This is a RUSH transcript from "The O'Reilly Factor," November 1, 2011. This copy may not be in its final form and may be updated.
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BILL O'REILLY, HOST: Right to the lead story: Herman Cain fighting back. As you know, Mr. Cain has been under fire on two fronts: personal allegations against him and how he's running his presidential campaign. To his credit, Mr. Cain is not ducking either issue, and he joins us now from Washington. First of all, Mr. Cain, did you expect accusations against you once you became competitive in the race? Did you expect them?
HERMAN CAIN, GOP PRESIDENTIAL CANDIDATE: Yes, we did. We did expect them. We just didn't know what type or what source they were going to come from. But it was expected and, as you noticed, and pointed out, once I got near the top in the polls and in many of them was no. 1, then they let all of the dogs out.
O'REILLY: OK. It makes sense. But you chose yesterday to engage in the conversation, which I'm not sure was the smart thing to do in the sense that you know anything you say can and will be held against you by your opponents. You're never going to convince them of anything because they just don't like your politics. So why engage at all?
CAIN: I did it for the public and I did it for my supporters. And even though I hadn't had 24 hours to process exactly what I was going to say or I hadn't had 24 hours to try and recollect some of the details, I wanted to go out front with it even though, by the end of the day, I had recalled more of the details -- Bill, this was 12 years ago. I did it for my supporters and they have responded in a positive way because I got out in front and was direct in addressing this issue.
O'REILLY: OK. So by that answer, I can assume that you weren't prepared for this kind of a situation to surface because if you had been prepared you would have had your people research exactly what happened so that you could put it forth. You weren't prepared for this? You were blindsided by this.
CAIN: Not totally blindsided, Bill. My campaign was made aware that this story might break 10 days ago. But we made a conscious decision not to go chasing two anonymous sources and not knowing what the rest of the story is going to be.
O'REILLY: No but shouldn't you then have if you were made aware 10 days ago that this could have -- could be in play, shouldn't you then have gone over with your attorneys, formulated a response, you know, they call it a rapid response team, all campaigns have them.
O'REILLY: So when it did get public that you calmly went over and said these are the facts. You seemed to be caught somewhat off-guard and you just said you didn't recollect. Shouldn't you have had all of that in your file ready to go?
CAIN: We didn't have all of that, Bill, but we did -- we do have a rapid response consultant but you are right. What happened was when questions got asked, some of them I didn't anticipate and I was trying to recollect -- I was trying to remember some of those facts in the middle of a very busy day. So you are right. Could we have started earlier such that I would have been better prepared to be more crisps with the response, yes. But I still didn't want to wait because I wanted my supporters to know that was I not about to duck this issue.
O'REILLY: OK. Do you think it's hurt your campaign, sets you back any?
CAIN: I don't think so. Bill, in the last 24 hours, our fundraising has been the highest it has been since I have been in this campaign. The phone calls into our campaign office have just locked up the phone system practically and I have many former employees who have called and stepped forward and say that they would be glad to do a testimonial on my character and my integrity. So no, I don't believe that it's hurt my campaign at all, just based upon not only the volunteers and the phone calls but the fundraising has just really gone up dramatically.
O'REILLY: How many years were you in the private sector earning a living? How many years?
CAIN: About 42 years. And I went from the Department of the Navy as a mathematician to the Coca-Cola Company as a business analyst, the Pillsbury Company as a business analyst and an information technology executive. And then from there I became a vice president with the Burger King Corporation and then president of Godfather's Pizza, then president of the National Restaurant Association. And in all of those experiences, only at the Restaurant Association did these two anonymous accusations come up.
O'REILLY: All right, so there's nothing else on your sheet. Forty-two years is a long time in the marketplace.
CAIN: Yes. Yes.
O'REILLY: And those of us who have been in the marketplace know that it's a treacherous place when you're successful. There is no doubt about it.
O'REILLY: I mean, people are jealous and whatever. So there is nothing else in the 42-year experience that you can anticipate you're going to have to deal with down the road?
CAIN: Absolutely. And as I have said, Bill, if something else comes up and it will, they are going to make it up.
CAIN: There are no other instances.
O'REILLY: And as long -- as long as you're not concerned about anything, we will see what happens.
CAIN: Nope. Thanks.
O'REILLY: Now Clarence Thomas, do you see any parallels to that situation?
CAIN: I see some parallels. But there is one big difference. I'm running for president of the United States. And, Bill, I believe that I have people on both sides of the aisle who really do not want me to get the nomination to become president. Why? Because I am an unconventional candidate and the American people are connecting with my message, and they are connecting with me.
O'REILLY: Well there's no doubt. I mean, sure.
CAIN: So it's a little different in that regard.
O'REILLY: All right, but, you know, it's the same kind -- well, anyway. There are some similarities. Now, you say you are running for president, unconventional campaign. We reported last week you got three paid workers in Iowa and three in New Hampshire. Have you upped that any? Because that certainly is unconventional.
CAIN: Well, Bill, when you reported three workers, that number was wrong. See, we don't send out a press release every day saying how many people we have on staff. We've had about nine or 10 people working full time in Iowa now for quite some time.
O'REILLY: And in New Hampshire?
CAIN: And yes, we have -- and in New Hampshire -- and we have increased that number as a result of what has happened in the past few weeks. So the reports that we have a very skimpy team in New Hampshire and Iowa and South Carolina and Florida is absolutely not true. We are ramping up very quickly.
O'REILLY: OK but nine -- nine employees in Iowa, that's not a lot. I mean, it's lean and mean. You might be able to get by with it. But compared to the others, that's not a lot. But anyway, be that as it may.
CAIN: Well it's not, Bill. But Bill, Bill, but let me add this. But we have a lot of volunteers that are dedicated and devoted. OK, you're right.
O'REILLY: Oh yes, sure, absolutely. The way it's traditionally been done is that you hire pros, they bring in their people, you organize, you get to all of that. But look, there is no doubt you are unconventional. You're doing it your way. As Frank Sinatra once said, you know, "I'm doing it my way." That's what you're doing.
CAIN: And it's working.
O'REILLY: We'll see. Now when we come back -- we're going to hold Mr. Cain over for the "B" block -- I'm going to ask some policy questions because there's a lot going on in that area.
O'REILLY: Continuing now with Herman Cain, who is in Washington this evening. The Dow dropped 573 points in the past two years (sic). Talk about spooky Halloween thing. Why do you think that happened, Mr. Cain?
CAIN: I think it happened because the financial markets are interrelated and with what's going on in Greece and what's going on in Europe, it has a ripple effect as to what's happening here. And so the stock market is naturally a little jittery.
Secondly, I believe that it dropped is because some of the latest projections about what the GDP is going to be in this country is that for the year it's going to be at or about 1.6 percent, which is anemic. So I think it's a combination of what's going on in Europe because those markets are interrelated and the anticipation that this economy is still stuck because of failed policies of this administration.
O'REILLY: You know, but you, if you were elected president, you're not going to have any power over the pinheads in Greece and the European Union who have mucked things up even worse than I think the United States has.
O'REILLY: You're not going to have any power over them. So you're going to be inheriting a world that's in chaos economically, are you not?
CAIN: You're absolutely right. But here's the deal. If this economy is growing, and it will be growing when I'm president, we become the lead dog in the world.
O'REILLY: But we're still the lead dog now.
CAIN: We are the lead dog but we are not the lead dog in growth. That's what we are missing. This is why I have proposed a bold economic growth and jobs plan. You have heard of this 999 plan.
O'REILLY: Yes and I want to ask you about that.
CAIN: I will be happy to talk about it.
CAIN: But what I'm saying is people have attacked it, that's fine. But we have to grow this economy. Right, we have to grow this economy.
O'REILLY: Absolutely, and I think that the flat tax that you're proposing would. I'm not so sure about the national sales tax at that level but, you know, it's certainly debatable. Now the Tax Policy Center and they study this kind of stuff. They are non-ideological. They say under your plan the USA would lose $300 billion worth of revenue in the first year. Not, you know, compared to what's going on, that's not an enormous loss of revenue but certainly with the $15 trillion debt, it's substantial. Would you disagree?
CAIN: I disagree, Bill. And that Tax Policy Center report is dead wrong. Now, let me remind some of your viewers that I was a mathematics major in college. And I understand what you can do to calculations if you change the assumptions.
O'REILLY: Yes, but you're basically saying they're dishonest though.
CAIN: Wait, Bill. That's exactly what I'm saying.
O'REILLY: Why would they be dishonest? They say Perry's would lose almost $1 trillion in revenue. Well, they don't seem to have a dog in the hunt here.
CAIN: Bill, if your word is dishonest it's dishonest. If you change the assumptions to basically try and discredit our analysis, that's dishonest. And that's what they did. And most analysts didn't read all the way through the report where they admitted that they changed some of the assumptions.
O'REILLY: All right, now what -- what are your projections, how much revenue would the government, the federal government lose under 999? How much would they lose?
CAIN: None. Because under 999 we had an outside analysis firm evaluate and score 999 statically and in a static evaluation we produced the same amount of revenue from five sources: corporate income taxes, personal income taxes, capital gains taxes, capital gains taxes, death taxes and the biggest tax, which is the biggest tax for most people, payroll tax. Yes, we would produce the same amount of revenue statically.
O'REILLY: The same amount.
CAIN: Then we did a dynamic analysis where we assumed some changes in business behavior and consumer behavior and calculated that we would grow this economy at about five percent GDP growth, cut the unemployment rate in half. So yes, we have evaluated.
O'REILLY: OK, but those are projections that are -- you don't know. That's what you hope happens.
All right. Let's move on to what is the most important foreign policy problem the United States has to deal with today?
CAIN: Lack of clarity.
O'REILLY: No, no. I mean, specifically. What area of the world concerns you the most?
CAIN: Oh the Middle East, obviously. Because our best friend in the Middle East is Israel. They are there. And one of our worst enemies is there, which is Iran.
O'REILLY: All right. So what are you going to do to Iran if they cause trouble in Iraq, which it looks like they will, and continue on the road to the nuclear weapon? Do you have a specific thing that you're going to do to them that President Obama is not doing?
CAIN: Let me tell you what I wouldn't be doing in Iraq. And that is I wouldn't be announcing and telling our enemy that we are going to pull out of Iraq.
O'REILLY: Well the Iraqi government did that. So we didn't have control over that.
CAIN: Well, well I know. But what I'm saying is when I become president, I will have to evaluate the situation at the time in Iraq, Afghanistan and every one of these countries because I will listen to the commanders on the ground. Now let me respond to these questions about Iran.
O'REILLY: OK, all right, let's -- yes, we're running out of time here. What would you do that hasn't been done?
CAIN: What I would do that hasn't been done, relative to Iran, two things. No. 1, develop and we are developing it and I'm going to talk about this within the next couple of weeks, an energy independence strategy with a serious independent strategy so we can become energy independent…
O'REILLY: That's not going to -- that's not going to go -- energy independence is not going to -- it's not going to influence Iran one way or the other.
CAIN: Bill, Bill, work with me here.
O'REILLY: It's going to help us, but it's not going to hurt them.
CAIN: Now work with me here Bill. No, that's not true.
O'REILLY: Well they'll sell most of this stuff to China. So China will pick up all the slack.
CAIN: Bill, work with me here. Just the fact that we have an energy independence plan, it's going to impact the world market for the price of oil about a third. What's that going to do is going to put pressure on Iran because they depend upon high oil prices in order to be able to fund that government.
Now, the second thing that I would do is I would maximize the use of our ballistic missile defense capability. I would double the number of ballistic missile defense capable ships that are Aegis warships and strategically place them in the world.
Iran understands only two things: economic pressure and our military might. And we have an opportunity to increase it.
O'REILLY: All right so you're going to put -- you're going to put the warships in the Persian Gulf because they'll attack them. You know they're going to try to do something if you do that, if you put them there.
CAIN: That would be perfectly all right because I believe that we have a superior capability.
O'REILLY: Oh we would knock them but then you are in a shooting war with Iran. Do you really want that?
CAIN: Well -- well, I don't want that, Bill. But if they fire first, we are going to defend ourselves and defend our enemies and they are no match for our warships.
O'REILLY: But isn't that a provocation if you would put warships off their coast?
CAIN: No. They have already announced that they are going to put their ships off our coast in international waters. That's not a provocation.
O'REILLY: Well all right, Mr. Cain.
CAIN: We are trying to protect ourselves.
O'REILLY: Can we continue this? Kind of like a -- you know weekly or bi-weekly or catch up to you because I think you're a fascinating guy. I just want to talk to you all the way through. Will that be OK?
CAIN: That will be OK, Bill. I look forward to it.
O'REILLY: All right. Thanks for being a stand up guy tonight. We appreciate it.
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