McCain said the veto legislation struck down by the court wasn't properly written to withstand constitutional muster. The court ruling came after then-President Clinton used the line-item veto to block a New York tax increase, prompting Giuliani - then mayor of New York - to file a lawsuit.
"I am deeply disappointed that Mayor Giuliani went to court to stop the president having a line-item veto so apparently he could preserve some of the projects for New York City," McCain said. "You can't be an economic conservative and in favor of fiscal discipline if you oppose the line-item veto."
In response, Giuliani spokesman Jarrod Agen said the former mayor "has committed to propose a constitutional amendment establishing presidential line-item veto. The mayor is a strict constructionist and the Supreme Court ruled the line-item veto is unconstitutional."
McCain also lashed out against wasteful spending by Congress as he campaigned in a tiny southeast Iowa town that claims to be the birthplace of the GOP.
"Members of our party should remember the principles upon which our party was founded, and one of those principles was careful stewardship of the taxpayers' dollar, which we have lost complete control of," McCain said.
Taking questions from reporters as locals looked on, McCain said maybe his colleagues "should come back here to Crawfordsville and remember what our party is supposed to be all about, and that's not through profligate spending and earmarking and pork barrel projects."
McCain criticized congressional earmarking, saying it wastes billions of dollars on projects such as the infamous $398 million bridge to nowhere in Alaska. McCain also included Iowa's proposed Earthpark near Pella, which has received a $50 million federal grant to pay for an attraction featuring an indoor rain forest.
McCain also plans to tell a New Hampshire Republican State Committee meeting on Saturday the differences between Republicans and Democrats on national security remain as strong as they were during the Reagan years, and Republicans remain the better party to protect the United States.
"Today, leading Democratic presidential candidates question whether there is a war on terror, offer to enter into unconditional negotiations with our worst enemies and talk about countering the forces of radicalism by advocating surrender to them in Iraq," McCain said in prepared remarks obtained by The Associated Press
McCain cites Reagan's "Shining City Upon a Hill" speech, in which then-California Gov. Ronald Reagan called the United States "the last best hope of man on earth."
But unlike then, the United States doesn't face the organized threat of a Cold War. Instead, it faces what McCain has called a perverted form of Islam.
"The world Ronald Reagan faced was a dangerous one, but more stable than the world today. It was a world where we confronted a massive, organized threat to our security," he said. "That world is gone, and please don't mistake my reminiscence as an indication that I miss it. That world, after all, had much cruelty and terror, some of which it was my fate to witness personally."