McCain Gives Straight Talk on Libya, the Economy and Ethanol

This is a rush transcript from "On the Record," June 16, 2011. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: How are we going to get out of this economic mess? We need jobs, and a recent uptick in the unemployment rate should set your hair on fire because that is in the wrong direction. President Obama is talking about job creation, but is he getting real results? Senator McCain says he has an idea. But first we asked Senator McCain about a lawsuit against President Obama over the U.S. role in Libya.


VAN SUSTEREN: Senator, nice to see you, sir.


More On This...

    VAN SUSTEREN: Does the president need authorization from Congress to proceed further with Libya?

    MCCAIN: I think it would be important that he do so.

    VAN SUSTEREN: Required to?

    MCCAIN: I think that every president has said that they don't respect the constitutionality of the war powers act but they've always complied. He should comply with it. There's a lot of ill will here that he went to the Arab League and NATO and the U.N. without coming to congress.

    So I think it would be very beneficial if he came to Congress and we pass a resolution that says we approved of not sending ground troops, but not prohibit, because that would be unconstitutional.

    Let me also say the president has made a mess of this situation by not sending U.S. airpower, by not declaring a no-fly zone when it counted, by not recognizing this transitional national council as the legitimate voice to the Libyan people, and a number of other mistakes. Qaddafi is crumbling and I believe he will go.

    VAN SUSTEREN: As I understand your view, correct me if I'm wrong, is you would you do more than he is doing in Libya. Your criticism is of his message, the puzzling message I think was the word you used on the floor, and because he went elsewhere and didn't come here to get - he has the grace period if you accept the war powers resolution, but that grace period is now ending.

    MCCAIN: Yes. On a practical side to say that NATO will do it. There's 28 countries in NATO, seven in the fight, including Germans not being in the fight. The fact is, we are supporting these other air assets with assets that they don't have. Most importantly, we could have gotten the job done with the use of U.S. air assets, rather than relying on our allies who simply don't have the capabilities that we do. If the president says Qaddafi has to go, we ought to at least do from the air what would hasten his departure.

    VAN SUSTEREN: Why are we there helping NATO? Every night we report about what is going on in Mexico which is closer and we are not devoting the same resources. I realize it is a different situation, but why Libya?

    MCCAIN: First of all, the Libyan people rose up a brutal dictator who has the blood of 90 some American families on his hands, the bombing of Pan Am 103. They were about to be slaughtered, as Qaddafi's forces were right outside of Benghazi. He said he was going house-to-house and kill people. So we prevented a massacre.

    Now the people of Libya have a transitional government, who will be willing to take over. To have Qaddafi remain would mean renewal of terrorist attacks. It would mean Al Qaeda would have a more fertile breeding ground in both areas. And it is in our interests to see Qaddafi go and then give the responsibilities to our European allies who have much more at stake than the Libyans do.

    By the way, the transitional national council has offered to repay us for the cost that we have incurred in helping them in their effort to become independent.

    VAN SUSTEREN: I picked Mexico as a hypothetical. They haven't risen up like the people of Libya maybe perhaps it is such a daunting operation and their government is trying to fight the war on drugs. Terrible, 40,000 people killed since December of 2006.

    So I guess I'm trying to figure out, yes they rose up. Yes pan am 103, we sort of look the other way when Scotland released a mastermind. So a lot of Americans wonder what's our goal?

    MCCAIN: Remember, in Mexico, the government is in a struggle with the drug cartels. We are creating the demand for those drugs. But, it is an intense struggle and threat to the existence of a freely elected government.

    Qaddafi took power 42 years ago. Among other things an uprising in a prison that slaughtered 1,200 people. This guy was also responsible for other terrorist attacks around Africa and the region. Not to mention the bombing of a disco in Berlin that killed some American servicemen. It is an apples and oranges comparison that you are making.

    But is it in our interests to see Qaddafi remain in power or go? I would say that the answer is pretty obvious.

    VAN SUSTEREN: I concede that Mexico and Libya are vastly different. I guess the situation, where do we spend our limited resources? I can't stand to see Libyan people slaughtered. I can't stand to see people in Mexico afraid to send their kids to school. We have to make decisions on how we do this. Obviously, this one you feel is the right one?

    MCCAIN: If Qaddafi were able to remain in power, no doubt he would be a threat to the United States national security. He would be doing what he did in the past, recruiting, training, and orchestrating terrorist attacks again United States embassies, against us, and other acts of terror.

    The Mexican government obviously is under threat if it collapses under the onslaught of the drug cartels we have significant problems. But, Qaddafi is a man of inestimable cruelty who has imposed on his people a terrible and brutal dictatorship.

    The people of Libya rose up without any of our instigation or assistance, and they were about to be slaughtered by his military. People say why don't you go into Syria? I don't know how you intervene in Syria. You see what I mean? There was a force in being in Benghazi that was something we could support. In Syria, it is terrible what is going on and it is tragic. Bashar is inflicting incredible cruelties on his people with the help of the Iranians, and that can be a threat to U.S. national security.


    VAN SUSTEREN: Coming up, can Senator John McCain fix the economy? He does say he knows what is wrong with it. The two big problems the senator says we need fix, straight ahead.



    VAN SUSTEREN: Here's Senator John McCain.


    VAN SUSTEREN: How do you describe our economic strategy to deal with what is very painful to many Americans and not looking to get any better although the chair of the DNC says it's turning around. I don't think so, but that is what she says.

    MCCAIN: I think facts are stubborn things. The so-called recovery has stalled as the stimulus funds have dwindled. I don't think there's any doubt that the stimulus was a failure. That many of the efforts at the housing market have failed. And I think that the American people are very concerned about a return to another severe recession.

    VAN SUSTEREN: Do you think the president is looking to another stimulus? He's getting criticism for the remark about shovel-ready not really being shovel-ready. I know a lot of people are jumping on him for it, but Governor Romney said earlier that he made a joke about how he's unemployed too looking for a job, which probably want the boast thing for him to say. Everybody says things they want do-overs on.

    MCCAIN: I know from experience, occasionally, there will be a verbal misstep, which you hear about for a long, long time, particularly if you are a candidate.

    I think the problem is, the president believes that money will get us -- government money and taxpayers' money will get us out of these problems we are in. I think it is also very important that while he's talking about lack of regulations, free trade, those kinds of reduction in government regulations, his government is doing the opposite. We continue to crank out regulations that harm small businesses medium and large businesses.

    It is clear that major companies are sitting on large amounts of money. They are not investing because of the uncertainty about what their taxes and regulations are going to be and whether they will be able to grow and prosper. And until they have the confidence that this is truly a free enterprise, less regulation, lower taxes government, unfortunately it going to be hard to come out of this.

    VAN SUSTEREN: I guess that's why I asked what is the current strategy, because the president's idea about a stimulus bill in February, 2009, over $800 billion dollars, here we are two and a half years later still in a mess.

    That strategy doesn't look workable unless the head of the DNC is right. I don't think she is. I think the American people know are we going to have another stimulus Bill? If so can you prove the last one worked and why the next one will? If we are not doing that, we need action. What are we going to do? Not what we are we going to talk about?

    MCCAIN: The president's economic adviser said if we pass the stimulus package that unemployment would be a maximum of eight percent. That's just a matter of fact.

    VAN SUSTEREN: Your state 9.3 percent in April.

    MCCAIN: It's very tough. One reason because our housing market is so difficult. We need to reform the tax code. We need to make sure taxes are low. We need to pass free trade agreements. Trade is very important. The president said we would double our exports in five years. Now they are not moving with these free trade agreements with South Korea, Colombia and Panama.

    There are so many things we could do in order to inspire confidence and help small businesses who are the job creators. Instead, he continues to go out and gives nice speeches. There's no follow-up to it. He committed a few weeks ago to the free trade agreements, remember? Since then, there has been no movement on the part of the Congress either on the Senate or the house or any leadership from the White House. It is one thing to talk about things and it is another thing to get things done.

    VAN SUSTEREN: Ethanol, huge fight. You had an amendment to defund the infrastructure to encourage ethanol. Something like six billion dollars poured into subsidies for ethanol or so. What happened to your amendment?

    MCCAIN: It lost because of the influence of the ethanol lobby. Ethanol is probably the greatest rip-off that I've seen since P.T. Barnum. It takes more everything to make a gallon of ethanol than you get from it. It distorted the markets. It has caused the price of corn to go up, which then is reflected in food prices. It is protectionist. It is one of the most outrageous examples of the influence of special interests.

    And we just showed the American people today we are not serious. And I'm sorry to tell you that. But when we can't cut ethanol subsidies and when we are willing to spend $20 billion dollars to install an ethanol pump for free, in a gas station, and the storm space for it and we are going to spend $20 billion dollars of the taxpayers money to do that, which I tried to stop today and lost, it is an outrage. And the American people should be absolutely outraged.

    VAN SUSTEREN: The thing that makes this a little different it is not Republicans versus Democrats. This is regional, those United States Senators in the areas that have ethanol. I guess when I say what can we do now, if the Senate is making some of those hard decisions, we see special interests going on while they talk about the big picture, it doesn't make you feel comfortable.

    MCCAIN: The American people as of last November expected us to act. If we don't, I think they will try to find somebody else that will. This example, the failure to address ethanol, at last to phase out these incredible subsidies to ethanol is really, I'm sorry to say, a signal to the American people we are not serious. And the special interests still govern here in Washington.

    VAN SUSTEREN: Is it fair to say the American people have been taken for a ride?

    MCCAIN: I think the American people have been mistreated because we are spending their tax dollars on a product that helps neither our economy nor our environment. But it does go to a handful, a number of people who would become incredibly rich over these subsidies. And it is really too bad.

    VAN SUSTEREN: Senator, thank you, sir.

    MCCAIN: Thank you.