This is a rush transcript from "On the Record," March 4, 2014. This copy may not be in its final form and may be updated.
GRETA VAN SUSTEREN, FOX NEWS HOST: There is no question this showdown with Russia is dangerous. Senator John McCain believes the Cold War is over but Putin does not.
Senator McCain joins us. Good evening, sir.
SEN. JOHN MCCAIN, R-ARIZ.: Thank you.
MCCAIN: I believe it because President Obama said, 20 years ago the Cold War ended. He said to Medvedev, "Tell Vladimir Putin, when I'm elected, I will be more flexible." A gross misreading of the nature and ambitions of Vladimir Putin and we are paying a very, very heavy price for it.
VAN SUSTEREN: What do you think President Putin is thinking tonight and what do you think that President Obama is thinking tonight?
MCCAIN: I think that President Putin, Vladimir, is thinking, well, I got what I wanted, which is Sebastopol and the Crimea. By the way, Russia signed a treaty in 1994 guaranteeing Crimea's territorial integrity as part of Ukraine. But he is feeling good. He now is deciding how much of Eastern Ukraine he is going to cause problems in. That really is something that we can't be really sure of.
VAN SUSTEREN: Is he going forward than Crimea?
MCCAIN: I think it's very possible that he would go further and cause, quote, "demonstrations amongst the Russian-speaking people in the Eastern Ukraine," who, by the way, don't want to be part of Russia. But that's part of his near abroad. Unless we understand that Vladimir Putin is part of the old KGB apparatchik that wants to restore the Russian empire --he said, not me, he said -- Vladimir Putin said the greatest catastrophe of the 20th century was the break-up of the Soviet Union. So this president totally misread him, ridiculed Romney in their debate when Romney said that Russia was a major geopolitical foe.
He keeps saying, well, this isn't East, West. This isn't the old Cold War chess game. No. As Rogers said, we're playing marbles and he is playing checkers. To Putin, it is still the Cold War. It is still the Russian empire. That's why he still has troops in Transnestra and Moldova. That's why he continues to occupy Kazie in south Ossetia. He believes in the near abroad and the Russian empire. And we need to judge him as he is, not in a delusional fashion, which is the way President Obama has viewed him.
VAN SUSTEREN: What is President Obama thinking tonight as he sort of looks out at what has transpired in the last couple days?
MCCAIN: I don't know how honest he is with himself. Because he now said that the Syrian strike was all about whether Bashar Assad would not turn over chemical weapons, when really was that he used the chemical weapons. I don't know, except that he is now faced with a situation where Vladimir Putin, in violation of all international law, has asserted sovereignty over another sovereign nation. And we don't know what he is going to do further.
VAN SUSTEREN: What Putin said today at a press conference, that he rejected the Western accusations of Russia aggression against Ukraine, saying the U.S. should know better, given what it's done, and identified U.S. action, Iraq, Afghanistan and Libya. So he is coming right back with at us with that.
MCCAIN: And, of course, in none of those cases did the United States of America want to exert influence and have our troops stationed there to basically occupy the country. He may say he is not doing that but he is. There's 16,000 Russian troops there. And also he said, by the way, when asked if there were Russian soldiers that are not -- he said those were local self-defense units. He even denies that they are Russian soldiers there, when we all know that. And that is the height of arrogance in my view.
MCCAIN: You saw the picture of those two sitting next to each other. You have seen the attitude that Putin has towards the President of the United States. He doesn't respect him.
VAN SUSTEREN: So what are we going to do? Because it doesn't look like Britain is going to go with us. And Germany is not going to go with us. And Western Europe is so hungry for that oil that either originates in Russia or comes through it or the natural gas.
MCCAIN: Well, we are going to tell them they should be ashamed of themselves because you are right. But, we need to first help get Ukraine back on its feet financially there. They're on the brink of collapse. Second, make sure that we do everything possible to get Moldova and Georgia into NATO. Third of all, we maybe need to do some military exercise with our small Baltic State friends. We need to restate and start working on the missile defense system in the Czech Republic and Poland that, in the name of appeasement, President Obama stepped down from. And then we need an expanded Magnitsky Act where we identify these people and we would prevent their travel, any visas in the United States, any banking practices that they would do, and restrict their lifestyle. They don't like that, these oligarchs. And understand. But the most important thing, Greta, understand who Vladimir Putin is, what he stands for, and what he is willing to do to try to restore the old Russian empire.
VAN SUSTEREN: Senator, nice to see you. Thank you, sir.
MCCAIN: Thank you.