pakistan, and other countries in the Middle East. Now you get the inside story.

Senator, it wasn't exactly sitting on the beach in the French Riviera -- seven days, seven countries. Pakistan, I want to talk about that first. What is going on with Pakistan?

MCCAIN: Before I mention that, could I just make myself clear. I know we Republicans are willing to sit down at any time with the president and the Democrats and start all over and get this health care reform done, because we need health care reform. We just don't need it done this way.

Pakistan is doing much better. The president of Pakistan is on shaky ground because of a loss of immunity that is has been enacted by the parliament. The prime minister is a, I think, also very pro-American.

I think there is no doubt that Kayani, who is the head of the Pakistani army, has a good relationship with our military leaders, Admiral Mullen and General Petraeus. The Pakistani army is doing much better, and they are sustaining significant casualties.

They are in south Waziristan and doing well there. They're planning on going into areas that have never been controlled by any government. And so I'm pleased with the progress militarily that has been made, but it is also going to be a very long, tough, slog here, and we have to prepare for that.

VAN SUSTEREN: That was not the impression I got when I was in Pakistan. I wasn't there a long, but when I was there it was checkpoint after checkpoint. The Pakistani people were saying very nasty things about the Americans. The editorials were anti-American.

They were mad because we gave them $7.5 billion dollars but we wanted to know what they were doing to spend the money on, which seemed enormously unusual to me, almost to the point of being ingrates.

And now President Zardari, he says he doesn't want the U.S. to send the drones into his country and to stop it because it's alienating his people against him.

That's maybe -- you were there more recently and got more access, but, boy, I had a different impression of that country.

MCCAIN: Let me say Greta, you make some legitimate points. There is strong anti-American sentiment in Pakistan there. There are difficulties in the government.

But I would remind you a short time ago, a year ago people thought that Pakistan, the whole government would collapse. It has not. Their military has been performing better.

This drone issue is a tough issue. But as I've said publicly, it is an important tool. It has disrupted Al Qaeda. It has significant beneficial effects. And at the same time, the Pakistani government has to condemn it, and it's a very delicate balance that going on there.

But, yes, there are difficulties in Pakistan, particularly with public opinion. But militarily, they have been doing better, and their government is far more stable than it was a short time ago.

But look, the Pakistanis are also nervous, as the Afghans are, about the fact -- as are other countries in the region, about the president's declaration that we would be leaving in the middle of 2011. That and the build-up of the Afghan army being sufficient to take over responsibilities from us eventually are the two big problems that I saw on my visit.

VAN SUSTEREN: You went to Afghanistan, and the Soviet Union years ago, they left, they gave up and they went home. What are we doing differently to fight this war? What makes it so much more different that we're staying there? What are we doing?

MCCAIN: The Soviet Union wanted to annex Afghanistan. Their brutality was unspeakable. They literally slaughtered thousands and thousands of innocent Afghans.

We visited in Kandahar with a province chief who was one of the leaders who fought against the Russians. He talked about how bloody they were and cruel and very -- and he was very interesting man. We sent you a picture of him. I hope maybe we could get it on the screen.

But he's -- it's very different. The Russians wanted part of Afghanistan to be...

VAN SUSTEREN: What are we doing militarily different that gives us a thought that we're going to win?

MCCAIN: We're working with and fighting with the Afghan soldiers. This operating base I went to outside of Kandahar, there was Afghan and American soldiers working, living, and fighting together, the same way that Americans and Iraqis did together.

The Afghans do not want the Taliban back. They don't want that kind of cruelty inflicted on their country again. Yes, there's corruption. Yes, there needs to be better police training. Yes, there needs to be a much larger army.

But the Afghan people do not want the Taliban back. They do want the United States to help them make sure they don't come back. And what they have to have is a secure environment so the economic, political and other aspects of Afghan life can continue.

VAN SUSTEREN: I can't let you go without asking you about the award that you got, the award in Georgia. Tell the viewers this is a big deal over there, this is a big award.

MCCAIN: Well, I was very touched and honored and humbled by the fact that the Georgian government gave me an award that has never been given to anyone that's not Georgian. There was a young woman who sang the star spangled banner. The whole thing was a very touching ceremony, and the Georgian people love America.

If you are looking for a place where the people really appreciate the United States of America, go to the little Republic of Georgia. It has a wonderful president.

VAN SUSTEREN: And the award, I should say, is the hero's award.

Senator McCain, thank you, sir.

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