CNN "The Situation Room" - Transcript: Situation in Egypt

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BLITZER: All right, Dan, thanks very much.

Dan Lothian, on Martha's Vineyard, where the president is vacationing.

Let's get some reaction right now to the president's remarks on Egypt.

Joining us, the Republican senator, John McCain, a member of the Armed Services Committee.

He's joining us from Phoenix.

He was just in Cairo last week, together with Senator Lindsey Graham, at the request of President Obama.

Senator, thanks very much for joining us.

Did the president go far enough on Egypt?

SEN. JOHN MCCAIN (R), ARIZONA: No, of course not, Wolf. A long time ago, we should have complied with our law, which we were asking the Egyptians to comply with the rule of law. We violated our own rule of law by not calling it for what it is, because our law clearly states that if it's a military coup, then aid is cut off.

So, initially, we undercut our own values and then we are told that, in media reports, that the administration called in the Egyptians -- said -- prior to the coup, and said if you have a coup, then we will be required by law to cut off that aid.

They had the coup and then, of course, we didn't do that. That's a blow to credibility.

And then, on the first of August, the secretary of State, John Kerry, said that the, uh, that the military -- that the generals were, quote, "restoring democracy." That was about the time that Senator Graham and I got over there.

So our message was, release these people from jails, have a constitutional change, set up a national dialogue and move forward with elections.

Obviously, that wasn't as impactful as it might have been, given the statements and actions by the White House and the secretary of State.

So we predicted, unfortunately, that there would be blood in the streets and it's a terrible tragedy.

BLITZER: So what you're saying -- suggesting, Senator -- and you'll correct me if I'm wrong -- that that statement from Senator Kerry that he made in Pakistan -- and I'm going to play it for our viewers right now...

MCCAIN: Yes.

BLITZER: -- that undermined the mission that the president himself had given you in going to Cairo.

Here's what the Secretary said.

(BEGIN VIDEO CLIP)

JOHN KERRY, SECRETARY OF STATE: The military was asked to intervene by millions and millions of people. And the military did not take over, to the best of our judgment, so far -- so far -- to run the country. There's a civilian government.

In effect, they were restoring democracy.

(END VIDEO CLIP)

BLITZER: I take it that's the statement that irritated you, is that right?

MCCAIN: Well, I just think that it -- it gave a degree of legitimacy to a non-elected government that was appointed by the generals. We know who's calling the shots. And it gave them a certain legitimacy, which then, in their view, I think may have interpreted as a green light to take whatever action necessary to put down any opposition.

And, Wolf, you and I remember -- and I hope many of our viewers do -- in the 1990s, there was an uprising in Algeria. And they put them down brutally at a cost of about 200,000 lives.

And I'm -- I'm afraid we may be seeing that Algeria scenario again.

There's no doubt that they can kill enough people, they can probably bring at least some order, but to think that they're going to eliminate the Muslim Brotherhood is -- flies in the face of -- of the history of the Muslim Brotherhood, who have managed to survive under Mubarak and will be able to survive, perhaps, underground, despite the efforts of the generals to eliminate them.

BLITZER: Are you suggesting, Senator, we may be on the eve of a full-scale civil war in Egypt, perhaps along the lines of what's been unfolding the past couple of years in Syria?

MCCAIN: I think it's more along the Algerian model. I think that this government probably has enough military capability, a lot of it our equipment, that they can probably quell disturbances. But I'm -- I don't think that they can put it down. I think there will be acts of terror. I think that there will be tremendous unrest.

And, you know, Wolf, our interests are our values and our values are our interests. And it is both our values that are being violated here, but, also our interests of a stable Egypt, which we know is the heart and soul of the Arab world.

And to repress in this way, with this kind of slaughter, is something that makes it incredibly more difficult to get what is absolutely necessary, and that's a national dialogue and reconciliation. And that is going to be much more difficult now.

BLITZER: You heard the president announce today he was canceling Bright Star, the joint U.S.-Egyptian military exercises that takes place in Sinai every two years. Thousands of troops from both countries and European troops normally would participate.

But that's gone. I assume you support that decision.

But what worries me, Senator -- and I don't know if it concerns you as much, the 700 American soldiers who right now are in Sinai at a time of a growing al Qaeda presence in Sinai, part of that multinational peacekeeping force in Sinai that's been in place quietly all of these years, since the Israeli-Egyptian peace treaty was signed in 1979.

How concerned are you about those American troops who are lightly armed in Sinai?

MCCAIN: I am concerned about that. I am concerned about the safety of American citizens. Under Mubarak, as you know, there was a tremendous amount of anti-Americanism and anti-Israel, which was fostered by the Mubarak government. This government is fostering that to an incredible degree. Pictures of President Obama in the street and our fine ambassador there, Anne Patterson. They accused me -- the leading newspaper in Cairo said that John McCain had hired Muslim Brotherhood on his staff. The intensity of the anti-Americanism, which is being stoked by the military junta, makes a lot of our American citizens unsafe.

And so what does that do to Egypt?

One, it dries up tourism. It harms any business interests they might be able to have. And, of course, the image of Egypt throughout the world is badly damaged.

So they are really on a very, very bad path here. And in this day and age of instant social networking and communication, I'm not -- I would have grave doubt -- I would have serious doubts as to whether they're going to keep everything -- be able to keep everything under control through brutality.

BLITZER: Would you pull out those 700 American soldiers from Sinai?

MCCAIN: Oh, I certainly -- well, first of all, I'd consult with our military people and ask about their security and their safety. I'd have to make that assessment with the facts.

But there's no doubt that as a result of all this, the Sinai is erupting -- is much less -- much more dangerous in the last few months than it's been in many, many years.

And these side effects of these things, you know, the Morsy supporters are now support -- are attacking Christian churches. I mean the implications and ripple effect of this kind of thing going on is far-reaching and terrible and tragic.

BLITZER: Senator McCain, thanks very much for joining us.

We're glad you and Senator Lindsey Graham are back safe and sound from Egypt, as well.

Appreciate it.

MCCAIN: Thank you.

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