PELLEY: You know, we just conducted a poll. And in this poll 68 percent of the American people disapproved of the job that President Bush is doing. And I'm curious, do you disapprove of the job that President Bush is doing?
MCCAIN: I think that President Bush deserves credit for the fact that there's not been another attack on the United States of America since 9/11. But I also think that some serious mistakes have been made. Those differences have been very open between us. I'll let history judge the Bush White House. But there's very little doubt the American people wanna turn the page.
PELLEY: My sense is that you do disapprove overall of the job that the President has done.
MCCAIN: I don't approve of the spending, as I mentioned, because the spending out of control really was the genesis of a lot of the problems we have today. I happen to think that President Bush is a good and fine and decent American. I really do. And my relationship with him has vastly improved over the years. And I admire and respect him. I just think the American people want a change, and they want fundamental change. And my record is fighting against my party and disagreeing with President Bush from time to time. Senator Obama, from the time he came up through Chicago politics, has never bucked his party. In fact, I've seen him cave into his party on immigration, on lobbying and ethics reform. And we invited him to join the gang of 14, a group of us who got together in a bipartisan fashion to move judges through. He chose not to because, well, you'll have to find out [why] he chose not to. Bipartisanship is something he's never engaged in.
PELLEY: What are the sharpest differences between you and Senator Obama?
MCCAIN: Well, I think, first of all, working in a bipartisan fashion, which Americans want us to do now. But most importantly, he wants to increase spending. And he wants to raise taxes. Depending on which iteration you see, it goes back to some of his votes in the Senate, where he wanted to raise taxes on people who made as low as 14 or voted to raise taxes on people who were making as little as $42,000 a year. Spending, the size of government, the nature of government -- a fundamental philosophical difference between the most liberal member of the United States Senate, according to his voting record, and I am a proud conservative, principled United States Senator. But one of the biggest areas of disagreement, finally, could I just say, was over Iraq. When the majority of the American people believed we shouldn't send more troops to Iraq, I said we should. And many political pundits said my campaign was over. Senator Obama moved to the left of his party and said we shouldn't, said the surge would fail, said it was doomed to failure, and still fails to acknowledge that he was wrong about the surge. Why is this most important? Because American lives were at risk. If we had lost that war and done what Senator Obama wanted to do, we would have had a dramatic increase in sectarian violence, increased Iranian influence, al-Qaeda reestablishing a base, and a possibly a wider war that would've engulfed other nations in the region and forced us back. Now, that's what was at stake. Senator Obama went to the left of his party and said you have to have a date for withdrawal, what General Petraeus has called a very dangerous course. And the fact is he was not swayed by facts on the ground and did not understand the consequences of failure. He treated it as another political issue. I was willing to sacrifice whatever political future I had because I knew that we had to win this conflict. And what is winning? Security for the people of Iraq of economic and political process and our troops come home with honor and victory and they won't have to go back.
PELLEY: You know that there are people in this country who are going to vote for you because you are the white candidate. To them you would say what?
MCCAIN: First of all, I don't accept that premise.
PELLEY: You don't think race is gonna play that large a role in this campaign?
MCCAIN: I believe that the American people, at the end of the day, given the challenges that we face, will select the person who they think can lead this country out of the economic swamp that we are in, economic crisis that we're in, and will make this nation safe and secure. I will also tell them I'll reform government, which I have a record of doing. But I have to rely on the fact that the American people are fair and decent. Now, there may be, there's always a small minority of every kind of opinion and views. But I know that this judgment will be made by the American people on the basis of who's best prepared and able to lead this nation.
PELLEY: We asked your running mate, Governor Palin, to join us for this interview but she's not here. I wonder why that is?
MCCAIN: Well, first of all, she probably thinks that I talk too much. Second of all, we will try to arrange it, Scott, so that she comes on this program. I'm very well aware and she is of how important a program like this is to informing the American people.
PELLEY: Senator Biden, Senator Obama's running mate, has done 84 interviews and news conferences by our count. And Governor Palin has done two. And I wonder why that is. There's a perception that you might be nervous about what she might say, that you're not putting her in front of reporters.
MCCAIN: She's gonna be doing more all the time. She's, as you know, been introduced to the country. We're campaigning hard. We're doing more than one event literally every day. The American people are being exposed to her. She'll spend a lot more time. And I would remind you that she's not a stranger to the media, as governor of the state of Alaska. She has had exposure to the media. Look, everybody that has met her and known her and the enthusiasm of these crowds, the American people are vetting her.
And they're liking a lot what they're seeing.
PELLEY: Is it true you only met her a couple of times before you selected her?
MCCAIN: I'd only known her a few times, but a couple of times. But I had watched her very carefully. I have followed her career. I have had my collisions, frankly, with the members of Congress from Alaska. And she took 'em on. And that really got my attention, because here was a person who took on the incumbent governor of her own party, former colleague of mine in the Senate, who is basically now committed to eliminating wasteful spending and earmarks. She vetoed a half a billion dollars worth of bills. And so I was so impressed with her on the couple of times that we had met. And we were vetting her all along.
PELLEY: How'd you make that decision?
MCCAIN: Well, I based it on what's the best for the country. I looked at her record. I looked at her. I looked at the times now. The times now require reform and change. Maybe in other times when the country was doing well economically and we weren't in wars and, you know, maybe you could have, you know, maybe someone who was, you know, more of a Washington insider. But what I felt America needed and needs and, frankly, if I'm gonna get elected, I have to convince the American people that we're gonna change it. And we're gonna change Washington. She comes to this race with a clear record of change. You know, you tell me how many times in history in the 20th or 21st century that individuals has taken on incumbents, sitting governors in their own party. Not very often. And she stood up to that governor and quit when she was the head of a board that oversights the natural resources of her state.
PELLEY: The criticism of Governor Palin is that she was a brilliant marketing choice for the campaign, but she's not well versed on the economy or foreign affairs.
MCCAIN: Well, actually, the most popular governor in America so and the largest geographically state. But the most important thing is . . .
PELLEY: But foreign affairs and the economy? Things that people are concerned about.
MCCAIN: First of all, anybody who's governed a state has some economic experience. And by the way, she cut taxes. Look at what's happened in states where they raised taxes. That should be an example for us at the national government. Things go downhill when you raise people's taxes. The second thing is, she shares the world view that I have. She shares a view of the world. She was for the surge in Iraq. Senator Obama was against it. By the way, Senator Biden voted for the war. Senator Biden was against it. Senator Biden was wrong. Senator Biden wanted to divide Iraq into three countries. Bizarre proposal, to be honest with you. So she understands Russia. She understands the threat that Iran puts that we face in the case of Iranian nuclear weapons. And she has the world view that I share. And I'm proud of that.
PELLEY: In your judgment, can you see her as President of the United
PELLEY: As President of the United States?
MCCAIN: Absolutely. Absolutely. What would that do for the morale of America? Oh, my goodness. I mean, the more I think about it, maybe we better switch. Listen, she has sparked out there, Scott, an enthusiasm and a chord that I haven't seen, frankly, in my political life. People see her as someone who has done remarkable things already. And certainly they want change in Washington. She represents what I think America believes is the best in America. And I don't have to detail those virtues for you. But it's remarkable what she has been able to do. And it's a lot of fun. We did a town hall meeting together last night. It was really fun. And you could feel people really enjoying it because they were participating.
PELLEY: In the beginning, was the war in Iraq the right war at the right time?
MCCAIN: You know, I believe that Saddam Hussein was bent on developing weapons of mass destruction, and he stated that after his capture. I believe that he posed a threat. I believe with oil at about $100 a barrel or more that he would have been very much enriched and been able to do a lot of the things that he had openly stated were his ambitions as far as acquisition of weapons of mass destruction. I'm glad he's gone. The problem with Iraq was not the initial invasion, in my view. We would have all have celebrated and been glad that he was gone despite the colossal intelligence failure concerning weapons of mass destruction. But then it was grossly mishandled by Donald Rumsfeld and the Administration. And we got bogged down and we made huge sacrifices, huge sacrifices that were so unnecessary. And then finally we righted the ship. And I won't recount to you again my role in that, which I am proud that I stood up for what I believed in.
PELLEY: Would it be the policy of your administration to put American troops on the ground in Pakistan to go after the Taliban and al-Qaeda without the permission of the Pakistani government?
MCCAIN: I think the most important thing is to work with the Pakistani government and convince them, as I believe they largely are and I know them, that the Taliban and al-Qaeda pose a threat to them as well. Tell you what I won't do. I won't do what Senator Obama said that he would do, and that is publicly broadcast my intentions to attack another country. I can get the job done. But I don't have to enflame their public opinion against us, because it's important for us to gain a cooperative relationship with the government of Pakistan. And it's tough. It's very, very difficult. I've been to Waziristan. I see a countryside that is basically the same as it was when Alexander the Great was in the area. So the point is that we have to employ the strategy that succeeded in Iraq, accommodating to changed conditions. But maybe we could negotiate with those tribes in Waziristan and along the Afghan-Pakistani border to do what the Sunni awakening did. And that's work with us against the Taliban and al-Qaeda. So I think we can establish the relationship that's in Pakistan's interests. If we openly broadcast, as Senator Obama said that he would have, that we're gonna attack that country, then I don't think that that's gonna help our efforts and secure the goal that we seek. But I can also assure you, I will get Osama bin Laden.
PELLEY: How? Hasn't been done in eight years.
MCCAIN: I will not telegraph it. But I can also tell you that human intelligence is an area that we need dramatic improvement in. And we know the importance of human intelligence because of our success now in Iraq when they started coming over to our side. We know that he's most likely in that area. And the key is, do you have the kind of intelligence capabilities, both technological and human, that will be vital to get him?
And I can't say anything more, otherwise I'd be warning him.
PELLEY: But this sounds a little like what people called Nixon's secret plan in 1968 to end the Vietnam War and turned out there wasn't a secret plan. Are you telling me you have a secret plan to get Osama bin Laden?
MCCAIN: No. No. I'm telling you I can marshal all the tools that the United States has at its disposal so that we can come up with a coherent plan and bring him to justice. I am convinced of that. And I'm convinced of that from my many years of being involved in these issues from not just service in the military but service and in being involved in every national security challenge this nation has faced for a long time.
PELLEY: Would it be your policy in your administration to engage in preemptive war against a country that might pose a threat to the United States? The Bush Doctrine, if you will.
MCCAIN: You cannot send American troops into harm's way unless you are absolutely convinced with overwhelming evidence and convince the American people. 'Cause unless you have the support of the people, you'll never sustain a long military involvement overseas. But you have to convince the American people.
PELLEY: But preemptively, a country that hasn't attacked us.
MCCAIN: If it's a provable direct threat. Suppose that the Iranians had nuclear weapons. And let's suppose we knew that they had a weapon on a missile and it was headed for the United States of America.
PELLEY: I'm sorry, sir. Headed for or aimed at?
MCCAIN: Well, excuse me. Aimed at. Excuse me. Aimed at. And you had a whole lot of the other information about Iranian intentions, and you could make the case to the American people and to the world, I think it's obvious that we would have to prevent what we're absolutely certain is a direct threat to the lives of the American people. Of course then the only logical answer is that. But don't think that I don't appreciate that the intelligence failure prior to the invasion of Iraq is gonna raise the credibility bar with the American people and the world community quite a bit higher. So any commander-in-chief is going to take whatever steps necessary to protect America. But that case has to be convincing and overwhelming. And so I don't think anyone who is President of the United States would not exercise that responsibility if you are if you are absolutely convinced and can prove America is about to be attacked.
PELLEY: Both campaigns have taken a lot of heat for the advertising. It's become a major issue. I mean, I have right here research from an independent organization. Here's a stack of falsehoods that the Obama campaign has told about your campaign. And here's a stack of falsehoods the McCain campaign has told about the Obama campaign. And I wonder, in making these false claims in advertising, how that squares with the campaign you promise to run and in man you promised to be?
MCCAIN: Well, thank you, Scott, but I dispute that any of the spots that we have run are not fact based. This is a tough campaign. We understand that. But I believe our ads are factual. And we, on our website, can document all of the spots we made. But the larger problem here is, I agree with you -- this campaign has gotten incredibly unpleasant, to say the least. And after Senator Obama secured the nomination I said, let's go to the country. Let's go, the two of us, and appear before the American people, appear before groups of voters the way that Jack Kennedy and Barry Goldwater had agreed to, way back before the tragedy of Dallas intervened. And let's go to the American people. Let's respond to their questions and their comments. I guarantee you that the whole tenor of this campaign would have changed because when you're standing on a stage with your opponent next to you facing the American people, it changes the entire tenor. And Senator Obama, after saying he would go any place, anytime, has refused to do that. I still ask him to. There's still plenty of time left. That would change the campaign.
PELLEY: But the point is the advertising. And you know there have been a number of independent organizations that have looked at your advertising and looked at Senator Obama's advertising and said that the claims are false. You're telling me that there are no errors in fact in any of your advertising?
MCCAIN: I am telling you we can back up every single piece that we have run with facts and a record.
PELLEY: Are you proud of everything you've done in this campaign?
MCCAIN: I'm proud of this campaign. But I also know that if you look at the timeline very quickly, you'll see that the attacks, the negative ads began with MoveOn.org and then the DNC, et cetera, et cetera. But, look, if I had my way, Senator Obama would be going and I would be going to every venue in America and we'd be talking to the American people. And I guarantee you, because I've done it with other opponents, that we would indeed, we would indeed have a very different tenor to this campaign.
PELLEY: What would you say to Senator Obama in this interview about his advertising?
MCCAIN: Look, all I can say is that the American people will make a judgment. People watching this program will make a judgment. But we will respond.
PELLEY: What are you willing to pledge with regard to your advertising from this point forward?
MCCAIN: Well, that I will do as we have done so far in this campaign. All of our ads will be fact based.
PELLEY: When your TV ad says that Obama would raise taxes on the middle class, he's not proposing to raise taxes on the middle class. When your radio ad says that Obama has a history of raising taxes on middle-class Americans, that's not true.
MCCAIN: Well, let me just say he voted to increase taxes on middle-class Americans on many occasions. So when you vote, your record counts. I have voted against tax increases consistently. The second thing is that Senator Obama has advocated, until recently, an increased tax on capital gains. One hundred million Americans have some kind of involvement in capital gains. He has advocated increasing taxes on them. I call that a tax increase on middle Americans, and so do most middle Americans.
PELLEY: The selection of Governor Palin, in many people's minds, has made the question of your health all the more urgent. So let me ask you, has there been any evidence of a reoccurrence of any type of cancer?
MCCAIN: No. No. And this was an issue in the primary. I convinced a majority of Republican voters that I have the vigor to do the job. And I understand it will be an issue in this election. And that's why we're campaigning so hard and doing the things we need to do and showing the American people that I'm not only fully prepared, but I have the knowledge and the background to make the right judgments.
PELLEY: Is there anything about your health, anything at all about your health, that would impair your ability to execute your duties as President of the United States?
PELLEY: Nothing at all?
MCCAIN: And as you know, we released my medical records I think it was a couple of months ago, month or so ago.
PELLEY: How urgent is climate change? And what's causing it?
MCCAIN: Human activity and greenhouse gas emissions are largely a result of human activity, certainly the increase in them. And we are in danger of harming our planet in a way that is profound and of perhaps consequences that will cause us to hand our children a planet this is damaged. And I have supported strongly measures to be taken to address the issue of climate change. And I think I can do it in a way that will help our economy.
PELLEY: How do you do that?
MCCAIN: Well, I think the cap and trade system, where if someone has a company, a corporation, a business that emits greenhouse gases and they reduce that, they can earn a credit. And they can trade that credit and sell it. And it seems to me with a gradual reduction in greenhouse gas emissions over time. Also, by the way, another way is to have a treaty that's international, but has to include India and China, where all nations will join together and reduce greenhouse gas emissions. But finally on that green technology, nuclear is great. Clean coal technology, hybrid cars, hydrogen, battery, wind, tide, solar. All of these things we can do. And you know, one of the things they have in common, just about every one of them every one that I've just mentioned to you, they reduce greenhouse gas emissions. That's the future of America's economy, green technologies. The light bulbs that you can buy now that that last so long. The cars that are gonna be coming out of Detroit. The Volt. The technology that Ford and Chrysler also are developing. Look, we can build 45 new nuclear power plants by the year 2030 and create 700,000 jobs. That's what the future of America is. So they're not contradictory, the need to address climate change. And finally, obviously, that all has to do with independence of foreign oil sending $700 billion a year to countries that don't like us very much.
PELLEY: One of the things that Governor Palin did say in her first interview was that our NATO obligations might require us to go to war against Russia in defense of Georgia. Is that a position that you share?
MCCAIN: Any nation this is a member of NATO, there's a clause that says an attack on one has to be responded to. So clearly there is a mutual security part of NATO, which is one of the fundamentals of it. So we would have to respond if Georgia were a member of NATO. And, I might add, why do you think that the Baltics and Poland are really in a good and safe and secure position? Because they are a member of NATO. So we would have to respond if any nation that is a member of NATO were attacked. That's the NATO charter.
PELLEY: And you support NATO membership for Georgia?
MCCAIN: I do. And I support it for Ukraine.
PELLEY: Don't we risk war with Russia?
MCCAIN: I think the best way to prevent war, to prevent Russian aggression, whether it be the Baltics or Poland that they have invaded several times throughout their history or Ukraine or Georgia, is that we are in a mutual security pact. That has been one of the reasons why the United States has supported Georgian and Ukraine involvement in NATO so we can have this alliance strong and robust. And I think it would have a salutary effect on the Russians.
PELLEY: But the Russian reaction to NATO membership for Georgia is likely to be pretty sharp. They just invaded that country.
MCCAIN: Regrettably, regrettably. Their reaction to the Baltic countries being in NATO was pretty sharp as well. But the point is that Russia did commit aggression against Georgia. That, in the view of our European allies and everybody in the world, is not acceptable behavior to occupy another country. And that's what the Russians did. But it doesn't meant that I'm saying we're gonna go to war with Russia. It does mean that we have to respond. And it does mean that this kind of behavior on the part of the Russians is not behavior that we expect of a country that is a member of the world community.
PELLEY: "Respond" doesn't mean war?
MCCAIN: "Respond" means that we respond. It depends on all of the circumstances that surround the security, the commitment to maintaining mutual security amongst NATO allies.
PELLEY: The race is essentially tied. We're little more than 40 days away from Election Day. Millions of people cannot decide. For those who are saying to themselves, "I'm thinking about McCain but I'm just not sure," you say what?
MCCAIN: I say reform, prosperity, and peace. We need to reform the government. I have a record of that. We need to restore prosperity of this country. I have a clear plan to do it. I articulated part of that plan just today. And peace, I know how to keep the world secure. I've been in war. And I hate war. But I also know how to keep the peace. And I know how the world works. And I've had the experience and the knowledge and the background to make the right judgments, to make their lives secure. Could I just mention very briefly? You talk about negative ads and everything. I just went in the airport a couple hours ago. Woman was there. She handed me this envelope. Says, "My son, Staff Sergeant Patrick Lee Leibert, KIA, 21, June 2006, Afghanistan. Please remember and support our troops in Afghanistan. God bless you. Cheryl Patrick."
PELLEY: KIA, killed in action.
MCCAIN: Inside of it, of course, is the dog tag with Patrick's picture on it. That's what being President of the United States is all about.
PELLEY: How so?
MCCAIN: To make sure that we don't have to have anymore Patrick sacrifice in the cause of freedom.
PELLEY: Thank you very much.
MCCAIN: Thank you.
part one of the transcript.