Discusses His Defeat in the SC Primary, His Hopes for the Upcoming MI Primary, and Various Campaign Issues (Interview)

SHOW: MEET THE PRESS (10:00 AM ET)
HEADLINE: REPUBLICAN PRESIDENTIAL CANDIDATE JOHN MCCAIN DISCUSSES HIS DEFEAT IN THE SOUTH CAROLINA PRIMARY, HIS HOPES FOR THE UPCOMING MICHIGAN PRIMARY AND VARIOUS
CAMPAIGN ISSUES

BODY:
MR. RUSSERT: Senator, welcome.

MR. McCAIN: Thank you, Tim.

MR. RUSSERT: Let me show you the results from last night and put them on our screen.

MR. McCAIN: Do you have to?

MR. RUSSERT: I do, indeed. Somebody put them on the screen: Bush, 53; McCain, 42; Keyes, 5.

Senator, he whipped you good.

MR. McCAIN: Oh, yeah. Yeah, he sure did.

MR. RUSSERT: What happened?

MR. McCAIN: Well, we got beat, and, obviously, there were some people who had, at least in my view, some misperceptions of my record and how I stand on the issues. But, look, I've had a lot of—a few hard knocks in my life, crashed a few airplanes, spent some time in a hotel where they don't leave a mint on the pillow. And I've been taking on the special interests in Washington for the last 17 years. We can take this hit. I mean, we won one in New Hampshire. He's won one now, and we're pressing on here in Michigan. And right now at least, we're even in the polls in Michigan. I think we've got a shot at it.

MR. RUSSERT: We talked to the voters as they left the polls yesterday. And let me show you, amongst Republican voters, what those numbers were because it's rather striking: Bush, 69; McCain, 26. How can you be the Republican nominee if only one out of every four Republicans are going to support your candidacy in a state like South Carolina?

MR. McCAIN: Well, I guess the same way that we got about two-thirds of the Republican vote in New Hampshire. We were able to get our message out. I'm a conservative, pro-life, good long 17-year voting record of being a proud Republican conservative. Obviously, we didn't do the job in South Carolina. We'll do a lot better job here in Michigan. As soon as we leave here, I'm getting on the Straight Talk Express. We're going to every major city in Michigan, and we're going to give the message and we're going to draw some distinctions.

MR. RUSSERT: Do you believe that the Christian right is responsible for George Bush's victory?

MR. McCAIN: Well, I think, you know, when you're showing up those polling numbers, we took every part of the electorate except for the Christian right. And, yes, they turned out in record numbers and they voted overwhelmingly for him. Yeah.

MR. RUSSERT: What does that say about the general election? Will George W. Bush be weakened if he's the nominee because he is indebted to Pat Robertson, Jerry Falwell and the others?

MR. McCAIN: I don't know—you know, I don't know that. Listen, I'm trying to win my second primary. I'm not very good at thinking that far ahead. I'm the guy that sat fifth from the bottom of his class at the Naval Academy, remember.

MR. RUSSERT: During the campaign, a lot of comment about Warren Rudman, who was your co-chair of your campaign...

MR. McCAIN: Yeah.

MR. RUSSERT: ...and what he said in his book about the Christian right.

MR. McCAIN: Yeah.

MR. RUSSERT: Let me show you and our viewers and give you a chance to respond. "The Republican Party is making a terrible mistake if it appears to ally itself with the Christian right. There are some fine, sincere people in its ranks, but there are also enough anti-abortion zealots, would-be censors, homopobes, bigots, later-day Elmer Gantrys to discredit any party that's unwise enough to embrace such a group." Do you agree with that?

MR. McCAIN: Let me tell you what he was talking about. He was talking about the attacks by Paul Weyrich and some others on Colin Powell, disparaging and tearing down the reputation of one of the most good and decent men that I know. And anyone who would hold a press conference as Weyrich and some of the others did and tear into and try to sully the reputation of Colin Powell, I'll tell you, I'd be pretty fired up, too, and I don't blame Warren for not liking that.

MR. RUSSERT: Do you think the Christian right has too much influence in the Republican Party?

MR. McCAIN: No, I'm not one to make that judgment. We're a party hopefully made up of a lot of different people and segments that represent all of our party, all of which, I think, will have an important role to play.

But, see, I've been trying to make this an inclusionary party. In New Hampshire, we were able to get a majority of the independent votes. We need to try to reconstruct the old Reagan Democrats that we were so proud of. Some people say, "Oh, no, we don't want any Democrats." Well, the reality is, it's 40 percent of the electorate are Republican, 40 percent Democrat. And the 20 percent that are in the middle are the ones that make you govern or not. So I don't have any problem with the Christian right being part of our party. And I think that it's important that they are part of it. But I also think we should share the same values and principles.

MR. RUSSERT: But isn't that what happened yesterday, when you went out and reached out to Democrats and independents, implored them to vote? The Republican hard core heard your message and turned out in record numbers and voted against you 3:1, basically saying, "McCain"—this is the Republican Party—"We're going to take it and keep it ourselves and not let you and these independents and Democrats take it over."

MR. McCAIN: No, I think—look, I said I am a proud conservative Republican with a 17-year voting record—in fact, far more conservative in many respects than Governor Bush.

MR. RUSSERT: In what way?

MR. McCAIN: Well, spending in Texas is almost doubled, while spending under Clinton has been increased by 20 percent. Campaign finance reform—Governor Bush is a governor of a state that has the most liberal campaign contribution rules. Anybody can give any amount of money to anything, practically. He's never proposed a campaign finance reform proposal until the day of the debate, and then it was a joke because there was no limits on the individual contribution, only had $ 1 billion loophole in it. I think it's conservative. I think it's conservative to want to pay down the debt. Not one penny of Governor Bush's surplus goes for paying down the debt or Medicare or Social Security. I think it's conservative to try to save Social Security by putting money into it. Governor Bush has no plan for that either. So I think that I'm very conservative and I think I'm far more conservative than he is.

Look, let me just give you the best example. Last November, we had a bill which the Citizens Against Government Waste called the most outrageous pork-barrel spending bill ever; spent the surplus for this year, billions and billions of dollars of pork. It was amazing. Governor Bush said that he supported that bill and would sign it. I said, "Look, if I were president of the United States, I would veto it." I railed against it. Look, in the name of an emergency, they spent $ 4.5 billion for the two-year 2000 surplus. I mean, it was the worst bill. Governor Bush said he would support it and sign it. I have a 17-year record of fighting against wasteful spending and unnecessary spending. I won all the awards from the watchdog groups. Governor Bush as governor increased spending by some 35 percent and even the Clinton administration only 20 percent. So there are significant differences there. And those are respectful differences, but they're matters of record.

MR. RUSSERT: Last night after you got the results, you called Governor Bush, conceded, and then you spoke to your supporters in a very, shall I say, strong tone.

MR. McCAIN: Yeah, sure.

MR. RUSSERT: Let me roll that speech for you, and let's talk about it. Senator McCain last night:

(Videotape, February 19, 2000):
MR. McCAIN: I will not take the low road to the highest office in this land. I want the presidency in the best way, not the worst way. As this campaign moves forward, a clear choice will be offered, a choice between my optimistic and welcoming conservatism and the negative message of fear, between Ronald Reagan's vision of inclusion and the defeatist tactics of exclusion so cherished by those who would shut the doors to our party, a choice between a record of reform and an empty slogan of reform, a choice between experience and pretense.
(End videotape)

MR. RUSSERT: Are you suggesting, saying, that George W. Bush is taking the low road to the highest office?

MR. McCAIN: No, I'm saying that I won't take the low road. I'm saying that it's obvious that negative ads were the entire campaign in South Carolina. You know, Cindy was on a talk show in South Carolina, and the talk show host said, "I'll give $100,000 if somebody in the next 10 minutes if will call up and tell me about any positive ad they've seen run by George Bush." Obviously, his money was safe. But, look, you know, we took down our response ad. We ran nothing but positive ads. I asked Governor Bush to take his down. Well, he started running negative ads in five states including this one. So much for that plan.

MR. McCAIN: But, Senator, when you say negative message of fear, low road to the highest office, there's a sense that John McCain is angry and running against George W. Bush and not against Bill Clinton.

MR. McCAIN: Oh, no. The fact is, he's a good man. He just—he's a politician and he decided to go negative after he lost in New Hampshire. And that's a fact, and reality. But, look, this is a tough business we're in. This isn't beanbag. We've got to compare records. I mean, somebody, who for five and a half years has never said a word about campaign finance reform and then comes and portrays himself as a "reformer," that's not right, so we're going to draw those differences.

MR. RUSSERT: You said last night, a choice between a record of reform and an empty slogan of reform. When the voters left the voting places, we asked them about that. This is what they said. And we'll put it on the screen: Who's the real reformer?

MR. McCAIN: OK.

MR. RUSSERT: Bush, 59; McCain, 53. Last week, Governor Bush was on this program. And he directed this question to you. I want you to watch it and give you a chance to answer:

(Videotape, February 13, 2000):
GOV. BUSH: I've led, and I can show you results as a result of my leadership. And I would ask, and I'm confident when he's on your show you'll say, "Senator, show me the reforms that you've put in place. What is the McCain reform?"
(End videotape)

MR. RUSSERT: What are the McCain reforms? What have you actually, successfully put in place?

MR. McCAIN: Lobbying ban and gift ban. Passing the line-item veto. Lobbying ban, gift ban...

MR. RUSSERT: Which was declared unconstitutional.

MR. McCAIN: It was declared unconstitutional. It was a 10-year fight to get what was right, and that was a line-item veto that we got done. Y2K product liability reform, aviation product liability reform. The list of—a continuous battle against wasteful pork barrel spending in Congress, a very long list. Governor Bush, in one of his ads, shows that HMO Patients Bill of Rights. He vetoed the first bill that came to his desk and then didn't sign the second one. Now, that's the kind of leadership in reform I find entertaining.

MR. RUSSERT: But the Bush people will say: McCain, campaign finance reform, could only get six other Republicans. Tobacco bill, he could get 10 other Republicans. He can't lead. He can't get big reforms. All he can do is rant and rave as a maverick.

MR. McCAIN: Two hundred and thirty-four pieces of legislation have passed the Congress with my name on them, including catastrophic health insurance reform, including, as I say, gift ban, lobbying ban, line-item veto. There's a whole myriad of reforms that I have passed, and everybody knows it in Washington. Look, why do you think they're coming after me? Because I haven't been able to do anything? You think that iron triangle is—which came down to South Carolina in droves is coming down there because I'm an empty suit? Come on.

MR. RUSSERT: What iron triangle are you talking about?

MR. McCAIN: The iron triangle. The lobbyists, the special interests and the legislation. We see the connection all the time. The Telecommunications Act in 1996 that was supposed to help the consumer, which I ranted and railed against. Every telecommunications cost has gone up. Cable became an unregulated monopoly. Look, we all know it's busted. And if you don't believe me, ask any ex-senator about this iron triangle and its pernicious influence in Washington. They'll tell you.

MR. RUSSERT: Let me talk about the negative ads, and again, this is what the voters had to say last night.

MR. McCAIN: Sure. Sure.

MR. RUSSERT: We'll put it on the screen. Who was more negative? McCain, 43 percent; Bush, 35 percent. And what they point to, Senator, is the now infamous ad you ran attacking George Bush early on in the South Carolina primary. Let me roll the end of that for you, give you a chance to respond. John McCain on Bill Clinton:

(Videotape):
MR. McCAIN: His ad twists the truth like Bill Clinton. We're all pretty tired of that. As president, I'll be conservative and always tell you the truth, no matter what.
(End videotape)

MR. RUSSERT: Was it a monumental mistake to compare George W. Bush to Bill Clinton?

MR. McCAIN: Oh, no. He and his people had been comparing me for days. In fact, he called—you know, he declared me like Gore in the debate. And I said, "Look, if I'm like Gore, you're spending like Clinton." I mean, his people—the unrelenting, unabated attacks. You couldn't answer a telephone or turn on a radio or television in South Carolina. Look, we responded and then—and that ad was out for about 18 hours. We took it down. We ran nothing but positive ads throughout the rest of the campaign.

MR. RUSSERT: Was it over the line? Was it over the line?

MR. McCAIN: Let me just finish. Let me just finish. Let me just finish. Let me just finish responding to you. I am proud of the campaign we ran and we have run so far. There is nothing about this campaign that I'm not proud of. Our message, the way we've inspired young people, our 4,000-student turnout at Clemson, the College of Charleston, all of these wonderful young people showed up. This whole campaign is about inspiring young people, and that's what I'm most proud of. Look, we ran a response ad to some very harsh attacks. I saw the thing spiraling down and I said, "Stop." We pulled the ad, we had no negative ads. And the people of South Carolina were inundated by negative ads from the other side. Look, but that's the way things go. But I'm proud of the campaign.

MR. RUSSERT: To this day, this very morning, do you believe that George W. Bush twists the truth like Clinton?

MR. McCAIN: Oh, sure he has. I'm sure he has. When he says that I'm not a reformer, when he says that I'm a hypocrite, when he says that I'm in the pocket of lobbyists—look, he's running a couple of attack ads right here in the state of Michigan, saying that I'm in the pocket of lobbyists and he got five times the money that I did from these very same people. I mean, of course he does.

MR. RUSSERT: Way back last year, I received a mailing from you. It came to NBC. And let me put it on the screen, 'cause it's quite striking. Now, this was a pledge, the 11th Commandment Pledge. Thank you, Senator McCain. "I hereby urge all Republican candidates for president to abide by President Reagan's 11th Commandment and pledge not to run negative advertising or engage in personal attacks against their fellow Republicans." John McCain broke his own pledge.

MR. McCAIN: No. No. I don't think so. We had to respond, and the fact is that we did, and we run a positive campaign that I'm very, very proud of. Again, look, I want my kids to read about this campaign someday when they get old enough to really appreciate it and they'll be proud of the message. They'll be proud of our whole reason for running and they'll be proud of the fact that we took on the iron triangle. Iron triangle beats us, maybe, but there's a lot of fight in this old dog.

MR. RUSSERT: One of the pieces of literature you put out was McCain 2000: Independents and Democrats Come Vote. And it says here that George Bush's plan will leave a $ 3 trillion deficit in Social Security.

MR. McCAIN: That's absolutely true.

MR. RUSSERT: Explain.

MR. McCAIN: There's $ 2 trillion that is in the Social Security system now as a surplus. The trustees of the system and every objective observer will tell you that it's a $ 5 trillion to $ 7 trillion liability, so it may be as high as $ 5 trillion that the Social Security system is short. I mean, that's fact. That's just a fact. So if you want to call that a negative ad when I'm stating an absolute fact, in the words of the trustees of the Social Security system, fine.

MR. RUSSERT: The trustees do, in fact, say that?

MR. McCAIN: Yes.

MR. RUSSERT: If nothing is done...

MR. McCAIN: Yes.

MR. RUSSERT: ...you'll have to reduce benefits by a third...

MR. McCAIN: Yeah.

MR. RUSSERT: ...increase taxes by a third.

MR. McCAIN: Yeah. Or change the eligibility, yeah.

MR. RUSSERT: But the McCain plan also would leave a huge gap in Social Security. You keep the $ 2 trillion in Social Security trust fund. You take $ 1 trillion out of the non-Social Security surplus and move it over. You're still $ 3 trillion or $ 4 trillion short.

MR. McCAIN: But we've made a significant step forward, and we were going—in the new surplus, we want to put more in there as well, if it actually materializes.

MR. RUSSERT: But there won't be $ 3 trillion or $ 4 trillion in new surplus. There is going to be a—by your own estimation, a $ 2 trillion shortfall in Social Security. How do we make it up?

MR. McCAIN: If you allow—if you put this infusion of money quickly into the Social Security trust fund and you allow people to invest part of their payroll checks into—taxes—payroll taxes into Social Security, you will change the solvency of Social Security dramatically, and that's a fact. If you—because the amount of money in interest that that investment will accrue is dramatically different and changes the equation, and that's the whole reason why I want to put 62 percent of this surplus into the Social Security trust fund.

MR. RUSSERT: But there's not enough there, Senator.

MR. McCAIN: Well, I think there may be.

MR. RUSSERT: There'll be 42 retirees for every wage earner. The cost of Medicare and Social Security now, $ 600 billion, is going to be $ 5 trillion. Unless—you can't just do it with surpluses.

MR. McCAIN: You allege that. I allege...

MR. RUSSERT: And you have said so in the...

MR. McCAIN: No, no. I allege...

MR. RUSSERT: In the past, you were willing to say, "Let's look at everything..."

MR. McCAIN: In the past...

MR. RUSSERT: "...cost of living, age, eligibility"—you know that.

MR. McCAIN: Tim, in the past when we were running deficits; now we have a surplus. If we allow working men and women to invest part of their payche—payroll taxes into retirement, that will have a dramatic and dynamic effect on this whole system. And that's the view, again, of experts. That's why I think it's so important to put this surplus, 62 percent of it, into the Social Security trust fund as opposed to putting it all into tax cuts as Governor Bush wants to do. I think it's mature and grown up to put this money into Social Security, put some into Medicare and start paying down the debt. And, by the way, that's what the majority of Americans want to do as well.

MR. RUSSERT: When Social Security was created, life expectancy was 65; life expectancy is now 77, heading towards the mid-80s. We have to do no structural changes. In other words, you're willing to say that Social Security and Medicare can absorb a whole new generation of the baby boomers and people living into their mid-80s without altering benefits or raising premiums.

MR. McCAIN: I'm willing to say that that should be the last option, not the first option. Let's do what they've done in other countries. This idea wasn't invented here of allowing people to put part of their taxes into investments of their choosing. By the way, that's the best way to keep Congress from robbing it, because if somebody's got investments with their name on it in a bank account somewhere, it's going to be a lot harder for Congress to keep robbing it as they've done in the past. I'm saying that we've got a good chance by allowing this—by putting that money in there, allowing them to make investments of their own taxes—and then with the solvency difference is dramatically different. It's triple what it is if their money simply just goes into the present system the way it's presently structured.

MR. RUSSERT: We have a lot more to talk about. We're going to take a quick break, come back and talk about a lot more issues and your plans to try to turn this around in Michigan, right after this. A lot more John McCain from Detroit, Michigan.

(Announcements)

MR. RUSSERT: We're back on MEET THE PRESS, coming from Detroit, Michigan, the site of the next primary in just 48 hours. Senator McCain, George W. Bush ran a commercial about you over and over again. Let me show a portion of that:

(Videotape):

Unidentified Woman: McCain says he's the only candidate who can beat Gore on campaign finance...

Unidentified Man: But news investigations reveal McCain solicits money from lobbyists with interests before his committee and pressures agencies on behalf of contributors.

Unidentified Woman: He attacks special interests. But The Wall Street Journal reports...

Unidentified Man: McCain's "campaign is crawling with lobbyists."

(End videotape)

MR. RUSSERT: In yesterday's vote, 55 percent of the Republicans said John McCain says one thing and does another. It worked.

MR. McCAIN: Oh, yeah. I think it obviously did, and I think he had a lot of help, you know, from these special interests in Washington: the tobacco companies spent hundreds of thousands; other special interests that are, you know, really dependent on the system. And it's really unfortunate. And by the way, that same ad is running in five other states, as well, attacking me even before we even went up on television. So this is the kind of thing—when you ask me if Governor Bush twists the truth, clearly that ad does. I don't quote—I've never done anything for any special interests before my committee, and that's a fact. But, look, this is a tough business we're in. I understand that. But that's also what I call winning in the worst way.

MR. RUSSERT: Let me show you the documentation that your critics will point to. And these are among the top career contributors to John McCain. I'll put them on the screen: U.S. West, $ 110,000; AT&T; BellSouth; Boeing. All who have significant work before your committee, the Commerce Committee. Newsweek magazine put it this way, and I'll read it to you: Eight of the top 10 contributors to his presidential campaign were executives at companies with extensive interests before the Commerce Committee, including U.S. West, BellSouth. "He acts like he's entitled to it," says a lobbyist whose firm has contributed. "He sees no connection between twisting our arms for money, then talking about how corrupt the system is."

MR. McCAIN: You know, that just simply is not true. It sounds to me like it's one of those disgruntled threatened special interest people. Look, you know where we've been getting our money? You know what's happened since that night in New Hampshire: We have $ 3.3 million over the Internet from people who have come in over the Internet and said, "Senator McCain, I want to contribute to your campaign." Most of it is matchable, and that's really been a key element. There is—don't ask me, ask the people of the Consumers Union, Mr. Kimmelman. Ask the Consumers Federation of America. Ask Joan Claybrook of Public Citizen. Ask any of the watchdog groups, and they'll tell you that Senator McCain has never, ever done anything but stand up against the special interests. And I'm proud of that. And the fact is, that you're talking about money that came from a lot of people, but the Commerce Committee oversights every single organization and their moves.

MR. RUSSERT: But the appearance of a sitting chairman...

MR. McCAIN: But, Tim...

MR. RUSSERT: ...taking money from people with business before their committee, didn't that give fodder to George Bush?

MR. McCAIN: This is—but, look, this is why we need to clean up the system, because we're all tainted by it. I'm tainted by the system because of what it is. But let me tell you, I'm the only candidate that has said, "Look, I won't have anything to do with the soft money." Everybody knows that that's the corrupting influence. Now, right now as we speak, Governor Bush's people are setting up this apparatus to funnel tens of millions of dollars. I have announced—I don't have to pass campaign finance reform law—that I will stop the soft money. That's why the iron triangle is trying to break me.

MR. RUSSERT: But your bill wouldn't stop executives from all those companies who practice before your committee from giving you money.

MR. McCAIN: Of course not. A thousand-dollar contribution limit...

MR. RUSSERT: So the triangle would still exist even with your reform.

MR. McCAIN: No, $ 1,000 doesn't—anybody will tell you, it isn't the $ 1,000 contribution that corrupts; it's the millions and millions and millions in soft money. It's the huge donations of hundreds of thousands of dollars.

Wait. The United States Supreme Court, two weeks ago, affirmed the constitutionality of the $ 1,000 limit. And you know what they also said? They said that too much money in politics corrupts the legislative process and leads to the alienation. They weren't talking about the $ 1,000 contribution, Tim. That's why they left the $ 1,000 contribution as being constitutional. Otherwise, they would have said, "No contribution is constitutional."

I'm taking money in $ 1,000 contributions. I've raised now more than $ 30 million. You're looking at 10 or 20--from a group of people in Washington, D.C. I'm proud that the overwhelming majority of my contributions have come in small donations and they've come from people all over America. A hundred and thirty-five thousand donations have come into my campaign. I'll stand that to any scrutiny.

MR. RUSSERT: When you were last on this program, you said you would beat Al Gore like a drum...

MR. McCAIN: Sure.

MR. RUSSERT: ...on the issue of campaign finance...

MR. McCAIN: Sure.

MR. RUSSERT: ...irregularities. Since that time, both the Bush people and the Gore people have said to me, "Nonsense. We're going to beat John McCain like a drum if we have to over his involvement in the so-called Keating Five." Now, I want to walk you through that so our viewers can understand exactly your position on it.

MR. McCAIN: Sure. Sure.

MR. RUSSERT: The New York Times put it this way, and I'll put it on our screen. "Senator McCain had taken $ 112,000 in Keating-related campaign donations, trips aboard Mr. Keating's corporate jet and family vacations at the executive's Bahamas hideaway. While legal, these gifts made his attendance at the meetings with federal regulators all the more questionable." The committee report put it this way, and here's the report. "The Committee concludes that given the personal benefits and campaign contributions he had received from Mr. Keating, Senator McCain exercised poor judgment in the intervening with the regulators."

MR. McCAIN: You ready? Obviously, I...

MR. RUSSERT: I am. Very, very strong language and something that either George Bush or Al Gore can tell the American people, "This is why John McCain is preaching campaign finance reform, because he himself was reprimanded by his colleagues."

MR. McCAIN: Well, first of all, I was involved in campaign finance reform long before the Keating affair. Second, I have said that I did wrong in the Keating affair, and I exercised poor judgment. Unfortunately, not the first time in my life that I exercised poor judgment. But I think the American people also know that Mr. Robert Bennett, the president's lawyer, was appointed as the independent counsel in that investigation. Mr. Bennett, after a yearlong investigation, recommended that John Glenn and I be completely dropped from the investigation. For the first time in history, the United States Senate Ethics Committee did not do that. Why? Everybody knows. I was the only Republican. Poor John Glenn got dragged along with me. Mr. Robert Bennett will tell you that he thinks that I performed acts of courage because when Charlie Keating walked in my office and asked me to do something that was wrong, I threw him out of my office, and he thinks that that is an act of courage and he'll tell you that, and that was before the meeting.

MR. RUSSERT: What is the poor judgment you exercised?

MR. McCAIN: By going to the meeting. I should not have gone to that meeting because of the appearance that it created, and it was poor judgment in doing so. But the person who did the independent counsel recommended I be dropped, the only time in the history of the Senate Ethics Committee that a recommendation of an independent counsel has been rejected. And we all know why. We all—everybody knows why. It's because I was the only Republican and they didn't want to have Democrats left. I'm proud that I threw Charlie Keating out of my office. I'm proud that I said to the people of Arizona before I ran for re-election in 1992, "Look, I did wrong by going to that meeting, but I'll tell you what, I've stood up for you and I've stood up for what I believed in and I threw this guy out of my office even though he had been a significant contributor to my campaign."

MR. RUSSERT: Let me show you what you said to The New York Times in November of '99, because it's an important quote. You said, "The thing I learned was that it's not only impropriety that counts, it's the appearance that is just as important."

MR. McCAIN: That's true.

MR. RUSSERT: Knowing that, why accept any money from people who appear before your committee?

MR. McCAIN: Because that's...

MR. RUSSERT: And just say, "I don't want it. It gives the wrong impression."

MR. McCAIN: It doesn't—it shouldn't give the wrong impression, number one. Number two, is everything—commerce in America appears before my committee, which is commerce, science, transportation, everything that moves, flies, walks or moves. It's a thousand-dollar contribution. You know, we've gone around this track several times here. I want to tell you again that I'm against the soft money. That's what everybody knows is what corrupts the system. Thousand-dollar contributions were just declared by the United States Supreme Court as reasonable, also saying that too much money in American politics corrupts, and then alienates the electorate.

I have received 135,000 contributions. Lately, and since the New Hampshire primary, $ 3 million, that makes all of those others that you just cited pale in comparison. I'm proud of the campaign we've run, I'm proud of the contributions that we have received. It is not improper to receive a thousand-dollar contribution from someone who believes in your campaign, and I will defend that and it will be attacked, but I think Americans will see through it. They know what corrupts American politics. They know it's the millions of dollars, it's the Chinese money that compromised security. I'm against all that. I've been fighting against it all of my life, and—political life and I will continue to fight against it.

MR. RUSSERT: We have to take another quick break.

MR. McCAIN: Sure.

MR. RUSSERT: A lot more of John McCain coming up live from Michigan right after this.

(Announcements)

MR. RUSSERT: The Michigan primary just 48 hours away. We'll be back with John McCain from Detroit, Michigan.

(Announcements)

MR. RUSSERT: And we're back on MEET THE PRESS. Senator, we're here in Michigan where they collect about $ 7 billion a year in sales taxes every year from goods that are purchased in the state. Three-fourths of that money goes to education. More and more, as e-commerce becomes acceptable, people are not going to the mom-and-pop shops, but they're buying it on the Internet and not paying the sales tax, and Michigan sales tax revenues go down, down, down and money for education goes down, down, down. Why are you for subsidizing, in effect, people who purchase things on the Internet and punishing and making non-competitive mom-and-pop stores who must charge a sales tax?

MR. McCAIN: Tim, I know you're reaching an advanced age and I understand why you may not understand this whole e-commerce deal. E-commerce thing gives that mom-and-pop people a chance to set up their own Web site and reach out to millions and millions of people that they never would have had the chance to come in contact with. The state of Michigan is now having record surpluses, not deficits—surpluses. And since we put the moratorium on sales tax over the Internet, guess what? The surpluses have increased, and sales tax revenues have increased. Look, this commerce is stirring this economy and churning it into a fantastic degree. Now, on the opposite side, if you put the existing sales tax on the e-commerce that's going on today, according to a Cambridge study, you hurt that commerce by as much as 25 percent; you reduce it. The mom-and-pop store that put up—when it's up on the Web site, they get hurt by it, too. Look, this is changing the economy, and the economy is booming. Unemployment is at an all-time low. And it's all due to this e-commerce. Forty percent of economic growth next year will have to do with the information technology impact on our economy. And for us to kill—to start in a—sales tax on it, I think, is crazy. But...

MR. RUSSERT: All the lost revenues for education, that comes from the sales tax.

MR. McCAIN: But they haven't lost the revenues. They're running record surpluses. They're running record surpluses, including here in the state of Michigan. Why? Because the e-commerce turns the entire economy of the state. Why is it, do you think, we're in the longest period of prosperity in the history of this nation? It's remarkable. It's because of this new technology. Now, if you want to start allowing every governor in America to start taxing it, the implications of that are very significant and very severe. By the way, speaking of the Internet, mccain2000.com, mccain2000.com.

And, by the way, you know, on this business of—wait. Could I just come back—raising the money you keep talking about. Governor Bush has raised more money than any campaign in history and they've spent more money. They're up around $ 60 million. One of the reasons why we had a little trouble getting our message out in South Carolina, because we were outspent 5, 6, 10-to 1. If you count in all the special interest groups from the iron triangle that came down, it was an overwhelming outspending us. And, by the way, Governor Bush—you were talking about the lobbyists. He had a million-dollar fund-raiser in Washington with the lobbyists, and they used to brag about it. Now they say, "Oh, no, he's the outsider."

MR. RUSSERT: When Governor Bush came to South Carolina, one of the first things he did was surround himself with veterans, Congressional Medal of Honor winners. A gentleman named Tom Burch, who I said last week had been arrested for disorderly conduct, eight of his supporters had been arrested. He insists he was not arrested himself. Nonetheless, the veterans' vote split yesterday, 48 percent/48 percent, and they were a third of the electorate. Why did John McCain, proud veteran, POW, not carry the veterans' vote so overwhelmingly?

MR. McCAIN: Well, I think, literally, we were overwhelmed yesterday. I mean, when you look at the numbers—and there was a whole lot of veterans that bought into the message that, you know, I was a liberal, that—all got the hate calls, you know, were inundated with this. I'm proud of the support of the veterans that we got, and in New Hampshire, we obviously did much better. We will do much better here in Michigan.

But, look, when you lose, all your numbers are skewed when you do that. And, by the way, Mr. Burch again—you know, talk about the twists and truth—Mr. Burch is a guy that attacked Governor Bush's dad viciously. Yet, he stood there, stood there at a campaign event that the Bush campaign paid for, and while Mr. Burch said John McCain abandoned the veterans—and Governor Bush stood there having paid for it, and never yet has he repudiated the abandoning the veteran comment of Mr. Burch. I mean, that's really remarkable.

MR. RUSSERT: Do you think George W. Bush should have gone to Bob Jones University knowing what you know now?

MR. McCAIN: I think he should have gone the way that I've gone to several places where people are not exactly my friends. I wouldn't have gotten out alive, maybe. But I'll tell you, I would have gone there and I'd have said, "Look, guys, this thing of yours about banning interracial dating, that's disgraceful. The things you've said in the past about the pope and about other religious leaders, that's disgraceful. Let's get into the 21st century. Let's announce to the world that you're a fine academic institution, but you've been dwelling in medieval times and get off with it, and stop doing this because it's poisonous to our society and, frankly, it's not giving the state of South Carolina a real great name." That's what I'd have done when I went there and I wouldn't have gone and pandered to them.

MR. RUSSERT: You, however, hired a gentleman named Richard Quinn, $ 20,000 a month, for your campaign in South Carolina. A lot of comment about who he is. Let me put on the screen—his magazine—and put it on the screen for you. "Southern Partisan, meet the staff, editor in chief Richard Quinn, senior adviser Patrick J. Buchanan." That's the one in the same Pat Buchanan.

And let me show you an article that appeared in the magazine about Abraham Lincoln, 'cause this is really important as you'll see. "In Southern Partisan, Abraham Lincoln is a consummate conniver, manipulator, and liar." And, Senator, they put out a catalog which would help subsidize their magazine, Southern Partisan General Store. Let me show you some of the items they sell and give you a chance to talk about them.

MR. McCAIN: OK.

MR. RUSSERT: Abraham Lincoln, sic semper tyrannis. You're a man of history. You recognize that slogan. It's what John Wilkes Booth said when he killed Abraham Lincoln. And let me show you some bumper stickers that the Southern Partisan General Store used to sell. If I Had Known This, I Would Have Picked My Own Cotton; Stop A Riot, Buy A Gun; Clinton's Military, A Gay At Every Porthole, A Fag In Every Foxhole. Why would you surround yourself with such a man?

MR. McCAIN: First of all, he didn't have anything to do with the articles. He did not. He was part of the Reagan campaign. He was part of a number of other campaigns, and he didn't write those articles, nor did he see them before they were printed. And the fact is, that he has been a part of a lot of political campaigns, and he has never espoused those views. Now, the editor in chief of The Nation magazine is not responsible for all the articles that are in The Nation magazine or other magazines that are—in which articles are printed. And that's a fact. And he's been a part of every political campaign that—major political campaign in South Carolina and he does not espouse those views—he repudiates them. But he—but that magazine has carried articles that are offensive. So have other magazines.

MR. RUSSERT: Let me show you an article he wrote about David Duke. And this was in Mr. Quinn's own words, and I'll put it on the screen. "What better way to reject politics as usual than to elect a maverick like David Duke? What better way to tweak the nose of the establishment?" Richard Quinn, he wrote it. He wrote those words.

MR. McCAIN: Look, first of all, I haven't seen the whole article, and I wouldn't see the whole article, but I know that Richard Quinn is a man of integrity and a man who does not espouse the views that I talked about, because—or that were necessarily in that magazine, I mean, period. That's really all there is to it.

MR. RUSSERT: Let me run through some issues that moderates, independents, liberals care about as you try to get them to come over. Gun control. You're still against the Brady Bill, still against the ban on assault weapons.

MR. McCAIN: We need to define assault weapons better so that we know exactly what it is. If it's just a regular gun that you add a little device onto, then I want to know what that device is. But, clearly—look, I am totally in favor of taking the guns out of the hands of children where they shouldn't be, and I will examine proposals to achieve that, including this technology that allows only the owner of a gun to fire a gun, including safety locks on guns, including—I'm proud to have played a role where we got the United States Senate to close again the pawn shop loophole. I'm proud of the effort that I and several other senators made to give a pretty good legislative proposal that is now hung up between the House and the Senate and has been so for some period of time.

MR. RUSSERT: But why not the Brady Bill, where about five...

MR. McCAIN: Because you need instant—instant background checks can be achieved easily. You don't need a five-day waiting period. A one-day waiting period—in fact, in some cases, a one-hour waiting period is entirely sufficient.

MR. RUSSERT: How about minimum wage?

MR. McCAIN: OK. Gun—wait. Let's go back to that a second. Gun shows last for two or three days. They want a five day waiting period. If you want to kill gun shows, kill them. Maybe that's a good idea if you espouse that. But don't do it through a five-day waiting period.

MR. RUSSERT: But why take a risk, if 400,000...

MR. McCAIN: Why take—why do it unnecessarily when you have the technology capable to do an instant background check?

MR. RUSSERT: But when Brady Bill was passed, the technology wasn't here.

MR. McCAIN: Oh, it certainly was, and it was certainly less than five days, and now it's technologically possible, so those people that support the Brady Bill, why won't they come over and support an instant background check? Huh?

MR. RUSSERT: How about...

MR. McCAIN: Because really the reason is not to have a background check. The reason is to take away the ability of people to conduct gun shows. Just say that. Fine, then we'll debate that one.

MR. RUSSERT: Bill Bradley says license guns the way you license an automobile.

MR. McCAIN: And Bill Bradley clearly has not read the Constitution of the United States recently. The Constitution of the United States says—doesn't say that every American has a right to own an automobile. It does say that every American has the right to own a weapon. And, obviously, we have, and must make sure, that every American does not mean every American child has the right to do that because we have to do whatever we can to stop this incredible scourge, including doing something that Bill Bradley and others don't want to talk about, and this is this pernicious influence of the smut and filth and terrible stuff that our children are being inundated with. If you look at the Columbine tapes, you will see children, murders, talking about video games. If you go to libraries, you will see that pedophiles are on the Internet in libraries and going out and molesting children. You'll find that people over the Internet are trying to entice young children into sexual liaisons.

Look, we've got big problems. And a lot of it doesn't have that much to do with gun control as it has to do with what is polluting our young children's minds. And I would like for Bill Bradley and Al Gore to start talking about that side of the equation, too, even if it might offend some people in Hollywood.

MR. RUSSERT: A lot of lower income people here in Michigan. Why are you against increasing the minimum wage?

MR. McCAIN: I'm not against it, as long as...

MR. RUSSERT: You voted against it.

MR. McCAIN: I'm in favor of increasing the minimum wage if we can make sure that small business people are not driven out of business by it. It's the small business person that's hurt when you raise the minimum wage because they can't afford to pay their employee. But I'll certainly support an increase in minimum wage, which large corporations can afford, as long as the small business people get commensurate tax breaks to make up for that.

MR. RUSSERT: You don't have that same concern about the Internet taxation for sales tax for small business.

MR. McCAIN: Because small business now have the greatest opportunity in history. They put up their Web site and millions of people all over the world get to look at their products and their services. It's a marvelous opportunity for them that they never had before. Not many small businesses people get to advertise over MEET THE PRESS. Archer Daniels Midland does. But—and so these people now will have a chance. Come to my Web site. See what we, the mom-and-pop store, have to offer. And that's an incredible opportunity. By the way, it's changing the face of all television advertising and everything else over time. It's a remarkable change.

MR. RUSSERT: Another quick break.

MR. McCAIN: Sure.

MR. RUSSERT: We'll be back with John McCain, live from Detroit, Michigan, right after this.

(Announcements)

MR. RUSSERT: And we are back. Senator, let me put a quote on the board for you, and I'll read it...

MR. McCAIN: All right.

MR. RUSSERT: ...see what you think. "We've got to reform our government or we won't get anything done. The key thing is to turn the government back to the people and take away from the special interests." Do you agree?

MR. McCAIN: Absolutely.

MR. RUSSERT: Ross Perot, 1992.

MR. McCAIN: Well, I think Ronald Reagan in 1976, also, Theodore Roosevelt in the earliest part of this century. If you read Theodore Roosevelt's speeches when he went after the robber barons and the trusts that were running American government, you'll see the same thing. This is cyclically throughout American politics.

MR. RUSSERT: Three out of four Republicans voted against you yesterday. If you don't win the Michigan primary because Republicans are voting against you but Democrats and independents are supporting you by margins of 2:1 and 3:1, would you consider moving over to the Reform Party and being their candidate?

MR. McCAIN: Listen, I'm pleased in New Hampshire two out of three Republicans voted for me.

MR. RUSSERT: Oh, 50/50 about.

MR. McCAIN: OK. The majority of Republicans voted for me. A majority of Republicans will vote for me here in Michigan and my home state of Arizona on Tuesday. I'm a proud pro-life conservative Republican. I want to change my party and get it back to what it was when we were an inclusive party.

MR. RUSSERT: But if things don't work out, would you consider...

MR. McCAIN: Never.

MR. RUSSERT: Never?

MR. McCAIN: Never.

MR. RUSSERT: It's either the Republican nomination or nothing?

MR. McCAIN: Under no circumstances. Once I get the Republican nomination, I would welcome the Reform Party, libertarian, vegetarian or even the Democratic nomination.

MR. RUSSERT: But in 40 of the 50 states, you can only run on one line. You can't have two parties in 40 states, only 10.

MR. McCAIN: Yeah, but if the Reform Party and other parties formally endorse me, that's always helpful. I mean if they make...

MR. RUSSERT: Now, in 10 states, you can be on two lines.

MR. McCAIN: No, but, I mean, just the fact that I had received their endorsement means we're broadening the base of the party. Look, this whole business of governing is about sticking to your conservative principles and broadening your base, attracting people that are independents and Democrats. If you think we're going to win this next general election with only Republicans, obviously, the numbers don't indicate that in any way.

MR. RUSSERT: If George W. Bush says, "John, run with me. We can unite this party. You can bring in Democrats and independents. Be my vice president"?

MR. McCAIN: Under no circumstance.

MR. RUSSERT: Never?

MR. McCAIN: Under no circumstances. I'm very happy in Arizona. The only thing that would make me move my kids to the city of Satan is if I were now the...

MR. RUSSERT: The city of Satan?

MR. McCAIN: Yeah, it's hard doing the Lord's work in the city of Satan.

MR. RUSSERT: What about secretary of Defense?

MR. McCAIN: No, I wouldn't be—I think my independence would not make me too attractive in that respect. But I'm very happy in the Senate. I'm happy being chairman of the Commerce Committee, ruling over all those special interests.

MR. RUSSERT: Let me tell you about a development in the whole issue of gays in the military. Great Britain, France, Canada, Israel, all now say openly gay people can serve in the military, leaving the United States alone amongst its allies. If the reason is because of unit cohesiveness and morale, how can the United States work with their allies, be deployed with their allies, if they have a different policy?

MR. McCAIN: Because they don't totally integrate their armed forces. And I don't want the United States military to be anything like any of those, even the Israeli military. We have the best military in the world. That's why they call on us at every turn. When people like General Colin Powell and General Norman Schwarzkopf and many other military people I respect, including the NCOs, tell me that they can maintain unit cohesion, I would be glad to review the policy. But for Al Gore to put a litmus test on a nominee for chairman of the Joint Chiefs of Staff is an insult or incredible naivete about how the military functions.

MR. RUSSERT: Bill Clinton was asked about Mr. Putin, the new president of Russia, the other day. He said he was highly intelligent, highly motivated and straightforward.

MR. McCAIN: Well, he sure was a great KGB apparatchik, did a great job during the Cold War, has now become most powerful guy in Russia, directly related to the massacre that's taking place in Grozny. The president of the United States talked about the liberation of Grozny and Chechnya. I mean, amazing.

MR. RUSSERT: How would you describe Putin?

MR. McCAIN: How would—ruthless, ex-Communist apparatchik that is probably going to tell the Russian people that he wants to make the trains run on time. And I'm telling you, this is a serious situation because I think the Russian people may turn to more and more of a dictatorial government because of the incredible economic woes they face. And us letting Mr. Putin get away literally unscathed with this brutality that's taking place in Chechnya has a lot of implications for the future.

MR. RUSSERT: Some would say those are intemperate remarks, Senator. You're trying to create a new Cold War.

MR. McCAIN: No, I'm not trying to create a new Cold War. I'm trying to stop the kind of brutality that's going on there, that the Russians have got to understand that the kind of kleptocracy that characterizes their government is hurting the Russian people immeasurably and U.S. taxpayers' dollars should not be going to a government that is incredibly corrupt. We wish them well. We will encourage them. We will help them. But they're very much like an alcoholic. They've got to hit bottom first, and Mr. Putin, rather than aligning himself with the Communists in the Duma, ought to align himself with the reformers. That might be a good sign that he has some noble motives.

MR. RUSSERT: We have just 30 seconds left.

MR. McCAIN: Sure.

MR. RUSSERT: If you don't win Michigan, this campaign's over.

MR. McCAIN: Oh, no, we're going to March 7. We've got the money, we've got the infrastructure, 100,000 volunteers over mccain2000.com. We've had a great time. We've had a won—look, I was 30 points down three weeks ago and now we're competitive in a lot of states. Look, we're going to have an incredibly good ride, and I've enjoyed every minute of it. And I can take the blows, and we can come back, just like we have at other times in my life.

MR. RUSSERT: We'll be watching. Senator John McCain, be safe on the campaign trail.

MR. McCAIN: Thank you, Tim.