MR. O'REILLY: You're going to be running against Barack Obama it looks like. What's his main weakness?
SEN. MCCAIN: Inexperience -- I think inexperience and lack of judgment and a record that shows that, whether it be showing a desire to sit down with the president of Iran, who has articulated his country's commitment to the extinction of the state of Israel, to wanting to raise people's taxes. There's 100 million people that are dependent on capital gains. He wants to raise their taxes, people who have saved their hard-earned money every month and put it into come kind of investment. So I think it's inexperience and judgment and vision.
MR. O'REILLY: He says that we have to talk to Iran and our enemies. We have to engage them to bring down the tension and that you, you know, you're part of the Bush machine, and that you're just going to keep that same conflict role ad infinitum.
SEN. MCCAIN: If you're going to sit down with someone line Ahmadinejad, who comes here to New York City and says they are going to, quote, "wipe Israel off the map," then you enhance their prestige. Now, if the president of Iran wants to sit down and talk seriously and says that they will abandon that horrible commitment, then maybe there is some room for discussion. But all you do is enhance their prestige. Same thing if you want to talk to Mr. Chavez. Same thing if you want to talk to Raul Castro, who was the henchman in Cuba and still is for many, many years. There's ways of communicating, and there's ways of enhancing the prestige of your adversaries. And what Senator Obama wants to do would obviously do that, in my view.
MR. O'REILLY: Senator Obama got real hurt on a judgment call with Reverend Wright and this guy William Ayers, this Weather Underground guy. You gonna bring that up?
SEN. MCCAIN: In the case of Reverend Wright, that is between Senator Obama and the American people. He has said that it is a legitimate political issue. I condemn Reverend Wright's remarks. I think almost everybody -- everybody that I know does. And because those remarks are very hurtful to our efforts to unite America, this campaign is not going to be about, in all due respect, about Reverend Wright or Mr. Ayers. It's going to be about vision. It's going to be about a plan of action for the American people who are hurting right now.
As we speak, American families are sitting around the kitchen table. How are we going to keep our home? We recently and suddenly lost a job. That's the case of over 250,000 Americans. And we've got to fix this economy, and it's hurting, and I've got a plan of action to do it. That's what this campaign really is going to be all about.
MR. O'REILLY: But he's going to have his plan, and you're going to have your plan. Okay.
SEN. MCCAIN: Well, but they're going to be starkly different. Do you want the government to take over health care and have a major role in health care in America, or do you want families to make the choices? Do you want to raise taxes, or do you want to lower taxes? I think the worst time to raise taxes is in an economic downturn, and I won't do that, and he wants to do that. So there will be stark differences.
MR. O'REILLY: For the rich guys, like me.
SEN. MCCAIN: Well, if you call 100 million people rich --
MR. O'REILLY: On the cap gains, yeah.
SEN. MCCAIN: -- if you call people who are now paying into Social Security, raising that cap and now encompassing millions and millions of more Americans, working men and women, I don't think that's the rich in America, and I don't think that those people think they are, either.
MR. O'REILLY: Okay. John Hagee is a guy that you sought his endorsement in San Antonio, Texas. He says bad things about Catholics and gays and other things like that. And your opponents are saying, hey, you know, McCain hangs around with Hagee, Obama hangs around with Wright -- no difference.
SEN. MCCAIN: I do not embrace a view that he stated about the Catholic Church. I steadfastly rejected and repudiate it. I've never been in Pastor Hagee's church. I know him. But the fact is that I accept his endorsement --
MR. O'REILLY: Yeah, but you were courting it.
SEN. MCCAIN: -- which means he supported --
MR. O'REILLY: You went down there and had breakfast with him, you know.
SEN. MCCAIN: Well, I had breakfast with him, and I met with him. I don't embrace all of his views. He endorsed me.
MR. O'REILLY: Okay. Are you ready for the viciousness of this campaign? We understand The New York Times has, you know, a squad of reporters looking to dig up any dirt they can on you. You know that, right?
SEN. MCCAIN: Sure.
MR. O'REILLY: You know, they're after you. They're going to dig up any kind of deal they can and throw it just like they threw that other story on the front page. That must have been hurtful for your wife.
SEN. MCCAIN: It's always hurtful when you see a story that is negative or --
MR. O'REILLY: Yeah, but this is more than that. The implication was that you're a, number one, corrupt guy and, number two, kinda looking at other women. That was the implication by The New York Times.
SEN. MCCAIN: Well, we discussed it already after it came out. And I don't discuss it anymore. There are negative stories that they have written since then, and I understand that. Look, I'm a big boy. I understand that this is going to be a tough campaign.
MR. O'REILLY: So you're ready for it.
SEN. MCCAIN: Oh, sure. Listen, Bill, in all due respect, I've had tougher times in a political campaign, my friend, and I know how to stand up to it. Sometimes I worry about my family, obviously, and that was one of the factors that was considered when we decided to run again for the presidency.
MR. O'REILLY: They're going to smear and slime you like crazy. You know that.
SEN. MCCAIN: But I have the utmost faith and reliance on the American people and their good judgment.
MR. O'REILLY: And Obama's going to get it, too.
SEN. MCCAIN: Well, look, I want to have a respectful campaign. That's what Americans really want. Every time I have a town hall --
MR. O'REILLY: You can't control these other guys because of the McCain-Feingold bill.
SEN. MCCAIN: (Laughs.
MR. O'REILLY: Ah! You see, be careful what you wish for!
SEN. MCCAIN: The McCain-Feingold bill, except for increasing the individual contribution limit, did not affect --
MR. O'REILLY: But George Soros is the big beneficiary. He set up this $350 million apparatus to attack you because now he can do that. You know that.
SEN. MCCAIN: It was already set up before, 527s are a violation of the '74 law. But before we get down into that minutia, this is going to be a tough campaign, 527s are there. We're going to unilaterally disarm. But I will run a campaign that I can look back on and say, as I did in 2000 and I have every other race I've ever been in, that that was an honorable campaign. That's what I'm going to do.
MR. O'REILLY: Okay. Arianna Huffington says you didn't vote for Bush in 2000. She's one of these people who are going to come after you. On her website yesterday, somebody blogged that you collaborated with the North Vietnamese, and they didn't torture you. This is Arianna Huffington. Now, Arianna Huffington's flat out said you did not vote for President Bush in 2000.
SEN. MCCAIN: (Laughs.) What can you say?
MR. O'REILLY: Did you vote for President Bush?
SEN. MCCAIN: That's totally false! Of course not. I campaigned all over this country for him.
MR. O'REILLY: So you voted for President Bush.
SEN. MCCAIN: (Laughs.) Of course, but I mean, that's a ridiculous question.
MR. O'REILLY: She lied.
SEN. MCCAIN: Well, frankly, I do not read Huffington Post. I spare myself that experience. (Laughs.)
MR. O'REILLY: But I do want to be clear. You voted for Bush in 2000.
SEN. MCCAIN: I voted for Bush in 2000 and 2004. And not only that, far more important than a vote, I campaigned everywhere in America for him. I enjoyed it. I campaigned with him. I did everything I could to get him elected and re-elected president.
(Pause videotaped interview.)
MR. O'REILLY: All right. When we come back with Senator McCain, we'll talk about illegal immigration, a very hot one for him and an issue that's caused him a lot of trouble. Also, his controversial votes on energy and how he's going to control the oil companies.
MR. O'REILLY: Continuing now with Senator John McCain. I spoke with him a few hours ago.
(Resume videotaped interview.)
MR. O'REILLY: Gas prices are the big deal.
SEN. MCCAIN: Yep.
MR. O'REILLY: You say suspend Memorial Day to Labor Day the federal gas tax. I say it sounds good on paper, but the oil companies will run in and whatever you suspend -- 43 cents, 45 cents -- they'll raise it 45 cents because nobody is watching the American oil companies. They can do what they want. They're exploiting the war on terror. They're exploiting the world's uncertainty. They're gouging the consumer. I believe this. We've investigated this. So your solution is going to enrich the oil companies.
SEN. MCCAIN: Bill, I'm sure that we would keep an eye on the oil companies.
They are brazen in some respects. There's been speculation, there's been all kinds of things that have happened as the price of oil has gone up. But two things. One is we would obviously keep a very close eye on that. But second of all, it's just a little temporary relief. It's just a little relief for low-income Americans.
MR. O'REILLY: But you're going to have to control these people.
SEN. MCCAIN: Who drives the furthest and who drives the oldest cars? The lowest-income people in America. Let's give them a little --
MR. O'REILLY: Listen, in theory, I'm fine with it. But in Illinois they tried it, and the oil companies came right in. Bang! And they took the money.
SEN. MCCAIN: But don't you think that we could keep an eye on the oil companies --
MR. O'REILLY: They're not now.
SEN. MCCAIN: -- in this respect --
MR. O'REILLY: The Bush administration's not keeping their eye on them now.
SEN. MCCAIN: Well, I'm talking about if we had the holiday. If we had the holiday, every one of us, including you, would be checking the price of a gallon of gas every day.
MR. O'REILLY: But I don't have the power to --
SEN. MCCAIN: The power of public opinion. But let's just give people a little relief.
MR. O'REILLY: Let's be honest. Both parties sold out the American people on energy, both the Republicans and the Democrats. You've been in the Senate 21 years. Come on, there's no alternative energy system. There was nothing under development until maybe a year ago. Clinton-Gore didn't do anything. They didn't do anything on global warming. They didn't do bupkus. So the American people have a right to be angry, you know. Why has it gone up? Why has a gallon of gas gone up a buck in the last four weeks? Do you know?
SEN. MCCAIN: I think it's because of one fundamental problem and that is that you have a cartel that controls virtually all of the world's oil supply.
MR. O'REILLY: OPEC.
SEN. MCCAIN: And they obviously can set the price of oil just to the highest level that will sustain it. And second of all, the United States of America must become independent, first of Middle Eastern oil and then of --
MR. O'REILLY: But that's going to take a while because we didn't do anything for the last three decades.
SEN. MCCAIN: I agree that we have not done enough. And I agree that we have to act. And I agree that it has to be our nation's number-one priority. We're sending over $400 billion a year to countries that don't like us very much --
MR. O'REILLY: Absolutely!
SEN. MCCAIN: -- and to terrorist organizations.
MR. O'REILLY: You voted against the ANWAR bill.
SEN. MCCAIN: But we can be --
MR. O'REILLY: You voted against ANWAR drilling.
SEN. MCCAIN: Yeah, and I'll vote against drilling if they want to drill in the Grand Canyon. And I'll vote against it if they want to drill in the Everglades. And I will try to make it more attractive for Florida and California and other states to have drilling off their coasts, but I'm not going to force them to because --
MR. O'REILLY: But ANWAR, nobody lives there.
SEN. MCCAIN: Nobody lives there. It's pristine beauty.
MR. O'REILLY: So what? Who sees it?
SEN. MCCAIN: Well, all I do is believe that we have to preserve some of the great natural treasures of this earth --
MR. O'REILLY: In the Arctic Circle?
SEN. MCCAIN: -- no matter where they are. No matter where they are, my friend.
MR. O'REILLY: You know, a lot of people aren't going to like that.
SEN. MCCAIN: I know a lot of people don't like it. But I am also an environmentalist, and so was Teddy Roosevelt, my hero. And I believe that there are just some things that you have to --
MR. O'REILLY: Hillary Clinton cited Teddy Roosevelt, too. (Laughs.) He's popular.
SEN. MCCAIN: He happened to be a Republican as well. (Laughs.)
MR. O'REILLY: I know. All right, the issue that's hurt you the most among conservatives is the immigration issue. You know that. In fact, you and I had a nice chat in May of 2001. I don't know if you remember that, in Phoenix.
SEN. MCCAIN: I try to forget it. (Laughs.)
MR. O'REILLY: Okay. I hammered you. I hammered you. I told you you gotta crack down on the border. Your own state is getting overrun. I was right. Will you concede that?
SEN. MCCAIN: I will concede that the American people want the border secured first. I will concede that.
MR. O'REILLY: Okay, but Arizona, your home state, has been punished by rampant illegal immigration economically, socially. In Maricopa County now, they're cracking down probably too much, but the people are furious. Now, my question is this. It's a simple question. I asked this to Hillary Clinton as well. Sanctuary cities -- San Francisco, Los Angeles, and on and on, Phoenix no longer, the mayor changed -- are harboring criminal illegal aliens. You know, there was an 18-year-old high school football star whose mother is serving in Iraq as a sergeant murdered by a criminal illegal alien with a long rap sheet let out of the L.A. county jail. ICE was never informed. The next president, Senator, has to crack down on the sanctuary cities. Will you?
SEN. MCCAIN: Obviously, I don't approve and would oppose sanctuary cities. But again, it's a larger problem, and that is our failure to carry out a federal responsibility to enact immigration reform. That means securing our borders first, a temporary worker program which we need that's associated with tamperproof biometric documents. Anyone who doesn't have that gets prosecuted.
MR. O'REILLY: It works.
SEN. MCCAIN: It works. And third of all, to address the issue of the 12 million people.
MR. O'REILLY: Health insurance -- and again, here's the folks. They're going, I can't afford to go to the doctor.
SEN. MCCAIN: Yep.
MR. O'REILLY: Barack Obama is going to give me -- give me -- pay for my medical bills. The government's going to take it over. Everything's going to be swell.
SEN. MCCAIN: Sure.
MR. O'REILLY: Mean guy McCain, he's not going to do that. Hey, I mean, it's a pretty attractive proposition having the government pay all the bills, and you're not going to do it.
SEN. MCCAIN: This is what the debate has got to be about. It's not the quality of health care in America. As you know, it's the highest quality. Go to any of the major --
MR. O'REILLY: It's the expense.
SEN. MCCAIN: It's the cost and availability. Availability and affordability --
MR. O'REILLY: Why is it so expensive?
SEN. MCCAIN: Because there is no real restraint or incentives to keep costs down, and that's the real problem. We've got to have incentives. Look, if your employer, Fox, is paying your health insurance, you don't care how much it costs. If I give you $5,000 or a refundable tax credit, no matter what your income is, and say, find the health insurance policy of your choice --
MR. O'REILLY: I'll shop around.
SEN. MCCAIN: Sure you will.
MR. O'REILLY: What you are proposing is complicated. What Obama is proposing is simple.
SEN. MCCAIN: No.
MR. O'REILLY: He's going to take care of it, going to pick up the tab. You're going to give them 5 grand, they're going to shop around. I'm just pointing that out.
SEN. MCCAIN: All I can say is I'm going to put health care choices in the hands of the family.
MR. O'REILLY: Of the folks, of the folks.
SEN. MCCAIN: Of the family. That's right.
MR. O'REILLY: Are you going to release your medical records?
SEN. MCCAIN: Yes, yes.
MR. O'REILLY: When is that going to happen?
SEN. MCCAIN: Very soon, I think a couple of weeks, a week or two, a week or so, yeah.
MR. O'REILLY: Okay. Are you and Webb, the senator from Virginia, going to be able to get together on this new GI Bill because we've got to reward our military in Iraq and Afghanistan in the toughest theaters. We have to -- health, education and housing -- we have to help them.
SEN. MCCAIN: My proposal, and others -- Senator Graham, Senator (Byrd ?) and others -- is we'll place incentives for people to stay in the military.
MR. O'REILLY: So the longer you stay, the more you get.
SEN. MCCAIN: Yeah, the more you get because we want people to stay in. And I believe we can sit down --
MR. O'REILLY: But are you guys going to work it out?
SEN. MCCAIN: Sure. I certainly hope we can.
MR. O'REILLY: Okay. Because I want to get this done quick.
SEN. MCCAIN: Yes, sir. We have to increase the benefits for the men and women who are serving and motivate those to serve.
(End videotaped interview.)
MR. O'REILLY: All right. Now tomorrow, we'll get into what many people believe is John McCain's strongest suit, the war on terror, and how to deal with our enemies abroad. There's also a controversy in McCain's world view, especially about waterboarding and coerced interrogation. And we'll get into that tomorrow.