Transcript: Sen. McCain on 'FNS'

The following is a rush transcript of the December 20, 2009, edition of "FOX News Sunday With Chris Wallace." This copy may not be in its final form and may be updated.

CHRIS WALLACE, HOST: I'm Chris Wallace, and this is "FOX News Sunday."

It's the Sunday before Christmas, but all through the Senate health care reform awaits to be finished. Can Republicans block the legislation? We'll ask their point man, Senator John McCain.

Can Democrats hold on to the magic 60 votes to pass their bill? We'll ask two of their key players, Senators Kent Conrad and Amy Klobuchar. McCain, Conrad and Klobuchar — only on "Fox News Sunday."

Plus, the Copenhagen compromise — is it a meaningful deal or empty rhetoric? We'll ask our Sunday group what it means for global warming and President Obama's image.

And our Power Player of the Week, honoring the nation's military during the holiday season, all right now on "Fox News Sunday."

And hello again from Fox News in Washington where we have been hit with 16 inches of snow. In case you don't know how Washington handles the white stuff, that qualifies as a full-fledged blizzard around here.

But the weather aside, the Senate is in session working on health care reform, and it looks like Democrats now have the 60 votes they need to pass it. Here to discuss what Republicans do now is Senator John McCain.

And, Senator, thanks for coming in. Welcome back to "Fox News Sunday."

SEN. JOHN MCCAIN, R-ARIZ.: Thank you, Chris.

WALLACE: Now that Senator Ben Nelson has signed on to the Democratic plan, is there anything...

MCCAIN: Signed on, is it ...

WALLACE: Well, we'll talk about that. Is there anything that Republican senators can do to stop the Senate from passing health care reform by Christmas eve?

MCCAIN: Probably not. But what we can do is continue winning the battle of American public opinion.

It's very clear since we have been waging this battle on the floor of the Senate and on the — all over America that increasingly American public opinion is against this massive new addition to our debt and deficit and government intervention in health care in America.

So we'll fight the good fight. We will fight until the last vote. We owe that to our constituents, because we can't — we must do everything. We must look back and say, "We did everything we can to prevent this terrible mistake from taking place."

WALLACE: Now, you laughed when I talked about Senator Nelson signing on. What do you think of the deal that was made that got him to be a supporter, the 60th vote?

MCCAIN: I'll let the American people judge the fact that Medicaid costs will not be borne by the state of Nebraska forever, and that puts an added burden on all the other states, including mine.

But I think the real problem here and the situation that we have gotten ourselves in is that the president of the United States when running said we would have a new way of doing business in Washington, there would be change, he — we would negotiate across the table, we'd have the C-SPAN cameras in.

And obviously, with their majorities — and I understand majorities — they decided to govern from the left and without Republican participation. That's why they're in a position of having to purchase the last vote or two.

WALLACE: The nonpartisan Congressional Budget Office has scored the bill, has read it and analyzed it. And let's put up on the screen what it says.

It says this new Democratic plan cuts the deficit by more than $130 billion in the first decade, by up to $1.3 trillion over the second 10 years, and it expands coverage to 31 million uninsured. Senator, aren't those all good things?

MCCAIN: You know, first of all, that assumes that the cuts in Medicare, which are to the tune of a half a trillion dollars, are going to take place.

That assumes that things like the doctors' fix and others are taken care of, which they haven't been in the past.

The fact is that this is — and of course, only Bernie Madoff would approve of this kind of budgeting. In other words, for the first four years after this budget is signed, the taxes are increased and the benefits cut, and the costs are reduced.

It is only after four years that the benefits kick in. So I'm not trying to get too arcane here, but if you go out and you buy a car, nowadays you don't have to pay for a year. Now this deal is you pay for four years before you get the benefits. That is budget gimmickry, and we all know it.

WALLACE: One part of the Democratic plan that you've hit hard, and you referred to it, is the almost half trillion dollars in Medicare cuts that are provided for in the bill. Here's what you said recently on the Senate floor.


MCCAIN: These are not attainable cuts without eventually rationing health care in America, and rationing health care for our senior citizens.


WALLACE: But, Senator, Democrats point out that during the last presidential campaign, last year, you proposed big cuts in Medicare and Medicaid, and Senate Majority Leader Harry Reid accused of you a, quote, "big belly-flop flip-flop."

MCCAIN: The fact is is what I proposed was changing the tax treatment of employer-provided health care benefits, that we would give Americans a $5,000 refundable tax credit to go out and buy insurance wherever they want to.

I also had medical malpractice reform. I also had ability to go across state lines to buy insurance of your choice, outcome-based treatment, wellness and fitness...

WALLACE: But — but — but...

MCCAIN: ... all of those...

WALLACE: ... to be fair, Senator...

MCCAIN: ... were reductions — all of those lead to reductions in cost of health care.

WALLACE: But to be fair, Senator...

MCCAIN: And the fundamental — wait. Let me just say, the fundamental of it was not providing — was removing the tax benefit from health-care-provided (sic) health benefits.

WALLACE: But to be fair, in the campaign you wanted to cut government funding for Medicare Advantage and, according to a Wall Street Journal article in October of 2008, after talking to your top economic adviser, Douglas Holtz-Eakin, that you — you proposed cuts to Medicare and Medicaid of $1.3 trillion over 10 years.

MCCAIN: And the immediately debunked that article by that Wall Street Journal writer. It was false. They called it false. It had nothing to do with our proposal.

Of course we need savings in Medicare and Medicaid. Ask Dr. Coburn. We can find all kinds of savings in fraud, abuse and waste. But we certainly aren't going to do it by taking away Medicare Advantage from 330,000 citizens of mine who are under Medicare Advantage program, which has been most successful.

We can reduce costs, but these kinds of draconian cuts that they're talking about, a half a trillion dollars, is certainly not doable in any way, shape or form. And it is violating the president's commitment to the people who are under Medicare.

WALLACE: As of today, the president — as of today, the president has been in office 11 months. How do you think he's done? Has he been the president he promised when he ran against you?

MCCAIN: No, in this respect. He said there would be a change in the climate in Washington. There's been a change. It's more partisan. It's more bitterly divided than it's been.

I have never been asked to engage in a single serious negotiation on any issue, nor has any other Republican. Now they've brought single Republicans down to try to pick off one or two Republicans so you can call it, quote, bipartisan.

There's never been serious across-the-table negotiations on any serious issue that I have engaged in with — I and others have engaged in with other administrations, both Republican and Democrat.

WALLACE: Are you saying...

MCCAIN: I'm saying there has been no real effort...

WALLACE: More partisan than Bill Clinton?

MCCAIN: Oh, in some ways, of course. Yeah. At least under "Hillary-care" they tried seriously to negotiate with Republicans.

There's been — there has been no effort that I know of that — serious across-the-table negotiations, such as I have engaged in with Democrats and with other administrations. And that was the commitment that the president made.

Look, they can govern however they want to with a majority, but the commitment that the president made to change the climate that, quote, "sit down and bring the C-SPAN cameras in so that —" and that's practically an exact quote, Americans can see who's on the side of the pharmaceutical companies and who's on the side of the American consumer.

Guess the most unsavory deal of all, of all these unsavory deals — the pharma, with the pharmaceutical companies. We could have saved $100 billion to consumers by being able to re-import drugs from Canada. We turned it down.

Medical malpractice reform — ask any doctor. They'll tell you that the practice of defensive medicine drives up the cost of health care. There's no provision in here for that because of the trial lawyers.

WALLACE: The president, talking to Oprah Winfrey, gave himself a grade of B-plus the other day and said if we get health care reform it tips into an A-minus. What grade do you give him?

MCCAIN: Well, I would still give him an incomplete, because I still think we can win overtime on this health care issue. I think he has fond out in Copenhagen in some rather bizarre scenarios that maybe it's more important to be respected than to be loved.

WALLACE: Well, let me ask you — let me pick up on Copenhagen.

MCCAIN: And by the way, I don't — presidents I know usually don't grade themselves. Usually they let the people grade them.

WALLACE: President Obama is just back from Copenhagen with a climate deal that he called an unprecedented breakthrough. How meaningful do you think it is?

MCCAIN: I think that the fact it has no binding provisions to it whatsoever is a rhetorical attempt to cover up what was obviously a serious failure.

But again, the American people right now are not interested in giving $100 billion to other countries, not when we have 10 percent unemployment, and we have people who can't stay in their homes and the serious economic situation that prevails in the United States today.

WALLACE: Some people are asking — and I know you know this because you read the papers; you're aware of what people say — "What's happened to John McCain?"

You, for instance, were a big supporter of global warming legislation, and yet two of your closest friends in the Senate, Joe Lieberman and Lindsey Graham, came out with a provision and you said it was horrendous.

And on many issues observers say that you have become this year more combative and more conservative.

MCCAIN: I, unfortunately, have always been combative. Second of all, I'm having...

WALLACE: Have you always been conservative?

MCCAIN: Yes, although I've certainly stood up for the things that I believe in. But look. I'm — I am happy with the honor of serving the people of Arizona. I am happy to be back in the arena. I'm happy that people listen to my views and enjoy the debate and discussion.

I still continue to work across the aisle with my Democrat colleagues. But the fact is this issue that's before us is one-sixth of the gross national product of our country. We have to fight with every tool we have.

And the debates we've been having have been vigorous, respectful and very important. And American public opinion has swung way over in our direction. Most Americans now want to do nothing. And I — and I — at this moment, and I agree with them.

WALLACE: Does the fact — you may argue whether it is a fact, but does the perception that you have moved to the right this year have anything to do with the fact that you might face a possible primary challenge from former conservative congressman J.D. Hayworth next year?

MCCAIN: I have always taken every race that I'm in seriously, no matter who's running against me. But the fact is that I have gotten back in the arena. I have fought for the things that I believe in. I've worked with the administration on defense acquisition reform, on a whole variety of issues.

I will continue. I believe the job of the loyal opposition is to work with the president and the Democrats where you can. But where it's philosophically fundamentally different, do everything you can to see that your point of view prevails.

And I've been very happy to have the teamwork with my colleagues and the Republicans in the Senate and the work they've been doing, and I'm proud of every one of them.

WALLACE: In the time we have left...


WALLACE: ... let's do a lightning round...


WALLACE: ... of quick questions, quick answers. I know you like this.

MCCAIN: It's my favorite.

WALLACE: You support, and have supported for years, the idea of closing Guantanamo.


WALLACE: What do you think of the president's plan — apparent plan to send up to 100 detainees from Guantanamo to a prison in rural Illinois?

MCCAIN: I think it's a serious mistake, and I think that the way to dispose of the — of this issue is by having an overall policy.

Right now they're going to — they're going to try terrorists in New York City, thereby giving Khalid Sheik Mohammed what he wanted when he was captured. He said, "I want a trial in the United States and a lawyer." I think they're making a serious mistake.

WALLACE: What's wrong with Thompson, Illinois?

MCCAIN: Well, first of all, I think that it's anywhere in the United States. It's not the fact that it's Thompson, Illinois. It's any...

WALLACE: No, but what's wrong...

MCCAIN: ... any place.

WALLACE: ... with sending them there?

MCCAIN: I think that they should be either sentenced to have the kind of military commissions that we have outlined in law and may make — have to make additional changes to, and — because they are enemy combatants, and I don't think they should be kept in prison in the United States.

WALLACE: Iran keeps enriching uranium. It has now just tested a missile that apparently could hit Israel. Has the president's effort to diplomatically engage Iran failed? And what should he do now in terms of sanctions or military action?

MCCAIN: Well, obviously, we've just given the Iranians some additional time to continue their efforts at acquisition of nuclear weapons. And we have additional information about the work that they are doing.

The president should impose sanctions and all the ones we've talked about and will on this program. But the president should stand up for the people who are demonstrating and risking their very lives on behalf of freedom on the streets of Tehran.

The president refused to speak up when the first days of those demonstrations I think was wrong and I think we ought to have — be able to — I think we should pass legislation to encourage that — those demonstrators, to provide them with the information that they need and the moral support.

It's not an accident the demonstrators are saying "Obama, Obama, who's — are you on — are you with us or are you with them?" Let's make it very clear we are with these people who are struggling for freedom as we always have.

WALLACE: Finally, your running mate, Sarah Palin, went on a — I assume you know this — went on a vacation — you can look at the picture there — to Hawaii and wore a sun visor with your name blacked out in magic marker. She says she adores you, she just wanted to travel incognito. Your reaction?

MCCAIN: Can't you take her at her word? It's — Sarah and I and Todd, Cindy — we have a wonderful relationship. We're dear friends. She is a — going to be a force in the Republican Party for a long time. And the hysterical attacks on her from the left continue to validate that.

WALLACE: So what do you think of the blacked out...

MCCAIN: Oh, it's fine. Sarah said she wanted to be a little bit incognito. I don't blame her. I understand that. But the fact is — I mean, are we in such a world now where we have climate change, health care reform, all these issues that are going on — massive debts and deficits — that we worry about Sarah Palin's visor?

WALLACE: I didn't ask you about Tiger Woods, Senator.


MCCAIN: Thank you. Thank you, Chris.

WALLACE: Thank you so much...

MCCAIN: Good to be with you.

WALLACE: ... for coming in, especially braving the elements to come in today. Merry Christmas to the McCain family, and we'll see you in the new year, sir.

MCCAIN: Same to you.

WALLACE: Always a pleasure.

MCCAIN: Thank you.

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