Updated

This is a rush transcript from "On the Record," March 3, 2011. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: No one should be denying this one! It is war in Mexico! And right now, Mexico's President Calderon is here in the United States, meeting with President Obama at the White House. A short time ago, both presidents faced the press corps.

But Mexico is not the only country consuming everyone's attention. There is Libya, for the first time, President Obama publicly saying Libya's leader, Moammar Qaddafi, has to go.

Arizona Senator John McCain is here live. Good evening, sir. You're just back from 12 days of traveling around that region. Let's start first with Libya. What should we be doing?

SEN. JOHN MCCAIN, R-ARIZ.: I think we should be imposing a no-fly zone. I think we should be trying to provide humanitarian aid. I think that covert aid is obviously also something we should seriously consider. The people of Libya are being massacred as we speak. One of the world's most brutal dictators has promised to set everything on fire.

And so I want to focus just for a second, if I could, on a no-fly zone. What that means is, we want to prevent Qaddafi from using his helicopters and airplanes from killing Libyans. And I think we can do it and I think we should do it. And if the United States' policy, as articulated by the president today and the secretary of state, that Qaddafi must go, then it seems to me that we should prevent and take steps to prevent from -- Qaddafi from being able to continue to kill people from the air.

VAN SUSTEREN: When you say the president - what he said today, among other things, with the press conference with President Calderon, is that he says, "Going forward, we will continue to send a clear message: The violence must stop." Moammar Qaddafi has lost legitimacy to lead and he must leave.

Where did he get this legitimacy to lead? He took over in 1969 in a coup. He's been nothing but a violent man. I've got a list here. He hangs out, or did, with Idi Amin. He supported Milosevic. His chum is Chavez. He tried to get China to sell him nuclear bombs. He's trying to get chemical weapons. He applauded the murder of Anwar Sadat in Egypt. We're now hearing that he has foreign mercenaries just to killing his civilians. He massacred the citizens, as you noted. And how about Pan Am 103? We're now learning that he was the mastermind, it was his idea to kill all those people, 243 passengers, 16 crew members and 35 college students from the University of Syracuse. And now we're talking about his -- quote, "He's lost his legitimacy to lead and must leave"? Where did he get this legitimacy? I don't get this one!

MCCAIN: Well, you described very accurately his past record. The fact is now that it is United States policy for Qaddafi to be removed from power. So that means that if we know that Qaddafi has the ability to massacre his people from the air and we have the capability to try to prevent that, then we ought to move forward with that. And I don't understand frankly, the reluctance of people to support such action.

And I want to mention that if we tell Libyan pilots that, If you fly, you're putting your life in danger, and sooner or later, we're going to shoot you down, it's very likely they're not going to want to fly. And we do have bases in Italy. We have a base in Sicily. And we have a capability -- and it's complicated and it's difficult, but we do have a capability to at least send the message to these pilots, Don't fly or you're going to die.

VAN SUSTEREN: Why is it -- I mean, that's what the Defense Department is saying, is that the -- sort of the reluctance or the dragging of the feet so to be -- so to speak, is that it is -- that it's a challenge, that it's complex. I guess they -- I'm not a military person. Far be it for me to tell you or anybody else about the military. However, I've seen these very sophisticated pilots we've had. I chased the FA-22, which is a plane that can catch any plane, any place, any time. I've chased them in a F-16 as a passenger. I mean, you know, we do have the finest air force. So if we -- if this is our policy and we don't want this guy to massacre his citizens, how can this be complicated and a challenge?

MCCAIN: I agree with the secretary of defense that it's complicated, that it requires a lot of assets. I would remind everyone, for 10 years, we enforced a no-fly zone over Iraq and so we do know how to do it. And I don't understate the complexities of it.

But here we are with this -- one of the worst dictators in the world saying that he will do whatever it's necessary to stay in power, including slaughtering his own people, including message after messages coming out of Libya. They don't want us to invade. And I don't want us to use ground military force. It's certainly not something that's in the scenario in the near future. But they want us to stop Gadhafi from attacking them from the air. And some -- we've recently heard from a group that called themselves a provisional government in Benghazi that say, Please impose a no-fly zone -- i.e., don't let him kill us from the air, if you can prevent it.

VAN SUSTEREN: Is it that we don't want to sort of go alone (INAUDIBLE) because, I mean, this is many days into this. And if you're sitting in Libya tonight worried that your president or your leader, your colonel, whatever he is, is going to all of a sudden call out the military just to fire -- or get foreign mercenaries in to kill you -- is it that we just don't want to go in and -- and do this alone or we're incapable? I mean, because -- because every day really matters to them. Not so much to us. We're all in our homes and we're safe -- pretty much, at least. I mean -- but it must -- really -- but it really matters to them on the ground there.

MCCAIN: I think it really matters to them on the ground. Otherwise, they wouldn't be calling for us to help them. And again, I am very reluctant, in fact, right now pose for us to have a ground invasion into Libya. I think we can help with -- it's a huge humanitarian crisis there. There -- I think we could help with some covert activities, the way we did in the Afghan war and other times.

And everybody says, Well, it's a, quote, "slippery slope." We don't have to get on a slippery slope. But I do believe sending the message to those Libyan pilots -- by the way, remember, a couple of them already went to Malta and decided to live there, rather than bomb their own people -- that they are facing sooner or later being shot down by a vastly superior air power, the United States of America, then I think it would have a very significant effect on their desire to carry out Gadhafi's orders.

VAN SUSTEREN: Senator, I don't have a whole lot of time left with you. But I mean, I'm curious about your trip to North Africa and the Middle East. Is there, you know, anything that -- you know, that you want to tell us that -- you know, that -- that you've learned from this trip?

MCCAIN: We should be excited. We should be exuberant. The triumph of these young people is one of the most incredible experiences that I've ever had. It's fraught with danger by being hijacked by the extremists, either the Muslim Brotherhood on the one side or old regime on the other. We should be assisting them where they seek our assistance. We should be investing. We should be helping them create jobs.

And this is an incredible testimony to social networking. Most popular man in Tunisia today, I was told, is Mr. Zuckerberg. And the -- what they did was an incredible thing. A young man who graduated from college could not sell grocery, could not sell fruit and vegetables, was prevented by the police, burned himself to death, and that spread throughout the entire region and surprised us all.

VAN SUSTEREN: Senator, it's so important -- and I understand -- to give this aid to this -- humanitarian aid, to help create jobs there. But when you say that, I know that a lot of Americans watching at home are thinking, We need money here. We need jobs here. How do you explain to them that we really do need to make that investment in these countries, that it matters to the people here at home?

MCCAIN: I'd love to see our high-tech corporations going over there and say create the environment for us with these new governments. We'll invest and we'll help you create jobs. That's the long-term course of action we need to take. In the short term, obviously, they need some economic assistance. Some of the $30 billion of Gadhafi's assets I think could be put in the right direction.

VAN SUSTEREN: But how -- but how do you tell Americans that instead of -- instead of keeping that money here and keeping those jobs here, we should put them over there?

MCCAIN: One, from ideological standpoint. We've always stood for the universality of human rights, and we should be proud and help them move into a free and democratic society. Second reason is, if this election, and others have -- take Iran, for the best example -- is hijacked by extremists, then it poses a threat to the United States' national security which could be very, very expensive in the long run.

VAN SUSTEREN: And by the way, just as an aside, I wasn't calling -- I wasn't suggesting we should do a ground invasion in Libya. I'm just obviously deeply disturbed at the suffering of these people.

MCCAIN: Sure. I am deeply disturbed at their suffering. And I don't understand why we would have any reluctance to try to prevent Qaddafi from being able to continue to massacre the people of Libya who are standing up for independence and freedom.

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

MCCAIN: Thank you.