MSNBC Hardball - Transcript

SEN. JOHN MCCAIN (R), ARIZONA: We haven't been able to ascertain the cost of the war, the cost reconstruction. We saw Americans who died in Saudi Arabia recently. We have enormous costs associated with homeland defense and national security, and I think we ought to figure that out before we increase the deficit by another few hundred billion dollars, which is already up to $300 billion.

We Republicans, I think, were for balanced budgets and lock boxes.

MATTHEWS: I know that, but let me ask but the impact on the economy. We have an $11 trillion economy right now, and these tax cuts are worth about $330 billion, as they finally came out, over 10 years. And I just did the quick math. That's a third of a trillion dollars over 10 years, trying to effect an economy of well over $100 trillion of all those years accumulating.

It seems like it's trying to push a battleship with your hands. I mean, how do you turn a battleship around by somebody pushing on it? It seem ridiculous. How is a little -- you say it's too big a deficit cost, but isn't it too small to do much good?

MCCAIN: I don't know. Alan Greenspan testified that the dividends side of it would not have much effect. It's a child tax credit is always good. And some of the things are always good.

I also know that large deficits drive up interest rates, are very bad for America. And most importantly, we need to find out what the war costs. I think it's pretty obvious that the reconstruction is going to cost a lot more than we may have originally estimated, although we never had an estimate. So, I think perhaps in September, we ought to look at the deficit and see if we need a stimulus then.

But I also want to remind you we went from an estimate of $127 billion surplus for this year to over $300 billion deficit. Some say it's going to be as high as $500 billion. We're talking about real money here.

MATTHEWS: What would you do to stimulate the economy?

MCCAIN: I would continue spending on homeland security, first responders, national security. And I would veto every single bill that came across my desk if our president of the United States were this unconscionable, disgraceful pork barrel spending. It was $44 billion in pork on appropriations bills last year. We're talking about big, big money.

MATTHEWS: Is the president out there buying votes?

MCCAIN: No, I think the president is doing a fine job.

MATTHEWS: No, buying votes of senators by giving them their pork. Why else is he issuing all this pork?

MCCAIN: I don't know why he signed the agriculture bill which was $180 billion bill, which most of it helped large farmers in agri-business. I think it was wrong.

But I know that these pork barrel spending bills -- in 1994, we had about 3,000 ear marks. In 2002, we had 10,000 ear marks. As I say, $44 billion, B, billion dollars and the most disgraceful spending.

The appropriations process is completely out of control, and there are three kind of senators, Democrats, Republican, and appropriators.

MATTHEWS: At a Washington fund raiser last night, President Bush helped raise $22 million for Republican House and Senate candidates. The event was the most raised at a single event under the new McCain-Feingold finance law that bans unlimited soft money, that's uncontrolled money from corporations, labor unions, and wealthy donors and restricts the nations to party committees to $25,000 a year for individuals.

In today's "New York Times," Mississippi Senator, Trent Lott, claimed that the Senator McCain argued that the new campaign finances laws would actually benefit Republicans. Lott said quote, "This is what John McCain always said would happen, that we'd be better off under the new campaign finance laws because we have a better ability to raise hard money."

Well, that said and agreeing with him, I -- do you agree with Trent Lott? He also said some other things that got him into trouble. But do you agree that he said -- his argument that the new reform is better for the GOP?

MCCAIN: Well, I always argued that the facts showed that the GOP had a larger small donor base, but I believe that the Democrats will catch up. They'll certainly mobilize their forces as well.

But what was missing from that fund raiser last night was those big corporations that paid $500,000 for a ticket in the name of good government. That wasn't there last night.

MATTHEWS: That's right. Let me ask you this about the Iraqi thing. Where do you think we're headed? The American people in the latest NBC poll that just came out last night said that they think the heavy lifting is ahead of us. The war, compared to the heavy lifting of occupation and reformists, is nothing.

MCCAIN: Dick Luger had an excellent piece in "The Washington Post" this morning. We need to know what the plan is. A lot of us have great confidence in Mr. Bremer, but the money is going to have to come from Congress. The administration needs to come to us, tell us what the plans are, what the milestones are, and what progress we expect to make in the coming months.

But I think we realize that it's going to be, as I have said on this program, a very, very difficult task, putting democracy and freedom into a country that has been oppressed for the brutality of this incredibly ruthless dictator.

MATTHEWS: What's your guesstimate on the occupation? The length of it?

MCCAIN: I think probably, you know, it's hard for me to know because we haven't been well briefed in Congress, but from what I do know, I would I say that just -- listen, this is a wild guess now -- it would be six months before we could start the installation of a civilian government. But all of that is dependent upon restoring law and order and basic services, and I don't know when that will be.

MATTHEWS: OK. Senator John McCain, great to have out once again.

MCCAIN: Thank you.