This is a rush transcript from "On the Record," March 22, 2012. This copy may not be in its final form and may be updated.
GRETA VAN SUSTEREN, FOX NEWS HOST: Now, this one is stunning. Members of Congress had to pass a bill to stop themselves from doing what the rest of us already know is wrong. A new bill bans insider trading in Congress but that is not all it bans. Senator John McCain goes "On the Record."
VAN SUSTEREN: Senator, nice to see you, sir.
SEN. JOHN MCCAIN, R-ARIZ.: Thank you, Greta.
VAN SUSTEREN: Let me start with the recent tweet of yours that says "Good news. Senate just passed stock act with amendment banning outrageous bonuses for Fannie and Freddie excess. Next step POTUS signed into law." So you like this?
MCCAIN: I like the stock act. I think it is an important signal to send, although I don't think it has as much impact as it is advertised. But we did have an amendment on it to cut out the outrageous bonuses for Fannie and Freddie execs. And they claim they can't attract good people unless they pay them $500,000, $700,000 in bonuses when we have people who are serving in the military in the cabinet and many other positions of responsibility.
So I thought we had maybe some patriotic Americans who would like to sort out this mess of Fannie and Freddie without having to have hundreds of thousands of dollars in bonuses. By the way, their predecessors, as you know, ripped off millions.
VAN SUSTEREN: We are even paying for their legal fees. It is extraordinary. They are being investigated for ripping us off and we are paying their legal fees.
MCCAIN: And we're paying millions in legal fees.
VAN SUSTEREN: Tens of millions.
MCCAIN: You can't make that up. Instead they should be forced to give the money back. And they were, what, $50 million, Johnson, Raines, a whole bunch of those guys --
VAN SUSTEREN: A full employment act for lawyers. Send 12 lawyers to a deposition knowing that the taxpayers will pay it for the people being investigated for cheating the taxpayers.
MCCAIN: And then you wonder why the American people are cynical.
VAN SUSTEREN: The stock act, this is another one I don't get, though. You've now passed a stock act which says it is improper to do insider trading. Did you all not see Wall Street being hauled away with handcuffs that you need a special law to tell you this is a lousy idea, that this is skimming and cheating?
MCCAIN: Well, one would think that this act was not necessary, that we could expect through rather ethics rules that we have and an ethics committee. But if it makes people feel better, then fine.
VAN SUSTEREN: I thought what in the world are they thinking. It is so wrong to use inside information to cheat and get an advantage as a member of Congress or the House or the Senate. And yet it was going on and there was reason some resistance to passing a statute to inform the members don't do this, this is wrong.
MCCAIN: All I can say, Greta, is that I think we are overall at the end of the day I'm glad it was passed. It's fine. But was it really necessary to tell members of Congress that they shouldn't do insider trading?
VAN SUSTEREN: The affordable care act yesterday you took to the floor talking about the class act. If the health care law is declared unconstitutional by the end of June by the United States Supreme Court, what happens?
MCCAIN: I think it depends on what portions of the law that the Supreme Court may declare unconstitutional.
VAN SUSTEREN: Suppose they say the whole thing, because there is a chance they could -- a chance. I don't know what they do, but they will do.
MCCAIN: I think it gives us chance to sit down and start over and this time with the object of preserving the quality of health care in America, which is the highest, and bringing the cost down. That was the whole purpose of Obamacare to start with, and obviously it didn't bend the curve down. It bent it up, and it was one of the biggest takeovers, one fifth of our gross domestic product, the healthcare industry in America, put it over and taken over by the federal government.
What Obamacare -- what I think will be declared unconstitutional is the notion that the government can provide a -- prescribe a product, say you have to have certain agreements -- ingredients of it, and then fine you if you don't buy that product or use that product. That's what this whole argument is about. And I believe that it violates the commerce clause of the constitution of the United States. And I cannot believe that in any way you could view it as being constitutional.
VAN SUSTEREN: Many people think at least on your side of the aisle say that the mandate clause that you just noted is unconstitutional, but in the statute is missing something called the severability clause, which means you can't just carve off the part and let the rest of the statute stand.
MCCAIN: The whole thing falls.
VAN SUSTEREN: So even if that is declared unconstitutional, that is where the whole statute falls.
MCCAIN: And we would be glad to join with the president and go back and start over with one object in mind -- preserving the quality of health care in America and bringing the costs down. If we don't, Americans will not be able to afford it. We all know the problems that Medicare is in fiscally. That's why Paul Ryan is proposing some of the choices now that people might have under his budget.
VAN SUSTEREN: Another thing that sort of bothers me at the discussion. We talked about how costs are going up and not going down as expected. Yet Washington names it the affordable care act. I mean like at some point, I mean, the American people are sitting there thinking like could you really, I mean --
MCCAIN: Let me mention two things that resonate with the American people. One was the deal making -- the "cornhusker kickback," the "Louisiana purchase," bringing in the various elements of the healthcare industry and basically bludgeoning them and the pharmaceutical companies, the hospital association, the AMA, bludgeoning them into submission to support it.
And then the other thing that the American people really objected to was this whole idea of this class act. In other words, that was going take care of people's long-term care. And, of course, when people haven't used it then they pay into the system. So that artificially made the cost the Obamacare less. Thank God for Senator Judd Gregg of New Hampshire. He had an amendment that they had to certify that over 75 years that this would be a system that would pay its own way. They couldn't do that. They couldn't do that. And so that part of the -- of Obamacare is moot, thank god.
VAN SUSTEREN: The American people also saw how the sausage is made, and I think a lot of Americans were troubled it was 2,500 or 2,800-pages thick and everybody voted on it yes or no but you nobody read it before voting on it. It is hard for the American people to think do you even know what you are voting about.
MCCAIN: I think the other thing that is evidence enough is that there have been thousands of pages of regulation already issued, thousands of pages of regulation. Everyone in the industries are saying here we have lawyers we had to hire lawyers to thumb through all of the thousands of pages of regulations. It is amazing.
VAN SUSTEREN: And not one elected official created the regulations. Those are being farmed out to parts of the government. People who are unelected who are making decision decisions about our healthcare.
MCCAIN: And so again it is no bonder to me thank God that over 60 percent of the American people believe that the whole thing ought to be repealed.
That is not to say we don't have to fix the healthcare system in America. And we have to fix Medicare and Medicaid. Medicare is going broke. We all know that. So wouldn't it be nice if we recognized that all of obvious to make sacrifices, including preserving the benefits of present retirees, but making some changes so that their kids will also have Medicare when the time comes for them to be a beneficiary rather than paying into it and getting nothing out? And that is what the situation will be.