HH: To discuss why the bottom in public support is falling out, Senator John McCain. Senator, welcome back to the program, great to have you.
JM: Hi, Hugh, thanks for having me on.
HH: What do you make of the stimulus as it currently stands?
JM: A disaster laying another $1.2 trillion dollars worth of debt on future generations of Americans, and it is a spending package. It is not a stimulus package. It doesn’t create jobs, and there’s tens of billions of dollars of unnecessary spending in it. You can tell me, Hugh, how $150 million dollars for honeybee insurance creates a job.
HH: Only if you’re a honeybee maker, I suppose.
HH: Senator McCain, what about in the Senate? Do you have enough votes to defeat it?
JM: I think we are gaining ground as the American people are figuring this out. I just lost a vote, just in the last few minutes, that I think is very revealing. The amendment called for, as soon as we have two quarters of positive economic growth, that we would be required to stop the spending and to adopt reductions in spending in order to achieve a balanced budget within five years. That was defeated basically on a party line vote. It got two Democrat votes, 52-44. So it’s pretty clear what the intent here of this bill is, not so much a stimulus as to put in spending programs that they were never able to get through in the past.
HH: Now Senator McCain, throughout the long campaign, you and the President went at it, sometimes at close range, often at long range. Do you, did it ever come to the fore that he would support a trillion dollars in new spending within a month of taking office?
JM: No, sir, it did not. And in fact, he campaigned on what I thought was a pretty laudable commitment to reducing spending and increasing transparency, and to eliminating the deficit. Now I’m sure that his response, as we all know, is that we are in extremely difficult times. I agree. I think we have to stimulate our economy. I think it’s through tax cuts that are payroll tax cuts and cuts in business taxes, and job creating investment, but also putting us on a path to a balanced budget. None of those elements are in this legislation.
HH: Now in terms of his press conference this morning when he appeared with Secretary Geithner to announce the salary cap, I’ll come back to that, he said that if we don’t act, we’ll have a catastrophe. This is consistent with a lot of alarmism of the very worst sort. Now it’s tough times out there with unemployment in my state at 9.3% and rising, you know, 8% across the country maybe, but this isn’t a catastrophe. It’s a recession, Senator McCain. Are they talking down the economy in order to increase political pressure on the Congress?
JM: Well, I think we would all agree these are terrible times. It’s probably the toughest in our lifetime. But I think history also shows that by the time these…much of the spending called for in this bill would actually take effect, it would be after our economy has recovered. That has been the history, generally speaking, of stimulus packages in the past. Look, I’m not against creating jobs. I think Americans want us to create jobs. We want to put people back to work, keep them in their homes. But they also don’t want to lay $10 trillion dollars worth of debt which we already have on future generations, and they want it to stimulate the economy. This doesn’t do that. No bill is better than this bill.
HH: Does it make sense for the President of the United States, though, to use the term catastrophe? Doesn’t that add alarm to an already panicky financial situation?
JM: Well, Hugh, I think he probably believes that, and there are Americans who have lost their jobs and their homes who would probably agree with that. The job of the presidency, in my view, is to give people hope, give people hope. Whether you happen to have liked Franklin Delano Roosevelt’s policies, and there’s a number of them I still think exacerbated the Great Depression, but he gave the fireside chats, and gave people hope and optimism for the future. I think that’s, there’s no problem that America can’t prevail over, because we’re still the greatest nation in the world.
HH: There are reports in the Washington Post and elsewhere, Senator, that the administration’s Office of Management and Budget are proposing cuts in the increase in the defense spending proposed by the outgoing administration. And there certainly isn’t much defense spending, if any, in this stimulus bill. Is that a mistake?
JM: Well, in our stimulus, there is funding for the “reset,” and that military construction projects, and also restoring the equipment and fixing the equipment that has been born out in Iraq, and will have to be used in Afghanistan. So I think that the military budget is probably going to be reduced. I’m all for acquisition reform. I’m also stopping the cost overruns. But I would do nothing to reduce the funding for the men and women who are serving with brave courage and sacrifice. And I worry about that.
HH: He also proposed today a salary cap of $500,000 on any firm accepting the TARP funds. To me, this is just an invitation for the most talented people to leave. What’s your reaction to this?
JM: Well, my reaction is, you know, we tried this with agricultural farm subsidies. If you might recall, we said no farmer could receive over a certain amount, so they spread it out amongst, in agricultural subsidies, you know, so they spread it out. The answer to this is shareholder responsibility. Shareholders should decide on the compensation, not the board, in my view. I think that boards get too cozy relationships. Shareholders who have an investment in the future of those corporations are the ones that should decide the compensation package of the executives.
HH: Now what can be done to make this bill acceptable to you, Senator McCain? Your colleague, Senator Graham, is going to be on next hour talking about housing stimulus, et cetera. Is there a list that John McCain says if I get this, I can support a stimulus, even if there’s wasted spending in there?
JM: We have a proposal that a group of us which is gaining support from Republicans that is a $420 billion dollars that has to do with payroll tax cuts, corporate and business tax cuts. It has to do with investments and making, allowing people to stay in their homes. And it also has provisions that as soon as there’s positive economic growth, we enact automatic spending cuts to get us on the road to a balance budget within five years. So those are elements that I think that we could support at this terrible time in America. And this, our proposal is nothing like the $1.2 trillion one that’s up before us now. And by the way, the amendments that we are proposing to fix it are all being defeated.
HH: Last question for you, Senator McCain, has President Obama reached out to you to ask for your help to craft a compromise?
JM: I appreciate the fact that President Obama has talked to Republicans and Democrats, and I talked to him again this morning. But the way you get things done is not to talk the talk, it’s to walk the walk, it’s to sit down, take and accept suggestions and recommendations, and policies of all sides to come together. That hasn’t been done. As you know very well, it went, rammed through the House. Speaker Pelosi said it best. We won, so we write the bill. And that’s pretty much been the way it’s been here in the Senate.
HH: Well, we appreciate the good fight, Senator McCain, and we hope you keep it up. We’ll check in with you again soon.
End of interview.